Washington, June 16 (IANS) An Atlanta company that has exclusive rights to sell India-made Mahindra pickup trucks in the US has sued the Indian automaker in federal court over delays in delivering the vehicles, according to media reports.
Global Vehicles USA. Inc. claims Mahindra & Mahindra Ltd.’s haggling with emission and safety testing contractors has delayed the government certification the company needs to sell the compact diesel trucks in the US, according to a report by GlobalAtlanta.com, a business news publication in Atlanta.
Global Vehicles has spent close to $35 million so far to prepare for the launch of Mahindra vehicles in the US and has signed up 350 dealers nationwide, according to the lawsuit filed June 14 in US District Court in Atlanta.
US dealers have spent more than $60 million in franchise fees for the right to sell Mahindra vehicles, the suit adds.
Mahindra had repeatedly pushed back the projected delivery date for the pickups, according to the suit.
Anticipating a delivery in early 2009, Global Vehicles was negotiating financing for an initial order, but the lenders backed out when Mahindra once again delayed shipment, the suit alleges.
Global Vehicles, at Mahindra’s suggestion, then began searching for a financial partner. But in July 2009, Mahindra said it was putting its plans for the US market on hold because Global Vehicles lacked adequate financing, according to the suit.
Global Vehicles claims it did have financing but that Mahindra has rejected its orders, imposing ‘onerous’ new financial demands that were not covered in the original agreement.
Meanwhile, Mahindra delayed completing emissions and safety testing that would lead to US government approval to sell its vehicles here, the suit states. While this normally takes only three years, Mahindra slowed the process by engaging in lengthy negotiations with the contractors who perform the testing, it said.
Global Vehicles and Mahindra are currently in arbitration over the dispute, the suit adds.
Global Vehicles is asking the US court to require Mahindra to comply with the distributor agreement. It also seeks an injunction preventing the automaker from selling in the US through another distributor or communicating with any of the dealers in the Global Vehicles network while the two companies are in arbitration.
Global Vehicles announced in 2007 that it would introduce the pickups as early as spring 2009. The trucks are slated to be made in India and shipped in finished form to the US despite a 25 percent tariff imposed on light truck imports to the US.
(Arun Kumar can be contacted at arun.kumar@ians.in)
