Business Today

A Rough Ride

The new decade was barely a couple of hours old when India’s utility vehicle major Mahindra and Mahindra and US carmaker Ford decided to put off their joint-venture plans. The two companies had been trying to cobble together a wide-ranging partnership since October 2019 that would have seen Ford exit the Indian market, leaving its assets in the JV with Mahindra. For a variety of reasons it had looked like a win-win deal. Ford would have benefitted from Mahindra’s marketing pull and frugal vendor development strategy, while the latter would get access to the much-needed technology for the present (gasoline) and the future (electric). The two companies blamed the pandemic and the altered market dynamics for the parting of ways.

“It was not an easy decision but both companies were clear that given the current situation, this is the most prudent decision,” Pawan Goenka, Managing Director and CEO for Mahindra, said at a virtual press conference on January 1. “We have to move on and focus on our core businesses.”

The break-up is yet another addition to Mahindra’s long list of unsuccessful collaborations. The decision comes at a time when electrification is structurally changing the global automotive industry. Mahindra finds itself under intense pressure in the utility vehicle segment in India — an area it lorded over not long ago. Its share in the segment has nosedived from a high 55.6 per cent in FY12 to just 15.2 per cent so far in the current fiscal. While it got swept aside by Maruti Suzuki as the leader in the segment in 2017/18, it has now fallen to a

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