Ford Motor announced Tuesday that it would put most of its operations in India into a joint venture to be headed by the Indian vehicle maker Mahindra & Mahindra, a bid to bolster Ford’s position there.
Mahindra will own 51 percent of the joint venture, which will take control of Ford’s assembly plant near the city of Chennai and another in Sanand, the two companies said. The joint venture is valued at $275 million.
Subject to regulatory approval, the venture could be in operation by the middle of next year, the companies said. They said the venture would be responsible for strengthening the Ford brand in India and exporting Ford products made there.
“This joint venture will grow Ford’s presence in India as well as in emerging markets,” said Ford’s chairman, William C. Ford Jr. “It will also allow the Mahindra brand to expand its global presence.”
The move is the latest effort by Ford’s chief executive, Jim Hackett, to cut losses and streamline the automaker. In Europe, Ford is closing five plants and eliminating 12,000 jobs. It is also cutting 7,000 positions from its global salaried work force, about 10 percent of the total.
Earlier this year, Ford joined forces with Volkswagen to develop self-driving cars. Ford and Volkswagen are also working together to produce commercial vehicles in Europe and pickup trucks for foreign markets. Ford has been working with Mahindra to develop a sport utility vehicle for emerging markets.
Mr. Hackett was hired in 2017 to reinvigorate Ford, but so far his efforts have had little impact on the bottom line. In the second quarter, Ford reported net income of $148 million, down from $1 billion in the year-ago period. On Monday, Ford stock closed at $9.16. When he was appointed C.E.O., the stock was trading above $11 a share.
Ford and other automakers are coming under pressure as sales slow in key markets like China and the United States while they are spending billions of dollars to develop electric vehicles and self-driving technologies. The two trends are forcing carmakers to seek alliances to share costs and risk.
“I don’t believe any one company can do this alone,” Mr. Ford said. “Partnerships around the world will become the norm in our industry.”
Ford said that it had invested about $2 billion in India in the last 25 years and that its business there was profitable in 2018. The company expects to book a charge of $800 million to $900 million in the third quarter to reflect the decline in the value of its assets there.
The joint venture with Mahindra signals a major shift in Ford’s strategy in India, an emerging market where it was once expected to see rapid growth. In the past decade, Ford closed its plants in Australia and invested heavily in India, expanding the Chennai plant and building a second factory in Sanand, in western India. It also tried to develop a car to be priced at about $10,000 for India and other emerging markets like Brazil.
The company imports the EcoSport, a small S.U.V., into the United States from its Chennai plant.
But the Indian auto market has not grown as many experts had expected. About four million passenger cars were sold in India in 2018, well below the 28 million sold in China.
Ford and Mahindra said their joint venture was expected to introduce three utility vehicles under the Ford brand, including a midsize S.U.V. built on a Mahindra platform. The companies also said they would collaborate on developing electric vehicles. Together, the companies have the capacity to produce 1.2 million vehicles a year in India, although they are currently operating well short of full capacity.
Working with Mahindra will allow Ford to fill its plants faster than it could have on its own, Mr. Hackett said.
Anand Mahindra, chairman of the Mahindra Group, said the joint venture should generate a profit before interest and taxes in its first year of operation.
The two companies will maintain their own branded distribution networks in India. But Mahindra will make use of Ford dealers to extend its reach in emerging markets. Ford will retain an engine plant in Sanand.
General Motors stopped selling cars in India in 2017. This year, Indian auto sales have slumped and automakers have cut production and laid off thousands of workers.