Ford Motor Company has reiterated its emphasis on 'Make in India' after reports emerged that it is in talks to sell 51 percent stake in most of its Indian assets to Mahindra & Mahindra (M&M).
“Ford remains committed to growing its customer base and product portfolio in the world’s fourth-largest automobile market, and will continue to make in India, for India and the world,” Lori Arpin, a spokeswoman for the Michigan-based automaker told Bloomberg.
The new entity will hold most of Ford India's assets including two car plants, but will not include its global business services division or an export-focused engine plant in Sanand. It also gets equal voting rights and board representation, sources told the news wire.
To deal is likely to be confirmed for less than $2 billion that it originally invested in India, would allow Ford access to the world’s fourth-largest auto market, while resting the financial burden with M&M.
Moneycontrol could not independently verify the report.
It would also allow M&M to sell Ford vehicles in other developing automobile markets under its own brand, the report said. The two companies are also working on a joint mid-sized sports utility vehicle (SUV) for the India market.
A final agreement hasn’t been reached and the discussions could still fall apart, the article quotes sources as saying.
The stake sale discussion comes after Ford's failure to make 'meaningful inroads' in India despite spending over 20 years. The auto maker commands barely three percent market share, sources said. Ford is also undertaking an $11 billion restructuring to pare its overseas losses under CEO Jim Hackett.
Ford first entered India in 1926 but shut operations in 1950s, it then re-entered the country after the economic liberalisation in 1991.
In 2012, the company shared its vision of making India its third-largest market by 2020. But fierce competition, especially from market leader Maruti Suzuki and the auto sector is forcing the industry to make alterations.
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