Ford, Mahindra to scrap previously announced joint venture


PTI, Jan 1, 2021, 9:37 AM IST

New Delhi: US auto major Ford Motor Company on Friday said it and India’s Mahindra & Mahindra have decided to scrap their previously announced automotive joint venture and it will continue its independent operations in India as it is.

The two companies determined that they will not complete a previously announced automotive joint venture between their respective companies.

The decision follows the passing of the December 31, 2020 ‘longstop’ or expiration date of a definitive agreement the organisations entered into in October 2019, Ford Motor Company said in a statement.

The outcome was driven by fundamental changes in global economic and business conditions – caused, in part, by the pandemic – over the past 15 months. Those changes influenced separate decisions by Ford and Mahindra to reassess their respective capital allocation priorities, it added.

Ford further said its ”independent operations in India will continue as is.”

”The company is actively evaluating its businesses around the world, including in India, making choices and allocating capital in ways that advance Ford’s plan to achieve an 8 per cent company adjusted EBIT margin and generate consistently strong adjusted free cash flow,” Ford Motor said.

Ford’s plan calls for developing and delivering high-quality, high-value, connected vehicles – increasingly electric vehicles – and services that are affordable to an even broader range of customers and profitable for Ford, it added.

The company said it is moving quickly to turn around its automotive business – competing like a challenger while simplifying and modernising all aspects of the company.

Also, it plans to ”grow by capitalising on existing strengths, disrupting the conventional automotive business, and partnering with others to gain expertise and efficiency.”

In October 2019, the two companies had announced an agreement under which Mahindra & Mahindra would acquire a majority stake in a wholly-owned arm of Ford Motor Company (FMC) that will take over the automotive business of the US auto major in India.

The new entity was to develop the market and distribute Ford brand vehicles in India while also selling both – Mahindra and Ford – cars in the high-growth emerging markets.

As part of the agreement, M&M was to acquire 51 per cent stake in a wholly-owned arm of the US auto major – Ardour Automotive Private Limited, presently a wholly-owned subsidiary of Ford Motor Company Inc, USA for around Rs 657 crore. The balance 49 per cent equity shareholding in Ardour was to be held by FMC and/or any of its affiliates.

The new venture was also envisaged to acquire the automotive business of Ford India Private Limited (FIPL), a wholly-owned subsidiary of FMC, that has been engaged in the automotive business in India since 1995.

The automotive business to be acquired includes vehicle manufacturing plants of Ford India at Chennai and Sanand but excluded the separate powertrain facility in Sanand, which is essentially used for FMC’s global markets, and the powertrain division of FIPL also did not form part of the deal.

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

Delhi govt directs sports facilities to stay open till 10 pm amid claims of stadium being closed early for IAS officer to walk his dog

Hijab controversy resurfaces in M’luru

Hijab not allowed for KCET exams

Front suspension of Ola Electric scooter broke while riding, claims user

SC sets aside HC order staying SFIO probe into 9 companies related to Sahara group

On a roll, RCB fancy their chances against Royals in Qualifier 2

Woman who rose above storm to find her sunshine


Related Articles More

Twitter to pay $150mn penalty for failing to protect user data

IKEA to open flagship store in Bengaluru in June 2022

Vipul Organics hires a veteran of Chemicals Industry as Head of Sales and Marketing

Sri Lanka picks Lazard Clifford Chance as advisers for debt restructuring

Sensex climbs over 132 points in early session; surrenders gains in volatile trade

MUST WATCH

Manipal Road Mishap Student end his Life

NEWS BULLETIN 25-05-2022

Wheel Chair Romeo actor exclusive interview | RELEASING ON MAY 27TH

Snake Rescue Operation at Sirsi

No Ticket For BY Vijayendra In Karnataka MLC Polls; BS Yediyurappa Reacts


Latest Additions

Delhi govt directs sports facilities to stay open till 10 pm amid claims of stadium being closed early for IAS officer to walk his dog

Germany to recognize Covaxin for travel from June 1

Japanese man spends Rs 12 lakh to become a dog

Hijab controversy resurfaces in M’luru

Hijab not allowed for KCET exams

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.