Ford to give control of its India business to Mahindra

American automaker Ford is all set to give Mahindra control of its India business. The official announcement is likely to come next week. Ford India will enter a joint venture with Mahindra, giving the latter 51 % control of the operation. Ford is said to have equal voting rights and board representation in the new company that it will form with Mahindra.

The set-up is expected to transfer much of Ford’s India operational risk to Mahindra while allowing the American automaker have a presence in what could turn out to be one of the world’s top-3 car markets in the next 10 years or so. Mahindra is expected to buy out a big chunk of Ford India’s operations for an undisclosed amount. Exact details could be available next week.

Ford has not denied this development but has not gone into the specifics, instead choosing to say this when asked about the new set-up by ETAuto,

Ford remains committed to growing its customer base and product portfolio in the world’s fourth-largest automobile market, and will continue to make in India, for India and the world.

In the past few months, there have been multiple rumblings about a Ford-Mahindra joint venture, which will allow Mahindra to use Ford’s KA platform for electrification. The Figo Aspire compact sedan’s electric version will be sold by both Ford and Mahindra. Also, upcoming Ford SUVs could use Mahindra’s platforms. In fact. a sub-4 meter compact SUV and a mid-sized SUV using Ford badges could use a Mahindra platform.

Already, Mahindra dealerships in cities where Ford does not have a presence retails the EcoSport compact SUV. Going forward, more Ford cars could be retailed from Mahindra dealerships in cities where the American automaker has no presence. This will give Ford access to India’s smaller cities and towns without actually having to appoint dealerships and service centers.

Ford is likely to continue operating the Sanand factory, which manufactures engines meant mainly for export. Last week, some reports suggested that Ford was looking at selling off the Sanand factory, into which it has invested a couple of billion dollars. Ford currently operates two factories in India, one at Sanand Gujarat, and an older facility at Chennai, Tamilnadu. Ford first entered India in 1926, and exited the market in 1990. It re-entered India in the early 1990s, partnering Mahindra in a joint venture, before deciding to go solo by the end of that decade. Ever since, Ford has been an independent automaker in India.