Mahindra’s recent decision to delay assembly of the US market pickup truck at a facility in Ohio is certainly a disappointment. It’s easy to understand their decision on several levels. Instability in the US economy being a primary concern, in addition to avoiding any launch delays due to issues with logistics or assembly.
On the other side of that, it seems as though Mahindra would want to do whatever they could to avoid the 25% Chicken Tax the US government will place on every truck made in India and brought here for sale. This also appears as somewhat of a cop out in committing to planting manufacturing infrastructure in US soil. Mahindra has spent considerable time, money, and effort establishing well over 300 dealerships in the US, and ensuring that the trucks will meet all federal requirements for emissions and roadworthiness, as well as extensive customer research.
Mahindra is claiming that the additional tax levied against each truck reaching these shores will not be added to the sales price. It is unclear whether they intend to eat this tax themselves or pass all or a portion of it onto their dealers. Which would clearly not be well received after asking them to commit to building dealerships well in advance of acquiring inventory.
Hopefully, the future is bright for Mahindra’s start in the US. It would be nice to see them get a strong foothold here and in the very near future assemble or completely build vehicles in America with a modern facility and a solid workforce. Mahindra Planet would like to see that 25% go directly into the pockets of US-based employees, rather than go as taxes directly into the government’s bottomless pit and hope it gets passed along to the rest of us.