Ford Motor and Mahindra & Mahindra call off Indian joint venture
Ford Motor Company and Mahindra & Mahindra have called off their previously announced automotive joint venture in India.
The decision follows the passing of the December 31, 2020 “longstop” or expiration date of a definitive agreement the organizations entered into in October 2019.
According to Ford Motor and Mahindra & Mahindra, 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 said its independent operations in India will continue as is. The company is actively evaluating its businesses around the world, including in India, making choices and allocating capital in ways that advance Ford’s plan to achieve an 8% company adjusted EBIT margin and generate consistently strong adjusted free cash flow.
Ford’s plan calls for developing and delivering high-quality, high-value, connected vehicles – increasingly electric vehicles – and services that are affordable to an even broader range of customers and profitable for Ford.
Ford said it is moving quickly to:
- Turn around its automotive business – competing like a challenger while simplifying and modernizing all aspects of the company, and
- Grow by capitalizing on existing strengths, disrupting the conventional automotive business, and partnering with others to gain expertise and efficiency.
In a statement to Bombay Stock Exchange, Mahindra & Mahindra said “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.”
The proposed 51-49 joint venture which had already received clearance from India’s Competition Commission was awaiting clearance from the local state governments of Gujarat and Tamil Nadu.