Auto major, Ford Motor Co. said that Ford and Mahindra & Mahindra have ended their discussions for a joint venture.
In an official statement issued by the company on Thursday, by Ford and Mahindra & Mahindra (M&M), the two automakers have mutually and amicably determined that they will not complete a previously announced automotive joint venture between their respective companies.
Ford Motors said the company is reversing its plans to cede most of its Indian operations to Mahindra & Mahindra Ltd., deciding to pull out of a proposed joint venture and continue its standalone business in the country.
According to the reports, the future of Ford’s business in India is unclear as it has struggled for more than two decades to grow in the world’s fourth-largest auto market. “The company is actively evaluating its businesses around the world, including in India,” Ford said in a statement.
Meanwhile, M&M in its statement to the Bombay Stock Exchange (BSE) informed that, “The Company and FMC have mutually and amicably determined that they will not further pursue their Joint Venture plan.”
Shares of M&M on Friday were up 2.14 percent at 736.00 on the BSE at 11.00 am.
M&M further said, the Company along with Ford Motor Company Inc., (FMC) had executed in October 2019 a Business Transfer Agreement and Share Subscription Agreement ("the Agreements") to enable the formation of a joint venture by way of the Company and/ or its subsidiaries acquiring 51per cent of the equity share capital of Ardour Automotive Private Limited, a wholly owned subsidiary of FMC ("NewCo") in India. The balance 49 per cent equity shareholding in NewCo was to be held by FMC and/or any of its affiliates.
Ford didn’t specify what would become of those projects. Mahindra said in its own statement the venture’s termination wouldn’t affect its product plans. “Mahindra is accelerating its efforts to establish leadership in electric SUVs,” it said.
The decision came as a Dec. 31 deadline loomed for formalizing the planned partnership. Jim Farley, who became the U.S. automaker’s chief executive officer in October, said in 2019 that the JV with Mahindra could allow Ford to double its revenue from India.
Going ahead, Ford said they would cooperate to develop an electric car for emerging markets and work together to introduce three new models to be sold under the Ford brand in India, starting with a midsize SUV.