Washington, Dec 31 (efe-epa).- Ford Motor and Indian automaker Mahindra on Thursday said they had canceled joint venture plans to co-develop vehicles, citing economic conditions caused in part by the coronavirus pandemic.
According to the companies, the decision “was driven by fundamental changes in global economic and business conditions – caused, in part, by the global pandemic – over the past 15 months.”
In a joint statement, they said the changes influenced separate decisions by Ford and Mahindra to reassess their respective capital allocation priorities.
Following the decision, Ford’s independent operations in India will continue as is, the American multinational automaker said.
The automaker said it 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 percent company adjusted earnings before interest and taxes margin and generate consistently strong adjusted free cash flow.
The two companies had signed an agreement last year to create a joint venture for developing, marketing, and distributing Ford brand vehicles in India, and Ford brand and Mahindra brand vehicles in high-growth emerging markets.
The joint venture planned to introduce three new utility vehicles under the Ford brand, beginning with a new midsize sports utility vehicle that would have a common Mahindra product platform and powertrain.
Another area of focus for the joint venture was to develop electric vehicles to support the growth of sustainable mobility across emerging markets.
Mahindra owned a controlling 51 percent stake in the venture.
The agreement stated that the deadline to complete the formation of the venture was Dec.31, 2020.
The joint venture would have used the Ford brand distribution network in emerging markets to extend support for export of Mahindra products, in addition to Ford branded vehicles.
In 2017, Ford and Mahindra entered into a collaborative strategic alliance to leverage Ford’s global footprint and Mahindra’s position in India.
Ford was among the first global automakers to enter India in 1995.
As one of the largest exporters of vehicles from the country, Ford manufactures and exports vehicles and engines from its facilities in Chennai, Tamil Nadu, and Sanand in Gujarat. EFE