[84.monsoon]

Originally Posted by GTO

And Mahindra's statement rolls in:

Emphasis mine. The disagreement is on money!

What was Mahindra supposed to pay Ford or invest in this JV? My best guess = due to the pandemic, Mahindra did a u-turn on their offer and changed it to a lower amount.

OR

Ford got a better offer from somewhere else.

It is indeed about money, but I don’t believe it is about who pays who and how much. I think this about what each company wants to do with their portfolio of investments globally. Both companies are spread thin across the world and trying to rationalise and focus on fewer things. Ford has been getting out of various unprofitable markets and segments and so has Mahindra, with their exit from Ssangyong as an example.

Ford definitely needs this JV if they need to compete in India. There is simply no other way for them to be successful or even operate meaningfully in India. Mahindra does not need this collaboration much any more in the conventional auto business - they have become self sufficient in power train technologies with the launch of the latest M-stallion engines and the new M-Hawk Diesel - if anything, they have better engine tech than even Ford does right now. However, where they probably saw benefits was in Electric vehicles. Ford is investing big globally there and it could benefit Mahindra's learning curve to have a global partner. However, that comes with the cost of dilution of focus on the immediate business, since the JV would probably place a big execution burden on M&M in developing and supporting joint platforms.

Sadly, I am almost certain this is the harbinger of Ford’s exit from the Indian auto market - there just isn’t any profit here and the investments required to become a meaningful player without a partner like Mahindra are huge. It would serve them much better to put that money into markets where they have a decent presence and a profitable business, such as in Latin America, and aim for market leadership there, than be a marginal player in the Indian market with no scale or profits. The company which gave us fun and VFM cars to drive, like the Icon, Fiesta and Ecosport, will be definitely missed.

[Rahul Rao]

Ford has good cars, the issue is lesser no of models, as the demand for full sized sedan's is falling, and there are already too many competing models for the market, they can concentrate on the three vehicles they now have, and work on introducing other variants like electric and diesel automatics in Ecosport and Figo.

Only new vehicle they need to introduce sits between the Ecosport and the Endeavour.
Something larger than Creta / Seltos but smaller than Harrier is needed with multiple engine options, and at least one option should be the current 1.5 Lit diesel to stay in the middle tax bracket, and is should also a larger engine for the enthusiasts.

Rahul

[cool_dube]

Well, the optimist in me still thinks that this is a positive development! Current and future Ford owners might be better off with regards to after-sales service levels. This also gives Ford an opportunity to go back to the drawing board and come up with new strategies, instead of being bullied around by Mahindra.

If Ford wanted to exit India, they would have done that quite some time back, instead of hanging around. While their portfolio is not very extensive, they are not doing that bad. Plus, they have a staunch fan following, given the lovely machines they build. Moreover, safety being an increasingly important factor for Indian car buyers should put Ford in better stead going forward.

Also, the JV being called off does not completely negate the possibility of collaboration on engines et al. Quoting from this article on Auto India.

It is hence likely that Ford will enter into a contract manufacturing arrangement with Mahindra to build the C-SUV in its Chakan plant. Ford is also likely to source engines from Mahindra going forward. The upgraded Ecosport due in mid-2021 will be powered by a Mahindra’s 1.2 TGDI (G12) motor. The Ford C-SUV too will be use the same 2-litre petrol and 2.2 diesel engines that will power the next XUV500.

[DieselWanderer]

My wild guess would be is that Ford could've got a tempting better offer from any of the Chinese brands trying to make its entry into India. May be GWM or Haval or their Chinese partner Changan Automobile.

[ABHI_1512]

Little against the view here but something tells me that Ford is going to consolidate its presence in India and come up with new products as well pretty soon. Ever since the talk of this, now defunct JV talk started, Ford Dealers were pretty upbeat.

According to the dealers, the next twelve month production plan is in place already and the cars allotted for the next three months. I don’t see the immediate panic part of the company winding up just yet. On the contrary, the dealers are looking forward to the next new launches. So I would not throw in the towel for Ford just yet.

The JV didn’t work out and I guess that’s a blessing in disguise for Ford more than it is for Mahindra. The dilution of the Ford name would have been such a bummer !!

I fail to understand that Ford with its so much capable vehicles and two amongst the segment best still has to play catch up in the Indian context. Service affordability has vastly improved and Ford will do well to cash in on the goodwill it has now and be confident in its capability in bringing newer products for our market. I hope it does, I would hate to see Ford go when all it needs is some push and new products to seize the strings of the market to its liking.

[motorworks]

Very likely that Mahindra called this JV off. They had a higher investment allocation at stake if they had gone ahead. And in all aspects, the JV seemed like a good thing for Ford more than Mahindra, Ford would have benefitted from more models such as its version of the XUV500 and maybe even more such cars. So I think Mahindra has realised during the pandemic this year that they need to be far more stringent in their capital allocations. And thereby Mahindra in all probability may have asked for better terms from Ford, which in turn may have been turned down. I can see no other possible reason. Ford would have been extremely happy with this JV, they would have moved to a less risky position and also a safe way to exist in the market for the next couple of decades.

[Carpainter]

This is really unexpected but what surprised me most is how two big companies with all their financial experts and global presence decide to go into a JV only to call it off within a year even keeping covid in consideration. Did they think this JV will be off to a flying start and didn't they have any plan B if things wouldn't go as planned. If I'm not wrong, Indian market was already going through consolidation when the JV happened and after 2020 auto industry is actually looking for a big year in 2021 worldwide.

But it seems the corporates have a different opinion about India. In the last few months we are witnessing big changes here. Harley packed its bags and now coming up with Hero. Honda stopped Civic and CRV and now this. Looks like this is the new normal for India. Now I won't be surprised if some more companies decide to "actively evaluate its business around the world and leave India as global business strategy" which Ford is probably going to do next leaving thousands of owners in knee deep water. I hope it won't happen as personally I really like Ford products for their build and driving dynamics but fringe players suddenly leaving the game will only make Marutis and Hyundais stronger because people will think twice before putting their money in anything else and in the process we will only get more tin cans with 0-2 star safety rated wheels. Our herd mentality is making Indian auto market a duopoly market and that's not good news for us enthusiasts.

[rajshenoy]

On a lighter note, ford must have consulted an astrologer who informed them how jinxed is any sort of JV with Mahindra.

Coming back to reality, wondering what ford is upto next? I don't see them going anywhere even after couple of decades of advantage over the likes of Kia.

Was really hoping for this JV to churn out some solid SUV with Ford handling and Mahindra frugality.

[padmrajravi]

I think Mahindra called the JV off considering their current position. This may just be an extension of Ssangyong and Pininfarina divestment. Someone in the mahindra higher ups is keeping a close control of how capital is being spent and has decided against all non profit making collaborations. And rightly so. Mahindra's product pipeline is strong and the upcoming XUV500 and Scorpio along with Thar will carry it forward for the next decade. They don't need a JV to survive in the Indian market.

And now that the marriage is canceled is there a chance for a rebound ? There is another Indian manufacturer actively looking for an alliance and without a single true SUV to showcase. It may be easier to share Ford's cheaper SUV platforms than bring down Landrover's costlier platforms to lower levels. And Ford can get access to cheaper hatchback and sedan platforms which they have anyway stopped development.

[Deep Blue]

I hope Ford does stay put in this country. All their products were fun to drive, affordable, cheap to maintain and reasonably safe. Just that it didn't click with Indians. The costly to maintain tag from its early days to played on its image even though it is now, one of the cheapest to maintain. Endy owners will vouch for this. With two plants, production capacity shouldn't be an issue. They need to find financial resources and the will to introduce new models here quickly. I am sure in the coming days, Indians will slowly move away from the Maruti embrace.

[vigneshkumar31]

Now it makes sense why Ford was pushing for people to book before 31st to 'freeze' prices of ecosport.

Good or bad, sudden changes do herald uncertainty.

[anjan_c2007]

Rocky past ! Cracked rear view ! When Mahindra Escorted Ford in the 1990's, they went steady for a few years and parted ways. Not sure whether it was a live-in or marriage.

No wonder Ford's India homecoming back to M&M was called off at the pre-engagement stage, with no plans for a re-marriage.

[arakhanna]

The partnerships of Ford and M&M in terms of the new XUV500 predated the JV so logically that should continue.

The JV not materialising is related to the amount of money ie. ~700 Crs that M&M needed to put in the JV, I think. The IRR on this would be negligible.

M&M has finally articulated a financial strategy that should work in the favour of investors. Exiting Ssangyong is a step in that direction. I think Ford JV cancellation is also a facet of the same.

[fhdowntheline]

Originally Posted by padmrajravi

I think Mahindra called the JV off considering their current position. This may just be an extension of Ssangyong and Pininfarina divestment. Someone in the mahindra higher ups is keeping a close control of how capital is being spent and has decided against all non profit making collaborations. And rightly so. Mahindra's product pipeline is strong and the upcoming XUV500 and Scorpio along with Thar will carry it forward for the next decade. They don't need a JV to survive in Indian market.

I think amongst all large manufacturers, Mahindra is relatively on a weaker wicket. As Kia continues to expand territory and potentially have a lineup of established designs from hatchback to large vans, and Hyundai being still unstoppable in the compact SUV segment, Mahindra has a lot of work to do. I think they may have to milk the Thar platform for success in the near term. Meanwhile, Tata is ready with Altroz AT, almost ready with Gravitas, and the HBX (all new design) is also coming through.

The XUV300 in its original avatar (with proper AT and beyond 4m) would have been excellent. But Mahindra chopped it off too much to make it impractical. A 6 lac Wagon R has more boot space than the '300.

[volkman10]

Ford C-SUV for India on track for 2022 launch. To be contract manufactured by Mahindra.

Along with the C-SUV project, the decision for Mahindra to supply its 1.2-liter TGDi turbo-petrol engine to Ford for the EcoSport as announced earlier also stays in place. This engine will essentially be a replacement for the EcoSport 1.0 turbo-petrol variant that was discontinued last year just before BS6 norms came into effect

Mahindra and Ford will go ahead with its plan to jointly produce C-segment SUVs for the Indian market despite both companies calling off its proposed joint venture.

•Ford's C-SUV will share its underpinnings with the new XUV500 (W601)
•Will be contract manufactured by Mahindra at its Chakan plant
•Will come with the same petrol and diesel engine options as the new XUV500.

Ford and Mahindra had decided to jointly work on the new C-segment SUV under a separate agreement called "Project Black."

This new SUV from Ford, is expected to see a market launch by April this year. The Ford version is expected to hit the showrooms after a gap of around eight-to-nine months which means an early 2022 debut can be expected

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