Will US buyers take to diesel-powered M&M UVs and SUVs? Mahindra believes they will
Starting next year, Mahindra & Mahindra Ltd. (M&M) is hopeful that its utility vehicles and pick-up trucks will do well in the US market. Despite the shrinking market for SUVs and pick-up trucks in America, M&M believes it can still do well with a small pick-up, and later, a midsize SUV.
Pawan Goenka, President – Automotive Sector, M&M, has earlier admitted that the company did, in the passing, consider acquiring GM’s Hummer division, But Goenka also said that the acquisition will probably not make much sense for M&M. That indicates that M&M will probably go it alone in the US market, with Mahindra-badged vehicles.
M&M, which plans to start selling its pick-ups in the US from 2009, will offer only diesel-engines to begin with, and add hybrid vehicles to its lineup within the next two years. Goenka believes that since diesel engines generally offer better fuel economy than petrol engines, M&M vehicles will right away have an edge over the competition in the US market.
M&M also understands that what works in South America and Africa etc. is not likely to work in the US, since customers there would be more demanding. But the company is said to be already spending millions of dollars towards reworking and refining its vehicles to adapt them to US requirements.
To start with, M&M hopes to be able to sell at least 10,000 vehicles per annum in the US, which would allow the company’s US operations to break even. Mahindra's distribution partner in the US, the Atlanta-based Global Vehicles USA, has already signed up about 300 dealers through which M&M vehicles would be distributed.
The Mahindra name, in the US, is associated with tractors – M&M is one of the biggest players in the US market in that space. But to rework its brand image, M&M will be spending more than US$50 million per year, on advertising. Whether M&M will really be able to get US customers out of their Ford F150s and Dodge Rams and into Scorpio-based UVs remains to be seen…
