The good news for Mahindra last week was the EPA approval of their four cylinder diesel motor, which paves the way for the rollout of the Indian manufactured TR20 and TR40 trucks in the United States. The bad news, as reported by Left Lane News, is that Mahindra has terminated their contract with the U.S. distributor, Global Vehicles, Incorporated. Global Vehicles had signed up as many as 345 Mahindra dealerships from coast to coast, but grew tired of waiting for Mahindra to overcome the numerous delays in the approval process. In June, Global Vehicles slapped Mahindra with a lawsuit claiming that they had incurred some $35 million in expenses due to the delayed launch.
Does this mean that Mahindra is back to square one? Not necessarily, as business opportunities have a way of overcoming lawsuits. Now that their trucks are EPA approved, Mahindra needs a dealer network if they’re going to launch as planned next February. Starting from scratch would be a monumental (and time consuming) task, so I wouldn’t be a bit surprised if the lawsuit from GVI was dropped and a new distribution contract was written. Whatever happens, this particular soap opera is still a long way from over.
In other pickup truck news, VW now tells us through Left Lane News that the Amarok won’t be coming to the United States. Currently, the truck is produced only at VW’s Argentina factory, which has a capacity of 100,000 units per year. That capacity is sufficient to meet worldwide demand, but just barely, so VW will limit distribution to South America, South Africa, Australia, and the EU. For now.
This is just speculation on my behalf, but no manufacturer will let production capacity stand in the way of sales. If VW determines the US market will support reasonable Amarok sales, then expect the truck to be produced at VW’s new US plant in Chattanooga, TN. Building it here would result in higher labor costs, but these would be offset by avoiding tariffs on imported pickup trucks. I’m not saying this will happen, but I’d bet serious cash that it’s being discussed by VW executives.