After agreeing to form a strategic alliance last year, Ford and India’s Mahindra & Mahindra now plan to jointly develop at least two new sport-utility vehicles, as well as an electric vehicle.
The two manufacturers say they will initially target the fast-growing Indian market where Ford has been trying to expand its presence. But they eventually may look at opportunities in “other markets,” according to a source in the U.S.
“Today’s announcement is the next step in the collaboration between Mahindra and Ford,” said Pawan Goenka, Managing Director, Mahindra and Mahindra Ltd. “Both teams are working together on joint development areas in keeping with industry requirements and leveraging mutual strengths. We are excited about the synergies unveiled through this collaboration and the potential opportunities it will bring.”
(Ford reveals tidal wave of new products coming by 2020. Click Here for the full story.)
Ford currently ranks eighth among Indian automotive brands, total sales of about 88,000 vehicles last year ranking well behind Maruti Suzuki, the market leader which sold 1.60 million vehicles last year.
Mahindra, the third largest automaker in India with 2017 sales of 242,000, has been trying to grow its presence in the home market while also expanding abroad. On March 2, it officially opened a new plant in the Detroit suburbs, the first all-new assembly line in the region in decades. It will produce the Roxor a Jeep Wrangler-style utility vehicle.
Pooling resources, the two automakers plan to target both midsize and compact utility vehicle segments, two areas expected to see sizable growth in the Indian market in the coming years.
“Listening to our customers and incorporating their future needs is the core premise of this collaboration,” Said Jim Farley, Ford’s President of Global Markets. “With utility vehicles and electrification as key focus areas, we are glad to see the progress our two companies have made.”
The two companies aren’t saying much more about the products they plans to develop and it isn’t clear if Ford and Mahindra will try to come up with distinctly different versions of each model or go with a badge-engineered approach where the products are essentially identical but for their name badges. Ford frequently took that approach as part of its now abandoned partnership with Japan’s Mazda.
It’s also unclear if the parties are exploring the possibility of growing their alliance into something more expansive, along the lines of the long-running Ford-Mazda partnership.
The move to develop an electric vehicle is no surprise, however. Trying to cope with some of the world’s worst air pollution problems, India plans to take a bold step over the next decade by phasing out internal combustion engines entirely. So, longer-term, all vehicles developed as part of a Ford-Mahindra partnership would have to be electrified for the domestic Indian market. And such a vehicle could find export opportunities around the world as more and more countries adopt stricter emissions and mileage mandates.
(FCA begins shipping Jeep Compass from India to Asian and other markets. Click Here for the story.)
In a statement outlining the latest developments, Ford and Mahindra noted that, “Teams from both companies will continue to collaborate and work together, for a period of up to three years, to develop further avenues of strategic cooperation such as:
- Extend support for Mahindra in global emerging markets, including Ford’s manufacturing and distribution network;
- Collaborate to address future mobility needs.
Ford was one of the first foreign manufacturers to enter the Indian market, but back in 1995 automotive demand was small and there were still strict controls over foreign investments.
As for Mahindra, it has been producing vehicles – mostly light trucks – for seven decades. It has struggled to get a foothold outside of India, however, and an attempt to set up an American dealership network collapsed a decade ago. It has since begun building electric bikes and scooters in Michigan and expects to start selling the Roxor this year. It is also exploring the possibility of adding a pickup at the new American plant in 2020.
(Click Here for background on Mahindra’s new Michigan plant.)
Ford, meanwhile, marked a milestone of its own with the recent launch of the new EcoSport model. The small SUV is the first vehicle shipped to the U.S. market from India.