Two decades on, Ford, Mahindra tie up again to leverage synergies
By Jonathan Ananda | Express News Service | Published: 19th September 2017 07:49 AM |
CHENNAI: Monday saw the announcement of yet another partnership between a foreign automobile group and a home-grown auto major. Mahindra & Mahindra has entered into a three-year strategic partnership with Ford Motor Company, which will see the two cooperate on a wide range of challenges — from product development to improving commercial efficiencies.
The announcement follows the general trend in India over the past few years, with partnerships becoming common between international auto giants struggling to crack the market and home-grown Indian firms in need of global reach and advanced technical expertise.
While some like the Tata-Volkswagen tie-up to build a common India-based automobile platform, and Ashok Leyland and Nissan’s joint venture for light commercial vehicles have failed, others like Force Motors and Rolls Royce (for engines) have gone ahead.
The current phase of international partnerships is essentially a repeat of earlier times, when foreign players entering the Indian market signed up with local firms. In fact, the Ford and M&M relationship goes back two decades, when Ford entered the Indian market in 1995 as Mahindra Ford India Ltd. However, by March 1998, Ford had increased its stake in the original 50:50 venture to 72 per cent and renamed the firm Ford India Pvt Ltd.
The current tie-up will offer the two similar benefits. Ford will get Mahindra & Mahindra’s expertise and network in the Indian market, while the latter will gain Ford’s arguably wider technology base. The two firms’ said they were “exploring a strategic alliance designed to leverage Ford’s global reach and expertise and Mahindra’s scale in India,” and that the area of potential collaboration would include mobility programmes, connected vehicle projects, electrification, product development, sourcing and commercial efficiencies.
A particularly crucial one for Mahindra is electric mobility and the competition it is likely to face from its home-grown rivals for a market that could potentially prove hugely lucrative, considering the Indian government’s electric push. Both the companies will work together for a period of up to three years and any further cooperation will be decided at the end of that period.