Ford was expected to end operations in India after struggling in the world’s fourth-largest car market.
Ford Motor Co. is canceling its intention to divest most of its Indian operations to Mahindra & Mahindra Ltd., deciding to withdraw from a proposed joint venture and continue its autonomous activities in the country.
The companies agreed to terminate the business after a reassessment in part due to the global coronavirus pandemic, they said Thursday. The move ends an agreement reached over a year ago under which Ford was to consolidate its local operations, including two factories, into a JV that would be majority controlled by Mahindra, a major Indian manufacturer of sport utility vehicles.
The future of Ford’s business in India is unclear as it has struggled for more than two decades to expand into the world’s fourth-largest car market. “The company is actively evaluating its business around the world, including India,” Ford said in a statement.
The U.S. automaker took an impairment charge of $ 799 million in 2019 in anticipation of the asset transfer to Mahindra to reflect what it called “fair value less cost to sell.” A spokesperson said Thursday that terminating the deal would not affect that assessment.
“There will be no impact on the depreciation that we recorded previously,” said TR Reid, the spokesperson.
The automakers had said they would cooperate to develop an electric car for emerging markets and work together to present three new models for sale under the Ford brand in India, starting with a mid-size SUV.
Ford did not specify what would become of these projects. Mahindra has said in her own statement that the company’s termination will not affect its product plans. “Mahindra is stepping up its efforts to establish leadership in electric SUVs,” he said.
The decision came as the deadline of December 31 was looming to formalize the planned partnership. Jim Farley, who became the CEO of the American automaker in October, said in 2019 that the JV with Mahindra could allow Ford to double its revenues in India.