Ford, India’s Mahindra enter into Rs43b deal

MUMBAI/NEW DELHI: Ford Motor Co and Mahindra & Mahindra said on Tuesday they would form a joint venture in India, in a move aimed at reducing risks for the US automaker’s local business and cutting the cost of developing and producing vehicles for emerging markets, a British wire service reported.

The venture, valued at $275 million (Rs43 billion), will see Ford (F.N) enlist Mahindra (MAHM.NS) as a partner for developing and selling vehicles in India and emerging markets using the US automaker’s production facilities in the country.

By shifting to a joint venture, Ford is also changing its strategy for India, where it has long run an independent operation. The South Asian nation, where auto sales are slumping, once promised growth for global carmakers, many of which are now frustrated after working hard to gain a foothold.

Ford’s decision comes at a time when Indian Prime Minister Narendra Modi’s administration is trying to boost local manufacturing by cutting corporate tax rates and offering cheap loans to push car sales. Ford President and CEO Jim Hackett said the partnership was “not only a fitness objective” but also gave the automaker a platform to expand in a market like India, where it wished it had done things differently.