Ford Motor Company has formally announced that the discussions for the joint venture have come to an end. In a later hour statement on the last day of 2020 from the Ford Motor Company and Mahindra and Mahindra, the brands have announced that the two automobile giants have decided to end the discussion mutually and amicably. The manufacturers entered into an agreement in October 2019 and following the “longstop” or expiration of December 2020 date for reaching a definitive agreement, the announcement was made.
In the official announcement, the outcome is driven by the global economic and business conditions caused by COVID-19 related shutdowns around the world. The pandemic has affected the manufacturers and businesses around the world causing brands to reassess their capital allocation priorities. After the deadline of 31st December 2020 expired, both the manufacturers have made the decision to end the agreement instead of closing the deal and extend the longstop date.
What was the JV?
In October 2019, Ford and Mahindra announced that they will form a joint venture in India. The move was aimed to cut the costs for developing and producing vehicles for emerging markets like India. The agreement also talked about developing, market and distribute Ford branded vehicles in India and Ford bran and Mahindra brand in high-growth emerging markets worldwide.
Mahindra would have got 51 per cent controlling stake and Ford owning the rest of the stakes. Ford was to also transfer its India operations to the JV including tits assembly plans in Sanand and Chennai. However, Ford’s engine plant operations as well as the Global Business Services Unit, Ford Credit and Ford Smart Mobility were to stay in Ford’s control.
Ford Motor Company said in the new statement,
“This decision will not have any impact on the company’s product plan. It is well positioned in its core true SUV DNA and product platforms with a strong focus on financial performance. In addition, the company is accelerating its efforts to establish leadership in Electric SUVs.”
What will happen to new products?
Ford and Mahindra have declined to comment on future products from the brands. Ford has said that its independent operations in India will continue as is and there will be no changes.
However, Ford planned to launch a C-SUV based on the next-generation Mahindra XUV500. Also, the plan was to power the Ford EcoSport using Mahindra’s turbocharged mStallion petrol engines. Ford and Mahindra were also planning to work on electric vehicles for emerging markets.
Ford spokesman T.R. Reid said to Reuters,
“The global economy and business environment are not the same as October last year,. At this point, there’s nothing to talk about other than the joint venture isn’t going to happen.”
Ford India has also declined to comment on future products at the moment. However, Mahindra will hold a press conference later today, which is expected to throw more light on the new development.
Ford’s independent plans in India
While Ford is yet to make an official announcement, a report suggests that Ford will bring a slew of new cars to the Indian market. Starting with the Ford Focus hatchback, the performance version – Focus ST will also launch in the Indian market. Ford also plans to launch the Ranger Raptor high-performance pick-up truck, the new Figo and the all-new EcoSport in the Indian market later this year.