Mahindra prepares 'brand journey' to launch passenger vehicles in U.S.

AUBURN HILLS, Mich -- India's Mahindra & Mahindra Ltd., preparing to launch an off-road vehicle in the U.S., will take a "thoughtful" approach to marketing on-road passenger vehicles next, company officials said Monday.

Speaking at a roundtable with reporters at the new Mahindra Automotive North America plant in a Detroit suburb, Anand Mahindra, executive chairman of Mahindra Group, would not give a timetable for when the global giant will begin selling passenger vehicles in the U.S., where it also sells tractors.

"It's not imminent," he said of Mahindra passenger vehicles in the United States. "But is it an aspiration? Yes, it remains very much an aspiration. We have stated on record, that amongst the options open to us are to come in with SsangYong Motors [vehicles], which is our Korean subsidiary. As you know it's the third Korean auto company that Americans don't know about."

Americans have "happily" accepted "Korean quality and automotive competence," Mahindra said, referring to rivals Hyundai and Kia. "So that could be a very logical step for us to introduce that brand here but that's a decision that will be taken by the SsangYong Motors board."

Mahindra attempted to enter the U.S. market in 2006 using independent distributor Global Vehicles U.S.A. to sell compact diesel pickups imported from India. The companies targeted a retail network of more than 300 dealers. But the plan collapsed in 2010 amid the industry's sales downturn and resulted in years of litigation.

Dealers sued Mahindra in 2012, claiming the automaker pocketed more than $9.5 million and more than a $100 million worth of dealer trade secrets to utilize for their future entrance into the U.S. market, and that it a strong market foundation gained at the expense of the dealers' free promotion of Mahindra's brand name around the U.S.

Mahindra denied the dealers' claims and placed blame for the failed plan to sell pickups here on its former U.S. distributor.

"We did attempt to come in here but I think the learning from that is if you're committed to a market, you must come in with your own entity, being the distributor here, and we will certainly use that learning," Mahindra said.

Mahindra executives believe tractors and other off-road products could be the key to determining whether or not passenger vehicles are viable in the U.S.

In 2013, Mahindra established a North American automotive headquarters in Troy, Mich., which houses design, engineering and vehicle development.

Mahindra held a ribbon-cutting ceremony Monday at the manufacturing plant, which is part of $230 million in investments by the company in southeastern Michigan. It's billed as the first new auto plant in the Detroit region in more than 25 years.

The factory will produce an off-road-only recreational and work vehicle dubbed the Roxor, which remains under wraps. Roxor production and sales are expected to begin in the first quarter of 2018.

"We hope that we will gradually creep into the consciousness of the American consumer as the maker of very rugged, sturdy SUV and crossover vehicles," Mahindra said. "So I think it's more about a brand journey than about a journey of investment."

Rick Haas, Mahindra Automotive North America president, pointed to current Mahindra customers -- hunters, farmers, ranchers, miners or recreational individuals -- as potential customers for the Roxor and passenger vehicles.

"All those people have cars in their garage too," Haas said. "Again, the idea is to build the brand in a very positive way, with a vehicle that we think demonstrates our DNA, let people kinda get a sniff of us and get used to what we're all about and then you start taking next steps that build on that as we go forward."