Mahindra to set date for US launch

Mahindra to set date for US launch

Mumbai: Mahindra & Mahindra, India’s largest utility vehicle and tractor maker, hopes to announce in 2-3 weeks a timeframe for the launch of its pick-up trucks in the US, a top official said on Thursday.

The US market is crucial for Mahindra to achieve its objective of becoming a global player but the launch, originally expected late last year or early 2010, has been delayed due to safety and emission certification.

“The process is taking a bit longer than what we anticipated," Pawan Goenka, president and member of the management board, said in an interview.

He said an application would be made to the US Environment Protection Agency as soon as the vehicle completed the tests required, which should be known in about two to three weeks.

Goenka said the agency usually takes a month to process applications.

“Since our long-term aspiration is to be known as the premier SUV and pick-up manufacturer in the world, it is but natural that we must sell and be successful in the US," he said.

“Without that we cannot call ourselves a premier player in that segment."

The pick-up will be competing with Ford Motor’s 2010 Ford Ranger and Toyota’s Tacoma models in the United States, the world’s largest market for SUVs and pick-ups.

Mahindra hopes to quadruple exports in 2010-11 from an expected 10,000 units in the current fiscal year that ends on 31 March, Goenka said.

“Once the US sales also start we will be able to achieve that ultimate objective of having 20% of our volumes coming from exports," he said.

Its exports had slumped 36% in 2008-09 to 8,000 units following the global downturn.

Mahindra has a 65% share of India’s utility vehicles market with models such as Scorpio, Bolero and the Xylo and competes with Tata Motors, Toyota and General Motors.

Sales to double in 2010-11

Goenka said the company is planning to launch a new SUV in a year’s time, which would be aimed at world markets. It would start selling the Xylo in Europe in 2010-11.

“In the short-term that will become our high-volume export product," he said.

“Beyond that we are sure the new SUV, we plan to launch will do well in many developed markets because that is designed with exports in mind."

The company aims to double its domestic sales in 2010-11, driven by a pick-up in demand for its utility vehicles, launch of Xylo variants and sales of mini-commercial vehicles.

Last year it made an entry into the mini-trucks segment with the 0.5 tonne 4-wheel Gio meant to wean away 3-wheeled commercial vehicles users, and the sub-one tonne Maxximo pitting itself against sector leader Tata Motors, which has a dominant 90% share with its mini Ace trucks.

The tiny commercial vehicles segment is set to see more competition with the entry of General Motors in collaboration with China’s Shanghai Automotive Industry Corporation in 2011.

Data from the Society of Indian Automobile Manufacturers showed sales of light commercial vehicles rose nearly 40% in the first 10 months of 2009-10.

Shares in Mahindra, valued at $6.8 billion, have eased 0.5% in 2010 while the main index has lost nearly 3%. In 2009, the stock had nearly quadrupled while the main index rose 81%.

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