Mahindra Pickup Future Remains in Limbo


Ever wonder what happened to the Mahindra T20/T40 pickup truck that was supposed to find its way onto our shores in 2009, then in 2010? You’re not alone. We haven’t heard any recent news about the truck, either, so we dug around online and placed a bunch of phone calls to try to shake some information out of the automotive ether.

What we learned was not promising if you’ve been waiting to test-drive one of these trucks. Long story short: The truck’s future in the U.S. is still bogged down in legal disputes, and it may be years before it goes on sale here, if it ever does at all.  

When last we turned our attention to the legal donnybrook that had erupted between Mahindra and its licensed U.S. distributor, Global Vehicles USA, litigation came to a halt after an arbitration panel in the U.K. claimed sole jurisdiction to resolve any and all disputes between them as per the original terms of their U.S. distribution contract.

GV USA then against Mahindra and agreed to take its case before the arbiters. Arguments were heard in London in August, and a ruling was expected by the end of November. No decision has been announced yet. 

In the meantime, Ward’s Auto reported in September that GV USA had ceased operations. Our attempts to contact the company this week were unsuccessful.

Some jilted dealers have taken matters into their own hands. In April, Jerry Ackerman, a St. Louis-based Hyundai dealer, filed a class-action lawsuit in U.S. District Court on behalf of 40 other would-be Mahindra dealers against GV USA and Mahindra. The lawsuit alleges that the network of nearly 350 prospective U.S. dealers had spent upward of $60 million on dealership rights and capital improvements, and the dealers are seeking compensation for breach of contract, unlawful enrichment and five other counts.  A pretrial discovery period wrapped up in late November; the plaintiffs have demanded a jury trial, so this case is likely to remain unsettled for months.

All the while, there has been no news coming out of Mumbai about the future of the T-series truck. What might have caused Mahindra to abruptly reconsider its plans to bring the vehicle to the U.S.? Most likely, two or three things are working in concert.

Disappointing Mileage

The first occurred in February. After a long and costly effort to win emissions certification from the EPA for the four-cylinder 2.2L mHawk diesel engine, the truck’s gas mileage figures ended up, shall we say, at 19/21 mpg city/highway, falling short of Mahindra’s promise that the company would bring a pickup truck to the U.S. that delivered around 30 mpg.

There could be a number of reasons for this discrepancy (mandated U.S.-spec exhaust gas recirculation systems come to mind), but one that stands out is the fact that the test vehicle the EPA evaluated was Mahindra’s biggest and heaviest truck: a four-door four-wheel-drive T40 with an automatic transmission.

While prospective buyer reaction seemed mixed online,  one wonders if such mediocre mileage didn’t convince some Mahindra executives that a truck of unproven reliability in the North American market would be a hard sell compared to, say, the segment-leading Toyota Tacoma, which delivers better highway mileage with a V-6 gas engine and has a proven track record with consumers.

The Chicken Tax 

There’s also the matter of the longstanding 25 percent “chicken tax” tariff the federal government levies on imported pickup trucks. U.S.-built Tacomas and Nissan Frontiers are no longer affected by this, but such a high import tax would have put Mahindra at a huge pricing disadvantage. The company announced in 2009 that it planned to import the truck as a complete knockdown kit — as crated parts to be assembled domestically to circumvent the tariff — but this would have obviously required either leasing an assembly plant from another manufacturer or building a new plant from scratch. Either way, this would have added appreciably to the vehicle’s initial cost and hurt its competitiveness from a price point perspective.

Korean Acquisition

The third, and possibly most relevant, reason might be Mahindra’s acquisition of a 70-percent stake, late in 2010, in Korean automaker Ssangyong, Korea’s third-largest manufacturer of utility vehicles, with the intention of transforming Mahindra into “India’s first global cult brand.” With more than 1,000 dealerships in 91 countries, Ssangyong would seem to have the necessary worldwide distribution and supplier infrastructure Mahindra needs as a first step toward globalizing its operations.

Ssangyong executives stated their intent last April to break into the North American market by 2016, and with Korean automakers having now secured a firm foothold here, you could easily imagine Mahindra leveraging the consumer outreach afforded by a future Sssangyong dealer network to bring its vehicles to the U.S.

So while we may very well see a Mahindra truck or SUV in a dealer showroom someday, it will probably happen because the company took advantage of the more cost-efficient unit-amortization and brand-building synergies offered by its partnership with Ssangyong rather than relying on a patchwork of independent dealerships and saddling itself with considerable startup costs to break into a fledgling market. 

New Utility Vehicle

Waiting a few more years would give Mahindra a little more time to refine and diversify its automotive product line (as well as its powertrains) to suit the tastes of a more demanding American truck-buying public. The company recently launched a new utility vehicle in India, the XUV500, that on first glance appears to be big leap forward in that regard, with sleeker sheet metal and styling, and upgraded interior trim and components. By contrast, the T20’s design aesthetic was, to put it charitably, idiosyncratic. It’s also the company’s first-ever foray into monocoque chassis architecture, with a transverse-engine/front-drive layout that would seem to be aimed at consumer markets beyond the Far East. It also suggests the platform for a future Ridgeline-like sport utility truck that could avoid the chicken tax.

Recertification for 2012?

The final nail in the T-truck’s coffin, at least for now, is news that Mahindra has still not applied for federal emissions recertification for 2012; its current certificate expires at the end of this year. EPA spokeswoman Cathy Milbourn confirmed this week that the company has not yet submitted the necessary applications for the 2012 model year. If Mahindra fails to meet the Dec. 31 deadline, it will need to submit the vehicle for federal emissions and safety testing all over again.

One can certainly understand the possible business considerations that may have gone into Mahindra’s decision to delay launching the T-truck in the U.S. On the other hand, one wonders if the company won’t eventually rue the day it failed to take advantage of fortuitous timing to establish some kind of presence in the U.S. truck market before Toyota, GM and Dodge had the chance to roll out brand-new versions of their midsize trucks, all scheduled for next year — and certainly before Jeep launches its highly anticipated Wrangler-based J-truck. But we’ll all find out in the years to come.


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