- Ford Motor Company announced a joint venture with the Indian carmaker Mahindra & Mahindra on Tuesday.
- The goal is to boost Ford sales in India and other emerging markets.
- Shares of Mahindra climbed as much as 3.5% on the news, while Ford traded slightly higher.
- As part of the $US275 million venture, Ford will transfer all India operations to Mahindra. The move comes amidst a massive $US11 billion restructuring at Ford.
- Watch Ford trade live on Markets Insider.
Ford will transfer all of its India operations to Mahindra in the joint venture, valued at $US275 million. Mahindra will own 51% of the venture, which Ford expects to be operational by mid 2020.
Shares of Ford gained roughly 0.5% in early trading Tuesday on the news. Mahindra’s stock climbed as much as 3.5%.
The move is a continuation of a strategic partnership with Mahindra that began in September 2017. It builds on CEO Jim Hackett’s work to make Ford a leaner, more profitable company. Since taking the top job in 2017, Ford has announced it will close five plants in Europe and slash 12,000 jobs there. It is also cutting 7,000 global salaried employees – about 10%- in an $US11 billion restructuring plan.
The joint venture will help grow Ford’s brand in India and other high-growth emerging markets. India is the fourth-largest automobile market, and Ford has failed to take a meaningful stake there for two decades, Bloomberg reported.
“Strong alliances like this play a crucial role in assuring we continue to achieve our vision while at the same time staying competitive and delivering value to our global stakeholders,” Hackett said in a statement.
The joint venture will introduce three new Ford vehicles that will have a combination of Ford branding and Mahindra technology. The venture will also be responsible for developing electric vehicles and supporting “the growth of sustainable mobility across emerging markets,” the company said.
The company has had a rocky year. In July, it announced it would step up its global alliance with Volkswagen, to use VW technology and invest further in self-driving cars. Then, In September, Moody’s downgraded its shares to junk status, citing its weak financial outlook after second quarter earnings largely disappointed.
Ford is up 18% year to date.
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