Ford Motor Co on Thursday announced that it was scrapping its plan to form a joint venture with Mahindra and Mahindra Ltd due to the downturn in business caused by the Covid-19 pandemic.

The companies said in separate statements that the decision was driven by changes in the global economy over the last 15 months, because of which they would have to reassess their investment priorities. Ford said its independent operations in India will continue.

“The global economy and business environment are not the same as October last year,” Ford spokesman T.R. Reid said. The deadline to finalize a joint venture between the companies was December 31, and both companies decided to end the agreement rather than close a deal or extend the timetable to do so, Reid said.

In October 2019, Ford and Mahindra said they would form a joint venture in India in a move to cut costs for developing and producing vehicles for emerging markets. The companies said at the time they expected to launch three new utility vehicles, starting with a midsize SUV, and also jointly develop electric vehicles for emerging markets.

Mahindra said in its statement that the decision will not have any impact on its product plan, and that it is accelerating efforts to develop electric SUVs.
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