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M&M counters lawsuit by US dealer Global Vehicles

M&M counters lawsuit by US dealer Global Vehicles
PTI
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First Published: Wed, Jun 30 2010. 01 34 PM IST
Updated: Wed, Jun 30 2010. 01 34 PM IST
New Delhi: Mahindra & Mahindra on Wednesday said that it has filed a motion to dismiss the lawsuit by its US distributor Global Vehicles over delay in the launch of the company’s pick-up truck in the American market.
“Mahindra & Mahindra (M&M) has filed a motion to dismiss the lawsuit that Global Vehicles USA, Inc. (GV) filed against Mahindra in the US District Court for the Northern Georgia,” the company said in a statement.
“Mahindra firmly believes that GV’s claims are without merit and will vigorously contest the lawsuit,” it said, adding it would like to expeditiously arbitrate the matter.
On 14 June, Atlanta-based GV, M&M’s exclusive dealer in the US, filed a lawsuit before an Atlanta district court and alleged that there has been inordinate delay in the launch of the pick-up truck.
M&M, which had planned to launch the vehicle by the end of 2009, missed two deadlines since, due to regulatory issues. It had again set 2010-end as the possible time for launching the vehicle in the US.
The statement further said: “Mahindra is diligently working towards satisfying all US homologation (making the vehicle comply with regulatory standards) requirements and intends to submit its final application as soon as possible.”
Claiming that the firm has not intentionally delayed the process, it said that M&M has committed substantial amount of resources behind this effort.
“The fact that GV has agreed to extensions of the deadline, demonstrates that GV was well aware of the situation and its impact. Mahindra remains committed to launch its products in the US market,” it said.
In its lawsuit, GV said that it spent close to $35 million in preparation for the launch of Mahindra vehicles in the US and had signed with as many as 360 dealers nationwide.
This also includes an initial distribution appointment fee of $8.5 million.
GV had also claimed that that the US dealers have spent more than $60 million in franchisee fees for the right to sell Mahindra vehicles and asked the court to prevent M&M from selling its vehicles through any other dealer or distributor.
M&M and Global Vehicles had entered into an agreement on 28 September 2006, according to which the latter became the sole distributor of the Indian company’s motor vehicles in the US.
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First Published: Wed, Jun 30 2010. 01 34 PM IST
More Topics: Mahindra | M&M | Global Vehicles USA | US | Truck |