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Ford and Mahindra announce joint venture to drive profitable growth in India and emerging Markets

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Long debated about Ford motor company forming a joint venture with Mahindra and Mahindra limited has finally started inching towards reality. As the two automakers have announced that the new joint venture which will be operational in mid 2020

Both companies have signed an agreement to create a joint venture that will develop market and distribute Ford and Mahindra branded vehicles in the high growth emerging markets around the world. Mahindra will own 51 percent stake, while Ford will own 49 percent stake with the value termed at 1,925 crores.

The creation of this joint venture is a pivotal moment in both our companies’ histories. Strong alliances such as this play a crucial role for Ford to compete profitably in the high-volume, affordable vehicle segments so popular with our diverse customer base. By combining our respective talents, we will offer more vehicles to more customers in more places than ever before and deliver profitable growth to both Ford and Mahindra,” said Jim Farley, president of Ford New Businesses, Technology & Strategy.

The new joint venture will be responsible for growing the Ford brand in India and exporting its products to Ford entities globally. Ford is also expected to hand over three plants to Mahindra but will retain its engine section in Sanand, its Global Business services centre, Ford smart mobility and Ford Credit.

The joint venture will also see the automakers turn out three new utility vehicles under Ford branding with a focus on midsize SUVs. Both models will however have a common platform and powertrain, most likely expected to be borrowed from Mahindra. Another area of focus for the joint venture will be electric vehicles, where Ford and Mahindra will work vehicles to support sustainable mobility across emerging markets.

It has also been learnt that the joint venture will make use of Ford’s extensive distribution network to extend support to Mahindra’s vehicles in emerging global networks. Markets such as South Africa, Nepal Bangladesh, Sri Lanka and Chile, among other nations will be of prime focus.

“Emerging economies including India are expected to account for one in three future vehicle sales,” said Dr. Pawan Goenka, managing director, Mahindra & Mahindra Limited. “The joint venture will have a distinct product portfolio with shared platforms and powertrains, the newest technology, high quality and engineering standards from both Mahindra and Ford, at optimized costs. This winning combination will enable the joint venture to successfully position its vehicles in India, as well as unlock the potential of other highly competitive emerging markets”.

Ford’s newly established International Markets Group (IMG) business unit will play a key role in the process. IMG brings together 100 high-potential, emerged and emerging markets including India Australia, ASEAN, Middle East, Africa and Russia. In addition to the established Ford Ranger and U.S. import businesses in IMG, the formation of this joint venture will add to IMG’s portfolio vehicles specifically tailored for emerging markets, and it places India very much at the centre of Ford’s strategy for IMG.

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