The most important development during the week that eclipsed all other automotive news was the joining of hands between two companies who are in search for future mobility solutions in a market that has become the most demanding globally.
But the collaboration between Ford Motor Company and Mahindra & Mahindra was more of a necessity than natural synchronisation. Both companies are very diverse in their work cultures, have very different product portfolios and their target audiences are also very dissimilar.
While the big and brawny American firm is known for its huge trucks (pickups as they are known in the US) and muscle cars, the Indian company is known for its rural, rugged and built-for-all-seasons people movers.
But there is one thing that is common to both. Both are under fire from competitors in India where the top two car makers, Maruti Suzuki and Hyundai, control 65% of the market. No other large automotive market in the world is dominated by just two players.
Ford has a negligible presence in India. Save its EcoSport, none of its other models like Figo, Aspire and Endeavour have made a mark in India despite a complete overhaul of its portfolio, which involved phasing out of several older generation models. To sustain operations, its headquarters decided to push exports from India for the time being.
M&M on the other hand has struggled to fend off competition. From a surging Maruti Suzuki to a resurgent Tata Motors every company has launched vehicles in the segment which had been the home turf of M&M. But despite launch of new models like KUV 100, TUV 300, Nuvosport and Thar, M&M’s market share has continued to erode in the utility vehicle segment. From a high of 55% its share in the UV segment dipped to below 30%.
Now as per plans, both companies will help each other develop compact and mid-size SUVs that would be sold under both brands. The engine and transmission units will be shared too. M&M stands to benefit from Ford’s vehicle platforms, while lower costs structures will help Ford further sustain its India operations.
However, this is not the first time the two companies have come together. More than 20 years ago, M&M agreed to manufacture the Ford Escort, a mid-size sedan for the Indian market. The partnership did not last more than four years as Ford decided to buy out M&M’s stake in the venture.
M&M partnership graph is not too bright either. The company severed ties with Renault, Nissan and Navistar (US truck major) as things went downhill a few years after joining hands.
Besides the conventional agreements, both companies have also decided to work on electric vehicle technology and connected vehicle projects for the future keeping in sync with the predicted changes in buyer preferences.
Even as the two unlikely companies join hands, a European pair have decided to go solo. Despite a set-back in their proposed plans to set up a product development joint venture with Tata Motors, Skoda and parent company Volkswagen have finalised a new range of compact and mid-size cars, crossovers and SUVs for the Indian market.
Skoda Auto is set to take the lead in spinning off vehicles on the India-specific vehicle platform: MQB AO IN. Volkswagen will follow suit with their line of vehicles. Both European brands are under pressure for failing to make a mark in the country despite being here for more than a decade.
Meanwhile, Tata Motors, Nissan and Datsun have decided to raise prices with effect from April 1. Nissan will raise prices by 2% across all models, whereas Tata Motors has decided to go with a price hike of up to Rs 60,000 (depending on the model).moneycontrol