Ford Motor Company and Mahindra & Mahindra have pulled the plug on their previously announced automotive joint venture citing changes in the global economic and business conditions partly because of the Covid-19 pandemic.

Separately, M&M said it was in discussions with a potential investor to sell its majority stake in bankrupt SsangYong Motor Company.

In October 2019, Mahindra and Ford had announced a definitive agreement to set up a joint venture to develop, market and distribute Ford brand vehicles in India; and Ford brand and Mahindra brand vehicles in the emerging markets.

Under the terms of the joint venture, in which Mahindra would hold a 51 per cent controlling stake, Ford would have transferred its Indian operations, including personnel and assembly plants in Chennai and Sanand. Ford would only retain the engine plant in Sanand and the global business services unit, Ford Credit and Ford Smart Mobility.

Both the companies on Friday said they were scrapping the venture. M&M said the partners had mutually and amicably decided they would not complete the previously announced automotive joint venture. It said that the action followed the passing of the “longstop”, or expiration date on December 31 of their definitive agreement .

According to the companies, the outcome was driven by fundamental changes in global economic and business conditions — caused, in part, by the global pandemic — since the agreement was first announced.

SsangYong

At a video conference, M&M managing director and CEO Pawan Goenka said they expect to know within three months the outcome of their negotiations to sell their stake in SsangYong to an investor.

“It will be known on March 1 and we do hope that during this two-month period we will complete the deal with the investor,” Goenka said.

“If the deal goes through, the majority ownership will be with the new investor. Mahindra will be in minority with around 30 per cent or less and the company will also do 25 per cent capital reduction,” he said.