Mumbai, Feb. 20: Ford Credit International has sold the retail auto finance portfolio of Ford Credit India, its wholly-owned subsidiary, to Kotak Mahindra Prime Ltd for an undisclosed sum. Kotak Prime is a subsidiary of Kotak Mahindra Bank Ltd.

Ford Credit India was earlier known as Ford Credit Kotak Mahindra.

The sale was part of Ford Credit’s strategy to rationalise the auto finance business globally, sources close to the deal said. While officials of Ford Credit were not available for comments, Mike Kozel, president of Ford Credit International’s Asia-Pacific region, said, “We have made a strategic decision to sell the India retail financing portfolio.” Kozel did not offer any reasons for the sale.

Ford Credit financed both retail buyers and dealers of Ford cars. Ford Credit will now move its wholesale dealer financing operations to Ford India Ltd as a separate division.

The deal is expected to boost Kotak Prime’s car finance franchise in a highly competitive market that has players like ICICI Bank. After the acquisition, Kotak Prime will finance retail purchases of Ford as well as non-Ford cars.

Kotak Prime director Dipak Gupta said, “The Kotak Mahindra group is committed to continue building its car finance franchise and maintaining its position as a significant player in the segment.”

The buyout comes months after both the Kotak Mahindra group and Ford announced the realignment of their nine-year old joint venture last year. As part of the restructuring, the Kotak group acquired the 40 per cent stake in Kotak Prime held by Ford Credit International, thus gaining complete control. At the same time, Ford Credit International increased its 55 per cent stake in Ford Credit Kotak Mahindra to 100 per cent.

The 45 per cent stake it acquired included 35 per cent of the Kotak group and 10 per cent of Mahindra & Mahindra.