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    Mahindra & Mahindra, Ford to ride together?

    Synopsis

    The proportion of shareholding will see Ford's holding at 49% and M&M's stake 51%, the channel claimed.

    Mahindra & Mahindra, Ford mega joint venture in the works?
    Anand Mahindra led Mahindra & Mahindra and Bill Ford Junior led US headquartered Ford are looking to further bolster the India ties between both the automakers and take the next big step in their two decade long relationship in the domestic market which began back in 1995.

    " Mahindra & Mahindra and Ford have initiated discussions for a mega alliance as part of which Ford is planning to transfer its India business to a proposed joint venture between both the companies, wherein Ford is likely to hold 49% stake and Mahindra & Mahindra is likely to hold 51% stake. ," multiple sources familiar with ongoing negotiations told ET NOW on the condition of anonymity. The talks are at an early stage and there is no certainty they will lead to an eventual transaction, sources added.

    " Mahindra & Mahindra is eyeing Ford's premium technology as part of the proposed JV along with access to the US carmaker's existing market share in the passenger vehicle & utility vehicle segments where it seeks a stronger foothold," said one of the sources cited above.

    In the past , Mahindra & Mahindra has struck joint ventures with other global players like French car maker Renault and Navistar, but both didn't achieve the desired results.

    " Ford is looking to tap Mahindra & Mahindra's domestic scale & operating model via the proposed joint venture and is looking to de-risk itself from the India market where it has pumped in more than $2bn but has not yet become profitable due to sluggish domestic sales since its entry in 1998," added another source.

    Ford's India sales grew by 1% in 2017 at 87,588 units while exports grew by 15% at 1,75,196 units. According to latest figures, Ford India’s combined domestic wholesales and exports in July registered 25,028 vehicles, compared to 26,075 vehicles in July 2017. The domestic operations in July stood at 7,816 vehicles as against 8,418 units in the same month last year. Exports recorded 17,212 vehicles compared to 17,657 units in July 2017.

    In response to an email query from ET NOW, a Ford India spokesperson said, " “While we do not comment on rumours or speculations, we are confident in our strategy to build a sustainable, profitable business in India. FY2017-18 was financially one of the best years in the history of Ford in India. Our domestic revenues recorded US$ 1billion. We also reached the coveted milestone of One Million Indian customers. We are excited about the transformation we are seeing in our business and remain committed to India.”


    ET NOW is awaiting a response to an email query sent to Mahindra & Mahindra on the proposed joint venture.


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