Mahindra-Ford Joint Venture: 10 Things You Need To Know

Mahindra and Ford Motor Company has announced creating a new joint venture to develop and sell Ford branded cars in India and other emerging markets. Here are 10 things that you need to know about the new joint venture.

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Here are 10 things that you need to know about the new joint venture between Mahindra and Ford

Home-grown utility vehicle manufactures Mahindra and Mahindra and American carmaker Ford Motor Company has announced creating a new joint venture. The new joint venture will develop, market and distribute Ford branded vehicles in the Indian market, to drive profitable growth in similar emerging markets. While there are a lot of things that are yet to be revealed - like the timeline for when the JV will be called, and when the first product will be launched, and we'll be sharing those details in due course, but here are 10 things that you need to know about the new joint venture between Mahindra and Ford.

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  1. In the new joint venture formed by Mahindra and Ford, Mahindra will own the controlling stakes of 51 per cent, while Ford will own 49 per cent stakes in the new company. The companies will have 50-50 representation on the board, with a Mahindra elected Chairman.
  2. The new joint venture company has been valued at ₹ 1,925 crore, out of which, there will be a debt transfer of ₹ 636 crore, with a likely equity value, will be ₹ 1,289 crore. Mahindra's contribution to this JV will be ₹ 657 crore, while Ford will be investing ₹ 632 crore.
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    In the Mahindra Ford JV, the Indian automaker will have 51 per cent controlling stakes, Ford will have 49 per cent stakes

  3. The new joint venture company is expected to become operational by mid-2020, subject to regulatory approval. While the new JV company will be operationally managed by Mahindra, it will be governed by members of both Mahindra and Ford.
  4. The joint venture will be responsible for growing Ford's presence in India and exporting its products the company's entities globally. The brand will continue to remain in India.
  5. The joint venture will see the brands co-develop new products and this includes three new UVs under the Ford brand starting with a new mid-size SUV that will have a common platform and powertrain shared by the companies.
  6. While the final decision is will be made by the JV company after evaluation, the new models are likely to include a C-segment SUV based on Mahindra's platform, a B-segment SUV based on Ford's platform, and a new MPV as well. The automakers are also working on the new generation Aspire EV that is currently under development and will use a powertrain sourced from the Indian automaker.
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    The JV will  see the brands co-develop 3 new UVs for Ford, including a C-segment SUV, a B-segment SUV and a MPV

  7. As for production, Ford Motor Company will transfer its India operation to the joint venture, including its personnel and assembly plants in Chennai and Sanand. However, ford will retain the Ford engine plant operations in Sanand as well as the Global Business Services unit, Ford Credit, and Ford Smart Mobility.
  8. The upcoming new models will be co-developed by Mahindra and the new JV and will be manufactured either in the Mahindra & Mahindra's plant or Ford's existing plants, but the company has confirmed that there will be no joint badging, and both the Ford and Mahindra badged models will be sold separately.
  9. The JV will also impact Ford's newly established International Markets Group (IMG) business unit. IMG connects 100 high-potential emerged and emerging markets including India, Australia, ASEAN, Middle East, Africa and Russia. The new JV will add to IMG's portfolio of products specifically tailored for emerging markets, in addition to the Ford Ranger and the US import businesses.
  10. The joint venture will be responsible for growing Ford's presence in India and exporting its products the company's entities globally. The brand will continue to remain in India.

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