Inside The Collapse Of Mahindra's US Market Plans
I believe that, legally, I’m still their U.S. distributor. And I want trucks delivered to our dealersImporting niche vehicles from an unknown foreign automaker has long been a fraught process for US-based entrepreneurs, and John Perez’s attempt to bring diesel-powered Mahindra pickups to the US has been no exception. For four years, Perez’s Global Vehicles distribution network waited while Mahindra sought EPA certification for its diesel pickup engine, and then six days after approval arrived, the Indian firm dumped Perez with little ceremony. Now Mahindra says it will consider giving franchisees to the dealers who paid Perez up to $200k for the right to sell Mahindras, but that it is not obliged to do so. Perez is suing Mahindra for failing to fill an order for pickups, while dealers are considering suing Perez and Mahindra is seeking to end its agreement with Perez so it can distribute pickups through independent dealers. Mahindra’s Roma Balwani tells Automotive News [sub]The current dealers’ contract is with GV [Perez’s distribution channel, Global Vehicles] and hence they do not automatically become Mahindra dealers. However, we would be considering these dealers for our network if they are interested. We will need a new distribution network and soon we will start a dialogue with potential dealers, including the ones who are signed up with GV, if they are interested in signing up with Mahindra.
But can Mahindra? Meanwhile, will we ever get those funky Indian diesel-powered pickups? Given how Mahindra has treated its US distributorship, one wonders whether its customer service is equally unrelenting. On the other hand, Perez says he’s willing to let bygones be bygones and resume the deal. Unless Mahindra has a great reason to avoid its patient distributor (in which case, it should share said reason), it should just close the deal already and start shipping pickups. More legal wrangling won’t help sales of an unknown brand in a market that’s as competitive as the US.
DougD on Oct 11, 2010
A copy of the contract won't tell the whole story. Working for a company that's done business selling machinery into India, a contract is only a preliminary step in the negotiating process. Anything and everything is up for discussion after the contract is signed, and you never get all your money. When doing business with a completely different culture with a greatly differing concept of ethics and truth, you are naiive to assume anything. Good luck to Mr. Perez, he's going to need it and a lot more...
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