In the US, Ford Motor Co is facing sluggish demand for some of its products which has resulted in production adjustments in the country and neighbouring Mexico. Production at five North American production plants are said to be affected. Ford will idle its Flat Rock Assembly Plant, Michigan Assembly Plant and a production line at its Kansas City Assembly plant for one week. In Mexico, Ford will shutter its Cuautitlan and Hermosillo Assembly Plants for two weeks.
The bright side for Ford is that it has an opportunity to strengthen its market position and most importantly distribution in India. Ford also realises the complexities of the Indian market where it has some presence and needs a local partner to boost its plans.
This is where truck and tractor maker Mahindra has come in once again as a possible saviour. Mahindra has big presence in India and Ford will use its partner’s infrastructure in various areas.
The deal looks at exploring cooperation on products, technologies and distribution including future mobility programmes, connected vehicle projects and electrification of cars among other areas.
Interestingly, Mahindra has worked with Ford before till 2005. As per the agreement, technical teams from both companies will work together for a period of up to three years, at which point the alliance will be reviewed.
The new tie-up with Ford could facilitate Mahindra’s expansion into global emerging markets, the company said in an exchange filing.
Mahindra managing director Pawan Goenka said: “Mahindra sees the need to anticipate new market trends, explore alternatives and look for ways to collaborate even as it competes and builds powerful synergies that will allow rapid exploitation of the new opportunities”.
It may be recalled that in 1995 Ford had approached Mahindra to co-build one of its cars but called off the deal as it wanted to go solo. Till now, Ford has invested more than US$2bn in India and has a market share of less than 3 per cent. Most of its India-based production is exported, which in turn helps Ford to utilise 60 per cent of its installed capacity of 440,000 units.