Mahindra & Mahindra and Ford have announced a new partnership deal with a cost-saving plan of more than 25.5 billion US dollars, globally. In fact, Mahindra will contribute a significant part of it.
Economic Times shares that the five elements stated as part of the Memorandum of Understanding (MoU) in September 2017, are inching close to a final agreement. In effect, the partnership can lead to potential savings of around 500 million to over a billion dollars, in the next five years.
Sharing vehicle platforms, engines, electric powertrain technology, connectivity and equipment are the key areas which can generate the above-mentioned levels of profit. The effective saving would be in the range of "hundreds of millions of dollars", say the officials involved.
Ford and Mahindra have already set up their plans to share connected car technology and efficient power trains over a commercial agreement. Regarding architecture or platform sharing, better clarity will be made in the coming months.
"A firmed-up agreement on C-segment SUV will be announced within a month and negotiations for a B-segment SUV and an EV architecture are progressing well," said an official. The SUV is likely to be made out of Mahindra's Chakan facility. The sourcing for the C-Segment SUVs codenamed W601 and W605 has already begun.
While Ford benefits from Mahindra's new SUV architecture, the maker of the Scorpio and Bolero can benefit from Ford's B-segment architecture for a monocoque SUV; a critical missing piece in the portfolio and modern EVs. "The synergies are clearly there, right from product development, sourcing, distribution and other factors that save a huge amount of cost and help return the investment; a big question mark nowadays," stated another official.
Pawan Goenka, MD of Mahindra & Mahindra, shared, "The investment that we're making together is the same either of us would've made alone. In addition to this, we get the benefit of cost reduction since in this kind of hardware, the economy of scale reduces cost. So, it's not only 50% sharing of investment, but also cost-effectiveness".
Thoughts On The Partnership Between Mahindra And Ford
Teams from both companies are working together to cross new boundaries of strategic cooperation that help achieve more in the commercial, manufacturing and business sector. Put in simple terms, we can expect some exciting products on the market in the not-too-distant future.