- Marks a new era of collaboration, using the strengths of both
companies to deliver operational excellence and value to
stakeholders
- The partnership will allow Ford and Mahindra to offer new
product to customers faster than before and will deliver profitable
growth to both companies
- Valued at INR 1,925 crores (US$275 million), the joint venture
will drive enhanced competitiveness through greater economies of
scale across the automotive value chain, including optimized
sourcing, product development, use of relevant technologies and a
global network
Mahindra & Mahindra Limited and Ford Motor Company have
signed a definitive agreement to create a joint venture that will
develop, market and distribute Ford brand vehicles in India and
Ford brand and Mahindra brand vehicles in high-growth emerging
markets around the world.
Mahindra and Ford will form a joint venture, with Mahindra
owning a 51 percent controlling stake and Ford owning a 49 percent
stake. Ford will transfer its India operations to the joint
venture, including its personnel and assembly plants in Chennai and
Sanand. Ford will retain the Ford engine plant operations in Sanand
as well as the Global Business Services unit, Ford Credit and Ford
Smart Mobility.
The joint venture is the next step in the strategic alliance
forged between Ford and Mahindra in September 2017 and is expected
to be operational by mid-2020, subject to regulatory approvals. The
joint venture will be operationally managed by Mahindra, and its
governance will be equally composed of representatives of Mahindra
and Ford.
The joint venture will be responsible for growing the Ford brand
in India and exporting its products to Ford entities globally. Ford
will continue to own the Ford brand, and its branded vehicles will
be distributed through the current Ford India dealer network.
Mahindra will continue to own the Mahindra brand and operate its
own independent dealer network in India.
“Mahindra and Ford coming together is a testament to the long
history of cooperation and mutual respect between the two
companies. Our combined strengths – Mahindra’s expertise in
value-focused engineering and its successful operating model, and
Ford’s technical expertise, global reach and access to future
technology – are a potent recipe for success. At its core, the
partnership will be driven by the shared values of both companies,
which are focused on caring for our customers, associates and our
communities,” said Anand Mahindra, chairman, Mahindra
Group.
“Ford and Mahindra have a long history of working together, and
we are proud to partner with them to grow the Ford brand in India.
We remain deeply committed to our employees, dealers and suppliers,
and this new era of collaboration will allow us to deliver more
vehicles to consumers in this important market,” said Bill Ford,
executive chairman, Ford Motor Company.
“At Ford, our purpose for 116 years has always been to drive
human progress, and that won’t change. But to continue to do that,
we need to evolve with new and faster ways of not only delighting
our customers around the world but also solving their very
different needs. Strong alliances like this play a crucial role in
assuring we continue to achieve our vision while at the same time
staying competitive and delivering value to our global
stakeholders,” said Jim Hackett, Ford president and CEO.
The joint venture expects to introduce three new utility
vehicles under the Ford brand, beginning with a new midsize sports
utility vehicle that will have a common Mahindra product platform
and powertrain.
Another area of focus for the joint venture will be electric
vehicles. Ford and Mahindra will collaborate to develop vehicles to
support the growth of sustainable mobility across emerging
markets.
Driving greater economies of scale across the automotive value
chain including sourcing, product development and access to
relevant technologies, the joint venture is expected to achieve
enhanced efficiencies to strengthen the Ford brand in India. In
addition, the joint venture will be a catalyst for growth for the
Ford and Mahindra brands in emerging markets, which are growing at
double the rate of the global industry.
The joint venture will use the Ford brand distribution network
in emerging markets to extend support for export of Mahindra
products, in addition to Ford branded vehicles. Exports today form
about 7 percent of Mahindra’s auto business revenues and its
products are exported to South Africa, Nepal, Bangladesh, Sri Lanka
and Chile, among other nations and areas.
“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.”
“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.
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.
Mahindra has led the utility vehicles segment in India for the
past seven decades. The spirit of ingenuity has driven Mahindra to
be among the few global companies pioneering the development of
clean and affordable technology and it is the only player with a
portfolio of electric vehicles commercially available in India.
Expanding its global presence, Mahindra owns a majority stake in
Ssangyong Motor Company in Korea. Mahindra also has entered into
the shared mobility space with investments in ridesharing platforms
in the United States.
Ford was among the first global automakers to enter India in
1995. As one of the largest exporters of vehicles from the country,
Ford manufactures and exports vehicles and engines from its
facilities in Chennai, Tamil Nadu and Sanand, Gujarat. India is the
third-largest Ford employee base globally, with more than 14,000
people working across the Ford India and Global Business Services
operations in Delhi, Chennai and Coimbatore. Under the new
structure, Ford will continue its support for all corporate social
responsibility initiatives.
About Mahindra
The Mahindra Group is a USD 20.7 billion federation of companies
that enables people to rise through innovative mobility solutions,
driving rural prosperity, enhancing urban living, nurturing new
businesses and fostering communities. It enjoys a leadership
position in utility vehicles, information technology, financial
services and vacation ownership in India and is the world’s largest
tractor company, by volume. It also enjoys a strong presence in
agribusiness, aerospace, commercial vehicles, components, defence,
logistics, real estate, renewable energy, speedboats and steel,
amongst other businesses. Headquartered in India, Mahindra employs
over 240,000 people across 100 countries.
About Ford Motor Company
Ford Motor Company is a global company based in Dearborn,
Michigan. The company designs, manufactures, markets and services a
full line of Ford cars, trucks, SUVs, electrified vehicles and
Lincoln luxury vehicles, provides financial services through Ford
Motor Credit Company and is pursuing leadership positions in
electrification, autonomous vehicles and mobility solutions. Ford
employs approximately 194,000 people worldwide. For more
information regarding Ford, its products and Ford Motor Credit
Company, please visit www.corporate.ford.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20191001005634/en/
Mohan Nair Mahindra + 91 22 28468510 nair.mohan@Mahindra.com
Kapil Sharma Ford India +91 98730 78122 Ksharma6@Ford.com T.R. Reid
Ford Communications +1 313.319-6683 treid22@ford.com
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