- Mahindra and Ford drop Rs 1,925 crore joint venture
- Ford to continue its India business operations independently
The Mahindra-Ford association has been called off by the companies after announcing the same 15 months ago in October 2019. An official statement has been issued by both the brands stating that both the companies have mutually and amicably decided against pursuing the venture citing the fundamental changes in global economic and business conditions. These changes have divided the decisions to reassess their respective capital allocation priorities. The deadline for materialising the venture was on 31 December 2020.
The agreement valued at Rs 1,925 crore was signed with Mahindra owning a 51 per cent controlling stake and Ford with the balance 49 per cent share. The arrangement was expected to become operational in mid-2020 with Ford transferring its India operations including its personnel and assembly plants in Chennai and Sanand. The joint venture was also expected to bring new models co-developed by both the brands. There were three new utility vehicles slated to be introduced under the Ford label.
The American car-manufacturer will continue its business operations in the Indian market independently. It plans to achieve an eight per cent company adjusted EBIT margin and generate adjusted cash flow. On the other hand, the revocation will not impact Mahindra’s future plans for introducing new models and the development of electric vehicles.
