``We are discussing with Ford on a buy-back option of our equity in MFIL. We are working out details because we are yet to go to the Foreign Investment Promotion Board (FIPB) with an application to reduce our equity,'' Mahindra said. Mahindra said the two companies planned to approach the FIPB next month to enable the world's second-largest automobile company to increase stake in the joint venture, currently making the `Escort' cars here.

M&M had recently told Ford that it was capping investment in the joint venture, as a result of which the Indian partner's equity would go down to about 20 per cent.

``This is not selling. We have merely capped our investment and over time our percentage of equity will go down. But right now we are not selling, we are not removing any money but merely capping ourinvestment at the current level of Rs 135 crore,'' Mahindra said. M&M decided to cap its investment in the venture as it required resources for developing its indigenous vehicle `Scorpio', Mahindra said, adding Ford was very keen to market the product under its name worldwide.

Mahindra said Ford was working very closely with Indian engineers to make Scorpio of international quality which was providing it with key technological inputs.

``Ford's interest was not only in helping us produce it (Scorpio), but also an offering to actually market it overseas. It was a clear choice for us, it was a trade-off,'' he said.

He said when M&M went into the car venture Scorpio, a fully indigenously-designed utility vehicle was not even in the drawing board but ``the way the programme evolved it became a completely new-generation vehicle in a new platform and hence the resources required to fund that was certainly not budgeted at that time.'' ``When you look at the resources to develop a completely new vehicle, itbecame obvious to us that in M&M, we certainly would have to prioritise between the two. Either we continue to put more money in MFIL or we reallocate some of the resources. It was a win-win situation for us,'' he said.

Mahindra said if the Scorpio, scheduled for launch in late 2000, succeeded and if ``M&M suddenly starts generating substantial amount of surplus income over and above the resources we need, we will have the buy-back option,'' he said.

``We are still looking at the technical aspect to ensure that whatever facilities we get, we are able to put them to productive use, not only for the possible Scorpio project, but also for maximising utility in that plant.'' Asked whether the breaking of ties with Chrysler over the `Jeep' issue and the subsequent drop in equity in the Ford venture presented M&M with a double-loss situation, Mahindra said, ``No, it is a win-win situation.''

``When the vehicle comes out and when more plans come out, we will be able to show that we can indigenously develop andengineer in India a world-class vehicle to the point that one of the biggest auto companies in the world wants to distribute it.'' Mahindra said when M&M joined hands with Ford, Scorpio was meant to be a small niche-segment vehicle to be produced on an incremental technology basis, but ``it went on to become a completely new-generation vehicle instead.'' Ford's confirmation that it was keen to export Scorpio under its name presented M&M with a significant opportunity ``not only because it gives us a completely new platform, but it would also mean that we would be using this vehicle to go down the technology curve much faster than we had thought.'' Mahindra said Scorpio has been fully designed by M&M designers and engineers. ``But when you are making a whole new vehicle, there are certain elements in vehicle integration that you require help for.''

Ford is providing help in areas like accelerated vehicle integration, vehicle testing and reliability, Mahindra said. ``Ford has offered us crucial help to makesure that the vehicle works. They have shown keen interest in distributing the vehicle clearly on a commercial understanding,'' he said.