Ford Motor Co called off its automotive joint venture with India’s Mahindra and Mahindra Ltd on Thursday. The agreement was initiated from 1st October 2019 in Mumbai with the purpose of developing, marketing and distributing Ford vehicles in India as well as overseas. Additionally, they were planning for a step to cut costs for developing and producing vehicles for emerging markets. They further mentioned working on launching three new utility vehicles, starting with a midsize SUV, and also jointly develop electric vehicles for emerging markets.
The JV came to an end due to the challenges caused by the Covid-19 pandemic. In separate statements, both parties mentioned that the decision was driven by changes in the global economy over the last 15 months, causing both to revaluate their capital allocation priorities.
“The global economy and business environment are not the same as October last year,” Ford spokesman TR Reid said.
Reid stated, the deadline to finalize a joint venture between the companies was December 31, and both made the decision to end the agreement rather than close a deal or extend the timetable to do so.
Meanwhile, Mahindra has stated that the failed JV will not have any impact on its product plan and that it is accelerating efforts to develop electric SUVs.