Ford and Mahindra have agreed to form a joint venture valued at US$275 million ($406 million), which will be based in India and focussed on making vehicles for "high-growth emerging markets around the world".
Mahindra will be the dominant partner in the relationship, owning 51 per cent of the joint venture and running day-to-day operations. Ford will own the remainder of the company, and will transfer its Chennai and Sanand factories and employees to the new company.
Ford will retain full ownership and control of the export-focussed Sanand engine plant, as well as its mobility, credit and global services operations in the country.
At this stage, the companies are planning to launch three Ford-badged utility vehicles, with the first one being a mid-size model based on a Mahindra platform.
The two automakers will also work together on electric vehicles for emerging markets.
The joint venture is expected to begin operations from the middle of 2020 once all the regulatory hurdles have been cleared.
Above: Mahindra XUV500.
In India, Mahindra and Ford will continue to sell vehicles through their own independently-run dealership networks, and cars made by the joint venture will be badged as either Mahindra or Ford cars.
The joint venture will also produce Ford- and Mahindra-badged cars for export to developing markets. These vehicles will be sold through Ford's dealership network where appropriate.
Working together the two automakers will have a combined market share in India of around 14 per cent, up from Ford's current 3 per cent share.
Anand Mahindra, chairman of the Mahindra group, said "Mahindra’s expertise in value-focused engineering and its successful operating model, and Ford’s technical expertise, global reach and access to future technology" will prove to be a "potent recipe for success".
Today's announcement is the second major partnership announced by Ford this year, and follows on from its alliance with Volkswagen. This will see the two manufacturers jointly develop their next generations of vans, as well as the Ranger and Amarok utes.
The Blue Oval is also leaning on its Chinese partners to flesh out its range in the Middle Kingdom and Latin America, with the latest Territory crossover being the first fruit.