Waiting to know Mahindra

Automotive News | March 16, 2012 - 3:48 pm EST

I'm embarrassed to admit that six years ago, when a couple of dealers tipped me off that an Indian vehicle manufacturer named Mahindra & Mahindra intended to enter the U.S. market, I had no idea who Mahindra was.

We keep up with all corners of the auto industry here at Automotive News, whether we write about them or not, tracking what folks are up to around the world. And I had never heard of Mahindra.

They were very small players. They supplied what appeared to be a low-tech Jeep-like vehicle to the Indian military. Dealers told us that they wanted to send over a compact pickup from India.

But back in that era, before 2008 spike in gasoline prices, Mahindra's plan had a twist: It would have a four-cylinder diesel engine, they said, that rivaled the muscle of a Dodge Ram six.

Mahindra would go through an independent U.S. distributor rather than attempt to import and set up field operations on its own.

Now, six years later, the plan is a mess. Mahindra said back in 2010 that its deal with its American distributor was dead, and that was about all they said.

The situation went to arbitration in England, leaving 350 would-be dealers clueless about their future for almost two years. And this month the British arbitrators finally concluded that Mahindra was correct: Its deal with its U.S. distributor is kaput.

A U.S. district court judge in Missouri has reached the same conclusion.

Mahindra clearly didn't know the American auto market well enough in 2006 to try entering on its own. If I had never heard of Mahindra, I'm willing to bet most American consumers hadn't either -- something Mahindra execs later told me they were a bit worried about.

Although Mahindra didn't have the expertise to enter the America auto market on its own, a network of 350 American retailers did. Eager dealers from New England to the Pacific signed up to invest, assume the risk, build the showrooms, spend the sweat equity, film the TV commercials, hire the sales personnel and train the service technicians to establish the Mahindra brand.

Those dealers are now out of luck, apparently. If the courts consider Mahindra to be free of its 2006 distributor agreement, the logical assumption is that Mahindra also has no obligation to the dealers who signed agreements with that distributor.

So maybe this is when America really gets to know the still-unknown Mahindra.

What judges rule and what one's higher conscience urges are sometimes two different things.

Will Mahindra now walk away, which appears to be its legal right, and abandon a group of American retailers who committed to the automaker and invested their time and money over the past six years?

Or will Mahindra honor the spirit of those dealers by making them all part of whatever business plan comes next?

Either option will be something of a revelation about who this company is.

Lindsay Chappell is the Mid-South bureau chief for Automotive NewsLindsay Chappell is the Mid-South bureau chief for Automotive News

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