Ford Motor Co and Mahindra and Mahindra said in separate statements that the two companies have called off their joint venture. As part of the JV, Ford was to cede most of its Indian operations to M&M. The companies attributed the decision to changes in global economic and business conditions caused, in part, by the global Coronavirus (Covid-19) pandemic since the agreement was first announced.
Mahindra and Ford “have mutually, amicably determined they will not complete a previously announced automotive joint venture between their companies,” M&M said in a late night notification to the stock exchanges. The action followed passing of the December 31, “longstop”, or expiration, date of a definitive agreement the companies had entered into in October 2019, it said.
The latest move will not have any impact on its product plan, Mahindra and Mahindra said, adding 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 company added.
After two years of intense deliberations, which started in September 2017, M&M and Michigan-based Ford Motor announced a joint venture in which Mahindra controlled the majority 51 per cent stake, whereas Ford was to transfer its entire India business, excluding the engine vertical, to the new entity.
Both the companies expected to achieve cost synergies, pare product development time and cost and leverage each other’s distribution reach to boost exports.
The deal was one of the several partnerships formed under Hackett as the Blue Oval sought to reduce costs and increase scale. It comes just months into the leadership of new CEO Jim Farley, who replaced Hackett in October.