The Indian auto market has witnessed several joint ventures over the years. Some have even made it to the record books by scripting tales of success. Be it Hero and Honda or Maruti and Suzuki, customers as well as manufacturers have also benefited from a majority of such collaborations. Recently, Japanese automakers Toyota and Suzuki also joined hands and launched their first product, Glanza, in the country. And now US auto giant Ford and Indian SUV king Mahindra have announced that they will jointly develop new cars. The collaboration is aimed at saving costs and producing cost-effective vehicles even as government imposes stringent emission and safety standard on automakers.
Now, a leading financial newspaper has reported that the two manufacturers will develop as many as 9 new SUVs. Seems like a sensible decision, isn't it? SUVs are one of the most popular and fastest-growing segments in India and Mahindra's expertise in this sector is unparalleled. The two companies will sell the newly-developed SUVs in India and international markets after rebadging.
The devil, however, is in detail. While six SUVs will be shared between both brands as rebadged products, the US company will exclusively get three SUVs that will be sold in India and many international markets too. The work on these SUVs in 2020 with an investment of over Rs 4,300 crore and the collaboration is expected to last over 6 to 8 years.
The exact details of the cars to be developed by the brand are not known but Mahindra and Ford are working on an all-new SUV that will replace the current-generation XUV500. It will be sold as rebadged products by both brands. While Mahindra will develop the architecture and engine for the all-new SUV, Ford is expected to develop the telematics system for the upcoming product.
There are reports that Mahindra is likely to use the production facilities of Ford in India. Ford has two plants in India -- Sriperumbudur and Sanand -- and products from both are sold in domestic as well as the foreign market. The combined capacity of these plants is 4.4 lakh units per year but currently only 2.7 lakh units are being manufactured.
The exact timeframe for the launch of new SUVs is not known yet. While Ford will focus on export of these news cars, Mahindra will try to expand portfolio in the country. This Ford-Mahindra partnership is expected to benefit both in India as well as the international market. Ford, at present, only has 3% of the market share in India. The first model by the collaboration is expected to be launched by the end of 2020 or early 2021.