Ford Keen To Vend M & M Scorpio Worldwide
Mahindra & Mahindra managing director Anand Mahindra said the worlds second biggest automobile firm, Ford Motor Company of US, is very keen to market its Scorpio utility vehicle under its name worldwide.
He said Ford is working very closely with Indian engineers to make Scorpio a vehicle of international quality by providing key technological inputs. Fords interest is not only in helping us produce it (Scorpio), but also actually marketing the vehicle overseas. It was a clear choice for us, he said.
When the vehicle comes out, we will be able to show that we can indigenously develop and engineer in India a world-class vehicle to the point that one of the biggest auto companies in the world wants to distribute it, he said.
According to him, when Mahindra joined hands with Ford, Scorpio was meant to be a small niche vehicle to be produced on an incremental technology basis.
But it went on to become a completely new generation vehicle instead. Fords confirmation that it was keen to export Scorpio under its name presented us with a significant opportunity not only because it gives us a completely new platform, but it would also mean that we would be using this vehicle to go down the technology curve much faster than we had thought, he said.
Scorpio has been fully designed by M&M designers and engineers. But when you are making a whole new vehicle there are certain elements in vehicle integration that you require help for, he said.
Ford is providing help in areas like accelerated vehicle integration, vehicle testing and reliability. Ford has offered us crucial help to make sure that the vehicle works. They have shown keen interest in distributing the vehicle clearly on a commercial understanding, he said.
He said when M&M went into the Scorpio venture, a fully indigenously designed utility vehicle was not even on the drawing board. But the way the programme evolved it became a completely new generation vehicle on a new platform and hence the resources required to fund that was not budgeted then.
When you look at the resources to develop a completely new vehicle, it became obvious to us that we would have to prioritise between this project and our joint venture, Mahindra Ford India Ltd (MFIL). Either we continued to put more money into MFIL or we reallocate some of the resources, he said.
Mahindra said his company is discussing equity adjustment options in MFIL with Ford. We are working out details because we are yet to go to the FIPB with an application to reduce our equity, Mahindra told PTI. He said the two companies planned to approach FIPB next month to enable Ford to increase stake in the venture, currently making the Escort cars.
M&M had recently told Ford that it was capping investment in the joint venture since it wanted to use the money for the Scorpio project. As a result of this, Mahindras equity in MFIL will go down to about 20 per cent.