Source: AutoVerdict
October 1, 2019
by Nick Saporito

Ford Motor Company announced Tuesday it has finalized a deal to shift nearly all of its operations in India to a new joint venture. The join venture will be with Mahindra, who Ford has an existing relationship with and will take a majority stake in the joint venture company.*

The joint venture will be valued at $275 million, with Mahindra owning a 51-percent stake. The joint venture "will develop, market and distribute Ford brand vehicles in India and Ford brand and Mahindra brand vehicles in high-growth emerging markets around the world."

As part of the deal Ford will transfer its operations to the new joint venture, including its personnel and two assembly plants in*Chennai and Sanand. Ford will retain its engine plant in Sanand and some of its business operations relating to other divisions, such as Ford Credit and Ford Smart Mobility.*

Jim Farley, Ford's president of*new businesses, technology and strategy, flew to India for the announcement. He called the development*"a pivotal moment in our company's history."

"This new joint venture is further going to advance our commitment to India," Farley said. "It brings a whole new era of collaboration with India. We will fully leverage each otherís strengths."

Ford confirmed the joint venture will release three new utility vehicles under the Ford brand, including a new midsize utility vehicle that utilizes a Mahindra architecture and powertrains. The two automakers additionally plan to collaborate on electric vehicles in the future.*

This joint venture is part of Ford CEO Jim Hackett's broader $11 billion restructuring plan for the global automaker. In recent years Ford has sunk about $2 billion into its India operations and still only has about three-percent market share in the country.*

Shifting its operations to this joint venture will get a huge negative off of Ford's balance sheet, which should please investors.*

Mahindra is the largest producer of utility vehicles in India. Ford and Mahindra say their joint venture could produce vehicles for other developing nations in the future as well.*

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