Mahindra rejects ‘invalid’ US order

MUMBAI: Mahindra and Mahindra announced that it had received and was rejecting an invalid order for pick-up trucks from former distributor Global Vehicles USA, Inc. According to a press communication, Mahindra views this order as another example of Global Vehicles' policy of engaging in PR theatrics while pursuing an unnecessary lawsuit. This is Global Vehicles' continued attempt to manipulate the press to damage Mahindra's reputation. Mahindra also believes that this is an attempt by Global Vehicles to distract Mahindra from pursuing other plans to bring its vehicle to the US market. As stated in Mahindra's September 24 statement, the contract with Global Vehicles has expired. In light of this fact, Mahindra will be contacting U.S. dealers to make other arrangements for distribution. P N Shah, Chief Executive, International division, Automotive & Farm Equipment sector said, "Mahindra's goal remains to bring its vehicles to the US market, satisfying the desires of US consumers and dealers alike." Global Vehicles to Place $35 Million Order: According to a press release issued by Global Vehicles in the US, a $35 million-plus factory order will be placed for U.S.-spec Mahindra TR20 and TR40 pickup trucks to begin the launch of the brand in the United States, exclusive Mahindra importer Global Vehicles U.S.A., Inc. Together, Global Vehicles and the nearly 350 Mahindra dealers it recruited in 49 states have invested almost $100 million to bring the rugged, affordable and fuel efficient trucks to the United States. Mahindra said in an August press release that it had EPA certification to sell the trucks, and they announced plans to begin selling vehicles in December. “We are proud of the sales and service network we created to support the launch of Mahindra vehicles, and we look forward to bringing American buyers something truly unique in the marketplace – rugged, high-quality, clean diesel pickup trucks that can achieve nearly 30 miles per gallon,” said John Perez, CEO of Global Vehicles. “Our dealers are all seasoned auto industry professionals who will treat customers with honesty, integrity and respect. We built our business on these bedrock principles, which should be the foundation of every business relationship.” Perez expressed confidence that Global Vehicles will prevail in pending arbitration hearings and court proceedings that the company initiated to force Mahindra to honor the terms of Global Vehicle’s distribution contract, which Mahindra inaccurately claims is no longer in force. Global Vehicles believes that Mahindra purposely delayed the EPA certification process so it could invoke a contract clause that would allow it to walk away if the truck could not be certified for sale in the United States. Global Vehicles extended the deadline for certification three times, with the latest deadline set at June 11, 2010. Mahindra submitted its certification paperwork to the EPA about 10 days after the June 11 deadline, and announced in an Aug. 20 press release that its vehicles were certified for sale. At the same time, Mahindra posted a two sentence statement on its website stating that its relationship with Global Vehicles had ended. Mahindra demanded the clause at the eleventh hour before the contract was signed in 2006 because it expressly wanted to limit its losses if the trucks could not be certified for sale here. Earlier this year, well before the June deadline, Global Vehicles asked Mahindra to remove the clause because it was no longer applicable and they refused. Global Vehicles later asked Mahindra for another extension but was again refused. “We trusted Mahindra when they said they wanted to cap their losses if the vehicle couldn’t be sold here,” said Perez. “We patiently waited and accommodated Mahindra through years of delays and kept an extremely powerful distribution network intact while the factory worked through the complicated task of meeting U.S. emissions standards. We did this because we believed we were all working toward the same goals. Now Mahindra is trying to change the rules. We delivered our end of the contract, and we’re ready to get down to business.” The press release also stated that Global Vehicles U.S.A., Inc., based in Alpharetta, Ga., is the exclusive importer and distributor in the United States of motor vehicles produced by the automotive arm of the Mahindra Group), a $6 billion-plus diverse conglomerate.