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Ford/Mahindra partnership ends

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This probably makes sense for the time being. The lower cost of Indian vehicles probably leaves small profit margins. Ford may want to reassess as India continues to industrialize (and become wealthier as a result) in future decades. 

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Just wondering what impact, if any, this has on the future of the Ford EcoSport.  

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1 hour ago, ice-capades said:

Just wondering what impact, if any, this has on the future of the Ford EcoSport.  

 

I am thinking that it would be minimal since EcoSport is built by Ford at several Ford plants around the world. 

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7 hours ago, ice-capades said:

Just wondering what impact, if any, this has on the future of the Ford EcoSport.  

 

EcoSport will continue to be produced at Ford's Chennai plant. In the announcement, Ford said that "the joint venture isn't going to happen", meaning the 51% Mahindra, 49% Ford ownership arrangement the 2 companies announced in October 2019.

 

Ford India Private Limited's independent operations, including its assembly plants in Chennai and Sanand, will continue operating as before.

Edited by rperez817

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15 hours ago, jpd80 said:

Maybe this was aother captain's call from Jim Farley?

 

I do believe JP you hit the nail on the head.  I think Covid is everyones latest excuse to bail on an issue.  Either that or there are ongoing issues associated with Covid and the effectiveness of the vaccine that Dr Fauci isn't telling us about😎

 

My guess is the deal was not that well thought out and the wheels were coming off.....This was done under Hackett's regime right?

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1 hour ago, Bob Rosadini said:

My guess is the deal was not that well thought out and the wheels were coming off.....This was done under Hackett's regime right?

 

The JV deal was well thought out. Even though the JV was announced in October 2019, it actually came about as a result of a strategic alliance that Mahindra and Ford started exploring 2 years prior. Jim Farley (who was at that time President of Global Markets at Ford) led the charge on the Ford side, while Pawan Goenka took the lead on the Mahindra side.

 

Ford and Mahindra are complementary. Both companies agreed that the strategic alliance and JV would "improve Ford’s reach within India" and "improve Mahindra’s reach outside of India".

 

Ultimately, the JV was undone by India's severe economic downturn caused by the Covid-19 pandemic. In FY 2019 when the JV was announced, India GDP grew 6.1%. In FY 2021, India GDP is expected to decline 5%.  

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The economic downturn is temporary as you don't see Suzuki, Toyota, Hyundai, Renault, and VW backing away from their investment in India. And neither is Tata slowing down. And also GM relaunched in India with a major push via a joint venture with SAIC (selling GM Baojun SUV rebadged as SAIC's MG brand).

 

I'm just speculating that  Ford is not entirely happy with the XUV500 based product that Mahindra has designed to be sold as a Ford. It turned out to be just a rebadge (see link below). And they may have had a bigger disagreement on how to proceed with EcoSport replacement. Mahindra's XUV300 is based on Ssangyong Tivoli (just chopped down to 4 meters to comply with India laws) so they probably want to replace EcoSport with another rebadge. Ford probably wanted to base the Indian EcoSport on the rest of the world EcoSport (just shorter/chopped to 4 meters).

And let's not forget that Mahindra decided to let its Korean subsidiary Ssangyong file bankruptcy last week rather than bailing it out. That's raises a lot of questions about the future of Mahindra's product pipeline... one the main reason why Ford linked up with Mahindra in the first place - to get lots of products in a hurry without major capital investments. If it turned out that Mahindra's drawing board was largely blank... well, this is a good time for Ford to pull the plug.

 

Ford is prepping to launch Ranger in India so it is definitely staying in India for the long haul. The question is how big is Farley thinking. Do they want to just use India as an export based and try to compete in a few segments. Or they want to challenge Hyundai which has quietly become a formidable #2 in India behind Suzuki. 

 

India in theory is a market ripe for Ford. While vehicle ownership rate is relatively low, poor roads and consumer tastes have shifted heavily in favor of SUVs - a Ford staple. Ford just need to figure out how to get to the market quickly and keep updating its products regularly. Basically what Hyundai has done in the last 7~8 years while Ford sold the same EcoSport that pioneered the 4-meter SUV segment in India. 

Edited by bzcat

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To me it sounds that they found out that, in the long run, it could be more cost effective to keep Índia in the international markets scheme, with a family of lower costs B2* vehicles shared with other emerging markets. Also, someome must have reminded them of what happened when Ford/VW formed as 49/51 joint venture in Autolatina... Those 2% go a long way...

 

*Eventually C2, as developed countries go deeper into electrification and underdeveloped ones struggle with infrastructure.

Edited by passis

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On 1/5/2021 at 3:58 PM, ausrutherford said:

Apparently the XUV500 based product is still a go as it is basically finished. Just no more products will come out of the stillborn JV.

 

Ok that makes some sense. It's basically done so might as well just go with it. In looking at the bigger picture, Ford can always merge the replacement of this XUV500 based CUV with its Territory program further down the road. They basically serve the same role as emerging market C-segment utility entry.

 

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On 1/7/2021 at 10:25 AM, bzcat said:

 

Ok that makes some sense. It's basically done so might as well just go with it. In looking at the bigger picture, Ford can always merge the replacement of this XUV500 based CUV with its Territory program further down the road. They basically serve the same role as emerging market C-segment utility entry.

 

This.

The development of RHD Territory is already done so no point reinventing the wheel with Mahindra.

I guess this all comes down to Ford evaluating alternatives and circling back to an existing vehicle.

Let's hope that Ford continues to show strength to review decisions and pick the right path.

Edited by jpd80

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Ford's ending manufacturing in Brazil throws EcoSport replacement out into the cold...

 

I'm wondering now what Ford is planning to do in India. The export operation seems to be the only reason Ford is still in India but if there is no next gen EcoSport to export... time to turn off the lights there too. 

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15 hours ago, jpd80 said:

Clearing the decks for more shared VWs?

 

maybe Chinese based products?

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3 hours ago, silvrsvt said:

 

maybe Chinese based products?

 

For India? Maybe Territory but that's about it. China and India auto markets are going to different directions. India is all about A and B segment cars and CUVs. China doesn't really care for A or B segment cars that much, unless it is tiny EVs. The main focus of the Chinese market is C and D segment cars and CUVs. 

 

The big unknown at the moment is what happens to the BX784 and BX785, the pair of low cost C-CUV and CUV coupe developed by Ford Brazil. It was supposed to replace Territory so Chinese production was probably going to happen. Does Ford now move the pair to Mexico and add India to the mix? 

 

 

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15 hours ago, bzcat said:

The big unknown at the moment is what happens to the BX784 and BX785, the pair of low cost C-CUV and CUV coupe developed by Ford Brazil. It was supposed to replace Territory so Chinese production was probably going to happen. Does Ford now move the pair to Mexico and add India to the mix?

 

Maybe Mexico is getting the Puma. As for India, the situation is very confusing. So the BX duo might just be completely dead as Ford is abdicating new peripheral ICE models in favour of EVs.

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