Global Hopes to Sign Up 400 Mahindra Dealers in U.S.

Mahindra & Mahindra Ltd.'s second plant will come on line next year to supply the U.S. market, says Xavier Beguiristain, marketing vice president for Global Vehicles U.S.A. Inc., the Indian truck maker's North American distributor.

Production at Mahindra's existing Indian plant assembled enough units to support the truck maker's domestic sales of about 200,000 units last year.

When Mahindra begins exporting to the U.S. in the latter half of 2009, the vehicles will come from a new plant nearby. It is likely they will arrive as knocked-down kits to get around a 25% tax imposed on pickup-truck imports.

Beguiristain says 315 dealers have signed on to sell diesel-powered trucks, Mahindra's first U.S. offerings. “We're aiming at 400 dealers eventually,” he says in an interview in New York. The U.S.-market lineup will consist of 2- and 4-door pickups, powered by a 2.2L common-rail diesel engine.

The Mahindra franchisees are mainly from the sales networks of General Motors Corp., Ford Motor Co., Toyota Motor Corp. and Nissan Motor Co. Ltd. Beguiristain says each dealer was required to pay a $195,000 “initiation fee,” which bestows an exclusive territory, or sales point.

He declines to say what the average dealer investment will be overall. The U.S. dealers are not required to operate stand-alone sites, but half will feature free-standing buildings, Beguiristain says.

Mahindra requires a minimum of 900 sq. ft. (84 sq. m) of exclusive showroom space at its dealerships. One wall will be devoted to the truck maker's heritage, with a screen showing highlights of its history. U.S. dealers will not have minimum sales quotas, but officials at the plant in India have assured the distributor that “if we sell them, they will build them,” Beguiristain says.