SsangYong could be part of M&M-Ford synergy drive

Murali Gopalan Mumbai | Updated on November 12, 2019

Pawan Goenka, Managing Director, Mahindra & Mahindra Ltd (right) and V S Parthasarathy, CFO. File Photo   -  BusinessLine

SsangYong Motor of South Korea could be part of the product synergies planned by Mahindra & Mahindra (M&M) and Ford Motor Company in their new joint venture.

“The product synergy that we are trying to work on between M&M and Ford here in India…SsangYong could very much be part of that,” Pawan Goenka, Managing Director of M&M, told BusinessLine in an interview.

In the process, similar products will “apply to SsangYong also” though these are early days yet. M&M had acquired the Korean automaker in 2011 and, more recently, had entered into a 51:49 partnership with Ford to spearhead work on new platforms/products.

“The benefit between M&M and Ford is that they are serving almost identical markets whereas Korea is very different from India,” said Goenka. Yet, the possibility of SsangYong joining M&M-Ford in terms of product synergy and platform commonalisation “is very much on the cards”.

Other opportunities could also crop up, added Goenka. For instance, SsangYong could have a product that Ford might find interesting for its markets. “SsangYong is also in a similar situation as M&M in the sense that it has 5-6 very good products but does not have a very strong brand and network outside Korea,” he elaborated.

This means a whole lot of new permutations and combinations could emerge in the future. For instance, a SsangYong product could be retailed under the Ford name and network if there is such an opportunity. While nothing has been discussed yet, “these are all possible”.

Host of initiatives

What comes through loud and clear is that the M&M-Ford joint venture could pave the way for a host of interesting initiatives that go beyond the products and platforms spoken of thus far.

“For example, we have not done enough talk yet on the mobility services businesses,” said Goenka. This was one of the key areas for the partners initially when they first decided to explore coming together in 2017. However, it would have resulted in “too much on the plate”.

Even while that has been kept aside for the time being, it is only a matter of time before the two revisit this space. As Goenka hinted, “after the dust settles down, we could combine hands and do something”. Likewise, there could be some opportunities in the pick-up space though these are way too premature at this point in time.

According to Goenka, there is a “list of possible things” that could be conceived jointly with Ford except that there is still some time to go before these can emerge a reality. It is still a million-dollar question if there is value in a Ford pick-up brand for emerging markets or if it will jointly develop one with M&M.

As Goenka said, the sky is the limit for new opportunities but the priority is to focus on what is required right now as part of the mandate in the joint venture. To that extent, there is really no reason to “put everything on the table right now”.

Beginning, not destination

In a way, this JV marks the beginning of a journey and not a destination. “There is nothing that cannot be done but there is a lot of work ahead. We should not start thinking beyond the immediate task right now,” reiterated Goenka.

At present, the focus is to get the whole of Ford India into the new core entity and make it fully operational. As the M&M chief said, it is important to get it “into a sort of well oiled machine” before embarking upon “what else we can do in the Ford universe globally” to create more “win-win situations”.

Published on November 12, 2019

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