By on September 25, 2019

In this case, the locale is India — birthplace of the EcoSport and a developing, massively populous market with the potential to make automakers a ton of cash. And yet Ford’s efforts to seize a slice of this pie hasn’t born the fruit the Blue Oval initially hoped. Meanwhile, Ford is in the midst of a major global streamlining effort.

What to do?

Partner up. In this case, with a major Indian automaker — Mahindra & Mahindra, builder of SUVs and ATVs, including the adorable, Jeep-like Roxor.

According to sources who spoke to Bloomberg, Ford plans to put more than half of its Indian assets into a joint venture with Mahindra. Under the deal, Mahindra would own 51 percent of the venture, with both companies having equal voting rights and representation on the board. An announcement could apparently come next week. The sources claim Ford assets not falling under the joint venture include an engine plant and the automaker’s business services division.

Speaking to the Detroit Free Press, a Ford spokesperson would only say the company is “engaged with Mahindra.” The word “engaged,” of course, could mean two things.

It seems Ford’s potential tie-up with Mahindra is going over well with analysts. Unlike Ford’s North American market, the company’s overseas operations have spent years struggling to extricate themselves from a quicksand of red ink, weighing down the automaker’s stock in the process. CEO Jim Hackett’s streamlining plan is as much about boosting investor confidence and reversing the company’s stock slide as it is about firming up the automaker’s financial footing in preparation for an economic downturn.

Autoline‘s John McElroy offered praise for the potential deal, telling Freep that the move would allow Ford to continue its attempts to penetrate the lucrative Indian market while offloading much of the financial burden. What vehicles the two entities might create, and how the duo will juggle production, remains to be seen.

Ford’s take of the Indian market sits at around 3 percent.

Reports of a looming joint venture are not shocking. Ford’s current efforts in India began back in 1995, when the automaker teamed up with, who else, Mahindra to build Escorts for the rapidly growing country. Two years ago, Ford and Mahindra announced their decision to explore a “strategic alliance,” with the main focus being mobility programs, connected vehicle projects, electrification, product development, sourcing and distribution, and global market opportunities for Mahindra.

At the time, the companies said the talks could last up to three years before both sides reached a mutually beneficial decision.

[Image: Ford]

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11 Comments on “Report: After Sinking Big Bucks Into a Big Market, Ford Finds Someone to Hold Half the Bag...”

  • avatar

    good luck, tho anything is better than a tata nano, indians do love their toyotas, though

    • 0 avatar

      More like Indians loving their Maruti Suzukis and then Hyundais.

      Toyota is a smaller player in India (but the reverse for Pakistan).

    • 0 avatar

      Indians love cheap, cheap cars. The Ecosport is the perfect car for them

      • 0 avatar

        No, the Ecosport hasn’t been successful in India either – because Ford like most people thought Indians liked “cheap” cars. They reality is different. India’s like car that meet the “value for money” proposition. The EcoSport is overpriced for what it offers and its competitors like Suzuki have a competitor that is cheaper, more modern and more fuel efficient than the Ford. In the end, Ford had to slash 100,000 rupees off the sticker price just to stay competitive and even then lost customers in droves.

    • 0 avatar

      How come that’s the only car people think exists in India ? Tata makes more than a dozen different models in India – including EVs. The Nano isn’t one of them any longer.

  • avatar

    At least they didn’t abandon the market. Yes you GM.

    • 0 avatar

      They should have – because they were never “in it to win it” in the first place. They’ve been there for “brand presence” but the truth is Ford’s “brand” has no weight in India at all. People have heard about it as a “also there” brand that nobody buys if they can help it .

  • avatar

    If somehow this resulted in a true Mahindra style small truck for USDM I say its a great thing, but somehow I doubt that is the endgame. I think the endgame is even sh!ttier Ecosports for USDM and a chance for Ford to ply its other products in a new market. Supposedly with the VAG tie up Ford is going to be an EV powerhouse so maybe’s its related.

    • 0 avatar

      Mahindra is going to use Ford’s supply chain to expand into Africa and Latin America. While absorbing its engineering and product design know-how to standardize its own quality and products. In India, Mahindra’s logistics network is massive compared to Ford’s and Mahindra’s brand has more recognition too.

  • avatar

    Two billion dollars down a rat hole.

    • 0 avatar

      Two billion dollars used to hand over X-box’s and free stero’s enticing people to buy a product nobody – not even the people who designed it would want to buy! Ford and GM are old fashioned companies that can’t compete in hyper-competitive markets in Asia. They have failed in China, in Europe and almost everywhere except North America because they don’t know their customers and they don’t care to know them either.

      If Koreans and Japanese automakers can be profitable and succeed in India – then the question is why can’t Detroit ?

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