Ford and Mahindra have announced a "definitive agreement" to jointly develop a new mid-size SUV for India and other “emerging markets”.

In October 2018, the two automakers “strengthened” their strategic alliance with the signing of two new definitive agreements, after putting pen to paper on five memoranda of understanding some seven months earlier.

Now, however, the two firms have confirmed plans to co-develop a mid-size SUV using a Mahindra platform and powertrain, making the announcement in a joint statement.

The statement added the strategic alliance between the two companies was focused on "leveraging the benefits of both companies".

"I am happy with the significant progress we have made and synergies we have created since the announcement of our strategic alliance with Ford in 2017," said Pawan Goenka, managing director at Mahindra.

"Today’s announcement is another significant step in the collaboration between our two companies. Having identified several areas for joint development, both companies will continue to work together to develop products using common product platforms. This will reduce product development costs and gain economies of scale for both companies," Goenka added.

Jim Farley, president of Ford new businesses, technology and strategy, said the announcement would "not only strengthen our ongoing partnership with Mahindra but also sharpen our competitiveness in an important emerging market like India".

"Ford's technological leadership combined with Mahindra’s successful operating model and product prowess will surely help us deliver a vehicle that will meet the expectations of customers in India as well as other emerging markets," Farley said.

According to Autocar India, the new vehicle will run on the next-generation XUV500’s platform and be built alongside that vehicle at the Indian automaker’s Chakan plant.

The report added the new models would likely hit the market towards the end of 2020, powered by Mahindra's fresh 2,0-litre turbodiesel engine.