Ford Mahindra JV Comes To End, Pandemic Quoted As Reason

In the year 2019, Ford and Mahindra announced their JV for the Indian market. However, on the last day of the last year – December 31, 2020, the American carmaker has announced its decision to pull the plug on the JV. The blue oval has cited the 15-month long pandemic as the reason for its decision. The brand claims it could understand the different capital allocation priorities of the duo. Thus, the American carmaker will now operate as a separate identity in the Indian market. This decision will impact the upcoming vehicles, which were planned to be developed under this JV. Mahindra had an upper hand in this JV with 51 per cent stakes, while the Ford had 49 per cent stakes.

Commenting on this decision, Ford quoted, “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. 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.”

Mahindra, however, has addressed the move by quoting, “This decision will not have any impact on the company’s product plan. It is well-positioned in its core true SUV DNA and product platforms with a strong focus on financial performance. In addition, the company is accelerating its efforts to establish leadership in Electric SUVs."

If reports are to go by, the brands were developing a C-segment SUV under the JV for the Indian market. The future of which is now in an unknown spot. Also, the new-gen Ford EcoSport was expected to come with the Mahindra-sourced 1.2L mStallion turbo-petrol power plant, which is capable of developing a peak power output of 130 PS and max torque of 230 Nm. With the dwindling sales of Ford’s products, it is tough to guess what Ford is planning next.