Ford Lets Mahindra Take Control Of Its Operations in India

Ford dismisses speculation on exit, saying it will continue to make cars in India for domestic market and exports.

Ford India’s plant in Sanand, Gujarat, makes engines and assembles the Figo, Aspire and Ecosport. 

Photo: The Quint

Ford India is likely to sign a new joint-venture agreement with Mahindra next week, in which the latter will own a 51 percent stake, according to a Reuters report. The report quotes sources saying that the deal “will see the US carmaker end most of its independent operations in the country.”

According to the report, Ford will retain its engine plant in Sanand, Gujarat, but will transfer most of its automotive assets and employees to the new joint-venture company.

The Quint reached out to Ford India for a comment on this report. Here’s Ford’s statement:

The company remains committed to growing its customer base in India and will continue to make in India, for India and the world. We have a strong brand, customer and dealer network in India. Using this as a foundation, we are working to expand our presence and product portfolio. We are confident that our success in India will enable us to unlock value in other emerging markets, as well. Forging a partnership for the future, we remain engaged with Mahindra to develop avenues of strategic cooperation that help us achieve commercial, manufacturing and business efficiencies.

Ford India Spokesperson

Ford also adds that it won’t be downsizing operations and won’t comment on speculative news reports. Mahindra did not offer comment on this.

While this is a purely strategic business move on the part of the company, should you, the consumer, worry about buying a Ford vehicle? The short answer: No. Here’s why.

In April this year, Mahindra and Ford said they have signed a definitive agreement to co-develop a mid-sized SUV for India and other emerging markets. This follows from the announcement of a strategic alliance between the two companies in September 2017, followed by an announcement on powertrain sharing and connected car solutions in October 2018.

The new mid-sized sports utility vehicle (C-SUV) will have a common Mahindra product platform and powertrain, thus driving engineering and commercial efficiencies. Ford has already signed an agreement with Mahindra Group to develop and supply a low-displacement petrol engine for use in Ford's present and future vehicles, beginning in 2020.

While sales for vehicles in the domestic market may not be meeting expectations at Ford, the sharing of the financial burden with Mahindra will help Ford in its Indian operations.

Life has come a full circle for Ford India, as the company first came into the market in a joint venture with Mahindra, launching the Ford Escort as its first product in 1997.