India's Mahindra & Mahindra Coming to U.S. Next Year with Fuel-sipping Pick-ups and SUVs
September 12, 2008

By Nick Kurczewski

PARIS -- Sales of pick-up trucks and sport-utility vehicles in the U.S. are in freefall, but not everyone is betting America's love affair with trucks is officially over.

Beginning in the fourth quarter of 2009, Mahindra & Mahindra, an Indian manufacturer specializing in tough and rugged-looking trucks, plans to sell two- and four-door versions of its compact pick-up in America. A sport-utility, based on the company's new Scorpio model, is set to arrive early the following year.  

M&M's U.S. distributor, Atlanta-based Global Vehicles USA Inc., is tasked with introducing an unknown Indian automotive brand into the States, and doing it at a time when Americans are abandoning fuel-guzzling trucks in record numbers. Edmunds recently compiled a list of the top-ten most fuel-efficient trucks of 2008.  But even the top two fuel-sippers - the Ford Ranger and Toyota Tacoma - experienced sales slides of more than 16 percent in July of this year, compared to the same month in 2007. 

Rather than see this as the proverbial writing on the wall for hawking trucks in the U.S., Global Vehicles views the downturn as a perfect opportunity to introduce Americans to the merits of a Mahindra vehicle. Global Vehicles USA chief executive, John Perez, and vice president of marketing, Xavier Beguiristain, spoke exclusively with AutoObserver in an interview about Mahindra's plans for the U.S., and how Global Vehicles will market Indian-built trucks at a time of soaring energy costs and slumping sales in the segments in which they plan to compete.

A Smarter, Less Thirsty Kind of SUV

It's hard not wonder - and impossible not to ask - if Mahindra has simply chosen an extraordinarily bad time to enter the U.S. market.  However, Perez and Beguiristain believe that high fuel costs, which are leading people to abandon their fuel-guzzling trucks and SUVs, will also help drive truck-loving customers into a Mahindra showroom.

Mahindra's trucks haven't undergone official testing by the federal government's Environmental Protection Agency, but Global Vehicles is optimistic that the combined city and highway economy figures will meet, or surpass, a 30 mile per gallon average. That would give the Indian trucks a huge MPG advantage over mainstream rivals, and place Mahindra vehicles amongst eco-minded SUVs like Ford's Escape Hybrid, which averages 34 miles per gallon in city and highway driving.

Credit for these figures goes to Mahindra's frugal 2.2-liter common rail four-cylinder diesel engine, fitted to a six-speed automatic transmission. The diesel motor and six-speed auto will feature in all of Mahindra's U.S.-bound vehicles. The diesel, developed with the help of German supplier and diesel expert Bosch, will be 50-state certified but isn't yet, officials of the import company insist. They further expect the higher fuel economy of their vehicles will offset the higher cost of diesel, which exceeds that of gasoline in the U.S. and has been driving buyers away from diesels.

Standard fare also includes four-wheel disc brakes, electronic stability control, and a four-year, 60,000-mile bumper-to-bumper warranty. "This will be a product that is high in technology but is also affordable," said Perez. "Our quality is as good as or better than Japanese vehicle I've ever seen."

Global Vehicles says it is determining a base price for the pick-up, but the two-door version should start around $25,000. The SUV that arrives in 2010 will be priced "slightly higher," says Beguiristain.

Regarding sales figures, Perez says that Global Vehicles "has a projection for 25,000 vehicles in 2010." 

He insists this could vary, depending on demand, and that Mahindra has not set rigid goals.  Earlier this year, The Wall Street Journal quoted Perez as saying that Global Vehicles would open a plant in Ohio, where it would assemble "tens of thousands" of Mahindra vehicles. Due to begin in late 2009, Perez confirmed to AutoObserver that the plans for the factory are still a go, though he could not discuss the factory's location or what vehicles will be assembled there.   

No to Hummer, and Nametags

Over the past few months, Mahindra has been mentioned as a suitor to General Motors' ailing Hummer brand. The match seemed possible, if only because it would have allowed Global Vehicles and Mahindra to take advantage of Hummer's established dealer network. Global Vehicles execs say they currently have signed up 324 dealers and hope to have an even 450 by late 2009.

As far as Perez is concerned, there is no Hummer deal. "Definitely no," he said, matter-of-factly, regarding Global Vehicle's interest in the brand. These sentiments echo those of Mahindra's top brass.  In comments published Aug. 18 by Reuters India, Mahindra's vice chairman, Anand Mahindra, sought to quash the rumors. "There has been a lot of speculation. I want to say categorically we are not pursuing Hummer." 

Instead of piecing together the choicest parts of an existing (albeit struggling) U.S. brand, like Hummer, Global Vehicles prefers to emphasize the strengths of Mahindra - even if it means ditching previously released model names.  Perez confirmed to AutoObserver that Global Vehicles has not decided what to name its Mahindra vehicles.

The "Scorpio" name is used on Mahindra's SUV in India, and the "Appalachian" badge was widely reported to be the choice for U.S.-versions of the two and four-door pick-up that arrives next year.

"The names are under consideration," said Beguiristain, adding that Global Vehicles might choose a "number or lettering system" so customers associate with the Mahindra brand and not a specific model. 

Testing and Technology

Global Vehicles had originally planned to be selling vehicles six months earlier. That was until Mahindra insisted on a delay, so more testing could be done.  Perez says the automaker currently is conducting on a fleet of U.S.-spec vehicles up to "3.2 million" miles of road tests before the U.S. launch.

Later this year, Mahindra will introduce a start-stop feature on its Scorpio diesel-electric hybrid SUV in India. Mahindra has been actively working on diesel-electric hybrids, as well as hydrogen and electric-powered vehicles. The company recently announced that it would market an electric car in India by 2010.

Despite numerous reports to the contrary, Perez says that, for the moment, Mahindra hybrids do not figure into the U.S. plans.  "Mahindra is working on many different technologies," said Perez. "But we're not even talking about hybrids [with Mahindra] right now."

Seeing and Believing

Perez explained that it's Mahindra's attention to detail - and willingness to listen - that made him a believer in the brand.

In February 2006, soon after U.S. sales plans had been given the green light by Dr. Pawan Goenka, president automotive sector of Mahindra & Mahindra, Perez says that he and 14 dealers paid a visit to the company's factory in Nasik, India. Located 120 miles northeast of Mumbai, the plant has an annual capacity of 200,000 units.

Once the tour was complete, "Mahindra gave [the dealers] the opportunity to critique what they saw." Perez says the dealers were stunned at the Indian company's openness to criticism and interest in making the vehicles more U.S.-friendly. Complaints ranged from cup holder size - originally they were too small for American super-sized drinks - to new seats, dashboard materials, and a change of location for cargo hooks in the pick-up bed.

Photos by Mahindra & Mahindra
1 - Mahindra Scorpio
2 - Mahindra Pickup

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