NEW DELHI/DETROIT -- Ford Motor Co. has frozen all projects it was working on with Mahindra & Mahindra while it finalizes a new India strategy, three people familiar with the U.S. automaker's plans told Reuters, weeks after the two companies called off their planned joint venture.
"The options could include working out a new relationship with Mahindra or ending the relationship and related vehicles completely," one of the people said.
The two other people said they expect Ford to make a decision in about a month on whether to proceed with Mahindra in a different form or not, adding Ford CEO Jim Farley wants to see a path to greater profitability in India.
Ford and Mahindra had proposed a joint venture to develop at least three utility vehicles for India and emerging markets, as well as share suppliers, powertrains and technology. The $275 million deal, which would have ended most of Ford's independent operations in India, was called off in December.
Since Farley became CEO in October, Ford has pushed harder to remake itself globally as part of an $11 billion restructuring plan, including ending manufacturing in Brazil and speeding up the rollout of electric vehicles. With so much on Farley's plate and limited financial resources, India is a lower priority, the first person said.
Ford entered India 25 years ago, but it has just 3 percent share in a market dominated by Suzuki Motor Corp.'s and Hyundai Motor's extensive line-up of mainly low-cost cars.
The tie-up with Mahindra would have given Ford a better chance against rivals by allowing it to launch new vehicles faster, at reduced costs and with lower investment, company officials and analysts previously said.
Ford said its independent Indian operations will continue.