The Joint Venture between Mahindra & Mahindra and Ford couldn’t bear any fruit as it was officially called off earlier this year. And now, reports suggest that Ford is on the lookout for a new partner for its India operations. Reports also suggest that Ford could join hands with Citroen. Citroen is comparatively a new entrant in the Indian car market and the French carmaker marked its debut in style with the C5 Aircross SUV.
Mahindra and Ford’s Joint Venture could have given birth to a slew of new products but as we mentioned earlier, the collaboration was called off earlier this year.
Ford has two plants in India and they are spread over 350 acres. The Chennai plant has an annual production capacity of two-lakh vehicles and 3.40 lakh engines. Ford’s SUVs, EcoSport and Endeavour, roll out of this plant, in which the company has invested more than $1 billion. The company has spent over $1 billion on the Sanand factory, which is spread over 460 acres. This factory has an annual installed production capacity of 2.40 lakh vehicles and 2.70 lakh engines. This plant makes the compact sedan Aspire and the hatchback Next-Gen Figo. However, with the kind of domestic sales Ford has been reporting, the plants are not utilised fully, even after making vehicles for exports to 37 countries. According to the latest data from the Federation of Automobile Dealers Associations (FADA), Ford India reported retail sales of 2,790 units in June compared to 2,872 units in the corresponding month last year. In May, the company had retailed 1,671 units and in April 4,214 units.
Reason for a new partnership
The sales of the popular Ecosport have been going down. Ford’s market share has gone down to around two per cent from more than three per cent earlier. The partnership with Mahindra was to lead to new products that would have soared up Ford’s market share in India. But that did not go very far, with the companies ending their joint venture within three years of entering it, in October 2019.
According to analysts, Ford India needs to get partners for contract manufacturing, with no further investments coming to its India operations in the near future.