[northstar*]

Ford and Mahindra have together pulled the plug of proposed JV plans. The deadline to finalize a joint venture between the companies was Dec. 31 2020, and the decision was made public on the very last day.

Ford states that its India operations shall be continued independently.


Email from Ford on the official announcement.

[bronco]

What happens to 3 SUV's that they were planning to jointly develop for emerging markets?!

I was wondering why the heck Ford would launch Ranger, Focus and Focus ST (Ford Focus, Focus ST coming to India)in India especially with JV going on! Now it makes sense.

[SideView]

With the ways previous Mahindra’s automotive JV (with Renault) and acquisitions (ssangyong) was done, this is good news that Ford stays independent.

Hopefully they dont fold up and leave after this.

[narayans80]

Good for Ford! They better not be associated with Mahindra, who have truly lost their way and sinking companies around them.

[volkman10]

Ford, Mahindra scrap joint venture to co-develop vehicles, citing pandemic.

The companies said in separate statements that the decision was driven by changes in the global economy over the last 15 months, causing both to reassess their capital allocation priorities.

Ford spokesman T.R. Reid:

The companies said at the time they expected to launch three new utility vehicles, starting with a midsize SUV, and also jointly develop electric vehicles for emerging markets.

Asked if those vehicles were now canceled, Reid said, “At this point, there’s nothing to talk about other than the joint venture isn’t going to happen.”

Press release (Ford):





Link

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Back in October 2019, Ford and Mahindra had signed an agreement to create a joint venture to develop, market and distribute Ford cars in India. Now, the two companies have decided to call off this joint venture.

The companies had decided to finalize the joint venture by December 31, 2020. However, the challenges posed by the outbreak of the Covid-19 pandemic have forced them to part ways.

According to the companies, the outcome was driven by fundamental changes in global economic and business conditions – caused, in part, by the global pandemic – over the past 15 months. Those changes influenced separate decisions by Ford and Mahindra to reassess their respective capital allocation priorities.

Ford has said that its independent operations in India will continue unchanged. The company is evaluating its businesses around the world, including in India.

As part of the deal with Mahindra, Ford would transfer its India operations to the joint venture. The new entity would introduce three new utility vehicles under the Ford brand. With the joint venture scrapped, these plans will not materialise.

Link to Team-BHP News Article

[CrAzY dRiVeR]

I'm not sure if we should be happy.

Sure, Mahindra has a very poor track record with their JVs and the recent bankruptcy of both Pininfarina Engineering and Ssanyong did raise a big question mark on their JV with Ford. So may big its a good thing!

BUT - is it? Americans have an even worse track record in our market. Chevrolet and Harley are already out! Let's not forget - even Ford tried to pull off a partial exit with the Mahindra venture, handing over 51% stake to Mahindra. IIRC, Anurag Mehrotra shared the delightful news saying it addressed all previous concerns of Ford exiting India. Ford was supposed to handover it's Sanand plant and operations to Mahindra as part of the JV.

Are we supposed to trust them now that 're-assessing their capital allocation priorities' 'caused in-part by the global pandemic' would mean full commitment to the Indian market?

Not trying to be the devils advocate - but it really doesn't sound good IMHO. Ford may be looking at an exit instead of even a 49% presence in the market via Mahindra. I would be extremely cautious of Ford, going forward.

Originally Posted by bronco

I was wondering why the heck Ford would launch Ranger, Focus and Focus ST (Ford Focus, Focus ST coming to India)in India especially with JV going on! Now it makes sense.

Ranger is a niche product anyways, and being assembled at Jayem Auto. Don't think Ford has invested much into the product. Same with the rumoured Focus ST which will again be just a CBU import, in limited numbers not requiring homologation.

Without Mahindra - what next for Ford? All their rumoured upgrades just fell flat - next Ecosport was supposed to be via Mahindra, next mid-size SUV was supposed to be shared with XUV 5OO and also the Marazzo based MPV which was to be launched next year. All three products are shelved now?

If yes - what next? Looks like the best case scenario will be to flog the current ageing lineup for a few years with few CBU imports to boost image.

[sumeethaldankar]

Ford has some good cars. I hope they continue. The Aspire/Figo and the Ecosport are good products. Maybe they suffer from poor marketing etc. I hope Ford continues in India and does not go the GM/Harley way. There is still hope for Ford and lot of potential. All they need is the will. I hope they learn from KIA/MG and re-valuate their India options. Double blow for Mahindra first the Ssangyong failure and now this.

[batladanny]

Mahindra's anti-midas touch strikes again?

[NICHE]

Ford entered JV with Mahindra only because they realized that they alone cannot run the business profitably here. It was at a when there was no Corona or severe crisis. Now things are much worse. Calling off the JV now has only one meaning - they started packing the bags. Being a figo owner this is definitely a bad news for me.

[Hayek]

Agree fully with Crazy Driver. If Ford had taken a call to reinvest in India and try to grow on their own, they would have been explicit about that. The tone of the release with its focus on Ford’s global strategy, and the use of the word “actively evaluating” makes it very clear that the future of Ford India is not assured - and the odds are unless the India management finds an alternate partnership or demonstrates a path to profitability, Ford may follow the GM path out of India. Not good news for Ford owners

[Vid6639]

Well this is not good news at all. Ford was going to sell the Sanand plant to consolidate.

Now with the JV broken off, the product lineup in future looks unclear. Moreover Ford was supposed to use the Mahindra engines in their future line up of cars.

The 1.0L Ecosboost was stopped since Ford was going to use Mahindra's 1.2L engine.

Looking at it as an outsider this puts Ford 2 steps behind the competition in terms of products and future.

With Nissan bouncing back and VW/Skoda India 2.0, things are going to only get tougher for Ford.

Right now the Endeavour is selling in low numbers, the Ecosport sales are dropping with Kia, Nissan and in future Citroen.

There doesn't seem to any product for India in the future as well.

Maybe change the strategy and go back to their core. Look at Fiesta and Focus as premium sporty vehicles.

There is no fun car to drive below 15-25L anymore with more than 150BHP. A Focus or Fiesta ST line with a 180BHP Ecoboost might just mix it up a little.

[neelkumar]

I'm still not sure if this is a good or bad news. I guess we would know that in coming days.

But I for one, am waiting for Ford's implementation of XUV500 and now it hangs in limbo. I hope they provide clarity on this as well as their continued operations in India asap.

I am a huge fan of Ford's build quality and I love Endeavour, but this uncertainty will only lead to reduced sales number which is already very low.

[creative420]

Originally Posted by typlo

Good for Ford. Now they need to throw in a good marketing team to capture the Indian sentiment, they already make (some) good cars.

I think they have a kickass marketing team already who've managed to educate people about the fuss-free ownership of the Ford cars with very limited options in terms of variety of cars. You arm the same marketing team with great new products, and I think they'll do a wonderful job.

But that being said, and reading between the lines of this press release, Ford isn't gonna come up with anything new for India anytime soon.

[anandhsub]

Wow. I didnt know the JV had still not been officially confirmed. How did the rumours of Ford coming out with XUV500 based crossover happen despite the JV not even been signed?

This is not at all a good thing for Ford customers. Chances of them going the GM way just skyrocketed.

[GTO]

Broadly, there are 3 possibilities here:

- Ford turned around and decided to go it alone, suddenly getting optimistic about India (unlikely)

- Ford got cold feet about marrying Mahindra (likely)

- Mahindra got cold feet about marrying Ford (unlikely)

Important to note that Ford has announced this. No communication yet received from Mahindra.

Looking at Mahindra's awful track record with JVs, mergers & acquisitions, I would say that Ford called this one off. As much as I like Mahindra as a company, they are a horrible partner to have. Just see their long string of failed marriages - check out this post of mine (Mahindra looking to let go of SsangYong). Am quite surprised though this happened so late in the day, with them already collaborating on engines & products. A deal-breaker surely popped up somewhere.

It will be very interesting to see how Ford's India story develops as they are clearly not interested in investing big + committing to India alone. And I can't think of anyone else - off the back of my mind - they'd partner with.

Is this the start of the end of Ford's Indian presence? I'd place the probability at 50 - 60%. Ford USA has decided to get out of unprofitable markets & segments (they even abandoned sedans & compact cars in the USA). After spending 20+ years in India, Ford really has no market-share to show for it.

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And Mahindra's statement rolls in:

Mahindra & Mahindra, a part of the USD 19.4 billion Mahindra Group and Ford Motor Company have mutually, amicably determined they will not complete a previously announced automotive joint venture between their companies. The action followed passing of the December 31, “longstop”, or expiration, date of a definitive agreement the organizations entered into in October 2019.

According to the companies, the outcome was driven by fundamental changes in global economic and business conditions – caused, in part, by the global pandemic – since the agreement was first announced. Those changes influenced separate decisions by Ford and Mahindra to reassess their respective capital allocation priorities.

Mahindra said that this decision will not have any impact on its product plan. It is well positioned in its core true SUV DNA and product platforms with a strong focus on financial performance. In addition, Mahindra is accelerating its efforts to establish leadership in electric SUVs.

Emphasis mine. The disagreement is on money!

What was Mahindra supposed to pay Ford or invest in this JV? My best guess = due to the pandemic, Mahindra did a u-turn on their offer and changed it to a lower amount.

OR

Ford got a better offer from somewhere else.