Ford India and Mahindra and Mahindra Ltd have announced that they are in talks with a pair of Chinese automakers for potential contract manufacturing deals. Ford India and Mahindra are attempting to utilize their excess production capacities according to two sources who claim to be familiar with the negotiations. It’s unclear what Chinese firms are in talks with Ford India and Mahindra.
Chinese automakers looking for partners in India include MG Motor India Pvt. Ltd, which is a unit of Chinese automaker SAIC Motor Corp. SAIC was the first Chinese automaker to start building vehicles in India. Another Chinese automaker seeking partners in India is Great Wall Motor Co. Ltd, which is the largest maker of SUVs in China.
Great Wall did recently buy the GM factory in Maharashtra. Other Chinese automakers are seeking local partners to help with manufacturing, including state-run Changan Automobile Co. Ltd and FAW Group Corp. FAW has partnered up with Bird Group, a diversified business entity, to start operations in India. One of the sources claims the Chinese firms aren’t looking to make major investments, and contract manufacturing suits their needs.
The second source said that some of the Chinese automakers are looking at volumes of under 50,000 units. The sources haven’t named the two firms that Ford and Mahindra are in talks with. The talks are said to be in an early stage and have yet to materialize into any firm agreement. At this time, neither of the Chinese firms have agreed to the price that Ford and Mahindra want to charge. Ford and Mahindra confirmed their joint venture last October. Mahindra is a 51 percent owner of the venture, with Ford owning 49 percent.
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Source: Livemint
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