Wednesday, September 15, 2010

In the End, It’s All About the Truck

Indian conglomerate Mahindra & Mahindra Ltd has made it clear that they no longer consider US-based importer Global Vehicles (GV) as a business partner, and have spent the last four months trying to sever their once amicable relationship with them. Recently, Global Vehicles’ CEO John Perez has spoken out, and has made it clear that he feels that Mahindra has abused elements of a contract which were negotiated in good faith. This all takes place while dealers look on and wonder if they will be speaking with Alpharetta or Mumbai once the dust has settled over this battle to sell the first India-made vehicle in the US.

Side with one company or the other if you will, but it all comes back to the truck. It may not be an earth-shattering vehicle. Maybe it’s not even worth fighting for, but without a doubt, it is a groundbreaking truck on many levels.

The recurring rally cry heard from nearly all of the Mahindra pickup lovers and haters out there is that the US market is primed and ready for a fuel-efficient, straight forward, reasonably priced, compact-to-midsize, diesel pickup truck.

After reading countless article comments and forum threads over the past three years, it has become crystal clear that Americans are ready for this product. It becomes equally clear that while there are plenty of fans dedicated to the Mahindra TR20 and TR40 pickups, there are many more consumers that do not care which manufacturer produces this type of vehicle. They just want the compact diesel pickup concept to become a tangible reality so that they can put their money down on it as soon as possible.

The he-said/she-said reports from both sides are likely to be silent for a while. Today, arbitration between Global Vehicles and Mahindra & Mahindra begins in International Court in London (per the original 2006 agreement). No matter how the arbitration is resolved; America has spoken, and we are ready for a new breed of small pickup trucks.

We want your truck, Mahindra. And we want Global Vehicles to supply reliable US-based support. But keep in mind that if you don’t make this truck happen soon, one of your established competitors surely will.


cRiPpLe_rOoStEr a.k.a. Kamikaze said...

volkswagen still says no, but they can start to offer a no-frills version of the amarok in the u.s. at any time...

Anonymous said...

I am still suspicious of the claims that we (more accurately, the US market) is ready for a small truck, let alone an ugly duckling of a small truck with questionable track record on quality and safety.

Two big reasons:

1. Patriotic buying: The US truck market is overwhelmingly driven by patriotic buying; it doesn't matter how good the truck is, it must be an US brand (although no one cares if it is made in Mexico and the foreign brand is made here in the US).

2. No real market: Ford, at least, is a hugely successful automobile company, the world over, and they do sell light trucks (and all kinds of light vehicles) outside the US (we can see a few of those Transits now), they have products that are light years ahead of whatever Mahindra can bring. If there is a real market, why isn't Ford not bringing anything to the US. One word: not worth it (i.e. no real market).

There is definitely a niche market for sure (but there is a nice market for pretty much anything people can come up with).

Mahindra is just trying to boost their image in their core markets (Asia) by trying to sell some token vehicles in the US (the toughest market to crack); and if they fail, it is not like Tata's humiliation in England (which is considered the easiest market to enter in Europe).

Anonymous said...

Everything you said about this launch is true and we share those same sentiments. However, the arbitration began 9/15 in a neutral International Court in London as per their original agreement from 2006 and agreed to by both parties. The District Court of Georgia has not ruled yet on Global's request for an injunction and Mahindra's motion to dismiss. That is a seperate legal action- just to clarify.

Anonymous said...

"Patriotic buying"

Is that why I see so many Tacomas, Frontiers, and Mazdas on the road?

"No real market: Ford, at least, is a hugely successful automobile company, the world over, and they do sell light trucks"

Yes, but if they take away the Ranger, Americans will buy F150s instead of Hiluxes and Mahindras. The F150 is a profitable (and very nice) vehicle, so they have every reason to try to manipulate me in to buying one. But, I don't actually need one for my own purposes (though I co-own one with a family member).

cWinfield said...

Thank you for the clarification "Anonymous 2". It's appreciated.

I have to agree with "Anonymous 3". History has proven that no matter what our first impressions are, Americans do not have a problem buying vehicles from foreign marques, especially in the small pickup category. Established brand loyalty plays a much bigger role in the full size pickup market.

Anonymous said...

Anonymous replied to anonymous :-)
"Anonymous said...
"Patriotic buying"

Is that why I see so many Tacomas, Frontiers, and Mazdas on the road?

Well you contradicted yourself in the next paragraph of your reply.

"....they take away the Ranger, Americans will buy F150s instead of Hiluxes and Mahindras."

The proportion of Tacomas, Frontiers, and Mazdas (btw. Mazda's are, or at least were, just Fords) are nothing compared to Ford Fx50s, chevys and dodges.

Patriotic buying is a very important factor in truck sales

It also helps that American trucks are extremely good; but if that were the only reason we would see the same success in other vehicle markets; Ford makes excellent cars, yet considering their colossal size, they have been outdone by smaller companies; i.e. their margin of success is much smaller.

Anyway, my point was not about Patriotic buying, but how it relates to Mahindra's ability to sell their bizzaro cart.

Those Japanese trucks are not doing as well as they should be even though they are almost as good as American ones. Compared to the Japanese trucks, Mahindra is a big joke.

This is where the massive force of patriotic buying is going to have a big effect. Mahindra stands no chance, except for any suckers stupid enough to buy one.

Remember Yugo?

Those who do not learn from history, are condemned to repeat the same mistakes, over and over again.

Anonymous said...

I did not contradict myself. Americans won't buy Hiluxes and Mahindras because they ARE NOT SOLD IN AMERICA. Therefore, the only alternatives that we will have is the F150 and its competitors -- at least for now.

The fact of the matter is that I don't need anything close to the F150, and that's true for a lot of the pickup truck owners I know. There clearly are a lot of people who need full-sized trucks -- but that's only a fraction of the people who own them. If the Hiluxes and Mahindras were available, I'd be in line to buy one, especially with the light-duty diesel. Or maybe the Jeep Gladiator concept that as just posted to I expect that there are a lot of other weekend DIYers like myself who would opt for a smaller/more efficient truck if it were good[0] and available.

There do seem to be people who get all patriotic about their buying, but I don't think it's nearly enough to drive the whole market.

If Mahindra gets their truck to market, then the dynamics will change completely -- because then the people in the buying public whose needs will be better served by a smaller trick actually will have a worthwhile alternative to the F150.

Unless you're right and people only buy trucks because it's like driving around with a huge American flag stapled to your back? I'll fly a flag over my house when I feel like it, and use my truck to haul woodworking and landscaping supplies, thankyouverymuch.

[0] Take the wheel-wells out of the Ranger's bed and it would be much easier to load and secure the cargo. Add a 30+MPG diesel, and it would be awesome.

Anonymous said...

I held out for Mahindra but am relieved to have bought a Tacoma. Is America ready for a fuel efficient truck? Hell yes!
I personally would like the truck I am driving to have a 4cyl turbo diesel that averages 30+ mpg. And I will trade my truck in when Toyota gets around to building what they deliver us. The US.

Tom said...

You’re absolutely right. At the end of the day, it’s all about the truck. And as you mention, it’s not just any truck but a compact, value-for-money diesel powered pickup that American truckers are ready for. A recent article in the WSJ mentioned that Americans are increasingly warming up to clean diesel technology. It was about time! I just hope now that we reach an end soon to the Mahindra-GV legal saga.

Anonymous said...

No way GV wins this one, and frankly even if they did they will never be able to work effectively with Mahindra.

They should take any settlement and move forward...