New Delhi: US-based auto major Ford Motor Co and India's Mahindra & Mahindra (M&M) on Friday said they have decided to scrap a previously announced automotive joint venture, citing changes in global economic and business conditions partly due to the coronavirus pandemic.
"Ford Motor Company and Mahindra & Mahindra have mutually and amicably determined they will not complete a previously announced automotive joint venture between their respective companies. The decision follows the passing of the Dec. 31 “longstop,” or expiration, date of a definitive agreement the organizations entered into in October 2019," a Ford statement said.
According to the companies, the outcome was driven by fundamental changes in global economic and business conditions – caused, in part, by the global pandemic – over the past 15 months. Those changes influenced separate decisions by Ford and Mahindra to reassess their respective capital allocation priorities.
Ford said its independent operations in India will continue as is. The company is actively evaluating its businesses around the world, including in India, making choices and allocating capital in ways that advance Ford’s plan to achieve an 8% company adjusted EBIT margin and generate consistently strong adjusted free cash flow.
M&M said the decision will not have any impact on its product plan but will enable it to focus on the core business of SUVs and also develop electric vehicles.
Ford’s plan calls for developing and delivering high-quality, high-value, connected vehicles – increasingly electric vehicles – and services that are affordable to an even broader range of customers and profitable for Ford.
The company is moving quickly to turn around its automotive business – competing like a challenger while simplifying and modernizing all aspects of the company; and Grow by capitalizing on existing strengths, disrupting the conventional automotive business, and partnering with others to gain expertise and efficiency.
