Mahindra & Ford announce joint venture

Mahindra and Ford have signed an agreement to create a joint venture to develop, market and distribute Ford cars in India. The joint venture is expected to be operational mid-2020 post regulatory clearances.

The joint venture is valued at Rs. 1,925 crores. Mahindra will own a 51% stake in the joint venture, while Ford will control the remaining 49%.

As part of the deal, Ford will transfer its India operations to the joint venture. This includes its workforce and its manufacturing facilities in Chennai and Sanand. Ford's engine plant at Sanand, Global Business Service unit, Ford Credit and Ford Smart Mobility will remain under the control of the American brand. Mahindra and Ford cars will retail from their respective dealer networks.

The joint venture will make use of Ford's distribution network in emerging markets to extend support for export of Mahindra products. The export countries include South Africa, Nepal, Bangladesh, Sri Lanka and Chile, amongst others.

As part of the deal, the new entity will introduce three new utility vehicles under the Ford brand that is expected to have a common Mahindra product platform and powertrain. The first of the three vehicles will be a midsize SUV. Ford and Mahindra will also collaborate to develop electric vehicles across the emerging markets.

The joint venture company will be operationally managed by Mahindra but will be governed by representatives of both companies.