Mahindra stops development on a pickup truck targeted at the U.S. market

Article by Christian Andrei, on July 16, 2012

Mahindra & Mahindra has stopped development work on a pickup truck targeted at the U.S. market amid legal disputes and failure to get the required certification. Mahindra, the largest utility vehicle maker in India, sells tractors in the U.S. but not passenger vehicles. It has been developing a pickup truck version of its saleable Scorpio utility vehicle since 2006, spending around $100 million.

However, Mahindra said that these plans have been thrown out. In Mahindra’s statement, it said that it chose not to proceed with the project because of changes in the U.S. regulatory and market situation. It said that it will continue with its usual operations in the U.S. and will stay flexible with how it approaches the market.

Last June, Mahindra said that it has yet to get the required certification to penetrate the U.S. market with the vehicle. No specific details were given. It has also an ongoing dispute with distributor Global Vehicles, with which it had agreed to launch the Scorpio version in the U.S. In early 2012, an international arbitration panel made a favorable ruling for the automaker, the flagship firm of the Mahindra Group conglomerate.

The company is faced with a newer lawsuit filed by U.S. dealers who claim that they "intentionally delayed certification of its vehicles." Mahindra has denied the claims. An analyst said that Mahindra may instead go into the U.S. passenger car market via South Korean unit Ssangyong. Umesh Karne, an analyst with BRICS Securities, won’t say if this is a major setback since the Ssangyong option is open and there might be another plan being considered.

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