Mahindra & Mahindra was up 0.36% at Rs 558.60 after the company formed a joint venture with Ford Motor Company after buying a 51% stake in the Indian unit of the US auto major.
Mahindra & Mahindra (M&M) and Ford Motor Company have signed a definitive agreement to create a joint venture that will develop, market and distribute Ford brand vehicles in India and Ford brand and Mahindra brand vehicles in high-growth emerging markets around the world. The announcement was made on 1 October 2019.Mahindra and Ford will form a joint venture, with Mahindra owning a 51% controlling stake and Ford owning a 49% stake. Ford will transfer its India operations to the joint venture, including its personnel and assembly plants in Chennai and Sanand. Ford will retain the Ford engine plant operations in Sanand as well as the global business services unit, Ford Credit and Ford Smart Mobility.
The joint venture is the next step in the strategic alliance forged between Ford and Mahindra in September 2017 and is expected to be operational by mid-2020, subject to regulatory approvals. The joint venture will be operationally managed by Mahindra, and its governance will be equally composed of representatives of Mahindra and Ford. The joint venture will be responsible for growing the Ford brand in India and exporting its products to Ford entities globally. Ford will continue to own the Ford brand, and its branded vehicles will be distributed through the current Ford India dealer network. Mahindra will continue to own the Mahindra brand and operate its own independent dealer network in India.
M&M's total auto sales rose by 20.11% to 43,343 units in September 2019 as against 36,085 units in August 2019.
Tractor sales surged 149.78% to 37,011 units in September 2019 as against 14,817 units in August 2019.
Meanwhile, the S&P BSE Sensex was down 553.55 points or 0.49% to 38,118.49.
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On the BSE, 65,000 shares were traded in the counter so far compared with average daily volumes of 3.21 lakh shares in the past two weeks. The stock hit a high of Rs 561.45 and a low of Rs 547.05 so far during the day.
The stock hit a 52-week high of Rs 847 on 03 Oct 2018. The stock hit a 52-week low of Rs 502.85 on 14 Aug 2019.
On a consolidated basis, M&M's net profit fell 51% to Rs 809.30 crore on a 0.1% decline in net sales to Rs 26041.02 crore in Q1 June 2019 over Q1 June 2018.
Mahindra & Mahindra is engaged in the manufacture of passenger cars, commercial vehicles and tractors.
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