The move comes as GM announces its withdraw from the extremely competitive market.
India is a hotbed for auto manufacturers and Ford wants to be a part of it. The Dearborn-based automaker released a joint statement today with India-based Mahindra, outlining a joint partnership to explore a variety of sectors in the automotive realm that, among other things, could help Ford gain a foothold in India’s rapidly expanding auto market. The current collaboration is set to run for three years, at which point both companies will reevaluate the situation and make new plans accordingly.
"Ford is committed to India and this alliance can help us deliver the best vehicles and services to customers while profitably growing in the world’s fifth largest vehicle market," said Jim Farley, Ford executive vice president and president of Global Markets.
India already supports a $30 billion auto market according to Automotive News, and that market is expanding rapidly. By 2020, India is projected to rank third in the world for sales behind China and the U.S., with small cars leading the way. As it stands now, Hyundai and Suzuki hold a significant portion of the market despite efforts by major brands such as Volkswagen and General Motors to gain share. In fact, while Ford seeks to gain new ground in India, GM has decided to withdraw from region.
This new partnership is neither Ford’s first entry into Indian markets, nor its first alliance with Mahindra. The two companies worked together starting in 1995, manufacturing a variety of models from a factory in Chennai. Facing stiff competition in the region even then, Ford pulled out in 2005 but the stakes – and potential for profit – have certainly risen since then.
“Our two companies have a long history of cooperation and mutual respect,” said Farley. “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. The enormous growth potential in the utility market and the growing importance of mobility and affordable battery electric vehicles are all aligned with our strategic priorities.”
Source: Ford, Automotive News
MAHINDRA AND FORD TO EXPLORE STRATEGIC COOPERATION TO DRIVE PROFITABLE GROWTH IN INDIA AND OTHER EMERGING MARKETS
- Collaboration strengthens Ford’s commitment to India, while facilitating Mahindra’s expansion into other emerging global markets
- Mobility, electrification and product development are key areas of potential cooperation
CHENNAI, INDIA, Sept. 18, 2017 – Mahindra Group and Ford Motor Company today agreed to explore a strategic alliance, designed to leverage the benefits of Ford’s global reach and expertise and Mahindra’s scale in India and successful operating model.
The agreement between the two companies will allow each to leverage their mutual strengths during a period of unprecedented transformation in the global automotive industry. The areas of potential cooperation include:
- Mobility programs
- Connected vehicle projects
- Product development
- Sourcing and commercial efficiencies
- Distribution within India; improving Ford’s reach within India
- Global emerging markets; improving Mahindra’s reach outside of India
Teams from both companies will collaborate and work together for a period of up to three years. Any further strategic cooperation between the two companies will be decided at the end of that period.
“Ford is committed to India and this alliance can help us deliver the best vehicles and services to customers while profitably growing in the world’s fifth largest vehicle market,” said Jim Farley, Ford executive vice president and president of Global Markets.
“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. The enormous growth potential in the utility market and the growing importance of mobility and affordable battery electric vehicles are all aligned with our strategic priorities.”
Dr. Pawan Goenka, managing director, Mahindra and Mahindra Ltd elaborated: “The changes facing the automotive industry globally are triggered by the accelerated rise of new technologies, sustainability policies and new models of urban shared mobility. 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. Today’s announcement builds on the foundation laid through our past partnership with Ford and will open opportunities for both of us.”
Mahindra has been leading the utility vehicles segment in India for the past seven decades. The spirit of ingenuity has driven Mahindra to be amongst the few global companies pioneering the development of clean and affordable technology, and is the only player with a portfolio of electric vehicles commercially available in India. Expanding its global presence, Mahindra owns majority stake in Ssangyong Motor Company in Korea, has forayed into the shared mobility space with investments in ride sharing platforms in the USA, and is developing products like the GenZe - the world’s first electric connected scooter.
Ford was among the first global automakers to enter India in 1995. Now one of the largest exporters of cars from the country, Ford manufactures and exports vehicles and engines from its manufacturing facilities in Chennai, Tamil Nadu and Sanand, Gujarat. India is also the second-largest Ford employee base globally, with more than 14,000 people working across the Ford India or Global Business Services operations in New Delhi, Chennai, and Coimbatore.