Mahindra-Ford JV has been called off on the last day of 2020, on 31st Dec 2020
The Mahindra-Ford JV which was signed back on 1st Oct 2019 in Mumbai, has been called off on 31st Dec 2020. The JV which gave Mahindra 51% stake and 49% stake to Ford, would have given control of Ford operations in India to Mahindra.
Under this JV, there were planned investments of about Rs 2,000 crores, joint development of new cars, SUVs; sharing of technologies, etc. The JV would have given Mahindra rights to not only manufacture Ford cars in India, but also to sell them in India, as well as export.
As a trial, some Mahindra dealers had also started selling Ford cars, in places where Ford dealerships were not present. As per the 2019 signed JV, “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.”
At the sign of signing the JV back in 2019, there was a deadline which was set for 31st Dec 2020. If any of the two did not want to go ahead, 31st Dec 2020 was the last day to do so. It was this day that the deal would have been finalized, or would have been broken off.
The reason behind calling off the JV – “fundamental changes in global economic and business conditions — caused, in part, by the global pandemic over the past 15 months,” says a Ford statement. Ford will continue their independent operations in India while Mahindra has stated that the break-up of this JV will have no impact their product plans. The announcement comes on the back of Pininfarina Engineering shutting down in Italy, SsangYong filing for bankruptcy in South Korea.
The JV break-up comes a few months after Jim Farley took over as the CEO of Ford. When the JV was signed in Oct 2019, it was Jim Hackett who was the CEO, while Farley was the President of Ford New Businesses. Farley replaced Hackett as the Ford CEO in October 2020. The deal was signed as a part of a global restructuring plan by Ford, to reduce operation costs and increase production scale.
Ford-Mahindra JV Car
Ford-Mahindra JV would have resulted in multiple new cars, including the next gen EcoSport, an all new Ford SUV in the C-Segment codenamed CX757. The new gen EcoSport would have been powered by Mahindra petrol 1.2 liter engine while the CX757 would have shared platform, parts, engine options with the upcoming new gen 2021 Mahindra XUV500.
In fact, the CX757 was expected to be launched later next year, after a leaked image went viral on social media. When asked what happens of the cars that were planned for launch under this JV, Ford said that, “At this point, there’s nothing to talk about other than the joint venture isn’t going to happen.”