Mahindra may tie up with Ford India for using Chennai plant for passenger vehicles

Home-grown utility vehicle specialist Mahindra & Mahindra (M&M) is reportedly in talks with Ford India to use the latter's Chennai plant for manufacturing its passenger vehicles.

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"The talks are at an advanced stage, and several rounds of discussions have already taken place," Times of India quoted a top source in one of the companies as saying. "At any given point of time, we are talking to different original equipment manufacturers (OEMs) for various possibilities, which can include sharing of platforms, (production) capacities or dealer network. However, I cannot confirm whether we are talking to Ford, or whether we are not talking to them," Pawan Goenka, managing director, said.

Ford India's Chennai plant has an annual production capacity of around 2 lakh cars. However, the American carmaker currently produces only about 1.2 lakh units from this plant annually. Ford also has a new plant at Sanand in Gujarat with a capacity of around 2.4 lakh units, but only around 60 per cent of it is under utilisation at the moment. Hence, a deal with M&M will help Ford India to make a better use of its current infrastructure.

If the deal gets through, it will also beneficial for M&M. The company, which has its main plants in the western state, will have a production base in South India with the tie-up with Ford. It will also significantly cut down the huge investment required to set-up for another plant for M&M.

This is not the first time Ford and Mahindra are joining hands together. After its first attempt to get a foothold in India way back in 1926, Ford re-entered the market in October 1995 as Mahindra Ford India Limited (MFIL), a 50-50 joint venture. The alliance sold the Ford Escort sedan between 1996 and 2001.