Ford Motor Co. and Mahindra & Mahindra Ltd. agreed to co-develop a midsize SUV for India and emerging markets in an effort to sustain profitability in the world’s third-biggest car market.
The new SUV will have a common Mahindra product platform and powertrain, helping to reduce product development costs and gain economies of scale, Mahindra and Ford said in a statement on Thursday.
The agreement signed by the two carmakers reinforces progress they have made since announcing a strategic alliance in September 2017 and powertrain-sharing and connected-car solutions a year later. Ford was among the first global automakers to enter India in 1995, partnering Mahindra when the country opened its car market for foreign investment.
The two companies set up a factory near Chennai and started making the Escort sedan. While models including the Ikon, Fusion, Fiesta and Figo followed, the carmaker lagged behind companies such as Suzuki Motor Corp. and Hyundai Motor Co. in India.
The tie-up with Mahindra is critical for Ford as it has been trying to boost its market share unsuccessfully in the market led by Suzuki and Hyundai.