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Vehicles from India gearing up for U.S. | Business | Chron.com - Houston Chronicle
Automakers
Vehicles from India gearing up for U.S.
By PURVA PATEL Copyright 2009 Houston Chronicle
March 20, 2009, 11:15PM
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PURVA PATEL Chronicle
Sport utility vehicles and pickup trucks based on the Mahindra Scorpio, like this one on display in Mumbai, are expected to debut in the U.S. this fall. The manufacturer claims the cleaner-burning diesel engine will get 30 miles per gallon.
Share Print Email Del.icio.usDiggTechnoratiYahoo! BuzzFacebookMUMBAI, INDIA Car buyers who walk into Alan Helfmanç—´ Houston dealerships later this year may see more than just Chryslers, Dodges and Jeeps. They might see a Mahindra.
Helfman is among the first dealers planning to sell Indian automaker Mahindra & Mahindraç—´ pickups and SUVs in the U.S.
Americans have bought Indian-made textiles, steel and software.
But will they buy a car made in India? Houston dealer Alan Helfman is betting on it.
的 think people are ready for it, he said. 典here痴 a car from every country here now, so I don稚 think that値l be a big challenge.
Mahindra plans to launch two- and four-door pickups in the U.S. during the fourth quarter, followed by a sport utility vehicle. The company is trying to position itself as a global brand, despite a global recession and slumping auto sales.
å…¸he U.S. itself accounts for more than 50 percent of the worldç—´ market, said P.N. Shah, executive vice president of Mahindraç—´ international operations. çš„f youæ±*e going to be a player in this segment, and you want to be a globally recognized niche player, you have to be in the U.S.
Origins in WWII
Mahindra & Mahindra, which started out making SUVs by building Jeeps for Willys during World War II, last year exported 12,500 vehicles to 25 countries in Europe, Africa, South America, South Asia and the Middle East.
Indiaç—´ largest SUV and tractor maker, Mahindra intends to enter the U.S. market at a daunting time. A recession, slumping auto sales and tight credit market, not to mention a shrinking pickup and SUV market, make for a formidable debut.
Pump prices have dropped as oil fell from $140 highs in July, offering some support to large-car sales. But consumer demand for green cars hasn稚 dropped in tandem, and analysts don稚 expect low gasoline prices to last long.
典hey may not go directly back to $4 a gallon, but we would expect prices to range between $2.50 and $3.50 when the economy comes back and demand comes back in general for fuel, said Jeff Schuster, executive director of forecasting at JD Power. Even if there was a high level of speculation factored into the oil when it sold at $140, it likely won稚 stay down where it is.
Mahindra hopes to ride the green movementç—´ popularity by equipping its vehicles with cleaner burning diesel engines. The vehicles, based on the companyç—´ Scorpio model, will get an estimated 30 miles per gallon. The company is still awaiting environmental certifications from U.S. regulators, so official mileage figures are unavailable.
Auto experts note that if the company meets U.S. emissions standards, including more stringent regulations the Obama administration may soon allow states to impose, it faces financially strapped dealers and more prudent consumers.
Tataç—´ cheap car
India痴 largest automaker, Tata Motors, made international headlines when it launched the world痴 smallest and cheapest car, the $2,500 Nano, designed for the Indian market. But the Mahindra name isn稚 necessarily as well known in the U.S.
鼎onsumers are so conservative in terms of what theyæ±*e buying. Theyæ±*e sticking to brands they know, said Michelle Krebs, editor of Edmunds AutoObserver.com.
The Mahindra name isn稚 completely foreign to American consumers.
The company has made major inroads into the American farm equipment market since 1994. Itç—´ the No. 3 tractor seller in the U.S., with its North American headquarters in Tomball.
From his office in the Mahindra Towers in Mumbai, Shah acknowledges the branding challenges ahead.
He notes Mahindra has invested in extensive market research and partnered with Georgia-based distributor Global Vehicles to be the face of the company in the U.S. A $60 million marketing campaign is in the works.
The recession will create opportunities to operate at lower costs, he said.
展e don稚 need to spend substantive time and money to set up our distribution channel, Shah said, adding he can cherry-pick dealerships in today痴 environment.
$20,000 to $25,000
More than 300 dealers have signed agreements or letters of intent to sell the vehicles, including Helfman, who said he paid a fee of $150,000 for each of the three dealerships where he plans to sell the trucks.
å…¸heyæ±*e very concerned about quality from what others have told me, so I知 pretty fanatic about it, Helfman said.
Helfman expects the trucks to sell in the $20,000 to $25,000 range, though Mahindra hasn稚 released an official sticker price yet.
The companyç—´ Scorpio SUV is popular in India, even in cities, as the appetite for larger cars is growing among the well-heeled.
Itç—´ easy to spot a Scorpio on Mumbaiç—´ notoriously log-jammed streets as it towers above a frenzied jumble of hatchbacks, sedans, mopeds and rickshaws.
Nayan Vora, who owns a tile company in Mumbai, uses his Scorpio to drive his family around the city, where most cars are small hatchbacks or sedans, as well as to travel to his family farm a 100 kilometers away, about 62 miles, once a week.
çš„tç—´ a bigger car and a safer car, Vora said.
å¾¹nce the rural area starts, the roads are pretty bad. There are parts where there are no roads.
While the vehicle is sturdy enough for Vora, he says the ride pales in comparison to the American trucks heç—´ ridden in on visits to New York.
Initially the vehicles will be sent fully built to the U.S. and later sent in parts to be assembled in locations the company has yet to determine.
Mahindra has re-engineered the cars for the U.S., promising a smooth ride and more powerful engine.
More horsepower
The pickups, for instance, will have more horsepower and boast a six-speed automatic transmission and automatic stability control, features that aren稚 standard in India.
çš„tç—´ the size of a Tacoma but has the capability of a Ford 150 or Tundra, said Xavier Beguiristain, a vice president of marketing for Global Vehicles who recently left the company.
展hat youæ±*e seeing in India is not whatç—´ going to be in the U.S. market, but it has the same toughness and ruggedness.
