M&M may partner Ford for greater global reach, expertise

Mahindra & Mahindra (M&M) is looking to partner with Ford Motor Co to enter emerging markets like Indonesia and Russia. Pawan Goenka, Managing Director, M&M, told Mint that the company is exploring various aspects with Ford, including manufacturing, sourcing and engineering.

“We are even looking at the retail aspect. But things are at an initial stage (in these markets) to conclude what aspect we will be partnering on,” Goenka said.

The two companies had in September last year announced they were looking to forge strategic alliances to “leverage Ford’s global reach and expertise and M&M’s scale in India.” They are looking to combine their strengths as the automotive industry goes from strength to strength.

If the deal goes through, M&M would become the first Indian automaker to enter such a global alliance. Analysts predict positive results accruing from this partnership for both automakers.

Rakesh Batra, Partner at consulting firm EY, said India is an emerging regional manufacturing hub with an ability to serve other smaller regional markets. “In this situation, Ford can bring its experience in distribution to these markets, combined with economies of scale in manufacturing in India, which would optimise the combined capacities of both partners,” he added.

Tata Motors and Volkswagen AG had tried to arrive at a similar agreement but the same failed to take off after an initial agreement.

Recently, M&M Executive Chairman Anand Mahindra said the company plans to develop products on a global scale, working with unit Mahindra Automotive North America (MANA) and design firm Pininfarina.

At Monday's launch of Marazzo, the recently launched multi-purpose vehicle, Mahindra said the vehicle is a proof of the concept of the company's global R&D network working together to deliver world-class products. There are reports that the automaker has already started developing another vehicle at MANA.