M&M-Ford pact to focus on joint tech

CHENNAI: While TOI had broken the story on MahindraFord alliance talks last week, it now emerges that the contours of the proposed partnership go much beyond capacity sharing alone. Sources say the two auto majors are talking about a global alliance that would focus on joint technology, product and component development. However, highly-placed sources said the "talks are at a very preliminary stage and the contours of the discussion are still hazy."

The talks are focused around technology and product development with Mahindra's

Detroit

tech centre, Mahindra North American Technical Centre (MNATC), playing a critical role. If the alliance does fructify, it could spawn a whole new range of global utility and sports utility vehicles as well as electric vehicles, said two people with direct knowledge of the matter.

When contacted, the Mahindra & Mahindra spokesperson said in an email reply ,"As a matter of policy , we do not comment on speculation." The

Ford India

spokesperson also said: "We don't comment on conjectures." Sources, however, say that the global alliance talks with Ford -which also includes sharing of excess production capacity as reported by TOI on March 3 -will primarily focus on joint development of products and platforms and next-generation technology ."For now what's being discussed is a purely technology arrangement with no equity involved," said a source in the company .

Sources say the tech talk with Ford Motor Company is part of Group Mahindra's global ambitions. The company has been focusing on global products in its auto, two-wheeler and farm equipment sectors. In auto, it is planning a fresh foray into the US market through both Mahindra-badged off-roader developed by MNATC as well as a US debut for Korean group company Ssangyong. In tractor and farm equipment, it went in for three global deals first with

Mitsubishi

Agricultural Machinery in 2015, then with Finland's Sampo Rosenlew Oy in 2016 and most recently Turkey's Hisarlar Makina Sanayi ve Ticaret Anonim Sirketi. And in two-wheelers, the

Peugeot

range is being lined up targeting South East Asian markets.

All of which point to a global focus, something that top Mahindra executives have already publicly hinted at. Earlier this month, Pravin N Shah, automotive sector president, M&M, was reported saying that the company is looking for another "home base" outside India and it will be a big move requiring brick-and-mortar investments. Sources say Mahindra could be looking at building the second home base in either Mexico or Brazil - both low cost production centres close to the US market. The Ford alliance could be part of that larger global focus of the group, say sources. As for Ford, a partnership with Mahindra could help it tap frugal engineering solutions and also crack the Indian market better, said industry experts.

The

Mahindra-Ford alliance

, if it goes through, will be the second local-global collaboration after the Tata Motors Volkswagen Skoda announcement and will follow a similar pattern of tech focus.