New Delhi: The strategic partnership between Mahindra and Mahindra Ltd and Ford India Pvt. Ltd reached the next level with the signing of two definitive agreements. The companies have decided to share Bharat Stage VI-compliant engines, besides jointly developing connected vehicle solutions for the Indian market, according to a joint statement issued on Wednesday.

Mahindra will develop and supply BS VI-compliant petrol engines to the American auto maker’s Indian subsidiary, while the companies will jointly invest in developing Telematics Control Unit for connected car solutions, which will be used by both companies. It was, however, not clear whether Ford will invest in developing the BS VI engines. The new arrangement will not only help Ford reduce its cost of developing vehicles in India, but it can also use the BS VI engines in vehicles for other markets.

Mahindra Group will, under the definitive agreement on powertrain sharing, develop and supply a low-displacement petrol engine to Ford India for use in its present and future vehicles, starting 2020, according to the joint statement. The BS VI-compliant powertrain will help Ford extend and strengthen its existing offering of petrol engines.

“This collaboration with Mahindra is also a smart way for Ford to reduce its cost of developing vehicles in India. The company will use the petrol engines in India and outside along with Mahindra, which will help recover the cost in a smaller time period," said a senior industry executive, requesting anonymity.

The companies will also develop Telematics Systems Unit to foray into the connected vehicle space. As of now, Mahindra sources the software for some of its electric vehicles.

“Today’s announcement further builds on commitments made so far, leading to a fruition of exciting new opportunities. We are confident to meet customer expectations by working together on a number of joint development areas. Going forward, we will continue to identify the synergies that exist between the two companies," said Pawan Goenka, managing director, Mahindra and Mahindra.

“Today we go further in delivering even greater value. With our collaboration in powertrain and connected car solutions, we will deliver an affordable portfolio and enable our Indian consumers to get behind the wheel, feeling more confident and connected," said Jim Farley, executive vice-president and president of global markets, Ford Motor Co.

Earlier this year, Ford and Mahindra had decided to collaborate on new products, including electric vehicles, specifically for the Indian market.