GV Responds to Rejection of Mahindra Pickup Order

[FJE]

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The connection between Mahindra and Navistar (aka International) has been discussed on this forum in the past. Both have denied that Navistar is going to be involved with the Mahindra light duty vehicles in North America but could it be that this is the reason behind Mahindra attempting to throw GV overboard? Think about these issues:

Mahindra and Navistar have a deepening relationship. They are currently involved in a joint venture producing heavy duty trucks and diesel engines for the Asian market in India. This is not the first joint venture between them. Mahindra got its start in the farm machinery business by selling International Harvester tractors in India.

Navistar has excess production capacity in the US. If they assemble the Mahindra trucks in Navistar facilities the whole Chicken Tax issue goes away.

Navistar has an established parts distribution system throughout North America.

There is an almost cult-like devotion to the former International Harvester Light Line of pickups and SUVs. The pickups and Travelalls (a Suburban like SUV) were discontinued in 1975 and the Scout SUV was killed in 1980 but there is a very active fan base of these vehicles all over this country and in Canada. Don't believe it? Check out www.binderplanet.com Many of the International fans (me included) would stand in line to be able to buy a new truck with the International name and logo, even if it was foreign sourced. Having it built in an International factory would only sweeten the deal! Perhaps the Scorpio SUV will be the new Scout.

Navistar has a great network of dealers selling medium and heavy duty trucks. Some of these would no doubt like to get back into the light duty market that they were driven out of 30 years ago. This may explain the way Mahindra has acted toward some of the dealers that GV signed up, trying to get them to back out. There may be an International dealer in that area that wants the franchise. In markets where there is no International dealer or the dealer isn't interested in selling the Mahindra vehicles then M&M may keep the GV recruited dealer and even sell the same product with a Mahindra label.

To me the Navistar connection makes a lot of sense for Mahindra's recent actions. What do you think?

[gnorthern]

Originally Posted by blue7.3

It's one of the niche vehicles.

I have never expected Mahindra to be more than a niche vehicle for several years. I really think that there are relatively few people who want to drive a small diesel truck; there are just enough to get the market started.

My theory has always been that the real growth potential lies in diesel SUVs, and Mahindra is starting with trucks to get the bugs worked out of the system. I think the average truck driver is more receptive to a diesel, and Mahindra needs to build their reputation for quality vehicles with them.

And trucks in general are somewhat of a niche market. I was shocked when I was younger and drove my truck into New York City, and I saw only one other truck there. Trucks are not that common in Portland here in Oregon.

[gnorthern]

Originally Posted by FJE

There is an almost cult-like devotion to the former International Harvester Light Line of pickups and SUVs.... What do you think?

I do not understand that at all. The Light Line trucks had to be without doubt ther worst trucks ever made. We purchased three on my job, and as the tow truck driver said those three trucks paid for his tow truck. I had one and the longest I ever went in three years was three weeks without a major breakdown. The Scouts we had were OK since they did not break down as often, and were better for four wheeling then the Jeep trucks we had. But we were always jealous of the two guys that had Fords.

[pee wee]

Originally Posted by FJE

Navistar has excess production capacity in the US. If they assemble the Mahindra trucks in Navistar facilities the whole Chicken Tax issue goes away.

Navistar has an established parts distribution system throughout North America.

Many of the International fans (me included) would stand in line to be able to buy a new truck with the International name and logo, even if it was foreign sourced. Having it built in an International factory would only sweeten the deal! Perhaps the Scorpio SUV will be the new Scout.

I agree with the idea that when Mahindra was ready to go with assembly in this country that Navistar would be a likely candidate, but based on what Mahindra had said previously I doubt that they would be rebadging their products. Consider that they said they nixed the Appalachian name to go with something more generic like TR20 and TR40 because they wanted to focus on Mahindra as a brand. I can see them trying to use their tractor dealers to sell trucks, but I don't think they want to blur the line between Mahindra and any other brands. Given that they plan to bring the SUV here, and the new version was to be unibody construction, and then there is talk of a MUV, it looks like they are not as compatible with International as a first glance might have suggested.

[michigandon]

I *had* a '69 Travelette that I was going to fix up and repower with either a Cummins or an Isuzu. Unfotunately, I had to abandon the project after I lost my job this winter and had to move. Now that I'm in the South I hope to find another "core" of some sort to start over with...but I need to get my garage/workshop built first!

[MahindraPlanet]

“With the engineering, design, styling, testing, marketing, dealer, and distribution resources International has, and modern body assembly and painting facilities in Springfield; an updated Scout could easily be produced with minimal investment. International-bodied trucks could roll down the same line as Mahindra-bodied trucks. With the current US market affinity for retro styled vehicles, the timing is perfect for a modern Scout. With a heavy duty chassis and powertrain, top value and fuel efficiency, and styling that is modern with a nod to International’s past (think Mustang, Challenger, and Camaro) this is an easy build and an easy sell.”

I wrote that (and probably started the rumors) nearly two years ago in an article speculating about where and how Mahindra could assemble trucks in the US; Mahindra Planet: Is this the next International Scout?
When I worked for International (a decade ago), there was always buzz about bringing back a light truck line, but Ford stipulated non-compete agreements kept that a fantasy. I believe the CXT was conceived to skirt around that. International CXT, World's Biggest Production Pickup - First Look - Motor Trend News

I heard stories about Scouts and Travelalls rusting (and being painted over) as they went down the line. But nostalgia is strong, and Springfield is now a very modern and world class facility. I think they could sell a ton of International bodied/badged Mahindras.

But at this point I don’t think International would want to be involved in anything other than providing a manufacturing location (possibly Springfield, OH or Chatham, Ontario?). Mahindra originally wanted their trucks to be seen in the same light as Land Rover (hence the establishment of Mahindra-specific brand new showrooms at all dealers). They never intended for them to be sold by tractor dealers unless those dealers committed to a new showroom (check out MahindraNC.com). Plus I question how many tractor dealers really want to sell new cars anyway. GV has set up a dealer network that would take Mahindra themselves years to reproduce. I think Mahindra is either going to have to cough up enough money to buy GV out, or suck it up and let them do the job they originally partnered with them for.

[PaulChristenson]

Originally Posted by howam00

I think the bigger picture issue is that they have to have different systems all over the globe. If we had a single standard it would be much cheaper as a whole. I know Euro 6 and T2B5 are really close to one another. We should just work wit the EU on one standard, Japan would likely be on board with that too.

Actually the Europeans are moving to tighten their diesel emission standards...i.e. they are moving toward the US standards...