The news about Mahindra and Ford joint venture are not new. From past months there have been various reports stating about Ford and Mahindra Joint Venture. First, a decision that Mahindra will sell Ford vehicles in rural areas. Then Ford sharing a mid-SUV platform with Mahindra, then finally the news of Mahindra and Ford forming a Joint Venture.
As reported by Bloomberg, Ford has finally decided to pull the plug next week and sign the deal for Joint Venture. The Joint Venture will Mahindra owning 51% of the entity. But Ford members will have equal voting rights and board representation. Also, Ford’s engine plant in Sanand, Ahmedabad and Ford’s global business services division will be excluded from this Joint venture.
This step comes from the subpar performance of Ford in India over the years. With a market share of less than 3%, Ford has invested many times more in the Indian market than it has made. So to cut burden and stabilize financial problems this joint venture will help Ford to share its financial load with Mahindra while still continuing to be Indian market.
What benefits does Mahindra get? Well, Mahindra will have an expanded range and can expand its market in urban arear with Ford products. Though this report does not tell that the decision of the JV is final and is yet to receive an official statement. While Ford replied to a comment on Twitter asking about its plans of existing India? Ford India said “Ford is not exiting India and remains committed to growing its customer base here. We will continue to make in India, for India and the world”.
This year has been already one of the greatest slowdowns in the automotive industry, with even leaders like Maruti Suzuki and Hyundai suffering. So it’s hard for companies like Ford to make a profit. We hope that through the JV of Ford and Mahindra, Ford will continue to exist in India. And we will still have good cars like Ecosport and Endeavour from their stable.