NEW YORK – Mahindra & Mahindra Ltd.’s second plant will come on line next year to supply the U.S. market, says Xavier Beguiristain, marketing vice president for Global Vehicles U.S.A. Inc., the Indian truck maker’s North American distributor.
Production at Mahindra’s existing plant at Nasik, about four hours from Mumbai, assembled enough units to support the truck maker’s domestic sales of about 200,000 units last year. In addition, Mahindra exported to 20 other countries, including Brazil and South Africa.
When Mahindra begins exporting to the U.S. in the latter half of 2009, Beguiristain says the vehicles will come from the new plant, which is being built south of Mumbai. It is a “high likelihood” they will arrive as knocked-down kits, he adds.
That would enable the truck maker to get around a 25% tax imposed on pickup-truck imports. Beguiristain would not confirm Mahindra is planning to establish an assembly site in Ohio, claiming the truck maker is in discussions with three companies to accommodate U.S. production.
Mahindra also has three tractor plants in the U.S., he adds.
Mahindra has budgeted an initial $50 million to launch sales in the U.S.
Beguiristain says 315 dealers have signed on to sell diesel-powered trucks, Mahindra’s first U.S. offerings. “We’re aiming at 400 dealers eventually,” he says in an interview here.
The U.S.-market lineup will consist of 2- and 4-door pickups, powered by a 2.2L common-rail diesel engine.
Using technology similar to the Bluetec system that enables Mercedes-Benz to meet emissions standards in all 50 states, the Mahindra trucks will be equipped with urea reservoirs to eliminate nitrogen oxides from their exhaust. Beguiristain says Mahindra’s trucks also will comply with all emissions standards in every state.
The Mahindra franchisees are mainly from the sales networks of General Motors Corp., Ford Motor Co., Toyota Motor Corp. and Nissan Motor Co. Ltd. Beguiristain says each dealer was required to pay a $195,000 “initiation fee,” which bestows an exclusive territory, or sales point.
He declines to say what the average dealer investment will be overall.
The U.S. dealers are not required to operate standalone sites, but half will feature free-standing buildings, Beguiristain says.
Mahindra requires a minimum of 900 sq. ft. (84 sq. m) of exclusive showroom space at its dealerships. One wall will be devoted to the truck maker’s heritage, with a screen showing highlights of its history.
Beguiristain forecasts a high percentage of pre-sales before Mahindra’s vehicles arrive in the U.S.
U.S. dealers will not have minimum sales quotas, but officials at the plant in India have assured the distributor that “if we sell them, they will build them,” Beguiristain says. However, he declines to specify a sales target for Mahindra’s first full year.
Mahindra also plans to export an SUV and a cross/utility vehicle to the U.S. Like the pickup, these also will feature diesel engines, but Beguiristain does not say when the vehicles will be available here.
In addition, a diesel-hybrid vehicle is believed to be in the works.
Global Vehicles has 24 employees. Based in Alpharetta, GA, it is led by CEO John Perez. Bill Geotze, who formerly worked for Mazda North America Operations and Subaru of America Inc., is president.
Mike Petrizzo, also formerly of Mazda, is senior vice president-operations.
Beguiristain says New York ad agency Strawberryfrog, an ad agency here, is working on a strategy for the truck maker’s advertising campaign. “It will be mostly digitally focused, but there will also be some print advertising.”