Ford, Mahindra to expand tie-up to muster up a rival to Hyundai's Creta

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As sports utility vehicles (SUVs) continue to be a hot favourite with buyers, the joint venture of Mahindra & Mahindra and Ford has added yet another vehicle platform to the partnership that will spin off a model each for both the players.

Both companies are building SUVs which will be based on a common Ford Motor Company platform. These two new SUVs will be targeting the entry mid-size segment currently dominated by the Korean heavyweights Hyundai and Kia. This is in addition to a number of other SUVs and projects that M&M and Ford have been working on since 2019.

Hyundai recently introduced the new Creta while its sister concern Kia is a dominant player in that segment with the Seltos. Volkswagen, Skoda and Citroen are some of the other brands who have lined up launches in the same segment.

Speaking to analysts, Pawan Goenka, managing director, M&M said, “The only gap that we have in the platform is a 4.4 meter kind of vehicle, and that will come from a joint product development that we are doing with Ford. This is a Ford platform called VX-772, which will take care of that need for Mahindra also.”

While M&M benefits from a readymade platform developed by Ford the US-based company gets to source Bharat Stage VI engines from the Indian company which can be used in products to be sold under its own brand in export markets such as Europe.

“The three engines that we have talked about - the 1.2 liter, the 1.5 liter and the 2 liter - they are all ready for launch. The 1.2-liter engine will go into Ford EcoSport, the 1.5-liter engine will also go into the B Platform SUV that Ford is developing right now. That platform will be used by Mahindra also. And the 2-liter engine has been accepted by Ford for the W605, the common platform, that we have for the C Platform SUV,” added Goenka.

The C Platform SUV codenamed W601 is the second generation XUV500, Mahindra’s flagship SUV. Goenka confirmed that this new generation XUV500 will be launched towards the end of the current financial year.

The C-SUV will be produce at M&M's plant while the B-SUV will be rolled out from Ford's plant for both companies.

“Both Ford and Mahindra brands would remain independent and products would be sold through two different channels. Work has started on the C segment SUV, based on M&M’s platform. Ford would pay Rs 1,000 crore for the product development. The alliance would bring down the time to market, reduce capex in product development and also shrink the cost structure of the JV,” a report from Motilal Oswal stated.

While neither of the companies provided any timeline for the launches, sources say that the C-SUV from Ford will likely follow the second generation XUV500 in 2021 later followed by the B-SUV launch in 2022-23.

Rajesh Jejurikar, Executive Director, automotive and farm Sectors, M&M said, “The potential benefits have been co-sharing of investments and technologies and economies of scale in joint sourcing. There's strong evidence of that on both sides. Mahindra has gained on some of its newer projects from overview that Ford was able to bring in and likewise for projects which are impacting the joint venture. We're seeing a lot of momentum on joint product development and capacity utilization.”