Late last month, a rumor was floating around that Ford and Indian automaker Mahindra & Mahindra were going to form a joint venture that would get Ford away from underperforming assets in the Indian market. Ford India has now confirmed that deal with the announcement that it and Mahindra will form a new joint venture. Mahindra will own 51 percent of that venture with Ford holding the remaining 49 percent.
Part of the deal will see Ford transfer its India operations to the joint venture, including all personal and assembly plants in Chennai and Sanand. Ford plans to retain the Ford engine plant operations in Sanand and the Global Business Services unit, Ford Credit, and Ford Smart Mobility.
The joint venture is the next step in the strategic alliance between Ford India and Mahindra since the two allied in 2017. The joint venture is expected to be operational by mid-2020 and is subject to regulatory approvals. Mahindra will manage the joint venture, and the governance of the operation will be equally composed of representatives of Mahinda and Ford India.
Duties of the joint venture will include growing the Ford brand in India and exporting products to Ford entities around the world. Ford says that it will continue to own the Ford brand, and its branded vehicles will continue to be distributed by the current Ford India dealer network. Mahindra & Mahindra will continue to own its brand and operate its own independent dealer network in the country.
Ford India notes that the joint venture will introduce three new utility vehicles under the Ford brand, starting with a new midsize SUV that will have a common Mahindra platform and powertrain. Another area of focus will be EVs. The partners will work to develop vehicles that will support the growth of sustainable mobility in emerging markets. Ford has had a hard time competing in emerging markets. The deal is valued at $275 million.