Diesel pickups from India delayed

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

Mahindra & Mahindra still hopes to be the first Indian automaker to enter the passenger vehicle market in the U.S., but the company has miles to go before ringing up its first sale.

Make that millions of miles. Global Vehicles USA Inc., Mahindra’s American distributor, had hoped to have the automaker’s compact pickup trucks on showroom floors here by next summer. That launch date has now been pushed back to the fourth quarter of 2009.

The reason? Execs at Global Vehicles, based in suburban Atlanta, say Mahindra ordered up more testing to make sure the trucks meet the expectations of American buyers. So 25 pickups will be driven 125,000 miles each over U.S. roads over the next several months. That’s more than 3.1 million miles.

“They want to make sure they get the vehicles right,” said Xavier Beguiristain, Global Vehicles’ vice president of marketing. “They’re very keen on that.”

Mahindra’s diesel-powered two- and four-door pickups still need get all the requisite U.S. regulatory approvals as well. They will have to meet the EPA’s tough new diesel emission requirements for the 2010 model year, a goal that Beguiristain said is attainable.

“These will be 50-state vehicles,” he said....

... Mahindra, which has been building utility vehicles in India since 1945, sells about 10,000 farm tractors a year in the U.S., targeting smaller farmers. With $4 billion in annual sales, the parent company is also involved in real estate, software and finance.

An impressive resume, but can they win over quality-conscious U.S. buyers?

“The vehicles they showed at the Detroit auto show were close” to rival U.S. and Asian vehicles, “but they still have some progress to make,” said Aaron Bragman, an auto analyst with Global Insight. “Their idea is, ‘We’ll make them really inexpensive, we’ll make them diesels, everyone will want one.’ That remains to be seen.”

Bragman also noted that the U.S. market isn’t exactly ripe for a new pickup. Light-truck sales have plummeted as gas prices have risen, and a key market — home builders and other building contractors — have been mired in a deep slump. The Indian company’s second U.S.-bound product, a sport utility vehicle, occupies an even more moribund market segment.

Global Vehicles won’t reveal price details, but it says the pickups are expected to sell for substantially less than their competition in the compact arena, which includes the Ford Ranger and the Toyota Tacoma.

The other key pitch point is the 2.2-liter, four-cylinder diesel engine.

Diesel fuel now sells for about 14% more than regular gasoline in California — $4.36 a gallon vs. $3.95 — but diesels typically get fuel economy that is 20% to 30% higher than gasoline-powered engines. Indeed, the advent of so-called clean diesel technology — able to meet emission requirements in every state, including hard-nosed California — is seen by many as a prime option for achieving affordable improvements in fuel economy in the near future.

Mahindra’s trucks haven’t undergone EPA mileage testing yet, but Beguiristain claims they will have combined city-highway fuel economy of close to 30 miles per gallon. If they can make that number, it would give them a clear MPG edge over the Ranger and Tacoma.

Diesels also can deliver impressive towing power. The Mahindra’s four-banger will be capable of towing a “fully rigged bass boat,” the distributor promises (in a clear play to its nearby Deep South audience).

Global Vehicles says it has signed up 324 of the 450 dealers it hopes to have on board when the Indian trucks reach these shores. Most are experienced dealers already selling at least one make of vehicle.

As Bragman notes, American consumers have heard a lot in recent years about Indian and Chinese automakers with big plans for the U.S. market. Launch dates keep getting pushed back and nothing has materialized. But that doesn’t mean it won’t happen soon.

Given Tata’s purchase of British marques Land Rover and Jaguar this year, Bragman noted, “Are the Indian automakers coming to the U.S.? They’re kind of already here.”

-- Martin Zimmerman