Ford Buys Indian Partner's Stake in U.S. Automaker's Subsidiary

BANGALORE, India March 30, 2005; The AP reported that Ford Motor Co. has bought its Indian partner's stake in the U.S. automaking giant's local subsidiary, a company official said Wednesday.

Ford has taken full control of Ford India after buying a 15.88 percent stake from local partner Mahindra & Mahindra Ltd., said Vinay Piparsania, Ford India's vice president, from the southern city of Madras.

Meanwhile, Ford sold its 5.1 percent stake in Mahindra back to the Indian company. Piparsania declined to give any financial details.

Mahindra said in a statement to the Bombay Stock Exchange that "both companies today operate in a much different business environment and the time has arrived for both the companies to manage their goals independently."

The move comes after Mahindra and Renault announced plans in February to launch a joint venture to produce Renault's low-cost Logan car in India.

Ford Motor set up its Indian subsidiary in Madras in 1995 as a 50-50 joint venture with Mahindra. But Ford later raised its stake.

Ford India's factory near Madras employs 1,700 workers and has a capacity of 100,000 cars per year.

Ford India sold 27,000 cars in 2004 and expects sales to rise 10 percent in 2005, Piparsania said.

Ford India: http://www.india.ford.com