Home Business Business News Make in India Success Story: Mahindra May Use Ford’s Chennai Plant To Manufacture Passenger Vehicles

Make in India Success Story: Mahindra May Use Ford’s Chennai Plant To Manufacture Passenger Vehicles

In a major success for the centre’s ‘Make in India’, Mahindra and Ford India have joined hands to manufacture passenger vehicles. Mahindra will use Ford India’s Chennai plant to manufacture these vehicles. The American giant’s Chennai plant is said to be seriously underutilized. It has a rated capacity of 2 lakhs vehicles every year. Mahindra will also improve its passenger vehicle output significantly under this deal.

Ford produces only around 1.2 lakh vehicles from the Chennai facility every year as of now. Ford India, remember, has a new plant at Sanand in Gujarat as well. That facility has a capacity to produce 2.4 lakh units annually. That plant is only 60 percent utilized at the moment.This deal is expected to use Ford India’s infrastructure to the fullest as well as increasing its own productivity. Mahinda is one of the largest Indian automobile companies.

Ford plant@Chennai
Inside the Ford plant in Chennai

The tie-up also has one great benefit for Mahindra: it will not have to shell out money to set up a new factory. The automobile industry is one of the heaviest industries in the world and is very capital intensive. Should the new plants at Sanand and Chennai pan out in the manner Mahindra is planning, the two plants together will carry the burden of Mahindra’s renewed thrust in the passenger vehicle segment besides Mahindra’s forte of heavy vehicles.

Pawan Goenka, who is the Managing Director of Mahindra & Mahindra Ltd stated that the strategic partnership was very important to them and it represented a significant commitment in labour and financial resource. The Mahindra-Ford partnership is one of the biggest in the country. However, this is not the first time that the two giants are merging: they had done the same in the early 90’s as well. That partnership had produced the Ford Escort sedan.

Some of the biggest partnerships in the Indian auto segment are Tata and Fiat- that partnership stands dissolved now, Maruti and Fiat, and Nissan and Ashok Leyland. That last merger too is now dissolved. However, the most successful merger in the history of Indian automobiles is Maruti and Suzuki. Sources suggest that Ford had also initiated a very similar contract-manufacturing talks for the same Chennai plant with its Chinese joint venture partner Changan Automobile. That deal did not materialize. The ‘Make in India‘ dream made it instead.

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