Mahindra - Truck

unit731 · June 26, 2010

Automotive News -- June 16, 2010 - 12:02 pm ET

MUMBAI, India (Bloomberg) -- Indian truck maker Mahindra & Mahindra Ltd. has been sued by a Georgia dealer, which has asked an Atlanta District Court to prohibit Mahindra from launching sales in the United States through any other distributor.

Global Vehicles USA Inc. said in its June 14 lawsuit that Mahindra breached a 2006 agreement by twice rejecting its purchase orders for the Mumbai-based company's vehicles. It also asked the court to order Mahindra to perform its obligations under the 2006 agreement.

Roma Balwani, a spokeswoman for Mahindra, said today the lawsuit and a separate arbitration was without merit and would be “vigorously contested.”

“Mahindra remains committed to launch its products in the U.S. market,” she said in an e-mailed statement. The Indian automaker's plan to sell its Scorpio pickup truck in the United States has been held up by more than a year after delays in obtaining technical clearance for its vehicles, a process known as homologation.

Alpharetta, Ga.-based Global Vehicles said in its lawsuit that Mahindra “in bad faith” engaged in protracted contract negotiations for services relating to emission tests prescribed by the U.S. Environmental Protection Agency and safety tests prescribed by the National Highway Traffic Safety Administration, or NHTSA.

“Under usual and customary circumstances, the process of completing the EPA and NHTSA tests doesn't exceed three years,” according to the lawsuit. Mahindra's negotiations for services “significantly delayed the commencement of the tests and has prolonged their completion date well beyond the three-year period,” according to the lawsuit.