Ford took a $799 million impairment charge in 2019 in anticipation
of the asset transfer to Mahindra to account for what it called fair value less
cost to sell.
Ford
Motor Co. is reversing plans to cede most of its Indian operations to
Mahindra & Mahindra Ltd., deciding to pull out of a proposed joint venture
and continue its standalone business in the country.
The companies
agreed to terminate the venture after reassessing in part due to the global
coronavirus pandemic, they said Thursday. The decision ends a deal reached more
than a year ago under which Ford was expected to fold its local operations,
including two factories, into a JV that would be majority-controlled by
Mahindra, a leading Indian manufacturer of sport utility vehicles.
The future of
Ford’s business in India is unclear as it has struggled for more than two
decades to grow in the world’s fourth-largest auto market. “The company is
actively evaluating its businesses around the world, including in India,” Ford
said a statement.
The U.S. carmaker
took a $799 million impairment charge in 2019 in anticipation of the asset
transfer to Mahindra
to account for what it called “fair value less cost to sell.” A spokesman said
Thursday the termination of the deal won’t affect that valuation.
“There will be no
impact on the impairment that we recorded previously,” said T.R. Reid, the
spokesman.
The automakers had
said they would cooperate to develop an electric car for emerging markets and
work together to introduce three new models to be sold under the Ford brand in
India, starting with a midsize SUV.
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