Mahindra delays U.S. launch

Indian truckmaker plans to start sales in 4th qtr. of 2009

Before Mahindra begins selling its trucks in the United States, the company plans to spend most of the next year evaluating the vehicles on U.S. roads. Above, engineers at a factory in India work on Mahindra’s Scorpio SUV. Photo credit: ADEEL HALIM/REUTERS
The Georgia distributor of Indian pickups is raring to go, but the man whose name is on the trucks — Anand Mahindra — says not so fast.

Mahindra & Mahindra Ltd., of Mumbai, India, has told its independent U.S. distributor to delay the 2009 retail launch for six months while the manufacturer spends most of next year evaluating its trucks on U.S. roads.

The request will mean that Mahindra brand diesel pickups will start sales in the fourth quarter of 2009 instead of spring 2009, says John Perez, CEO of Global Vehicles USA Inc. in Alpharetta, Ga. A Mahindra diesel SUV will follow in 2010.

Few of the 324 dealers who have signed up to sell Mahindra have constructed stores.

Perez says the manufacturer has informed him that Mahindra intends to clock about 3.2 million road miles on a fleet of 25 trucks in the United States before the pickups go on sale.

In August, Perez spoke with Anand Mahindra, the family-owned truckmaker's global managing director. Says Perez: "Mr. Mahindra said to me, 'My family's name is going onto this vehicle, and it's not going to fail.' "

The small pickups will use an untested, clean-burning, four-cylinder diesel engine that has not yet been approved by the EPA. The agency has imposed tighter new 50-state diesel emission requirements for 2010. Mahindra will apply for certification in January, and Perez says he has no worry about receiving approval.

More dealers
The plan to sell Mahindra pickups and SUVs in the United States is evolving. Here are recent changes.
-- Retail launch is delayed 6 months until fourth quarter of 2009.
-- U.S. distributor seeks more dealers in western states.
-- Distributor plans 50% more U.S. dealers at launch.
-- New Indian factory promises ample supply of vehicles.

The Mahindra startup — the first effort by an Indian automaker to tap the U.S. market — is undergoing other changes as well, Perez says.

-- A plan to market Mahindra hybrid diesel vehicles has been delayed for an undetermined time. Perez says he is uncertain when those vehicles might be available in the United States.

-- Global Vehicles now plans to sign up 450 Mahindra dealers around the country by the end of 2009. The company originally hoped for about 300 dealers in time for its spring launch. Global is collecting fees of about $200,000 per franchise, although the fees have changed as the project has unfolded over the past two years.

-- A new auto assembly plant in Chennai, India, could supply as many as 400,000 vehicles a year for the United States, if sales warrant. But Perez says Global Vehicles' initial sales target is closer to 50,000 a year.

Perez says the new schedule will give Global more time to sign up retailers in the western United States — particularly California, where Global's representation is weak.

But he says the factory's slower-than-expected entry has nothing to do with the depressed U.S. market for light trucks. Perez says Mahindra's small diesel pickups and SUVs will deliver more than 30 mpg.

You can reach Lindsay Chappell at lchappell@crain.com

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