Global Vehicles Lawsuit Pre-Emptive Strike Against Any End Run by Mahindra

NEW YORK – A frustrated Global Vehicles U.S.A. Inc. has gone on the offensive against partner Mahindra & Mahindra Ltd., apparently concerned continued, unexplained delays in delivering promised trucks for distribution in the U.S. may signal the Indian auto maker’s intent to now go it alone.

Global Vehicles has filed a lawsuit in a federal district court in Atlanta seeking to force Mahindra to submit to arbitration, as called for in the original contract between the two companies, to settle disputes over the vehicle-distribution plan.

Alphareta, GA-based Global Vehicles signed an agreement with Mahindra nearly four years ago to obtain exclusive distribution rights for its trucks and SUVs in the U.S.

Some 350 U.S. dealers were subsequently signed to sell the Mahindra pickups, contributing a collective $60 million to Global Vehicles for franchise rights. The distributor says it has spent about $35 million of that total in preparation for the U.S. launch.

Mahindra has missed three deadlines for homologating the vehicles with the National Highway Traffic Safety Admin. and Environmental Protection Agency, a necessary step before the trucks can be distributed in the U.S.

In its complaint, Global Vehicles asks the court to prohibit Mahindra from distributing vehicles through any other company or to contract with U.S. dealers directly.

In addition, the distributor is asking that Mahindra be required to refund the $1 million the U.S. firm says it spent preparing to distribute the auto maker’s diesel-powered Scorpio SUV. The Scorpio was to go on sale in the U.S. a year after the pickups arrived, but Mahindra no longer wants to sell that model here.

Scorpio no longer U.S. bound.