Wednesday, May 25, 2011

Mahindra Class Action Gains Momentum, Dealers File Complaints at State Level

A lawsuit initiated by St. Louis-based would-be Mahindra pickup dealer Jerry Ackerman, has piqued the interest of 45 other expectant dealers seeking refunds and punitive damages from Indian automaker, Mahindra & Mahindra Ltd (Mahindra) and US importer, Global Vehicles USA (GV).  Additionally, another 70 dealers recently met in Atlanta to discuss joint legal action directly against Mahindra & Mahindra.

Class Action Claim
As we reported in April, Ackerman and Automotive Leasing Corp. filed a federal class action claim against both Mahindra and GV.  The claim states that despite Ackerman’s requests, both Mahindra and GV have refused to release the money paid for three Mahindra franchises.  The class action lawsuit is open to any entity that entered into at least one Dealer Sales and Services Agreement and paid money for the right to sell Mahindra products and accessories.  The suit seeks actual and punitive damages for breach of contract.

According to Automotive News (via Autoblog), around 45 (of around 350) other dealers have shown interest in joining Ackerman’s class action claim.

State Grievances
Another 70 dealers met in Atlanta (GV is headquartered in nearby Alpharetta) Georgia last month to discuss taking legal action directly against Mahindra.  Global Vehicles has not responded to email requesting response on the Ackerman claim, but Mahindra Planet is surmising that they are the organizers of the Atlanta meeting and are possibly encouraging the dealers to organize and seek legal action against Mahindra directly.

The 70 Mahindra franchisees, lead by New Hampshire car dealer Joseph Yergeau, intend to file complaints against Mahindra directly with their state motor vehicle law enforcement agencies.  These dealers feel that Mahindra and its failure to deliver its over-promised compact diesel pickups lies solely with Mahindra itself.  Yergeau says, “Our beef is with Mahindra, not Global.  Mahindra refuses to to talk to us.  But at some point they are going to have to deal with their dealers.”

A Third Action
Since Mahindra claimed that its distribution agreement with GV was null and void back in August of 2010, GV has focused on litigation and an arbitration process to come to an accord with Mahindra and satisfy the empty-handed dealer network they began developing in 2008.  After being forced to drop their federal lawsuit directly against Mahindra in February, GV has focused entirely on the arbitration set to begin in August of this year. 

According to Automotive News, some dealers have been contributing to a legal defense fund in support of GV’s arbitration efforts.  After an arbitration decision is rendered, GV will once again have the option of filing another federal lawsuit against Mahindra if they choose to do so.

With three separate actions occurring simultaneously: 1) federal class action, Dealers v. Mahindra and GV; 2) Dealers v. Mahindra, via state law enforcement; 3) GV v. Mahindra arbitration, a clear outcome and conclusive arrangement may not emerge for quite some time.

As an anonymous dealer on a dealer’s forum put it:

“In a nutshell, for my investment to be worth a plug nickel, Mahindra needs to do one of three things: 1) Give an absolute confirmation, "Global's Dealers are Mahindra's dealers regardless of the outcome of the Arbitration; or, 2) Global needs to win the Arbitration; Or, 3) Mahindra needs to buy either a majority interest in Global's stock (thus we become Mahindra's dealers) or buy out Global's Assets including all the franchise agreements (thus we become Mahindra's dealers).

Clearly, there is little here we dealers have contol over!

You're right--What a Mess!”

Thursday, May 19, 2011

Opinion: Ram Ridgeline?

2002 Dodge M80 Concept
Back in 2002 Dodge came out with the M80 Concept.  The exercise was to see if there was demand for a fairly light, minimalist pickup design with styling and pricing that would appeal to a younger pickup (first time buyer) demographic, and those who just needed a basic pickup with decent hauling and towing capabilities and a very low target price (I think it was under $20k at the time).  I was all over it.  I wanted the M80 so badly with its retro-mini-PowerWagon styling, and I was a DaimlerChrysler employee at the time (discount!).  I even got to see the concept in person later that year and I was in love.  If they had built it, I would’ve been first on the list.  In my eyes the styling still looks fresh (even though they eventually slapped nearly the same nose on the Nitro) and I would still buy it today.  Stick a little Fiat diesel in it and its even better.
 If you read the comments on the post on theRam Lifestyle Pickup (possibly similar to the 2006 Rampage Concept), there is a commenter (@paul810) who believes that the Ram Ridgeline/Rampage/Lifestyle (or Rampon as @pup cleverly named it) is purposely a softened up, unitized pickup so that it won’t compete with an expected Jeep small pickup (possibly a more rugged full-frame compact, and not the JK8 conversion).  I suppose that the Rampon has its place, but I am seriously hoping that the Jeep takes a lot of cues from the M80 and gives us something more along those lines.

Monday, May 16, 2011

India to Require Diesel Vehicles to Average 46.8 mpg by 2015

The Indian government is set to impose stringent CAFE (Corporate Average Fuel Economy) requirements on Indian automakers within the next year.  While the current average allowed for an automaker’s full line of vehicles is 36.6 mpg, companies like Mahindra & Mahindra and Tata will have until 2015 to make a 10 mpg improvement when the new standards take effect.  If the CAFE requirement isn’t met, manufacturers will face monetary penalties.

The increased fuel economy ratings are directly related to a reduction in CO2 emissions.  The current 36.6 mpg target correlates with the production of 165 grams per kilometer, and the 46.8 mpg target translates to 135 g/km of CO2 emissions.  Environmental organizations are pushing for India to aim for parity with European standards and achieve 110 g/km by 2020.

Indian manufacturers build many small vehicles like Mahindra’s Gio and Maxximo which help them to meet the current standards.  However, the proposed requirements will force all manufacturers to tighten their fuel efficiency belts.  Since Mahindra is, and intends to remain an SUV-focused company, we can expect to see economy improvements across the product range, but they will certainly make hybrid and electric technology more of apriority.  Efficient designs from Ssangyong and Mahindra-Reva electric cars should help Mahindra meet the standards as well.

Of course none of this will immediately effect the US introduction of Mahindra or Ssangyong vehicles.   But it does help to force common global economy and emissions standards into place.  India is emerging as an international automotive player.  Quickly stepping up to meet some of the world’s strictest emissions standards is a very positive move which will help all Indian manufacturers to be seen as serious global carmakers and shed some of their third world stigma.