Mahindra Pik Up Still “In The Mail”
Jason Lancaster | Sep 13, 2010 | Comments 11
People always seem to believe the old “it’s in the mail” excuse, or at least give someone the benefit of the doubt. Since October 2008, Mahindra has been promising that their long-awaited baby diesel pickup is “in the mail,” but here we are in September 2010 and we’re no closer to a Mahindra now than we were then.
Since 2008, Mahindra has been promising the U.S.A. a "Pik Up" powered by a small diesel. Image copyright Viva Chile.
Of course, we’re willing to give Mahindra a break on this delay because:
- U.S. environmental and safety regulations can be challenging, especially for a first-time US auto importer
- The economy and consumer demand for pickups ground to a halt for most of the last 2 years, which made launching a new product a little challenging
- Mahindra told us these delays were needed to improve quality
- Deep down, we’re all a little excited about a small diesel truck with a 2500 lbs payload rating that gets 30 mpg highway
If Mahindra’s truck can be successful, other automakers might just re-visit their plans for diesel half-ton, raising the chance that we might see a diesel Tundra someday. However, before anyone gets all warm and fuzzy about the prospect of a cool little Mahindra pickup, they should read this story about Mahindra dismissing their existing U.S. business partner. Here’s the short version, plus some other important facts:
1. In 2006, Mahindra wanted a U.S. distribution partner. They sought out an experienced automotive retail expert, and they ended up with a company called Global Vehicles (GV). This 2007 BusinessWeek.com article quotes one Mahindra exec as saying “We are very impressed with the type of talent pool that GV has put together to help launch Mahindra into the USA.”
2. Mahindra signed a contract with GV, but it contained an “out” clause. Mahindra wanted a chance to cancel their contract with GV if, after 3 years, Mahindra did not certify their vehicles to meet U.S. standards. This three year out clause has been extended twice, most recently to June 2010.
3. Mahindra started to question GV’s distribution plans in March 2010. Since 2007, Global Vehicles has been selling dealers around the USA Mahindra franchises, with fees from $125k-$200k per dealership. Allegedly, Mahindra questioned some aspects of the distribution plan. When GV was unwilling to “fire” some dealers, Mahindra ceased all communication.
4. Mahindra canceled their agreement with GV in June. Once it became clear Mahindra was going to cancel their contract with GV, GV sued Mahindra arguing that they had intentionally delayed the certification process.
As it stands today, Global Vehicles (GV) CEO John Perez says that Mahindra has taken advantage of their knowledge and experience, while Mahindra refuses to comment on the matter.
Other Important Facts
Some of GV’s Mahindra dealers didn’t actually pay for a Mahindra franchise. Instead, they were “given” a Mahindra franchise because, back in the late 90’s, GV tried to import the Aro SUV and failed. Since GV collected franchise fees for the Aro but couldn’t deliver, they gave these franchises a Mahindra dealership.
US franchise laws aren’t friendly to automakers. GV has been selling franchise agreements on behalf of Mahindra, and in most states, the laws regulating franchises are very much on the side of the small business person. Mahindra isn’t going to be able to abandon these franchise agreements very easily.
Mahindra’s execs might not fully appreciate the U.S. legal system. The Indian government and legal system are notoriously corrupt – Mahindra execs might not be aware that the US justice system isn’t something they can buy off.
Questions For GV and Mahindra
- Will Mahindra meet their December 2010 launch date without a distributor?
- Did GV sign-up low quality dealers to sell the Mahindra? Why did Mahindra question the distribution plan?
- Did Mahindra plan to use and then abandon GV all along?
- Is GV really a company that deserves the benefit of the doubt? This is the second time GV has promised an imported vehicle and failed.
- Is this heavy-handed interaction with GV indicative of how Mahindra will treat dealers, suppliers, and customers?
- Is Mahindra simply trying to back out of their plan entirely?
Bottom Line: We’re probably not seeing any new Mahindra Pik-Ups for sale until this issue with GV is cleared up. Hopefully, once it’s resolved, we’ll see some comment from Mahindra explaining this disagreement and (hopefully, finally) some trucks in dealer showrooms.
What do you think – did Mahindra take advantage of GV, or are we only hearing one side of the story? Will Mahindra treat customers this way?
Filed Under: Auto News
Who would really buy that ugly squared off/African Safari pickup anyways even with a diesel? Sorry if you disagree, but unless it was like 15-16K and cheap, no way.
mk: I would! There is no other option in the USA. The Mahindra can hold 2500lbs of cargo and can tow more than 5000lbs.
There is no small truck in the USA that can do that and get more than 20mpg. The Mahindra is saying 25-30mpg.
I want the TR40, I’m gonna put a FourWheelCampers “Finch” drop in camper on it, and tow a boat behind it…
There is no equivalent in the USA unless Ford puts an ecoboost in a Ranger and makes a 4 door version (not the crappy Sporttrac Explorer). The Colorado would need an improved powertrain, and the Nissan gets terrible mileage. The Toyota comes close but you have to get the top-o-the line models to get close to the Mahindra basic offering, and those Toyotas would be more than an F150 or Chevy 1500!
vr, you are one in a million then. Not saying a diesel wouldn’t be nice for gas mileage, but I haven’t seen a diesel engine out there that did not cost 4-6K more than any gas engine on the market thus making this truck pushing the tundra price tag I would imagine? I had back in the 90’s a very nice 1996 chevy s-10 2wd ext. cab 4.3L V6 that would easily pull 5,000 lbs. but not the 2500lbs. cargo capacity and it would haul butt with a much better ride than this Mahindra would have. All for around I think 16K brand new in LS trim. GM screwed up big time when they replaced this powerful, fuel efficient (got 23 mpg), proven, torquey 4.3L V6 with the incompetent, not fuel efficient, wimpy 5 cylinder engine – what a joke!
mk – There are a lot of people who would entertain buying a Mahindra – many for the reasons listed by VR – but you’re absolutely right that the cost will be a factor.
If the Mahindra is $22-25k and offers 30mpg hwy mileage along with decent towing and hauling ability, they just might sell…but it’s going to be interesting. There are a lot of reasons to be negative about their prospects – dealer and distribution questions, unproven quality in consumer’s minds, and they’re not exactly good looking either…
Still, I say the more the merrier. I’m genuinely hopeful these trucks are successful.
I agree Jason. If it is cheap then some people may buy it. I might buy one but it looks horrible! I will say though, I own a Mahindra tractor and it is a great product. We’ll have to see.
at the right price, i’d be interested. this could eliminate my small hhr cargo carrier and still get about the same mpg. like the diesel idea. would perfer a taco diesel but then again, cost plays a major issue for work trucks. if i could get 30mpg out of this 2010 tundra, i could just have one vehicle. lol.
I could see a Subaru fanatic in one of these.
It appears,Perez is about to nail another group of dealers. As an Ex-Crosslander franchisee, I,like several hundred other dealers, lost tens of thousands of dollars waiting for this clown to produce vehicles. I can’t imagine Mahindra not doing their due diligence. Then again maybe on closer inspection,they did. Perez and his escapade in Romania to import small trucks(Crosslander USA) would make a fabulous story. Right down to allegations of fraud by the Romanian Government, and a quick exit with excuses to Franchise holders. I believe this is actually the third time around for this,collect the franchise fee and fold strategy.
Steve H – Thanks. Mahindra’s tractors are a great example of that company’s ability to build a quality product. Like anything, you can sell them if the price is right.
Danny – I’m with you on the Taco diesel, and I can’t wait to drive one of these Mahindras (assuming they become available).
TXTee – LOL! The replacement for the Baja, perhaps? I think you’re on to something… 🙂
Gerry – Fascinating comment. I managed to read a few things that illustrated Perez has a history of this type of thing. Perhaps Perez is simply unlucky, but it’s wise to suspect someone who has collected franchise fees from dealers for cars that never see US shores. Thanks for commenting.
Some guys actually are pulling for the underdog. We don’t mind funky styling. It’s a shame the Big 3 won’t give us what we want – a 9/10ths scale truck with a regular cab and a small turbodiesel V8.
Instead, driven by pure profit, they shove huge 4-door trucks at us. 90% of these trucks are under-utilized given their superhero capabilities.
I say, let’s get real with the size and fuel economy. The best possible Tundra is only rated at 17 MPG highway. That’s pathetic, even though the truck kicks ass. And fuel economy will matter a whole lot more during the Second Great Depression around the corner.
David H – I hear what you’re saying – I think there is a demand for a small, fuel-efficient truck – but for every person who wants a right-sized pickup, there are two people who want the biggest, baddest truck they can afford regardless of their real needs.
I count myself in that second group, and I really don’t see a problem with it assuming I can afford the truck. I want the extra capacity just in case I need it, and to me it’s not worth trading that capability to get an extra 5 mpg. I don’t drive often enough to be concerned about gas mileage.
There’s also the fact that a lot of work users are better off buying bigger than they need. It’s often more efficient to fill the truck to 60% capacity than it is to use a half-size truck and make two trips.