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M&M's truck launch plan in US still mired in problems

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With Indian automaker Mahindra & Mahindra confirming last week that it had got certification from the US Environmental Protection Agency for its diesel pickup trucks, it cleared a major hurdle before it could launch these in the US market.

But one hurdle it still faces is the lawsuit filed by a company that had earlier been contracted by Mahindra to be its distributor in the US. That casts doubt over whether Mahindra can meet its latest target of bringing the trucks to the US by December.

The Alpharetta, Georgia-based Global Vehicles USA, appointed the sole distributor in the US for Mahindra’s pickup trucks under a 2006 contract, sued the Indian company in a federal court in Georgia last month, seeking delivery of the vehicles, which it said had been postponed repeatedly. Mahindra counter-sued, asking for Global Vehicles’ complaint to be dismissed.

The American company’s vice president for marketing and communications, Max Butler, says Global Vehicles (GV) heard about the EPA certification from press reports. Nevertheless, he insists, GV was “excited” to hear the news and hoped the delivery of vehicles would follow soon.

There’s one hitch, though. GV also found out from a press statement on Mahindra’s website that “Mahindra’s relationship with Global Vehicles Inc has ended, the agreement dated 26th September 2006 between Mahindra and GV having terminated”.

But the US firm isn’t taking the hint. GV maintains it has not received any direct communication from Mahindra regarding termination. Says Butler, “You can’t terminate a contractual agreement via press release.” He calls Mahindra’s position on the agreement an “inaccurate claim” and an “invalid statement”. “They have to obey US law and can’t arbitrarily dismiss a contractual agreement,” he says, adding that the distributorship agreement was “still in place”.

Meanwhile, GV’s lawsuit is pending in court. The company’s lawyer Todd Legon, of the Miami firm Legon, Ponce & Fodiman, said his client had completed all their filings in the case and expected Mahindra to complete theirs by next week. The judge is yet to set a date for a hearing or for his ruling.

It is learnt that GV is also engaged in arbitration proceedings with Mahindra in the UK. In the midst of the ongoing legal dispute, uncertainty about the launch and Mahindra’s claim of the agreement being called off, it seems GV and the 350 dealers it says it has signed up across the US are all dressed up and still waiting for their ride. Butler insists GV still wants to distribute the Mahindra trucks in the US and says they and the dealers are “ready to roll”.