Ford and Mahindra & Mahindra announced last week they were ending plans for a previously announced joint venture, citing the changing automotive landscape of the past 12 months as one of the reasons.
The two automakers had been in talks since at least 2017 and had set December 31, 2020, as the deadline for a definitive agreement for the joint venture. The aim of the joint venture was to develop electric vehicles and SUVs for India and other emerging markets.
Ford said it is continuing to evaluate its operations around the world and for the present will maintain its operations in India. The Blue Oval was among the first foreign automakers to start selling cars in India when it entered the market in 1995.
Mahindra said it will focus on its core SUV offerings in India while also developing EVs to help its expansion in global markets. In addition to its own Mahindra brand, the company, known for its SUVs and trucks, also owns Italy’s Pininfarina, as well as South Korea’s SsangYong which is undergoing a restructuring after declaring insolvency last month.
India is often touted as the next China but apart from a similar population size, currently approaching 1.4 billion people, there isn’t much else to compare. China has invested heavily in infrastructure and manufacturing over the past few decades, and this in turn has attracted plenty of foreign investment and helped build up a large middle class keen on catching up with western counterparts. Automakers, especially those in the luxury segment, racked up sales record after sales record there for years.
The same can’t be said for India which is why most automakers apart from those selling inexpensive vehicles have struggled, despite India being the fifth largest market for new cars in the world. General Motors pulled out of the market in 2017, and the Volkswagen Group has also struggled there. It originally courted Suzuki which has seen some success in India, though the relationship went sour and finally ended in 2015. Since then VW Group has worked with India’s Tata to help make inroads in the Indian market for its Skoda brand.