Business Week: Baseball, Apple Pie... and Mahindra?
How an Indian company plans to woo America's heartland with its fuel-efficient SUVs and pickups
Engineers from India design advanced jet engines, write some of the world's most sophisticated software, and run massive global computer networks. But can they make a pickup truck that will sell in America's heartland?
Mahindra & Mahindra, a conglomerate based in Mumbai, intends to find out.
In spring, 2009, the company plans to launch two- and four-door pickups and a sport-utility vehicle in the U.S.<<<Anyone want to guess if they will continue or cancel...with the US auto industry going into the tank...so to speak...
This trio of diesel-powered trucks will compete against a big pack of aggressively promoted offerings from General Motors (GM), Ford (F), Dodge, Nissan (NSANY), and Toyota (TM). All of these manufacturers have been warring over a domestic pickup market that is shrinking and a SUV market that's overcrowded.
Skepticism abounds. Trucks in the U.S. are sold with imagery of waving flags, macho companionship, and brawny workers showing off feats of towing strength to the sound of John Mellencamp anthems. Buyers tend to be loyal, practical traditionalists.
Considering that established players such as Toyota, Nissan, and Honda have already had their share of trouble attracting this crowd, some experts wonder whether a little-known company from a country that has no history of selling vehicles to American consumers has a prayer. They're also skeptical that buyers will flock to diesel-a technology that many U.S. consumers associate with belching big rigs. "It looks like an impossible marketing play," says auto industry consultant Dan Gorrell of AutoStrategem in Tustin, Calif.
But at a time of soaring gas prices, Mahindra's vehicles are going to have one big thing in their favor:
superior fuel economy. Despite diesel's historic brown image, it is emerging as a green technology. New low-sulfur fuel, federally mandated in 2006, can produce mileage figures that nearly equal those of more fashionable hybrids. Mahindra estimates that its compact SUV, the Scorpio, and pickups, one of which will be called the Appalachian, will get about
30 miles per gallon in the city and as much as 37 on the highway. That compares with 30 city/34 highway for the $27,000 Ford Escape SUV hybrid and 21 city/27 highway for the gas-powered $23,000 Toyota RAV4.
Although Mahindra is unknown to most American consumers, the company has made cars in India for more than 50 years. The $4.5 billion company also has financial services, information technology, telecommunications, and agricultural equipment businesses. Over the past decade, it has
sold more than 50,000 tractors in the U.S.
Well aware of the image problems confronting an Indian pickup, Mahindra has conducted extensive consumer research in America. At a recent meeting at the Alpharetta (Ga.) offices of Global Vehicles, the company that will distribute the brand in the U.S., interviews with potential buyers were projected on a big screen. "I don't see them [Mahindra] entering the market and immediately competing with more established brands," said one thirtysomething male. "Can it really be made well if it comes from India?" asked another.
Given these attitudes, the company has made a key strategic decision: It is not going to waste energy trying to persuade the unpersuadables. Instead, Mahindra is going to target the three groups it believes will be the most receptive to its vehicles-consumers who identify themselves as "green," people who have bought Mahindra tractors, and the close to 3 million Indian expatriate households in the U.S. The plan is to generate buzz with these buyers, then hope the word spreads to the mainstream.
Rather than unrolling a big image-building marketing campaign, which would be drowned out by the thunder of other truck promotions, Mahindra plans to start small. It will spend only about $20 million on marketing in 2009, less than 10% of what Toyota spent to launch the Tundra pickup. Almost none of this money is expected to be devoted to television or glossy print ads. Instead, it will purchase carefully selected search terms and banner ads on Web sites popular with its target consumers. These links will steer potential buyers to detailed information about Mahindra's trucks. The green consumers whom the company is courting relentlessly research the products they buy, then frequently promote them to friends.
Mahindra has set modest sales targets for its American operation. In the second six months of 2009, it plans to sell just 18,000 vehicles, followed by 45,000 in 2010. Mahindra will ship its SUV whole from India, but the pickup
trucks will be transported in pieces. They will be assembled at one of three plant sites Global is scouting in the Southeast. Worried that any quality problems could quickly stigmatize the Mahindra brand, Global Vehicles CEO John A. Perez is working hard with Mahindra
to keep the number of defects to a minimum. "We don't want to be Kia or Hyundai and have to apologize after we launch," says Perez.
So far, Perez has attracted
263 dealers to distribute Mahindra trucks. One of them is Steven Taylor, a Cadillac dealer who's invested more than $1 million in a Mahindra franchise in Toledo despite all of the obvious risks. "Trucks and an SUV that get over 30 mpg is a market niche that will get noticed," Taylor says.
Mahindra & Mahindra is 63 years old and entered the car business in 1949 by building Willys Jeeps in India. Today it's the
leading maker of SUVs in the country. The privately held company is still controlled by the Mahindra family. In an interview with Business India, Vice-Chairman Anand G. Mahindra said of his global truck and SUV strategy: "
We want to be the next Land Rover."
2009 Mahindra pickup 
PickupTruck.com has just interviewed John Perez who is the CEO of Global Vehicles U.S.A. (GV-USA), a company that's going to bring over the Mahindra pickup from India.
This is going to be an interesting addition to the American pickup truck landscape in that it will offer a number of unique features not currently seen over here. For one, it will be a compact pickup with a clean, high-tech 4-cylinder diesel... In addition it will have a 6-speed tiptronic transmission. It will be offered in both crew cab and regular cab versions. Payload reportedly will be a little over one ton, which is extremely high for this class of vehicle.
Prices are expected to start in the low $20K range, with US sales beginning in 2009. Perez states: "...we're not going to be the cheapest in the market, but we're going to be very reasonably priced." Perez is hoping to sell 45,000 units the first year.
It's also interesting to note that there will not be an extended cab model. I think that's smart, as I see the advent and popularity of crew cabs as being the death blow to extended cabs—especially for compact and mid-size trucks. It would not surprise me one bit to see other truck makers drop that body configuration in the future.
India’s Mahindra Plans Truck Production in Ohio
February 11, 2008
The U.S. distributor for Indian automaker Mahindra & Mahindra Ltd. told dealers Monday it plans to assemble tens of thousands of light pickup trucks annually in Ohio starting in 2009, and to start selling a range of hybrid vehicles in the U.S. by 2010, the
Wall Street Journal reported Monday afternoon.
Mahindra, which was defeated in a bidding contest by rival Tata for Jaguar and Land Rover, has partnered with Atlanta-based Global Vehicles USA, which will distribute the vehicles, establish marketing plans and manage a network of hundreds of dealers that have signed up to sell Mahindras throughout the U.S., the newspaper reported.
Global Vehicles Chief Executive John Perez laid out the latest strategy to dealers at a convention in San Francisco. Perez, in an interview with the
Wall Street Journal, said the company is in final stages of talks with an assembler in the U.S., but declined to name the assembler, saying only it is not a major U.S. automaker.
Mahindra will send kits for the pickups from India to the U.S. Workers in Ohio will assemble the kits using additional parts from suppliers in the U.S. for the two- and four-door pickup trucks. By assembling the trucks in the U.S., the company avoids the 25 percent “Chicken Tax” on pickup trucks imported to the U.S. from outside North America, the paper noted.
Mahindra has been working on a plan to enter the U.S. market next year by offering three products — two pickups and one SUV that will be shipped as a whole vehicle from India, Perez told the
Journal. The vehicles are expected to have a base price in the mid-$20,000 range and use diesel engines built by a major German auto supplier.
Perez told the
Wall Street Journal that Mahindra is committed to selling each of its products with an optional hybrid-electric diesel engine about a year after launching in the U.S. He said the vehicles will be priced higher than conventional models, but the premium will be about half the premium established automakers tack onto their hybrid vehicles.
Mahindra diesel pickups in 2009? 
What sort of quality could we expect? 
Steering wheel's on the wrong side!
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