Ford JV opens up possibilities of M&M partnering Ashok Leyland
12 November 2019
The partnership between Ford Motor Co and Mahindra and Mahindra in India could open up possibilities for similar partnerships industrywide while also opening up possibilities for alliances between groups.
Mahindra & Mahindra and Ashok Leyland could come together as part of the global trend of automobile companies taking the collaboration route for the common goal of success in electric mobility, say reports.
As the global electric mobility megatrend, among others, gains traction, automotive companies worldwide are taking up collaboration as a strategy to achieve success.
There's a valid argument behind it. For electric vehicles (EV) to become commercially viable, the EV industry needs to have scale. "If everybody starts doing things on their own, we will end up with sub-scale. It's not going to benefit anybody," Dr Pawan Goenka, MD, Mahindra & Mahindra and chairman, Mahindra Electric, was quoted as saying at a press conference on Friday.
Dheeraj Hinduja, chairman, Ashok Leyland, also aired the same sentiment on 4 November when he said, "We are quite open to the idea of working with others on electric vehicles".
Ashok Leyland's 'Circuit', launched about three years ago, claims to be India's first locally made electric bus. The OEM then partnered with Sun Mobility to launch the 'Circuit S', an electric bus powered by the latter's swappable Smart Battery technology, in February 2018.
"Although we have developed a product on our own, it will keep evolving. The rate at which battery costs have come down has been very significant and its capacity is also increasing. Unless there's some new technology someone is going to offer or bring in, or we can co-develop, I don't think we have done everything to make sure that we're very much independent and self-reliant in our technologies," Hinduja said, adding that Ashok Leyland is working on a new bus platform designed exclusively for electrification.
Ashok Leyland-owned British bus maker Optare also manufactures electric buses. ALL acquired a 26 per cent stake in Optare six years ago, and later raised it to 98.3 per cent, to enter electric mobility space.
Mahindra & Mahindra entered the electric mobility space with the May 2010 acquisition of a majority stake in Bengaluru-based Reva Electric Car Company, which is now called Mahindra Electric Mobility.
Both Mahindra Electric and Ashok Leyland have a common link in Chetan Maini, the Bengaluru-based technocrat who was the founder of Reva, and is now the co-founder and vice-chairman of Sun Mobility.
The two, however, have not expressed clear intentions of partnership in the area of electric mobility.
With the new-age automotive/mobility world getting increasingly collaborative, it will be interesting to see if electric mobility triggers collaboration between major Indian companies, a practice that's not common among local players, yet.
Meanwhile, South Korea-based SsangYong Motor could be part of the product synergies partnership of Mahindra & Mahindra and Ford Motor Company, reports quoted Pawan Goenka, managing director, V S Parthasarathy, CFO, respectively, of Mahindra & Mahindra Ltd, as saying in an interview.
“The product synergy that we are trying to work on between M&M and Ford here in India…SsangYong could very much be part of that,” the Hindu BusinessLine quoted Pawan Goenka as saying in an interview.
M&M acquired the Korean automaker in 2011 and, more recently, entered into a 51:49 partnership with Ford to spearhead work on new platforms/products.
“The benefit between M&M and Ford is that they are serving almost identical markets whereas Korea is very different from India,” the report quoted Goenka as saying. Yet, the possibility of SsangYong joining M&M-Ford in terms of product synergy and platform synergy “is very much on the cards,” he added.
Goenka said SsangYong could have a product that Ford might find interesting for its markets. Like M&M, SsangYong has 5-6 very good products but does not have a very strong brand and network outside Korea. An alliance with Ford would help the Korean manufacturer market products under Ford name.
This means a whole lot of new alliances and partnerships could emerge in the future as the industry churns and new players appear on the new-age mobility side.