US Mahindra-Navistar Alliance: A Possibility

[MahindraPlanet]

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Hope is fading fast for a timely resolution to the battle for distribution rights to selling the first Indian made pickup trucks in America. Over the last six months, Americans anticipating the...

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[ToxicSludge]

So then one has to ask,why didn't m&m go to Navistar right from the get-go??Why on earth did they ever bother with GV and then let them arrange the entire dealer network only to fold at the last minute? Why then would m&m try to take away the dealers from GV if they were already thinking about (decided on?)Navistar? Holy 4by's sports fans.........I'm confused.

[jriosa]

Originally Posted by ToxicSludge

So then one has to ask,why didn't m&m go to Navistar right from the get-go??Why on earth did they ever bother with GV and then let them arrange the entire dealer network only to fold at the last minute? Why then would m&m try to take away the dealers from GV if they were already thinking about (decided on?)Navistar? Holy 4by's sports fans.........I'm confused.

You are of course assuming that this was a one sided decision by Mahindra. Maybe Navistar wasn't interested. Look at it this way. IH has no consumer level distributorship, and if Mahindra expects any decent sales volumes they sure as hell wouldn't want their vehicles to be marketed where you go to buy tractors or big rigs. They need them in the auto strip malls in urban centers so your average consumer that hasn't heard of them can easily see, compare and test drive. Then there is the matter of using an idle IH facility to do some level of assembly to beat the chicken tax. Given the cost of re-tooling and the relatively low volumes - what is their business case, even for cost recovery. Finally we have parts distribution - again something I would see IH struggling with for a consumer market.

Jim

[ToxicSludge]

My questions were both satirical,and rhetorical......or so I thought

[howam00]

I would bet the ultimately Navistar builds the trucks in the NA market for Mahindra and the existing dealer network is who wil sell them, regardless if GV or someone else is the distributor.

Over the three main markets: US, Mexico and Canada they could probably justify around 100k total units and that is sufficient volume for a single plant to operate effectively.

[Bugman]

I still think part of Mahindra's decision was a quality issue..