‘Mahindra working as per schedule to enter US’

‘Mahindra working as per schedule to enter US’

New Delhi: Auto major Mahindra & Mahindra on Thursday said it is working as per its original schedule to enter the US market by December this year, despite facing a lawsuit filed by its exclusive American distributor.

The company, however, said the actual launch of the product would depend on the outcome of the ongoing litigation.

“We are going as per (our) original plan for the launch of the pick-up truck in the US, but can’t say on the actual time of launch, as it will depend on the outcome of the litigation," Mahindra & Mahindra (M&M) president (automotive and farm equipment) Pawan Goenka told reporters.

Last month, M&M’s exclusive US distributor, Global Vehicles — which claims to have made an overall investment of $103.5 million (about Rs480 crore) along with franchisees for the launch of the vehicle —- filed a lawsuit against the Indian firm before an Atlanta District Court, alleging an inordinate delay in the launch of the pick-up truck.

The domestic auto major had subsequently filed a dismiss suit motion in a US court, countering the lawsuit by asserting that GV’s claims were without merit.

M&M, which had planned to launch the vehicle by the end of 2009, has missed two deadlines since, due to regulatory issues. It had later set end-2010 as the possible launch date for the vehicle in the US.

The utility vehicle manufacturer had said it was diligently working towards satisfying all US homologation (making the vehicle comply with regulatory standards) requirements and intended to submit its final application as soon as possible.

In its lawsuit, GV said that it had 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.