Mahindra v. Tata: What Statement Does the Donation Battle Make?

Has anyone been following the charitable donation battle between Anand Mahindra and Ratan Tata? In a nutshell, Mahindra donated USD $10 million to Harvard a couple of weeks ago to secure the re-naming of a humanities center to The Mahindra Humanities Center at Harvard. To up the ante, Ratan Tata (Mahindra’s biggest Indian automotive rival and owner of Jaguar and Land Rover) recently donated USD $50 million to the Harvard Business School for a new building to be named Tata Hall.


It’s understandable that both of these incredibly successful Indian businessmen want to give back to their Alma Mater (and satisfy their equally incredible egos), but it also stirs controversy in India. Just when you think the divide between the haves and the have-nots in America is getting bigger every day; we’ve got nothing on India. So, what’s to be gained by donating millions of dollars to a foreign university (that isn’t exactly cash-strapped to begin with) while millions of your fellow countrymen live in utter poverty?

Is it all about image? Do these charitable acts give credence to those who have suspected all along that Mahindra (and possibly Tata) only wants to sell vehicles in the US to gloat about the achievement and fluff up their status as an Indian international success story just to sell more cars at home?

It’s my sincere hope that both of these men make far more charitable contributions to those in need than these very public donations to a wealthy American institution portray. I personally believe there is a bigger statement to be made by taking a more stealthy approach to giving, but hey, the Salvation Army probably isn’t going to let me re-name one of their second-hand stores no matter how many lightly used slacks I donate. Personal satisfaction, warm feelings, and good karma be damned, they should at least paint my name on the side of a Red Kettle come Christmas time. Anonymous gifting is so overrated.

So are these multi-million dollar Harvard donations simply a good deed, or just good business?

Sources: Stuff Rich People Love, The Wall Street Journal, All Headline News

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.

Hey Mahindra, Are You Listening?

And Mahindra & Mahindra thinks I’m down on them? Mahindra Planet’s occasional constructive criticism and suggestions for mitigating Mahindra’s multiple US pickup launch delays, their blatant disregard for positive public relations, and how they appear to ‘deal’ with their partners (Global Vehicles), their dealers, and their future customers has nothing on what some Indians have to say about them. This is not to mention all of the great commentary written by fans and detractors alike on various mainstream automotive news sites. Consider this post as an open appeal to Mahindra.


Dear Mahindra & Mahindra Ltd,


Most of us fans here in the US now figure that you really don’t care what any of us may think of you. However, most of us are convinced that you have the right product at the right time (and are ready to buy it now) and generally want to see you succeed. Some see your promised launches and subsequent delays as a reflection on your ability to deliver a vehicle that will meet expectations. Others see you as an arrogant corporation who has frustrated it’s own dealer network, is being sued by GV in the US and the UK to motivate you to deliver vehicles, is trying to dissolve contracts via press releases, and is even trying to kill Mahindra Planet as it currently exists and takeover http://www.mahindraplanet.com/ for it’s own use.


I don’t know much about marketing, but it seems to me that listening to your customers and working to continuously improve your public perception are things that most companies aspire to do. Regardless, if you do actually care about your future in the United States, you should click the links listed below and see what your potential customers really think of you, your business practices, and your products before you, ahem, deliver pickups in December.


Sincerely,
Mahindra Planet

Here you go Mahindra (or anyone else interested). Here are the MP top 5 must-read, user-generated, Mahindra PR links:

1 – Team-BHP.com
This is (IMHO) simply the best Indian car forum out there. Some serious car fans from around the world are on this site. This very long thread reveals that some people in India have a surprising lack of faith in the success of Mahindra’s US launch. It’s an eye-opener.

2 – Autoblog.com
This is a post with some, er, interesting comments. Some good, some bad. All are a good read.

3 – PickupTrucks.com
This is Mike Levine’s latest post on Mahindra, again full of colorful commentary. I suggest digging through some of the older posts and reading those comments as well.

4 – Jalopnik.com
It’s hard to beat Jalopnik’s posts. Again, the comments are a very interesting read. Search through older posts and read those comments too.

5 – MahindraTruckForum.com
Goes without saying, MTF is the voice of Mahindra lovers and haters in the US, offering opinions galore. If you sincerely want (or barely care) to put your fingers on the pulse of the US Mahindra truck scene, you’d better get on board. Your importer and dealers lurk and participate on MTF; you should be doing the same.

Sources: As Hyperlinked

Mahindra Launch Delays: Is 2010 Too Soon?

Automotive News published a fantastic report by Lindsay Chappell on the state of Mahindra’s US vehicle launch on Monday. It has subsequently been hacked by the blogosphere into disjointed, bite-sized chunks of reconstituted “news”. We’re not going to do any further disservice to AN here, so please click this link, read the article in its entirety, then finish reading this Mahindra Planet commentary. Automotive News: Mahindra Dealers are Still Waiting


Missed Dates
Although AN was unable to contact Pawan Goenka for a comment on the delays for their article, Mahindra Truck Forum member, Joe Callimachus was able to directly contact Goenka by email late last week. His letter follows:

Pawan,

On March 4th you told Reuters that Mahindra would be announcing the times for the US launch of the Mahindra Pickups, TR20 and TR40, in 2-3 weeks. It's officially three weeks today.

I really need to decide on buying a new pickup and the TR20 is exactly what I want. But I can’t keep waiting forever. My F250 is literally falling apart. I just had to take one of the fuel tanks off ‘cause it rotted away.

I would like to know if you are going to get the EPA certification and start production of these trucks soon. If not I will have to start looking at other trucks that I really don't want.

Yours truly,
Joe Callimachus

Goenka responded to Callimachus’ letter with the following:

Joe,

Thank you for your interest in the Mahindra Pickups. It is very encouraging to note that there are customers waiting to purchase these vehicles. Unfortunately we are not in a position to announce a definitive date as we are still waiting for the homologation process to be completed. Only after the process is completed can we give a firm date. Hope you are able to wait for the vehicle.

Regards,
Pawna Goenka
President (Automotive Sector) Mahindra and Mahindra

Obviously, Goenka is very noncommittal at this point, as is Global Vehicles. This only reaffirms contact that Mahindra Planet has had with GV and franchised dealers. All news and timelines on the launch have been driven by India since the start of 2010. Global Vehicles has taken a stealthy approach to PR and media, only passing on information as they get it, and not offering much more. It’s better to keep quiet, than to keep pissing on the customers’ Cheerios.

Feeling the Love/Hate
The overall feeling among dealers and fans is positive about Mahindra products, and most are confident that Mahindra will be a great success… once they get here. Some of the web media seems to perpetuate the gloom and doom of missed launch dates and lack of information (not that we haven’t done it either).

Whatever. That’s old news, so get over it. Part of Mahindra’s (and GV’s) charm is that they are so excited about, and emotionally invested in, their product that they tend to be overly optimistic on announcements and timelines. Does it hurt their credibility? Possibly. But then, would you rather be known for multiple missed launch dates, or for selling a crappy product that falls apart, or possibly accelerates your customers into oblivion, or worse?

Tensions Are High
Clearly there are strained relations between GV and Mahindra. GV finds themselves precariously hanging onto millions of dollars in franchise money from dealers who are spending even more money to pepper the country with proper sales shrines for Mahindra vehicles (insert your own Taj Mahal quip here). In return, Mahindra will not commit to a go date.

We’ve Waited This Long
Between supplier issues in India, the complexities of making a new vehicle ready for the road in the United States, and the development of new world-market platforms, there certainly could be concern that even a summer of 2010 launch may not be a possibility. Mahindra Planet has previously questioned some of the logic in actually launching the current first generation Scorpio platform (TR20 and TR40) in the US when the second generation vehicle looms large on the horizon.

Keep in mind that the truck Mahindra is trying to launch here is new to us, but was first introduced to India in 2002. Aside from the arguably relevant and truly geriatric Ford Ranger, eight years is ancient history for any unchanged vehicle platform for sale in the US.

From the AN article:

Speaking with Automotive News last year, Goenka said Mahindra's entry into the United States was important -- but not the company's most important current project. He said only about 6 or 7 percent of Mahindra's total global engineering force of 1,000 was working on the U.S. entry.

"We also have three new vehicle platforms we're working on right now and just completed a fourth," Goenka said. He said that entering the United States would cost half as much as developing a new vehicle platform.

More important, he said, was doing it correctly: "A launch date is very important to us, but not as important as getting our product right."

At this point, would it make more sense to redirect the efforts of those engineers working on Americanized pickup design projects and ensure that the next generation trucks are inherently designed with the US-market in mind?

If Mahindra were to scrap plans to bring the current generation TR20 and TR40 to the US, do a post-mortem on everything they have learned about developing a US vehicle, and use that knowledge in making a solid effort with a brand new truck, would they lose any more face than they already have? Again, we’ve waited this long for Mahindra, what are another few months or even another year going to matter.

Go ask your neighbor if they plan to buy a new Mahindra this year. Unless they are highly aware of auto industry news, a farmer, or possibly Indian-American, they probably won’t have a clue what you are talking about. It’s easy for all of us closely involved in Mahindra goings-on to assume that everyone in the country is on the edge of their seat waiting for these trucks. In reality, if Mahindra were to wait until 2011 to launch an all new truck, most Americans would be none the wiser, but maybe all of us hardcore fans would reap benefits worthy of our patience.

Interesting Speculation: Would Mahindra & Mahindra buy Saab?

In his blog post on BSMotoring.com this morning, blogger Rohin Nagrani curiously speculates that Mahindra & Mahindra would be the only international player with the ability or desire to swoop in and grab Saab after the Koenigsegg deal fell through yesterday.

Mahindra Planet thinks this is a stretch, since M&M have so much on their plate already, but an interesting take on the Saab deal anyway.

The complete post can be found: Here

Diesel Demand: Why is Mahindra Alone in Introducing a Mid-size Diesel Pickup to America?

While Mahindra is establishing itself as a clean diesel and diesel/hybrid niche-brand in the United States, domestic manufacturers have no known plans to introduce competitive vehicles in response.

Emissions compliance, development costs, and consumer demand are the main reasons other manufacturers are not developing their own diesel-powered small trucks. Of course these are completely valid reasons. So, how about some Q&A…

Q: Why are small, diesel-powered vehicles so difficult to introduce to the United States?

A: Blame it on California.

The land of CARB and The Governator imposes the harshest emissions requirements on diesel engines in the country. Selling any vehicle in the US is dictated by the ability to sell it in California. This is not necessarily a bad thing.

California’s Tier 2, Bin 5 emissions requirement for particulates (soot) and nitrogen oxides (NOx) are extremely strict. The requirement forces US-bound, passenger car diesels to be very clean. The T2B5 requirement closely mimics European EU5 and EU6 standards. AutoblogGreen has a great article with a graph that explains the standard here: Why can’t Americans have good, small diesels?

Q: Why do automakers expect consumers to pay a premium for small diesel engines in cars, SUV’s and compact light trucks in the US?

A: Price point is reflected by cost.

For a domestic manufacturer, the claimed cost per vehicle for a T2B5 compliant diesel over an equivalent gasoline burning vehicle is $2000 to $5000.

VW is the exception. VW has their TDI diesel firmly planted in its small sedan platform. With a base price of just $1300 over the base price of a gasoline-burning Jetta, the TDI version is an interesting option. Economies of scale are in effect here. VW builds a lot of TDI engines. An engine well regarded for good power and exceptional fuel economy. Maybe one day they will put it in one of their SUV’s sold here, but a compact pickup truck does not appear to be on the horizon.

Q: Why won’t domestic small truck makers develop a small pickup with a compact diesel engine despite the costs?

A: Chicken.

Emissions and cost both come into play here. Manufacturers will claim that the demand doesn’t justify the development of a compact diesel powertrain. The additional cost will then be passed on to consumers, whom they feel won’t want to pay a premium for the technology. Understandably, there is more to converting a current production pickup to diesel. The heat from a diesel engine must be mitigated and room for post-combustion emissions treatment must be made in addition to many other design considerations. This would force a significant redesign of current product or a new truck entirely. However, we would like to see the hard research data on actual demand.

If GM, Ford, and Chrysler were smart (they aren’t), they might put aside corporate pride and jointly develop a shared small diesel engine to put in their own small pickups. Or they could contract the design to a diesel specialist (International, Cummins, Cat, Daimler, etc.). Even more simply, they could revive the GM compact V-8 diesel that was nearly ready for launch before the plug got pulled earlier this year. Maybe they are just scared.

This is their loss. Mahindra is entering the mid-size truck market with their 4-cylinder, 2.2 liter, intercooled, common rail diesel. Mahindra gets to be the pioneer… or the guinea pig, depending on how you look at it.

Small Diesel Future

Certainly other manufacturers will monitor Mahindra’s success or failure in the coming year. Demand for the unusual truck from an unfamiliar source will be the litmus test for others looking to stick a toe in the diesel-powered, small truck waters.

If demand for small, diesel trucks overcomes any consumer hesitation about buying an unproven, Indian-made vehicle with uh… unique aesthetics, maybe a market does exist. Mahindra is poised to show North American consumers that diesel pickups aren’t the big, loud, stinky, and black smoke spewing, trucks and buses they dread getting stuck behind in traffic.

Mahindra will have the edge by being the first to the market, but surely others will follow suit and create a healthy level of competition (if things go to Mahindra's plan). And just maybe, Mahindra becomes the brand that makes diesels in the US a truly viable and readily available option. Time will tell.