Mahindra, Ford Motor enter second phase for a potential alliance

Mahindra and Mahindra and the India subsidiary of Ford Motor have signed five non-binding agreements, furthering the accord signed between them last September, Mahindra said.

The two automobile makers would be collaborating on multiple areas including connected vehicle projects, electric battery vehicles, development of compact sports utility vehicles (SUVs), B-segment SUVs and power trains. Teams from both would work towards definite agreements in these areas, the statement added.

If all this translates into something as clear, it will mark a fresh beginning for a partnership that was ended in 1998. Mahindra was Ford’s first partner in India. Mahindra Ford, as it was then called, made the Ford Escort sedan in 1995. In 1998, the company became Ford India.

Since then, the global automobile industry has seen drastic change. Changing consumer behaviour, onset of a digital era and pressure on automobile companies to adopt 'green technology' has prompted them to collaborate and share costs.

A partnership will allow them to share investment and technology, get economies of scale and increase efficiency.

The new compact SUV, the plan goes, will be built on the Mahindra platform. Both companies will sell it independently under own brands.

Mahindra will also supply its power trains to extend Ford’s product range, went the statement. The scope will include the companies co-developing a suite of connected car solutions and electric vehicles.

“Today's announcement is the next step in the collaboration between Mahindra and Ford,” said Pawan Goenka, managing director at Mahindra. The companies are excited about the potential opportunities from the partnership, he added. Jim Farley, executive vice president and president of global markets, Ford, said, “Ford is committed to offering the best vehicles, technologies and services that fit the lifestyles and preferences of Indian consumers.”

The alliance will continue to focus on leveraging Ford’s global reach and expertise, and Mahindra’s scale in India and its operating model. The teams would work together, up to three years, to develop further avenues of cooperation, Mahindra said.

The collaboration's advanced phase will include extending support for Mahindra in global emerging markets.Harish H V, partner at consultancy Grant Thornton, said they were progressing with the partnership in a measured and calibrated way, to avoid mistakes. Maruti Suzuki and Hyundai Motor account for about 66 per cent of India’s passenger vehicle market. Mahindra has been under pressure in the utility vehicle segment from rivals.Harish was sceptical about plans to sell the same model under different brands. Cross-badging has not worked for others in India, such as Renault-Nissan and Volkswagen Skoda.