Mahindra and Ford partner to make 9 new SUVs

Mahindra and Mahindra(M&M) and Ford India is to jointly develop nine Sports Utility Vehicles(SUVs) in India starting from 2020 for the International Market.

Though M&M and Ford have already had patnerships before but, this one is mainly due to the cost cutting measures taken by both the companies. Ford has been taking a lot of cost cutting measures in the recent times to Terminate its low profit markets globally and boost their standings in emerging markets such as India, especially in the SUV sector.This new partnership will enable Ford to manufacture under lower costs which otherwise had an expensive manufacturing model.

Ford India has struggled in the Indian markets with 92,937 units sold with a market share of just 2.75% in the FY 2019. Despite being in the Indian market from 1995, Ford always had a lower market share precentage compared with the leaders such as Maruthi Suzuki and Hyundai. This oppertunity will help Ford to understand the Indian way of low cost manufacturing and help it to yeild better profits in the international markets.

As for Mahindra this would be a great opportunity for then to shine in the Global markets since all the SUVs manufactured are to be exported to Global Markets with a rebadging format.Though most of the Investment is to be made by M&M, Ford is to provide a Capital of $200 million and further investment will be done in the future according to the needs.

As the Indian Government is being more strict on the emission and the fuel economy norms to deal with the alarming pollution levels in most of the Indian cities, diesel engines would decrease by a considerable amount in the coming years. Since Mahindra has always been a diesel dominant player it will be interesting to see the kind the engines which Ford India and M&M will develop to tackle this problem.