Domestic auto company Mahindra & Mahindra (M & M) recently announced in a press release about the acquisition of majority stake in Ford Motor Company’s wholly-owned entity. This acquisition will give Mahindra control over Ford’s automotive business in India. The new unit will develop the market in India and sell Ford brand vehicles. The joint venture will sell both Mahindra and Ford vehicles.
Under the agreement, Mahindra & Mahindra Ford Motor Company Inc.’s wholly owned entity Ardor Automotive Pvt. The company will acquire 51 percent stake for Rs 657 crore. The remaining 49 percent will be held by Ford Motor Company or any of its associate units.
Ford India Pvt. Ltd. Engaged in India’s automotive business in 1995. The automotive business acquisition also includes Ford India’s acquisition of a vehicle manufacturing plant in Chennai and Sanad.
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The acquisition excludes the power train facility of Sanad-based Ford Motor Company. It is used by Ford Motor for the global market. Ford India’s automotive business achieved revenue of Rs 26,324 crore during the financial year ended 31 March 2019. It was Rs 25,010 crore in FY 2017-18 and Rs 22,103 crore in FY 2016-17.
With the consistent approach from the government to ensure 30 percent electric mobility in India by the year 2030, both local and foreign companies are making huge expansion plans and investments to grab this opportunity.
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Mahindra and Mahindra in last couple of years has been betting big and trying to gain a strong foothold in the India’s Electric Vehicles ecosystem.
In the latest interview with managing director of Mahindra and Mahindra, Dr. Pawan Goenka, emerging economies including India are estimated to account for one-third of the future vehicle sales.
The joint venture will introduce three new utility vehicles under the Ford brand, starting with a mid-size sport utility vehicle. It will be built with the combined efforts of the Mahindra product platform and power train. The acquisition is expected to be completed by mid-2020.