Mahindra and Mahindra gears up to drive its UVs, pick-up trucks into US

MUMBAI: Two years after India's largest utility vehicle maker Mahindra and Mahindra put its ambitious foray into the utility vehicles and pick-up trucks in the United States on hold, the company is taking small steps to re-enter the highly competitive market.

ET learns the recently inaugurated Mahindra's North American Technical Center (MNATC) in Troy, Detroit, which is primarily working on products meant for the Indian market, is also slated to work on products for the US market, in the second phase.starting 2016-17.

One of the key reasons behind M&M dropping plans for the US market was that the company did not obtain necessary certification to enter the US market, with major developments of TR40 being done back in India. But with a plan of having significant product development infrastructure in US and some of the engineering talent from Detroit, the Center is expected to play a serious development role. It now has about 50 engineers, which will be eventually expanded to 200 in few years.

"It is fair to say, the first seeds are sown for re-entry in US, with the establishment of MNATC. It is an ultimate thing for any OEM to sell in US and M&M too would want to have its presence in the market, as it pursues it ambition of being amongst top globally admired brands," said a person close to the company on condition of anonymity.

The current focus is to begin the development activity of products meant for Indian market. Post the development of the next generation Quanto (U321) and Xylo (U421), which are expected to hit the market in 2016-2017, the MNATC is expected to begin work on Global SUV/Pick up trucks which may have US as one of the focussed markets.

And even as development work for products meant for US begins, the company will be focussed on getting legal issues settled post its dispute with Global Vehicles and sort out the distribution.

When queried on the US re-entry, M&M spokesperson offered, "no comments."

People close to the company say the plan to re-enter is at a very early stage. Unlike other markets, the lead development for US market is more as it is the most difficult, most regulated and a high profile market in the world where the customer's requirements, regulatory requirements and on emissions, crash safety.

The team at MNATC has a cumulative experience of 600 years in design and development of automobiles with executives having decades of experience working for the likes of Chrysler, GM, Ford, Dodge, Jeep, Nissan and Tesla.

They would have collectively worked on developing more than 200 vehicles on at least 40 different platforms including Dodge Dakota pickup, Ford Explorer SUV, Jeep Grand Cherokee and Tesla's electric crossover Model X, M&M would definitely have the capability to meet the requirements of future.

M&M first harbored its ambitions of entering US market in 2004 after tasting success in its tractor business. But it was a challenging endeavor spread over 6 years (2006-2012), which involved over $100 million investment, a legal dispute with the distributor Global Vehicles and eventually it had to give up on the project citing regulatory changes and market environment in 2012.

"Just because the earlier attempt didn't fructify, that does not mean, company will give up on the market. With the continuing tractor success, M&M is already a respected name in US. The company has already launched a new electric two wheeler in US and entry into PVs is just a matter of time, but 'when', will depend on many variables, which will play out in coming years" added the person quoted above.

While making the statement in 2012, M&M had said, the company will monitor the US situation and remain flexible with its approach to the US market.

Earlier, Dr Pawan Goenka was quoted by a news agency, as saying, "Since our long-term aspiration is to be known as the premier SUV and pick-up manufacturer in the world, it is but natural that we must sell and be successful in the U.S. Without that we cannot call ourselves a premier player in that segment."

M&M's long term aspirations are still intact, the definition may have changed in the last half a decade.