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Sunday, January 3, 2021

Is It End of the Road for the Ford EcoSport?


Citing “fundamental changes global economic and business conditions,” Ford and Mahindra will not push through with their planned joint venture.

As a background, the two automakers explored a strategic alliance back in 2017 with plans to develop vehicles on common platforms, including a possible compact SUV and the next-generation Ecosport. The JV, which was to see Mahindra having a 51 percent controlling stake, would develop and market vehicles not just for the Indian market, but other developing markets globally.

Ford said its operations in India will continue as is. 

The question is for how long. The primary purpose of the Ford Mahindra joint venture was to cut costs and boost economies of scale. However, with the American carmaker currently chasing an 8 percent company-adjusted EBIT margin and improving its free cash flow, this might mean a gradual winddown of operations there.

It is increasingly likely (though nothing has been confirmed) that Ford will simply enter into a contract manufacturing agreement with Mahindra, especially for engines and vehicles which were being developed jointly.

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