M&M faces lawsuit in US for delaying pick-up truck launch
17 June 2010
Mahindra & Mahindra (M&M) has been slapped with a lawsuit in the US by its exclusive US distributor for continuously delaying the US launch of its pick-up truck.
Atlanta-based Global Vehicles USA Inc (GV) filed a suit in a district court in Atlanta on Monday, alleging that M&M has continuously delayed the launch of its compact diesel pick-up truck in the US as it failed to get the final safety and emission certificate.
GV said it had spent more than $35 million and signed more than 350 dealers, who in turn have paid more than $60 million towards franchisee fees for the right to sell M&M vehicles in the US.
It alleges that the Indian company has not revealed when it will proceed with the launch and has also initiated arbitration proceedings against M&M.
The US firm has urged the court to prevent M&M from selling its vehicles through any other dealer or distributor in the US since M&M altered the original contract and wanted a new "onerous" set of financial demands in order continue with the contract.
"Mahindra & Mahindra (Mahindra) has learnt that Global Vehicles USA, Inc (GV) has filed a lawsuit in the US. GV has also initiated separate arbitration proceedings. Mahindra firmly believes these legal actions to be without merit and will vigorously contest these actions. As this matter is now under litigation, Mahindra would not like to comment further at this stage on these unfortunate developments," M&M spokesperson said in a statement.
M&M president (automotive) Pawan Goenka had, last month, said that the company would launch the compact diesel pick-up truck in the US by the end of the year to become the first Indian company to sell an Indian-made vehicle in North America.