Abandonment of plans

Ford Motor has abandoned its plans to expand its presence on the Indian market. The American concern will not create a joint venture (JV) with local giant Mahindra Mahindra, which the parties had previously agreed on in autumn 2019.

It should be noted that in October 2019, Ford and Mahindra decided to create a joint venture in India it was to develop and produce new cars that would be sold in parallel under the two brands. They hoped to promote these cars both in India and in neighbouring developing countries.

Ford wanted to bring its existing plants in Chennai and Sanand to the joint venture, while Mahindra would invest money. The JV planned to launch seven new models and produce up to 1.2 million vehicles. The joint venture was to have a 49/51 split, with the Indians taking the largest share.

The decision to abandon the joint venture is explained by "fundamental changes in the global economic and business environment, triggered by the coronavirus pandemic". The trends of the last year have forced a rethinking of their investment priorities, both companies said in their statements.

Ford also adds in the press release that it is actively reviewing its business globally to achieve a rate of return of at least 8%. The US group will continue to operate in India in the current format, that is, independently.

At the same time, there will be one Ford model that was created for the JV a mid-size crossover under the domestic index C757 on a new platform, jointly developed with Mahindra. The Ford C757 will begin production in about a year.