Ford and Mahindra & Mahindra on Friday said that both have mutually and amicably determined that they will not complete a previously announced automotive joint venture between their respective companies.
The decision follows the passing of the December 31 'longstop,' or expiration, date of a definitive agreement the organisations entered into in October 2019.
According to the companies, the outcome was driven by fundamental changes in global economic and business conditions – caused, in part, by the global pandemic – over the past 15 months.
"Those changes influenced separate decisions by Ford and Mahindra to reassess their respective capital allocation priorities," the companies said in a statement.
Ford said its independent operations in India, however, will continue as it is.
"The company is actively evaluating its businesses around the world, including in India, making choices and allocating capital in ways that advance Ford’s plan to achieve an 8 per cent company adjusted EBIT margin and generate consistently strong adjusted free cash flow," the Michigan-based company said.
Ford’s plan calls for developing and delivering high-quality, high-value, connected vehicles – increasingly electric vehicles – and services that are affordable to an even broader range of customers and profitable for Ford.
"The company is moving quickly to turn around its automotive business – competing like a challenger while simplifying and modernising all aspects of the company, and grow by capitalising on existing strengths, disrupting the conventional automotive business, and partnering with others to gain expertise and efficiency," it added.
Meanwhile, M&M has scheduled a press conference at noon to chalk out further details.
According to analysts, it would be tough for Ford to continue its business in India, as it has already falling sales in the passenger vehicles market. It's only saviour 'EcoSport' has also tough competition from rivals such as Maruti Suzuki Brezza, Hyundai Venue, Kia Sonet, Tata Nexon and even M&M's XUV300.