Ford and Mahindra & Mahindra, which called off their proposed joint venture earlier this year, have now decided to call it quits on the engine and platform sharing supply pacts too.
As a result, M&M’s plans to supply the upgraded Ford EcoSport with its 1.2 litre petrol engine will be shelved. The Ecosport which is due for comprehensive facelift will continue to be powered by the 1.5 litre petrol (Dragon) and 1.5 diesel (DV5) motor
Similarly, the American carmaker’s C-SUV scheduled to debut next year was to have been fitted with M&M’s 2-litre petrol and 2.2 diesel engines. Once again that supply arrangement will stand cancelled. In fact it is likely that the C-SUV will be built on the Ford Territory sold in the Chinese market and not the next-gen XUV500 platform (W601) as originally planned.
Even after the JV was called off in January, the two companies had planned to collaborate on the C-SUV/XUV500 under the umbrella of Project Black. It now seems as if this will not happen either which means Ford is pretty much on its own to handle both the vehicle and its engine requirements.
Doubtless, this will have a huge impact on costs and it remains to be seen how both company meets this challenge. For Ford, localisation and huge export volumes will help to an extent. M&M, meanwhile, is on track to launching its next generation XUV500 that will precede the C-SUV, which could be delayed by a further six months and is unlikely to launched before the last quarter of 2022.
There is no formal communication from either Mahindra or Ford on what has triggered this move between the two companies. M&M sources reveal that it will not enter into engine supply arrangements with domestic players whilst Ford is keen to control its powertrain destiny rather than place it in the hand of what is now a rival company. In the case of Ford, it will have to revisit its costing structure and work out a Plan B where the C-SUV could roll out of its Chennai or Sanand plants.
To the market, the move marks a clean break for the erstwhile allies who were betting big on this JV to take their growth story forward. The pandemic and a change in the leadership at M&M has led to reassessment of investments and the subsequent shelving of the alliance.
It is likely that the duo decided that it did not make too much sense to have a piecemeal collaboration subsequently — whether this was a result of an expensive estimate for contract manufacturing of the C-SUV and the engines by M&M is not known.
Ford is pressing on with the development of its Creta fighter, a mid-size SUV (BX772) and an all-new sub 4 metre SUV (BX 744) which is slated for not just the Indian markets but export markets as well. India is key manufacturing hub for Ford’s small SUVs and the American car maker is still betting big on its operations here to serve over 70 international markets.
In the case of M&M, it has cut back on a whole lot of projects while deciding to focus on its core business of SUVs. The heady response to the Thar is an encouraging start, whilst the all-new XUV500 due in June and the Scorpio in early 2022 could keep the momentum going, once productions constraints are overcome.