Mahindra Pushes US Launch Back Six Months
By Brendan Moore with Chris Haak
Mahindra and Mahindra, the large Indian vehicle manufacturer, has informed its US distributor that it is pushing back its planned launch in the United States by six months in order to do more actual road-testing of its small truck, according to an article in Automotive News (paid subscription required).
The small truck will use a four-cylinder clean diesel engine that remains unapproved by the EPA in the US. The emissions requirements in the US become even stricter in 2010, but Mahindra’s public stance is that they are not concerned about the engine passing the tighter emissions requirements.
The delay of the launch of the first Indian auto manufacturer’s vehicles to sell in the US has nothing to do with concerns about EPA certification, from what Mahindra says. Nor does it have anything to do with drop in the light truck market in the US, states Mahindra, as their small trucks will achieve around 30 mpg. Mahindra simply wants to do more real-world testing in order to make certain all the bugs are out before launch in the world’s most competitive and most visible market.
John Perez, CEO of Global Vehicles USA Inc in Alpharetta, GA, the independent distributor of Mahindra vehicles in the United States, states that Anand Mahindra, the family-owned truck maker’s Managing Director, told him in a phone call this month that the company wanted to roll up around 3.2 million miles on US roads before the launch of its small diesel pickup. Perez has also related that Anand Mahindra told him that, “my family’s name is going onto this vehicle, and it’s not going to fail.”
That means the original launch timeframe of Spring 2009 would be pushed to Fall 2009.
Which may work out to be a good thing from a sales network perspective, anyway. Mahindra has collected roughly $200,000 USD apiece from 324 dealers in the US for a Mahindra franchise, but almost none of those dealers have actually started construction on the stores required in their dealer contract. Dealers seem to be taking a wait-and-see approach before committing more money for facilities construction. There have been many US distributors that have all promised the next big thing to dealers vis-à-vis the importation of a new line of foreign-made vehicles that are now but a distant memory, so the caution exhibited by the new Mahindra dealers has some historical basis.
Global Vehicles had planned to launch the Mahindra truck in Spring 2009 in the US with around 300 dealers, but now plans to sign up a total of 450 dealers before the new launch date in Fall 2009. Global Vehicles says most of the extra dealers added between now and launch will be retailers in the Western states, where dealer coverage for Mahindra is sparse.
Mahindra has established a new factory in Chennai, India that has production capacity of 400,000 US-spec units a year, but Global Vehicles says that their sales goal is a more modest 50,000 units retailed annually.
Mahindra plans to follow the US launch of their diesel pickup with the launch of a small diesel SUV named the Scorpio in 2010.
Mahindra & Mahindra is best known for their commercial vehicles in India, making various sizes of trucks, SUVs, very basic Jeep-like 4WD vehicles, military vehicles, tractors, three-wheeled urban delivery vehicles, etc. Mahindra vehicles are valued for their toughness and durability in the often-poor road conditions in India. Their main competitors in-country are Tata, Bajaj Auto and Suzuki Maruti, and the company’s US subsidiary Mahindra USA has been selling tractors assembled in the US from knockdown kits since 1994 with good results.
Realistically, the only hope this truck has of succeeding is based on cost (both in terms of purchase price as well as operating costs), at least initially. We’re not going to have any idea of its reliability at first, so everyone above who might consider buying a Mahindra pickup, “as long as it’s reliable” might as well look elsewhere for a few years. The Mahindra pickup sure won’t sell on its looks – how is there appeal in looking like a 30 year old Datsun pickup, sans the rust – unless buyers want something old-school and quirky.
We don’t want to sound too negative – we’re glad there will finally be a true small pickup in the US, and by virtue of its focus on quality and its existing reputation as a tractor manufacturer/seller in the US has a head start on rivals from China – but Mahindra faces some formidable obstacles with the launch of this truck.
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