Ford Announces $275 Million Joint Venture With India-Based Mahindra To Develop Models In Emerging Markets

What does this mean for both companies?

Ford Announces $275 Million Joint Venture With Mahindra To Produce New SUVs For India, Global Markets
Ford entered into a $275 million agreement with Mumbai-based Mahindra to develop products for emerging markets.

Ford’s restructuring plan continues.

On Tuesday, Ford agreed to sell 51 percent of its Indian business operations to Mahindra & Mahindra, one of India’s largest auto manufacturers. The $275 joint venture deal will see Mahindra develop and market Ford-branded vehicles in “high-growth emerging markets around the world”. The deal comes as part of Ford CEO and President Jim Hackett’s $11 billion restructuring plan.

The joint venture is set to fully go into effect in 2020.

“Strong alliances like this play a crucial role in assuring we continue to achieve our vision while at the same time staying competitive and delivering value to our global stakeholders, Hackett said in a company statement. As part of the company’s restructuring plan, Ford is pulling back from markets where it hasn’t been making sound profits, and instead focusing on markets where the company performs well, like North America.

Speaking of North America, Ford said in its statement the joint venture would produce three new Ford SUVs. The next vehicle will be a midsize SUV that uses a Mahindra platform and powertrain. The companies will also work on jointly developing electric vehicles for growing markets.

Ford Announces $275 Million Joint Venture With Mahindra To Produce New SUVs For India, Global Markets
Mahindra currently sells the Roxor in the U.S.

What does this mean for the EcoSport and Roxor?

Currently, Ford produces the subcompact EcoSport for the North American market at its Chennai, India plant. As Ford shifts its strategy, what will come of the relatively popular small crossover remains to be seen. For its part, Mahindra also sells the Roxor as an OHV here in the United States, and the company has already been expanding its presence here.

“Ford and Mahindra have a long history of working together, and we are proud to partner with them to grow the Ford brand in India,” said executive chairman Bill Ford. “We remain deeply committed to our employees, dealers and suppliers, and this new era of collaboration will allow us to deliver more vehicles to consumers in this important market.”

The Ford EcoSport is currently produced in India for the North American market. [Photo: Ford]

Impacts on U.S. models?

For now, this deal focuses mainly on global markets. Ford has a comprehensive product portfolio here in the U.S. already. The company’s home market in North America is a profitable one, and one where Ford will likely keep most of its current models on their current track. The exception could be the EcoSport, where the companies could jointly develop a new model.

As to whether the electric models will make their way to this hemisphere, we’ll have to wait and see. “At its core, the partnership will be driven by the shared values of both companies, which are focused on caring for our customers, associates and our communities,” said Mahindra Group Chairman Anand Mahindra.