Ford close to joint venture deal with Mahindra in India

Ford logo in their auto plant

Ford Motor and Mahindra & Mahindra are possibly going to sign a deal next week to form a joint venture in India, two sources informed Reuters, in a move that will see the U.S. automaker end most of its independent operations in the nation.

The two companies have for months been thinking of a deal to create a new entity in which Ford will hold a 49% stake, where as Indian competitor Mahindra will own 51%, Reuters reported in April.

Under the deal Ford will shift most of its automotive assets and employees in India to the new company, however the automaker will retain an engine plant in Sanand located in the western state of Gujarat, according to the two sources.

A Ford spokeswoman said nothing directly on the deal, but said the company was in talks with Mahindra “to develop avenues of strategic cooperation that help us achieve commercial, manufacturing and business efficiencies”.

Mahindra has not made any comments.

By moving to a joint venture, Ford is modifying its decades-old India strategy focused on operating an independent operation. Under pressure from shareholders to generate profits, the U.S. automaker has been globally restructuring its businesses, aiming to save $11 billion over the next few years.

Ford-brand cars will continue to be constructed and sold in India and exported by the new company, one of the sources stated.

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