Ford India enters into Joint Venture with Mahindra group

Ford India enters into Joint Venture with Mahindra group

India is the fourth largest automobile market in the world. US based Ford Motor Company has handed its major operations in India to Mahindra & Mahindra Limited.

Ford India enters into Joint Venture with Mahindra group

As the Automobile markets are sinking into diminishing rate of growth, Ford Motor Co. has announced a key decision about its operations in India.

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Ford’s operations barring engine plant at Sanand in Gujarat and Global Business Services Unit in Chennai will be handed over to Mahindra And Mahindra (M&M) Group.

As per the latest developments all the Ford Motor Co. sales and services and other related operations will be organized and maintained by M & M group in India.

M & M will have a 51% stake in the Joint Venture with Ford which will hold the remaining 49% stake. Accordingly, Rs.657 crore will be invested by the M&M and Rs.632 Crore will be invested by the Ford Motors India. A total of Rs.1,289 crore Joint Venture will have a new dimension in Indian Automobile industry.

The latest developments were announced Jointly by both the company heads of India at a conference in Mumbai. However, the deal is expected to get completed by mid of the year 2020.

Once the Joint Venture becomes operational, it will have equal number of nominees from both the companies and operated Jointly. However, the Chairman for the Joint Venture company would be nominated by the M&M.

Mahindra & Mahindra Managing Director Pawan Goenka has stated that the the department of sales and marketing of both the firms will remain independent. The operations also will be independent though its a Joint Venture.

Mahindra Group chairman, Anand Mahindra stated –

No matter how large a company is, everyone is looking at partnerships in the world for better future,

Ford president and CEO stated –

India will play a big role in providing computing, software and other key elements involved in technologies such as connectivity and urban mobility to Ford’s global product development

Executive chairman of Ford, Bill Ford said –

We live in an increasingly complex world. The auto industry is disrupted by several incoming trends, new business models and customer buying patterns are ever changing. I don’t think any one company can address all those areas on its own. We aren’t rushing into partnerships. They have to be the right ones for us,

Ford India has struggled a tough competition in India with key players like Japan’s Maruti Suzuki India Limited and South Korean Hyundai Motor India Limited. In 2017, General Motors (GM) which was Ford’s native rival has left India after it failed to compete.

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