The Atlanta company that has exclusive rights to sell India-made Mahindra pickup trucks in the United States has sued the automaker in federal court over delays in delivering the vehicles.
In the lawsuit filed June 14 in U.S. District Court in Atlanta, Global Vehicles U.S.A. 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 U.S.
Global Vehicles has spent close to $35 million so far to prepare for the launch of Mahindra vehicles in the U.S. and has signed up 350 dealers nationwide, according to the lawsuit.
U.S. 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 U.S. 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 U.S. 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, according to the suit.
Global Vehicles and Mahindra are currently in arbitration over the dispute, the suit states.
Global Vehicles is asking the U.S. court to require Mahindra to comply with the distributor agreement. It also seeks an injunction preventing the automaker from selling in the U.S. through another distributor or communicating with any of the dealers in the Global Vehicles network while the two companies are in arbitration.
Mahindra’s website now says that the truck will go on sale on in the U.S. in the late fall of this year.
Mike Geylin, a spokesman for Global Vehicles said final U.S. government certification for the pickups has not yet been obtained by Mahindra. He declined comment on the lawsuit. A spokeswoman for Mumbai-based Mahindra did not immediately comment on the suit.
Global Vehicles, which has offices in the Atlanta suburb of Alpharetta, 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 U.S. despite a 25 percent tariff imposed on light truck imports to the U.S.
The Mahindra Group is a $6 billion company and one of India’s top conglomerates. Its automotive arm makes about half of the utility and light commercial vehicles sold in India, according to its website.
The parent company isn’t new to Georgia. Mahindra USA, its U.S.-based farm equipment subsidiary, announced Dec. 9 that it would close a tractor assembly plant in Calhoun, Ga., moving those operations to a new facility in Chattanooga, Tenn. At the same time, officials announced that the farm equipment unit’s headquarters would move to Houston from Tomball, Texas.
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