Bhubaneswar: Ford and Mahindra have decided to call off the joint venture they were supposed to finalise by December 31, 2020. The main reason has been cited as fundamental changes in the global economy, arising out of the COVID-19 pandemic.
The pandemic forced both companies to reassess their capital allocation priorities.
Ford will continue its operations independently in India.
Ford would have transferred its Indian operations to the JV and co-produced three new vehicles under Ford’s brand name, had the deal materialsed.
“Mahindra & Mahindra, a part of the USD 19.4 billion Mahindra Group and Ford Motor Company have mutually, amicably determined they will not complete a previously announced automotive joint venture between their companies. The action followed passing of the December 31, ‘longstop’, or expiration, date of a definitive agreement the organizations entered into in October 2019. According to the companies, the outcome was driven by fundamental changes in global economic and business conditions – caused, in part, by the global pandemic – since the agreement was first announced. Those changes influenced separate decisions by Ford and Mahindra to reassess their respective capital allocation priorities. Mahindra said that this decision will not have any impact on its product plan. 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,” Mahindra said in a statement.