Ford and Mahindra Sever All Ties; Here's How it Will Impact Both Companies

American automaker Ford and India’s Mahindra & Mahindra have decided to call it quits on the engine and platform sharing supply pact. Earlier this year, the two auto giants also called off their proposed joint venture. Both companies had decided to enter into a joint venture according to which Mahindra was to acquire Ford's India operations and in turn Ford was to help Mahindra enter several international markets.

However, there is no formal announcement made from either of the companies on what has triggered this move to end all the ties. According to a reports, the decision is based on several factors including the carmaker's reassessment of its global plans. It says that the Indian market does not rank high on Ford's CEO, Jim Farley's priority list in the American carmaker's bid to strengthen its global position. The Financial implication of the COVID-19 pandemic is also one of the reasons which has compelled Ford to take this decision.

The American carmaker will now have to chalk out a new strategy for where the C-SUV could roll out of its Chennai or Sanand plants instead of M&M’s Chakan plant. It is also likely thatthe C-SUV will be built on the Ford Territory platform in China. Ford was developing three new SUVs for India in partnership with Mahindra.

Out of the three SUV's one was a compact SUV which was originally scheduled to be launched in the country in 2022. And as per the plans, this Ford C-SUV built by Mahindra was to be underpinned by the new XUV500's platform.

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According to the joint venture, Mahindra's engines were to be used for the remaining two upcoming Ford SUVs and now this plan has also been shelved. Mahindra was also supposed to supply a 1.2-litre turbocharged petrol engine (XUV300's unit) to Ford EcoSport.But after the ties come to an end, Ford is likely to continue using the existing 1.5-litre petrol (Dragon) and 1.5 diesel (DV5) motor. The cancellation of deals will have a huge impact on the companies in monetary terms.

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