Ford, M&M expected to announce partnership
19 March 2018
The country's top SUV maker Mahindra & Mahindra (M&M) and Ford Motors through its Indian arm are likely to formalise a memorandum of understanding that they signed six months ago and establish a partnership in the coming week to 10 days, The Economic Times reported today, citing "several people with knowledge of the matter."
They are likely to share vehicle architecture, electric powertrains, common sourcing and leverage each other’s distribution network in the first phase, they said.
According to the report, three to four of the eight broad areas of discussion that were in the September 2017 MoU are likely to be part of the partnership, they said.
Last September, the two companies had agreed to explore a strategic alliance for joint development of products, including electric and connected vehicles.
The move followerd Tata Motors decision to end similar partnership negotiations with Volkswagen group in August.
The partnership will also look at expanding Ford's reach in the domestic market and Mahindra's access to global markets. The announcement comes less than three months after Tata Motors (the only other homegrown player in domestic car market) decided to end partnership talks with Volkswagen group.
The areas of potential cooperation include mobility programmes, connected vehicle projects, electrification, product development, sourcing and commercial efficiencies, distribution within India (improving Ford's reach within India) and improving Mahindra's reach outside of India. (See
: M&M, Ford to explore strategic co-operation in India, emerging markets
This was followed by Mahindra & Mahindra helping Ford Motor Co develop its cheapest electric car globally. The companies are also reported to have also started work on a new platform to develop a sports-utility vehicle that would be sold under their individual branding (See
: Mahindra helping Ford bring out its cheapest EV globally
M&M is likely to share its utility vehicle platform with Ford for a C-Segment SUV, which is being touted as a new-generation XUV, whereas M&M will get access to Ford’s platform for an electric sedan that it plans.
Coming together is expected to help shave the development timeline.“
For Ford India, which has been trying to reduce cost and improve profitability, the lower cost structure of Mahindra & Mahindra is a major attraction.
Mahindra is reported to have 12-14 per cent lower manufacturing cost structure than Ford's.
For M&M the tie up would help gain Ford Motor's global market networks