- The companies said in separate statements that the decision was pushed by changes in the global economy over the last 15 months
- It caused both to reassess their capital allocation priorities
As per a report by Reuters, Ford Motor Co said on Thursday it was calling off its automotive joint venture with India’s Mahindra and Mahindra Ltd due to the challenges because of COVID-19 pandemic. It added that the companies said in separate statements that the decision was pushed by changes in the global economy over the last 15 months. It caused both to reassess their capital allocation priorities.
The report added that Ford spokesman T.R. Reid said that the global economy and business environment are not the same as October last year. It said that the deadline to finalise a joint venture between the companies was 31st December and both made the decision to end the agreement rather than close a deal or extend the timetable to do so.
Jointly develop electric vehicles for emerging markets
As per the report, In October 2019, Ford and Mahindra said they would form a joint venture in India to reduce costs for developing and producing vehicles for emerging markets. They added that the companies said at the time they expected to launch three new utility vehicles, starting with a midsize SUV, and also jointly develop electric vehicles for emerging markets.
The report added that when asked if those vehicles were now canceled, Reid said that at this point, there’s nothing to talk about other than the joint venture isn’t going to happen. Ford said its independent operations in India will continue. As per the report, Mahindra said in its statement that the decision will not have any impact on its product plan, and that it is accelerating efforts to develop electric SUVs.