Ford India handing over to Mahindra with new joint venture

Ford and India's Mahindra are likely to sign a deal next week to form a joint venture in India, in a move that would result in the US automaker ending most of its independent operations in the country.

Last April Ford and Mahindra had for months been structuring the deal to create a new entity in which Ford would hold a 49% stake while its Indian rival held 51%.

By shifting to a joint venture, Ford was changing its decades-old India strategy focused on running an independent operation. Under pressure from shareholders to make profits, it has been globally restructuring its businesses with an aim to save US$11bn over the next few years. In May 2017 Rival General Motors, Ford's local distributor, ended sales in India (and South Africa), shifting local operations to production of vehicles only for export.

Ford's two manufacturing plants - in Chennai in southern India and the other in Sanand,  in the western state of Gujarat, inaugurated in 2015 - will be moved to the new joint venture, but Ford will keep the engine plant at Sanand. Combined maximum annual manufacturing capacity is 440,000 vehicles.

Ford brand cars would continue to be built and sold in India and exported by the new company.