After two decades, Mahindra & Mahindra, Ford join hands again to tap opportunities

The two companies inked a pact to explore a strategic alliance covering areas like product development, electric vehicles and distribution in India and abroad.
Mahindra and Mahindra
Reported by: PTI New Delhi September 19, 2017 20:06 IST

After two decades, Mahindra & Mahindra, Ford join hands again to tap opportunities

Mahindra and Mahindra (M&M) and Ford Motor Company on Monday announced plans to join hands again, after nearly two decades of parting ways, as they prepare to meet challenges arising out of new technologies and tap opportunities in a fast-changing environment. 

The two companies inked a pact to explore a strategic alliance covering areas like product development, electric vehicles and distribution in India and abroad. 

Under the agreement, teams from both companies will collaborate and work together for up to 3 years to leverage benefits of Ford’s global reach and expertise and Mahindra’s scale in India, the two companies said in a statement. 

“Any further strategic cooperation between the two companies will be decided at the end of that period,” they added. 

The companies said their alliance would look at areas of potential cooperation including, “mobility programmes, connected vehicle projects, electrification and product development”. 

Besides, it will explore sourcing and commercial efficiencies, distribution within India, improving Ford’s reach within India, global emerging markets, improving Mahindra’s reach outside of India, the statement added. 

Mahindra and Mahindra Managing Director Pawan Goenka said: “Today’s announcement builds on the foundation laid through our past partnership with Ford and will open opportunities for both of us.” 

The two companies had a 50:50 joint venture—Mahindra Ford India Ltd—in the mid-90s when Ford re-entered India. Ford later increased its stake in the JV and the Indian partner exited from it. 

Goenka said accelerated rise of new technologies, sustainability policies and new models of urban shared mobility have triggered changes in the automotive industry globally. 

“Given these changes, we see the need to anticipate new market trends, explore alternatives and look for ways to collaborate even as we compete and build powerful synergies that will allow rapid exploitation of the exciting new opportunities,” he said. 

Ford Executive Vice-President and President of Global Markets, Jim Farley said the company is committed to India and the alliance could help it deliver the best vehicles and services to customers while profitably growing in the world’s fifth-largest vehicle market. 

“Our two companies have a long history of cooperation and mutual respect. The memorandum of understanding we have signed today with Mahindra will allow us to work together to take advantage of the changes coming in the auto industry,” he added. 

The enormous growth potential in the utility market and the growing importance of mobility and affordable battery electric vehicles are all aligned with Ford’s strategic priorities, Farley said. 

Ford has been struggling to increase its volumes in India although it has been one of the biggest exporters from the country. 

Mahindra, on the other hand, has been aiming to become a substantial player in the global markets although it has a stronghold in India’s utility vehicles segment. 

The announcement comes at a time when Tata Motors and VW group firm Skoda failing to fructify a planned partnership to develop vehicles targeted at emerging markets. 

In the fast-changing environment, many automobile companies are increasingly looking for partnerships. 

Earlier this year, Japanese auto majors Toyota and Suzuki Motor Corp have also agreed to begin concrete examinations towards realisation of their business partnership in areas including environmental, safety and information technologies, and mutual supply of products and components.

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