By Santanu Choudhury
NEW DELHI--Mahindra & Mahindra Ltd. (500520.BY) and BAE Systems PLC (BAESY) are reviewing their defense joint venture in India to see if any changes are needed, the two companies said in a joint statement Wednesday.
Mahindra, India's largest maker of sport-utility vehicles by sales, and U.K.-based BAE said that there has been a "significant evolution" in the Indian market for land systems since the establishment of their joint venture in 2009.
The Defence Land Systems India joint venture -- 74%-owned by Mahindra and the rest by BAE -- makes special military vehicles at a facility on the outskirts of New Delhi. The facility was also to be used to make artillery guns for the Indian Army.
"Developments in both the industry environment and in customer procurement frameworks and acquisition strategies have led the shareholders to institute a strategic review of the business," the statement said.
"This review will assess any changes necessary to address the evolving market and to meet emerging customer requirements," it added. "No decision has yet been taken on the way forward."
The two companies didn't elaborate on their plans.
Khutub Hai, chief executive at Mahindra Defence Systems, a division of Mahindra & Mahindra, declined to comment when contacted.
In addition to BAE, Mahindra has a joint venture with U.S.-based Telephonics Corp. a unit of Griffon Corp. (GFF), to make radar systems in India, and another with U.A.E.-based Arabia Holdings and Ras Al Khaimah Transport Investments LLC to make and sell armoured vehicles in the Middle East and Central Asia as well as in Africa.
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