[gshanky]

Global Vehicles U.S.A. Inc., the Alpharetta, Ga., company fighting to retain import rights to Indian-made Mahindra pickups, has withdrawn its legal demands in U.S. court.
Separately, the Indian automaker has been dealt an apparent marketing setback by getting a U.S. fuel economy rating of 19 mpg in the city and 21 mpg on the highway - far below the 30 mpg promised to dealers.
The legal move could be seen as an olive branch between the battling automotive companies. By withdrawing his complaint in U.S. District Court in Atlanta, Global Vehicles CEO John Perez is letting a British arbitration panel have sole say over whether he will be Mahindra & Mahindra Ltd.'s U.S. distributor.

SRC: http://www.autonews.com/apps/pbcs.dl...110219897/1400

[GTO]

M&M wins arbitration case in US

Source & Full Article

India's largest utility vehicle maker Mahindra & Mahindra's long pending entry into US got a major fillip , with the International Arbitration Panel rejecting the claims of the automotive dealer Global Vehicles USA which had accused the Indian automaker of violating the distribution agreement for selling vehicles in the US .

The arbitrators held that the distribution agreement with Global Vehicles (GV) had ended according to it sown terms and that Mahindra hasn't violated any agreement or law in the US in its dealings , the company said in a filing with the Bombay Stock Exchange on Friday .

[VeluM]

Good news for Mahindra. They should be able to go in with the XUV5OO now, instead of the Scorpio. Maybe this has something to do with the LHD XUV spotted testing a couple of days ago?

[Harbir]

I said it earlier, and I will say it again. Mahindra's products are not ready for the american market. Not even the XUV500.

[Jeeper1941]

Originally Posted by Harbir

I said it earlier, and I will say it again. Mahindra's products are not ready for the american market. Not even the XUV500.

Why do you say that? Mahindra is already selling tractors and farm equipment in the US.

This was the same case when Hyundai and KIA first entered the US market. People were skeptical about the standards etc. and now look at them. Hyundai and KIA are firmly established, and they entered the US market with crappy cars, far worse than the XUV500.

[dockap]

Originally Posted by Harbir

I said it earlier, and I will say it again. Mahindra's products are not ready for the american market. Not even the XUV500.

What you say is true for the products sold here in India but for the export market the quality of the products is totally different.

[gomzi]

Originally Posted by gshanky

SRC: http://www.autonews.com/apps/pbcs.dl...110219897/1400

Originally Posted by dockap

What you say is true for the products sold here in India but for the export market the quality of the products is totally different.

The quality might differ, but with fuel economy ratings of 19 - city and 21 - highway, there will be few takers unless they are priced really really low. With established players like Toyota & Honda offering SUV's with 30 MPG (Highway) it will be tough to compete.

Then there is KIA and Hyundai which offer better mileage at lower costs and more importantly are known quantities.

And this is discounting the used car market.

If I were in the US market to buy an SUV, it would be difficult to sell me a Mahindra XUV500 - it is just not appealing enough as a package.

[m8002?]

Originally Posted by gomzi

The quality might differ, but with fuel economy ratings of 19 - city and 21 - highway, there will be few takers unless they are priced really really low. With established players like Toyota & Honda offering SUV's with 30 MPG (Highway) it will be tough to compete.

I guess you are mixing up the units. 15kmpl translates to 37mpg. Given the road conditions there, it can achieve these readings easily.

The major obstacles i see are lack of petrol engine and quality concerns.

[Harbir]

1. Selling tractors and farm equipment in the US has no bearing whatsoever on how the american consumer will react to a mahindra car or SUV.

2. Hyundai was the butt of jokes for 25 years, sold with huge discounts and terrible resale values to the bottom rung car buyers who just wanted a new car at the lowest possible price and didn't care about anything else. It is now with the latest Sonata and the genesis that Hyundai is finally earning respect for the quality and capabilities of its vehicles. Only when Hyundai has made vehicles that beat the best of Honda and Toyota at their own game has the ridicule started to subside.

THis fate awaits mahindra as well. Mahindra can either choose to make a profit now with lousy vehicles and then spend 20 years digging itself out of the hole, or it can let another generation or two of vehicles pass before exposing itself to ridicule that will then have to be undone.

3. What price will they sell it at? Let us look at some vehicles that are close to the XUV500 in price in India and are also available in the US and see what their prices there are:

The 4wd variant is 13.5lacs ex showroom. At approximately that price you can get:

Chevy Cruze LT. Petrol variant is $20,000 in the US. lets say $22,000 for the diesel (if it were available)

Honda Civic 1.8V A. Approximate equivalent is the Civic EX-L with leather upholstery which is $22,000

Toyota Corolla 1.8G automatic, comparable to the 1.8LE automatic, $20,000.

VW Jetta TDI, $23,000.

So we see that on average, vehicles that cost about Rs 13.5 lacs here cost about $22,000 in the US.


However, note that:
- The Subaru Forrester 4wd is $20.6k
- CRV AT 4wd for $23k.
- Jeep Wrangler 3.8V6 is $22k

For $25k, you can buy the 4x4 versions of the Toyota RAV4, the Outlander, the Jeep Liberty, and the Hyunda Santa Fe.

Clearly, Mahindra will not be able to sell this vehicle at $22,000.

I bought a brand new 2007 Toyota Camry CE with all the features (power everything, cruise, A/C etc), at a discounted price of $18,000. At the time the Honda Accord LX was offered for $19,000 on discount. Will Mahindra be able to sell the XUV500 at anything approaching Camry/Accord prices in the US when it cannot dream of charging 21lacs for the vehicle in India that an accord costs?

Its failure to meet Honda/Toyota/Hyundai/Subaru (etc) levels of engineering, refinement and quality means that it cannot be sold at more than about $16,000. thats 8lacs. If you remove the 22% excise duty from the 4wd SUV500's 13.5 lac price, you get 11 lacs. Which means mahindra will have to sell an 11 lac rupee vehicle in the US for 8 lacs.

How much money will they make at that price?

And if they sell it cheap, apart from thin margins, if they make any money at all, what brand perception will they get except "cheap Indian junk"?

I am afraid that Indians don't understand how harsh and mocking and unforgiving the american market is. The products are superb, the efficiency of the factories is phenomenal, the used car market is rich with top notch high value cars, and there is virtually no tolerance for anything except the very best unless it is bankruptingly low prices.

Sure, they have to start somewhere, and you can argue that they will learn by exposing themselves to the harsh winds of that market which will force them to do better. That is true, but I think that there are so many things about the SUV 500 that can be straight off marked off at bad, and it would be foolish on mahindra's part to suffer the ravages of the market to learn the lessons it ought to know and that it can be taught by the knowledgeable immediately.

Just my thoughts. No doubt the brilliant people in charge know better than me.

But it ought to be noted by the prudently skeptical that the diesel mahindra bolero pick up got 19/21 city/highway mpg rating from the EPA ,when something like the fullsize F150 with the 302hp 3.7L petrol V6 Ford F150 gets 17/21 despite its much larger towing and payload capacity and cost about the same that the mahindra pickup was expected to (about $23k). In a country where diesel is more expensive than petrol.

Its a VERY TOUGH market over there.

[dadu]

Originally Posted by Harbir

Its a VERY TOUGH market over there.

I have to agree with Harbir here, its a different consumer market there, unforgiving and they expect nothing but the best of products.

Even Niggles are not tolerated like here and its a mature market therefore the expectations are Quite high.

[gomzi]

Originally Posted by m8002?

I guess you are mixing up the units. 15kmpl translates to 37mpg. Given the road conditions there, it can achieve these readings easily.

Umm, nope, its 19 mpg & 21 mpg as per the article. So no mixup of units.

I tried to get other articles for the MPG rating but didn't find any.

[Durango Dude]

Probably M&M can start by selling Ssangyong and then slowly shift focus to its own vehicles. It will become as difficult as reinventing the wheel if it tries to sell its crude produce there to start with. It would also help to brand its Mahindra Classic as a 'retro-lifestyle' vehicle and turn it's 'niggles' into 'characteristics'. Every niggle is a 'Oh La La La' a "M&M" character, hard clutch, poor NVH, rattles, and the list goes on. They could also revive (exhume) the "Marlboro" Man as its brand ambassador. Rename its Thar as the Mojave. They could probably provide this link(http://www.team-bhp.com/forum/techni...utions-10.html) for their XUV 500 owners to find solutions.

[Harbir]

21mpg equals 9km/l approximately.

THe highway rating is not just a steady speed drive on a the highway. It includes high speeds, full throttle acceleration up to high speeds from low speeds to simulate merging situations (where you enter a limited access highway, needing to very rapidly accelerate from slow speed upto the high speed of the traffic travelling on the highway before you enter the highway lanes, typically full throttle), carried out at with A/C running, etc, including full throttle acceleration from near standstill to 130km/h at full throttle.

It simulates typical american driving conditions and it is rare for the average user's expereince to differ very significantly from the EPA ratings since the procedure was revised in 2008 (before the, EPA ratings were helpful to compare between cars, but not a good guide to what you could reasonable expect for any specific car in your own use.

It is a paradoxical scenario. low performance vehicles actually get poor fuel economy because they are so slow that to meet the conditions of the test, they require lots of wide open throttle for long periods of time, which actually demolishes their fuel efficiency compared to more powerful engines.

So it is entirely believable that an underpowered diesel mahindra pick up truck being forced to perform at the level that US consumers expect would drop it to 9km/l or less. especially keeping in mind that the vehicle has almost certainly had negligible wind tunnel time and would almost certainly have huge drag at high speeds encountered in the US.

[srishiva]

Diesels are used in Tractors or trucks where towing is one of the requirements. Else diesels are known for the hybrid equivalent mileage (from the likes of VW).

Now if we think XUV is the vehicle that will be sold with mileage figures similar to the ones mentioned above with lack of refinement for a people mover, it will be difficult, very difficult. I would atleast hope that Mahindra removes all un-necessary gizmos other than cruise control to improve the reliability.

[Harbir]

Detailed Test Information

details on how the testing is done. Do look at all the graphs for city, highway, high speed, hot, cold, etc.