Yet another Asian automaker is eyeing the U.S. market.
Mahindra & Mahindra Ltd., India’s leading manufacturer of sport utility vehicles, announced yesterday it plans to begin exporting SUVs and pickups to the United States next year.
The 61-year-old company, based in Bombay, has signed an agreement with Global Vehicles USA Inc. of Alpharetta, Ga., to import and distribute Mahindra vehicles.
If the deal materializes, Mahindra would be the first Indian automaker to break into the North American passenger vehicle market.
“The decision to enter the U.S., the most demanding automotive market in the world, is a deliberate and rational decision,” said Pawan Goenka, president of Mahindra automotive sector. “As the market changes, we realize that even to stay on top of the Indian market, we need to be a global player, and the U.S. forms a crucial part of our strategy to make Mahindra a truly global company.”
The United States accounts for almost half of global sales of SUVs and pickups.
Mahindra will have plenty of company among foreign automakers selling cars in the United States. Foreign brands now account for more than 50 percent of all vehicle sales in the United States, with Toyota and Honda the biggest Asian sellers.
China’s state-owned Chery Automobile Co., also plans to sell cars here in 2008.
Global Vehicles USA has been given exclusive rights to market Mahindra products. Mahindra said it will announce during the second quarter of 2007 when its vehicles will be available in the United States.
Mahindra said it will sell an upgraded version of its pickup and its popular SUV, the Scorpio, but released few details — including sticker prices.
The company manufacturers about 30,000 to 40,000 Scorpios annually, said Jeff Schuster, an automotive analyst with J.D. Powers and Associates.
Mahindra traditionally has built no-frills trucks, farm equipment and off-road vehicles intended to cope with India’s rugged terrain and bumpy roads. Recently, however, the company has upgraded the Scorpio’s design and features.
Selling Indian vehicles in the United States won’t be easy.
“It’s not an untested product — this product has had some international exposure,” Mr. Schuster said. “But it’s going up against some pretty stiff competition here in North America.”
The Scorpio “has had some appeal, and it’s been a strong seller in India and elsewhere, but I think this is a different market here,” he said. “Features and content [of Mahindra vehicles] tends to be more on the basic end of the spectrum, which could be an issue here.”
SUV sales have declined this year, and buyers increasingly are turning to more fuel-efficient vehicles and “crossover” SUVs — cars with an SUV appearance but smaller and more fuel-efficient than traditional SUVs.
Global Vehicles has an established channel network of 130 dealers, which would expand to about 200 by the time the first vehicles are sold in the United States, Mahindra said.
Mahindra plans to earn about a fifth of its revenue from exports in the next few years, up from 5 percent now. It already exports to Africa, Europe, Southeast Asia and South Asia.
The company is the world’s fourth-largest tractor maker, and recently signed a deal with France’s Renault to assemble 500,000 cars a year in India.
“We want to capture at least a small fraction of that [U.S. market] to start with,” Mr. Goenka said.
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