Ford Motor Co. and India’s Mahindra and Mahindra Ltd. called off their auto-making joint venture Thursday, a little over than a year after announcing it, citing pandemic-related economic challenges.

In a joint statement, the companies said the dissolution of the venture “was driven by fundamental changes in global economic and business conditions — caused, in part, by the global pandemic — over the past 15 months.”

“Those changes influenced separate decisions by Ford and Mahindra to reassess their respective capital allocation priorities,” the companies said.

The two auto makers announced the joint venture in October 2019. Ford
F,
-0.79%

would have transferred most of its auto operations in India to Mahindra
500520,
+2.36%
,
a cost-saving move intended to keep a foot in a growing market where Ford has largely failed to make inroads. The joint venture would have focused on producing vehicles for emerging markets.

Ford said Thursday its operations in India “will continue as is,” and added that it is “actively evaluating its businesses around the world, including India” to boost margins and generate consistently strong cash flow.

Ford shares ended 2020 down about 5.5%, despite a 30% surge in the past three months, compared to the S&P 500’s
SPX,
+0.64%

16% gain for the year.

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