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Mahindra-Ford MoU to get formalised into a partnership within 10 days: report

Mahindra-Ford MoU to get formalised into a partnership within 10 days: report

The MoU will allow both companies to deal with changing practices in the global auto industry, triggered by the accelerated rise of new technologies and sustainability policies.

PC: Reuters PC: Reuters

The strategic alliance announced by Indian carmaker Mahindra and Mahindra Ltd (M&M) and Detroit-based Ford Motor Co. last September is reportedly taking shape at last. Sources aware of the developments told The Economic Times that the two automakers are likely to establish a partnership in the next 7-10 days. Moreover, the partnership is expected to cover 3-4 of the 8 broad areas of cooperation included in the scope of the Memorandum of Understanding (MoU) signed six months ago. In the first phase, the auto makers will get access to each other's vehicle architectures and electric powertrains as well as sourcing and distribution networks.

This is not the first time that M&M and Ford have joined hands. The alliance, which was first forged in 1995 to make Ford cars in India under the banner of Mahindra Ford India Limited (MFIL), had led to Mahindra developing its first SUV Scorpio from scratch. The hope, this time round, is that the MoU will allow both companies to deal with changing practices in the global auto industry, triggered by the accelerated rise of new technologies and sustainability policies.

Keeping that in mind, a council has now been formed with four representatives each from M&M and Ford to define the framework. The report adds that M&M is likely to share its utility vehicle platform with Ford for a C-Segment SUV, codenamed W601. Currently, the US-based company boasts the Ecosport and the Ford Endeavour in its line-up, with nothing in between. Hence, its need for a mid-sized SUV to plug the gap. On the other hand, M&M will reportedly get access to Ford's B562 platform, which underpins the Figo and the Aspire, to roll out its envisioned electric sedan. "The intent is to come out with these projects in a much faster timeframe than working on products or projects independently. These projects are likely to hit the road in the coming two to three years," a source told the daily.

No wonder the Ford-M&M tie-up is being seen as a game changer in the industry. For M&M, this alliance holds the key to its international ambitions as it plans to expand its global distribution network. Also, the partnership comes close on the heels of policymakers announcing early phase out of petrol and diesel vehicles in India.

Ford, meanwhile, will gain a greater footprint in the Indian market where it currently holds less than 3 per cent market share while benefitting from access to affordable electric technology used by M&M. According to media reports, the Indian automotive giant has already helped it to develop an electric version of the Ford Aspire, which will be its cheapest electric car globally when it hits the road, perhaps in the coming year.

The alliance could also help the duo take on India's largest carmaker Maruti Suzuki, which recently announced a tie up with Toyota for opening of a lithium ion battery plant in Gujarat to power its electric vehicles. Competition is also heating up from the foreign players. Recently, Europe's largest automobile manufacturer Volkswagen Group announced that it was rapidly expanding its capacity to produce battery-powered vehicles and that from 2019, there will be a new electric vehicle virtually every month.