Ford Motor, Mahindra call off JV over global economic, business conditions



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.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor





Source link