Ford Joint Venture: Automaker Close To A Deal With India’s Mahindra & Mahindra

A deal may be on the horizon for automakers Ford (F) and Mahindra & Mahindra (M&M.NS) as the two companies reportedly are looking to form a joint venture in India.

Through the joint venture Ford may end its independent operations in the country, allowing Mahindra to take control of its automotive assets as well as its employees with the creation of a new company, sources told Reuters.

The move for Ford is thought to be a part of its $11 billion global restructuring plan that will take place over the next few years as it faced challenges in India from low car demand to a low market share of only 3 percent, the news outlet said.

Ford, however, will reportedly retain its engine plant in Sanand, Gujarat, India, but move its Chennai and other Sanand plants to the JV. Ford opened the two Indian plants, which have a capacity of 440,000 units, in 2015.

Sources for Reuters did say that Ford branded cars will continue to be produced and sold in India as well as export under the joint venture. Ford has invested more than $2 billion in India, over the last 20 years.

A Ford spokesperson did not confirm the joint venture but told the news outlet that the company was working with Mahindra “to develop avenues of strategic cooperation that help us achieve commercial, manufacturing and business efficiencies.”

Shares of Ford stock were up 0.38 percent as of 10:47 a.m. ET on Wednesday while shares of Mahindra & Mahindra stock were down 4.30 percent at the same time.