Mahindra delaying US launch of their pickups to remove Global Vehicles as middleman?
India’s largest utility car manufacturer, Mahindra and Mahindra has been hoping to launch their pickups in US for quite some time now. Mahindra first announced their intentions of launching pickups in US back in 2006. The same year, Mahindra signed contract with Global Vehicles USA, appointing them as their official importer and distributor of vehicles in US.
For some odd reason, Mahindra kept on delaying launch of their pickups in US. This made Global Vehicles USA and their appointed network of 350 distributors, suffered heavy losses over capital investments. Due to these losses, Global Vehicles USA filed a lawsuit against the Indian vehicle manufacturer. The case was filed in a court of arbitration in UK, according to which, Global Vehicles and their distributors have suffered losses to the tune of $60 million due to delay in launch of pickups by Mahindra.
Mahindra was supposed to launch a new line of pickups called T20 and T40 in US. These were based on their best selling global SUV, Scorpio. According to Mr Anand Mahindra, “We do not have any specific date for US launch. We’re still interested in getting into the US. We don’t want to turn this into a war of words.” On the other hand, Mr John Perez, CEO, Global Vehicles USA, said, “Mahindra delayed government certification to improperly terminate distribution contract. The bottom line here is Mahindra now believes this is a huge project. They want us out of the way so they can go direct and save the money we were going to make.”
Other reason behind delay in launch could be the level of competition in the US market and unable to create a liking amongst US car buyers. Americans prefer large sized pickups and not mid-sized pickups like the T Series. GM and Ford are the leaders in the pickup segment. Both of them offer larger pickups which give better fuel efficiency than Mahindra’s proposed T Series pickups.