The desertion of a proposed joint venture between Ford and Mahindra & Mahindra appears to be the beginning of a scaling back of Ford’s presence in the Indian market.
Visibly, the nullification of the joint venture was driven by Mahindra’s unwillingness to invest new capital to take over Ford’s two manufacturing facilities in India – a step that would have encumbered the automaker with excess capacity and additional costs.
For the time being, Ford has stated that it wishes to pursue a much higher sustainable margin on a global scale, implying tougher choices for future investment. This being evident from the automaker shutting manufacturing in Brazil in January.
Not long ago, the planned development of the Ford B-SUV and C-SUV with Mahindra has been put on hold.
Apart from these two SUVs, along with the next-generation versions of Ford’s existing limited product range, no new model programs have been added to the Indian market. The lack of sufficient product expansion in the country is to limit the automaker’s volume and exert additional pressure on its profitability.
Hitherto, Ford’s Indian operation used to get help by steady exports of the EcoSport and the Figo, but those volumes have also dropped to a great extent lately as a direct result of the change in Ford’s global strategy.