After two decades, Ford could finally be giving up on its vision to include India in one of its three largest markets by 2020. According to multiple reports, Ford is in talks with Mahindra & Mahindra to transfer most of its assets in India while entering into a joint venture to stabilise its position in India.
Bloomberg reported that people familiar with the plans said Mahindra would hold a 51 percent stake, while Ford would retain equal voting rights and board representation in the new entity. While an official announcement is yet to be made by either automobile manufacturers, it is expected to be announced as early as next week.
Ford, however, issued a statement denying rumours that suggested Ford would be leaving India. "Ford remains committed to growing its customer base and product portfolio in the world's fourth-largest automobile market, and will continue to make in India, for India and the world," Lori Arpin, a company spokeswoman, said in a statement.
Prior to Bloomberg's report, Reuters had reported about the joint venture between Ford and Mahindra back in April. Bloomberg's sources also suggested that the deal between the two automobile brands could still fall apart.
In case the JV plan comes to fruition, Mahindra will hold Ford's majority assets in India, which also include two car plants in the country. Mahindra will also be able to sell Ford vehicles in developing markets under its own brand and an India-specific mid-sport SUV could also be under works.
In all the years, Ford has remained optimistic about its growth in the world's fourth-largest automobile market. But the numbers don't seem to agree with Ford's vision. The carmaker reported a 31.4 percent YoY decline in August 2019 after just 5,517 cars sold in the month as compared to over 8,000 units sold in the same month last year. The company had invested over $2 billion in India so far, but earnings aren't even close. Ford isn't alone in the struggle as the entire auto industry is facing a slowdown.
Will Ford meet the same fate as GM in India, which exited India two years ago when it stopped selling Chevrolet cars, or will it join hands with Mahindra to save its sinking ship? Only time will tell.