A long road ahead if Indian pickups ever hope to hit U.S. roads

Plans to bring two small pickups to the U.S. have been put on hold again by the manufacturer. Mahindra & Mahindra, an Indian company that already builds small pickups in India with exports to Australia, announced plans back in 2009 to bring the trucks to the U.S. in its efforts to become a global company.

At the time, Mahindra struck a deal with Global Vehicles USA, a Georgia-based company set up to distribute the trucks here. Global Vehicles said it arranged over 300 dealers to sell the trucks and announced a launch date of early 2010. That time has since passed and arrival of the pickups does not appear imminent.

mahindra.jpgThe relationship between Global Vehicle and Mahindra has, for all intent and purposes, dissolved into a legal battle that continues to delay the vehicles.

Global Vehicles claims Mahindra is responsible for delaying the introduction of the trucks. The company’s chief executive officer John Perez did not mince words in a press release, accusing Mahindra officials of not being truthful.

“Nearly 350 dealers have been ready to sell Mahindra trucks for more than three years,” said Perez. “If Mahindra executives were being truthful when they said that the trucks would be on sale by the end of the year, they should honor that commitment so dealers can start earning back the tens of millions of dollars they have invested in the brand.

“Binding arbitration will decide if Mahindra lied to Global Vehicles and our dealers about the status of the trucks and whether they broke the law when they attempted to arbitrarily terminate our distribution contract,” Perez added. “In the meantime, Mahindra is legally – and morally – obligated to conduct business as usual.”

According to Global Vehicles, Mahindra used an escape clause in the contract that allowed it to walk away from the contract if the vehicles had not achieved U.S. safety and emissions standards by June 11, 2010. Mahindra announced in August the vehicles had passed and could be sold in the U.S.

Global Vehicles invoked an arbitration clause in the distribution contract on June 11, claiming the clause forced both companies to continue to honor the agreement while any dispute – in this case the lack of EPA approval – is resolved. Once Mahindra tried to get out of the deal, a federal lawsuit was filed by Global Vehicles.

“Any suggestion that the arbitration process or the federal lawsuit we were forced to file to protect our rights are responsible for the delay in bringing trucks to the United States is patently not true,” Perez said. “If Mahindra’s trucks are ready to sell, they should continue performing their obligations under the distributor agreement just like we have. If dealers start to doubt Mahindra's integrity, they don’t stand a chance of earning the trust of American consumers.”

Mahindra has only issued a brief statement saying, “the contract with Global Vehicles has expired. In light of this fact, Mahindra will be contacting U.S. dealers to make other arrangements for distribution.”

Based on an Australian model, Mahindra said the truck has a 2,633-lb. payload rating. It will be offered in 2- and 4-door versions, both powered by a 140-hp., 2.2L 4-cyl. diesel mated to a 6-spd. automatic transmission. WardsAuto.com reported a projected combined city-highway fuel economy of 30 mpg, and says the truck will be offered in 2- and 4-wheel drive.

According to Global Vehicles, it has nearly 350 dealers lined up in 49 states with more than $120 million already invested and millions more set aside to purchase inventory. In statements to the Associated Press, Perez hinted at the fact that Mahindra thought it could only sell “maybe 5,000 to 6,000 vehicles a year” in the U.S. With so many dealers lined up, he implied Mahindra is not interested in working with a third party.

A Mahindra spokesperson told the Associated Press the company is “still interested in getting into the U.S. We don’t want to turn this into a war of words.”

I guess we’ll have to wait until the court case for a conclusion, but I wouldn’t count on seeing the Indian pickups anytime soon, if ever at all.

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