Ford India has been an underperforming asset for Ford, which is why the company was considering a joint venture agreement with Indian automaker Mahindra & Mahindra. The move would have theoretically helped the company save money on production and development costs while also transferring most of The Blue Oval’s assets in the country to Mahindra. But now, Ford has officially announced that both companies have decided not to go forth with the venture.
The news arrives as the December 31st, 2020 deadline to solidify the previously-announced agreement came to pass. Both companies stated that their decision was based on changes in global economic and business conditions, with COVID-19 also playing a role in the termination of the joint venture considerations. As a result, Ford India will continue operating in its current configuration – as an independent entity within the country.
More specifically, that means the Ford Chennai Assembly plant and the Ford Sanand Assembly plant will remain in Ford’s hands. Ford India had always planned to retain the Ford engine plant operations in Sanand as well as the Global Business Services unit, Ford Credit, and Ford Smart Mobility divisions despite the agreement with Mahindra, so those assets were not affected by this recent pivot.
The break up talks between Ford India and Mahindra does not spell the end of The Blue Oval’s operations in the country, but it does signify that The Blue Oval might significantly shift its strategy. As previously reported by Ford Authority, the company plans to introduce the Ford Focus and Ford Focus ST into the country, and might bring Ford Ranger Raptor and Ford Bronco to India as well. Additionally, semi-finished Ford Rangers have shown up outside a Jayem Automotive factory located within India, a possible indication that the company is getting more serious about its operations there.
At the moment, it is unclear whether this latest development affects the three Mahindra-based vehicles that were set to be rebranded into Ford models. One such vehicle, a crossover/minivan/MPV derived from the Mahindra Marazzo, had already been announced.
In its statement announcing the termination of the joint venture, The Blue Oval said that it is committed to “developing and delivering high-quality, high-value, connected vehicles – increasingly electric vehicles – and services that are affordable to an even broader range of customers and profitable for Ford.” This could mean that Ford will simply adapt existing global models to the Indian market in the future, instead of spending money on region-specific products.