Thursday, December 15, 2011

Revealed: US Mahindra Pickups to be Made in Alabama Beginning 2012

Mahindra Genio DC (TR40 US)

2013 Mahindra TR20 and TR40
Mahindra Planet has been working to confirm that a 2-million-square-foot facility in Muscle Shoals, Alabama which was recently leased by Navistar, will begin assembling Mahindra TR20 and TR40 compact diesel pickup trucks beginning in the first half of 2012 and sell them in the United States as 2013 models soon after.

Despite the infamous fallout and between Mahindra & Mahindra Ltd (Mahindra) and US importer/distributor, Global Vehicles (GV), Mahindra Planet understands that Mahindra has continued to work with Navistar to locate a suitable assembly location for Mahindra vehicles in the US.  Mahindra Planet was tipped regarding this potential news shortly after Navistar announced that they were signing a 10-year lease for the facility on September 27th.


A US Mahindra Truck Plant
The mile-long facility in Northwestern Alabama (about 70 miles west of Huntsville) will be leased by Navistar (International Trucks) beginning January 1st, 2012.  The 10-year lease was officially signed on October 24th.

A Navistar press release on the announcement does not disclose what product will specifically be produced at the former rail car manufacturing plant.  However, the company intends to make the facility a cornerstone of a planned expansion strategy.  The Alabama Trucking Association references state-filed documents which state that the purpose of the lease is for Navistar to engage in its “business of motor vehicle and related product manufacture and assembly”.

Requests for comment by Navistar, Mahindra, and Global Vehicles have gone unanswered.  However, sources near the project have stated that engineers from India have regularly visited the facility over the last 2 years, and that Navistar plans to assemble a pickup truck with a diesel engine from India there.  Navistar’s press release states that “Navistar intends to finalize its initial operating and product plans for the facility in the coming months, and expects to disclose those details by year end.”

Mahindra Genio SC (TR20 US)

The Navistar-Mahindra Connection
Navistar and Mahindra & Mahindra Ltd have a long-standing business relationship which reaches back to 1963 and continues to this day with a shared engineering and manufacturing joint-venture which produces Mahindra-Navistar heavy trucks for the Indian market.

Mahindra has repeatedly been rumored to be searching for an appropriate assembly facility in America since 2008.  Mahindra stated in January of 2011 that despite their dismissal of former import partner, Global Vehicles USA, they were open to partnering with Navistar to find a suitable location for assembling Mahindra Pickups specifically for the US market.

US Manufacturing Justification
Assembling the compact diesel pickups in America from India-made parts allows Mahindra to avoid the 25% Chicken Tax imposed on complete vehicles imported to the United States.  This has been a key part of Mahindra’s strategy to offer their compact diesel pickup trucks at a low price in order to successfully enter the highly competitive US light truck market.  Assembling the TR20 and TR40 in a "right-to-work" state like Alabama also has the potential to keep manufacturing costs low.

Navistar’s involvement, and the location of the new facility close to existing plants will (in Navistar’s own words) allow them to “capture synergies and efficiencies given the close proximity to Navistar’s two engine plants in Huntsville.”

Mahindra and Global Vehicles Await Arbitration Verdict
Global Vehicles and Mahindra & Mahindra are still awaiting an arbitration decision which will determine the fate of their tumultuous relationship and indicate which company will ultimately control import and distribution of Mahindra vehicles in the United States.  Despite the lack of a rendered verdict, it appears that Mahindra is moving forward with US-assembled pickups and will be producing vehicles here no matter the arbitration outcome.

If Global Vehicles retains distribution control, they will continue to service the nearly 350 dealers which they have established franchises with nation-wide.  If Mahindra is granted control of distribution, they may be able to utilize Navistar’s distribution resources, establish their own relationship with the dealers already set up by Global Vehicles, utilize their tractor distribution through Mahindra USA, or a combination of all three.

EPA Certification
WardsAuto reported in September that Mahindra has not submitted a formal application to the Environmental Protection Agency for a 2012 model-year federal emissions certification as they had for the 2011 model-year back in late 2010.  Mahindra still has until the end of 2011 to file for a 2012 model-year certificate.  However, it is more likely that Mahindra will wait until the beginning of 2012 to file for a 2013 model-year certificate for pickups they intend to sell as 2013 models.  The EPA has not returned MP’s request for comment.

NHTSA
WardsAuto also reported that “Mahindra & Mahindra has identified itself to the National Highway Traffic Safety Administration as a vehicle manufacturer and submitted the necessary information to sell its vehicles in the US”.  Mahindra Planet confirmed with the NHTSA that although no additional paperwork has been filed recently by Mahindra, any manufacturer may begin moving forward with their business plans without approvals or submitting crash test data.

Return of the Scout?
Alabama Govenor, Robert Bentley has stated that the lease agreement with Navistar has the “potential to be one of the largest economic development projects in the United States and will transform northwest Alabama”.

While not necessarily the return of an International-branded light truck like the old International Scout, this move will make Navistar and Mahindra a player in the North American light truck market (remember that Navistar no longer has to abide by a non-compete agreement with Ford).  It could also be a stepping stone for the entry of Mahindra’s recently unveiled XUV500 which was arguably designed purposely for the US market and is experiencing great success in India.

Mahindra XUV500
US Jobs
To take full advantage of state tax incentives used to lure Navistar to the Alabama facility, Navistar must employ at least 1,800 workers by the end of 2015.  Local news reports have stated that Navistar intends to eventually employ 2,200 workers at the facility and fully optimize the manufacturing capabilities of the plant. 

Navistar’s Secret
Despite their promise of creating over 2,000 new US manufacturing jobs and the Alabama govenor’s comments about this being one of the largest economic development projects in the US, Navistar is being curiously tight-lipped about what will actually be made at the facility.  Since the arbitration decision has not yet been made (word is that that a decision may not be made until after the New Year begins), an official announcement on what will be produced there has still not been made.  There is a correlation here.

Mahindra Is Not Dead
Mahindra Planet is convinced that plans are indeed in place to manufacture Mahindra vehicles in the US in 2012.  We believe that American Mahindra fans have something to look forward to in 2012.  Stay tuned as we learn more.

Sources: As hyperlinked
Photos: Mahindra & Mahindra Ltd.

22 comments:

ADO said...

These trucks are butt-ugly, and will not sell very well in the United States. American truck buyers aren't even going to consider a truck from India when there are several domestic and Japanese options to choose from.

Jim said...

These trucks will have diesel engines just like all the other small pickups that are sold in the rest of the world and will sell like hotcakes because of that.

Scott said...

It's going to be a tough sell for them. It depends on the price point and the fit, finish, and quality of the product. If they can make nice little trucks and sell them cheaply they will do well. Otherwise it will become another Daewoo, Yugo, or Suzuki (which still sells cars in the US, sorta).

And if they have the equivalent of early 80s GM Diesels they will get chased back to India.

Anonymous said...

These will sell very well. International and Mahindra quality will beat the pants off the Ford and Chevy light trucks. Emphasis on utility and durability over cup-holders and a car like ride will appeal to those who want a small truck as opposed to those who would be better served by the rancharo/el camino offerings that Ford and Chevy produced in the Ranger and S10.

Anonymous said...

yup, I'll believe it when I see it..until then, still driving the silverado. I'd love to have a compact diesel truck.

Anonymous said...

Is this why Ford has decided to quit producing the Ford Ranger? I think so.

Anonymous said...

I love the SUV! Very sharp. The trucks look like they will be great little work horses. I like that they are diesel and so utilitarian. If you build quality vehicles we will by them here in the USA.

Good luck. We would love to see you in Alabama!

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Anonymous said...

I own a Mahindra tractor and if their pickups are as sound as my tractor they should find a niche in the market.. All IH replacement parts for their tractors are made by Mahindra.
I do wwelcome the job additions to our economy...

Anonymous said...

I'm still driving my tired Honda and i've retired my old truck (it finally died and couldn't be revived at a cost efficient way). I've looked at everyone else's offerings and can't get a cheap basic light truck, let alone one with a diesel engine. I don't need a full size, loaded up fluff truck, and I don't want or need all the package crap that chevy, ford, dodge, etc. seem to think every car and truck has to have at my expence. Experience tells me that there are alot of people and companies that share my needs in a smaller truck. Mahindra has built Jeeps for the foriegn market since WW2 so quality isn't in question. It will sell as long as our current manufacterers refuse to sell what is being demanded by consumers; a small, resonably priced, basic, diesel truck. I'll stay waiting for it to arrive, even if it's from India....

Air Ride Parts said...

Mahindra has been successful as of late but in this case I think it would be tough for them. Tougher in competition with US brands.

Anonymous said...

After this whole fiasco, why would anyone buy a truck from a company that is either completely inept, morally corrupt, or both. The trucks will have to be both cheaper and better quality than the existing competition in order to sway American consumers who are very fussy about trucks. Nothing I've seen about the proposed design/build suggests they are anything other than cheap garbage. A sturdy, practical, small, diesel truck is high on my wish list but I'm not holding my breath that it will come from Mahindra or Navistar.

Truck Lowering Suspension Parts said...

Mahindra is competitive enough to have good sales on trucks like these. It's durable and reliable.

diesel engines said...

Mahindra trucks are durable and reliable.

GaramChai said...

Fascinating to see desi made-and-designed trucks in the US!

Welcome to American, Mahindra

Anonymous said...

I'm an american, I drive a ford f 150 4x4 4 door with a 5.4l. I fully intend to buy one, and its all fords fault. I wanted an f100 our a new ranger, but ford decided in 2011 that the f150 was the smallest truck they needed. i'm not buying another full sized pickup, I'll taller the gas mileage of the mahindra.

Anonymous said...

Americans consumers IMO are fed up with being overcharged for something they don't want.. pickups these days are not built for someone that needs a pickup I wouldn't have any of the trucks coming out these days. I welcome mahindra with open arms i don't care where it's from, my loyalty for American made trucks ended when their loyalty to the working American ended.

Anonymous said...

Butt-ugly is certainly a matter of taste. I really like the rugged looks of the crewcab 4x4. Its the right size and a diesel is a major plus. I agree with several of commenters - I do not need a huge F-150 size truck with tons of car like luxuries. I want a tough, rugged, dependable 4x4 that can haul. It should ride ok and have air-conditioning and comfortable seating. That is pretty much all I want. I hope Mahindra can overcome all the Obama admin obstacles to protect the unions, and get this car to the consumers who are hostages to established car makers. This could be a revolution similar to the Jap invasion that bought inexpensive quality cars and my favorite the Datsun King-Cab.

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Anonymous said...

Any new news on these trucks? I've driven them in Belize and I can't wait for them to make it here. Awesome little truck.

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