Mahindra is preparing to enter U.S.
"Mahindra & Mahindra", a small auto-maker in
Mumbai, India, is quietly preparing to enter the U.S. Mahindra
has signed an independent distributor, Global Vehicles U.S.A. Inc.,
of Alpharetta, GA.
Global Vehicles is asking dealers for a $ 125,000 payment to
apply for a franchise.
Dealers who have heard Global Vehicles sales pitch say
Mahindra plans to reach the market in October 2008. The venture
plans two vehicles, they say: a regular-cab pickup with a 2.6-liter
turbodiesel engine and an SUV called the Scorpio. The company
already sells farm equipment in the U.S..
"Mahindra & Mahindra" officials did not respond to phone and e-mail
requests from Automotive News for information about the arrangement.
The company is best known for supplying India's military with small
Jeep-like vehicles.
William Goetze, a former Mazda executive, is president of
Global Vehicles. He said an agreement with "Mahindra & Mahindra"
management restricts him from speaking about the venture publicly at
this point.
Global Vehicles has given dealers a single-page copy of a
"distribution agreement" that is signed by senior executives
from Mahindra and Global Vehicles, but it does not state what the
agreement covers.
Many retailers are perennially interested in getting in on the
ground floor of a new import auto brand. And would-be importers,
including one-time Yugo importer Malcolm Bricklin, are
jockeying to bring Chinese-made vehicles into the country.
Global Vehicles knows how difficult importing an unknown
brand is. This year, the company gave up its multiyear effort to
import a Romanian SUV known as the Aro.
Operating under the corporate name Cross Lander U.S.A., the
company had signed approximately 130 U.S. dealers to sell the Aro
and had taken security deposits for franchizes.
But in an unusual statement, Cross Lander broke off its
relationship, complaining that it had been "subjected to a
continuous barrage of attacks" from Romanian government officials,
the media and others associated with the project. It said opponents
to the project in Romania were involved in a "web of corruption."
The company halted the import plan, changed its name to Global
Vehicles, moved from Miami to Alpharetta and promised its
dealers that it would "find them another product to sell," Goetze
said last week.
He said Cross Lander's private investors, whom he declined to
identify, had lost a "substantial" amount of money on the Romanian
project. But he said the company had refunded the deposits of
dealers who wanted out.
According to other dealers who declined to be identified, Global
Vehicles is asking for a $ 125,000 payment to apply for a
Mahindra franchize. It's not clear if other payments will be
necessary. In addition, the dealers must secure floorplan financing
of $ 200,000 and have a $ 500,000 line of credit in place 180 days
before the brand's October 2008 launch.
Federal officials say that "Mahindra & Mahindra" has not
applied for certification under U.S. safety and emissions
regulations. But it has time to do that before its planned on-sale
date in 2008.
Last year the company sold just 127,521 vehicles worldwide. That was
only slightly lower than the 151,366 sales posted by China's
Geely Automobile Holdings Group, which also has set its sights
on the U.S..
Source: autoweek.com
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