Ford and Mahindra to complement three-year strategic alliance

By:   Fedora Atjeh Fedora Atjeh   |   September 27, 2017
Ford and Mahindra

Ford has announced a new strategic alliance with one of India's largest automakers Mahindra to facilitate expansion in emerging markets. The agreement between both companies will allow each of them to take advantage of their respective strengths: the experience of the centennial firm of the oval and the export model of the Indian company, which incidentally, had to leave the British market recently due to the shortage of sales.

The enormous growth potential of the Indian market will allow the two companies to collaborate in areas such as mobility, electrification and development. The previous collaboration between the two companies came to an end in 2005 without much success.

The Indian giant, owner of the brands Mahindra, Pininfarina and Ssangyong, has not only been engaged in the production of vehicles such as pick-ups, jeeps or SUVs. It has also developed trucks, agricultural and construction tractors, motorcycles, aircraft parts, military equipment and electric vehicles, and Ford wants to take advantage of Mahindra's position to penetrate an emerging market.

Areas of potential collaboration include mobility programs, connected vehicle projects, electrification and product development. This collaboration has an expiration date, since it has been signed for a period of three years.

"The enormous potential for growth in this market and the growing importance of mobility and economic electric vehicles in India are in line with our strategic priorities," said Ford. But it is by no means the first incursion of the oval brand in India.

Ford was in 1955 one of the first manufacturers in the world to enter the Indian market and is now one of the largest exporters of cars in the country (the best example is the current B-SUV EcoSport). It has factories in Chennai, Tamil Nadu and Sanand, Gujarat, where more than 14,000 people work. It is the second country in employees of Ford at world-wide level, although it has faced in the last months to a significant cut of its global staff.

Mahindra, meanwhile, has been a leader in India's commercial vehicle segment for the past seven decades, and is the country's first manufacturer of SUVs. It owns the majority stake in the Korean Ssangyong Motor Company and the Italian Pininfarina and has made inroads into the shared mobility space with investments in shared platforms in the United States, as well as developing products such as GenZe, the world's first plug-in electric scooter.

General Motors announced its withdrawal from the Indian market in May, while the alliance between Volkswagen and Tata Motors did not come to fruition, nor did the union between Ford and Mahindra in the mid-1990s. However, the recession of Ford and the competition faced by the Indian giant with Suzuki and Maruti in the country make this alliance an imperative for both firms.

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