Mahindra's Bold U.S. Plans

Posted by: David Kiley on October 25, 2007

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In writing on Mahindra and Mahindra this week, I ran into considerable resistance to their plans to launch three vehicles into the U.S. in 2009—a two-door pickup, a four-door pickup and an SUV.

Marketing consultants and auto analysts aren’t enthusiastic. Consultant Dan Gorrell calls it an almost impossible marketing play, though he also said that relatively small sales goals—18,000 in 2009 and 45,000 in 2010—makes it a more reasonable gamble. John Humphrey of J.D. Power and Associates says that Mahindra is a dynamic company, but he wonders, “Why now, and why the U.S.?” Humphrey points out rightly that with a stagnating U.S. auto market, every sale Mahindra scores will have to come from an established rival. Too, while Mahindra bests the likes of Honda in India for Sales Satisfaction, as tracked by Power, it is still below industry average in Initial Quality.

Dealers who are investing, of course, have a different view. And the people at Global Vehicles, the U.S. distributor appear to know what they are doing. Charleston, SC dealer Manly Eubank, a long-time Ford dealer, has bought a Mahindra franchise, as well as a Mahindra tractor franchise. Steve Taylor, a Cadillac and Kia dealer in Toledo, in the shadow of the Jeep plant that builds Wrangler and Liberties, is spending more than $1 million on a stand-alone facility.

John Perez, CEO of Global Vehicles, Mahindra’s U.S. distributor, is a former dealer, and dealer consultant. He also invested in the first Coke bottling plant in Romania. Global’s president Bill Goetze is an extremely experienced sales and distribution executive who was at Subaru of America at the time of its founding, and with Mazda for two decades.

I’m not surprised, though, at the skepticism. After all, with Ford so down on the mid-sized pickup market Mahindra is entering, it hasn’t upgraded the Ranger since Bush 41 was president. And then there is the “Mahindra” name. A fellow auto writer of mine says they’d be better off going with a non ethnic sounding name. Who wants to buy an Indian SUV or pickup” he asks.

Could be that it’s very few people. But it’s hard to ignore Mahindra. It’s a major company in India, and good enough at what it does that Renault is in a venture with the company to build its Logans, and Navistar has it building trucks for it. It used to built the Escort for Ford, and it has been building military vehicles since 1949.

After my deadline, I had some e-mail with Dr. Pawan Goenka, a mechanical engineer who earned a doctorate at Cornell and spent 15 years at GM. He heads Mahindra’s auto sector.

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