• Jun 6, 2012
In 2004, Indian automaker Mahindra & Mahindra began courting U.S. auto dealers to build a network of outlets for its trucks and SUVs. Eventually, the company had accumulated $9.5 million in fees from prospective dealers itching to sell Mahindra-branded vehicles.

Mahindra promised to have trucks for sale in the U.S. by 2008 and SUVs by 2009. Fast-forward to 2012, and there are still no Mahindras for sale in the U.S.

Now, Miami-based law firm of Diaz Reus & Targ has stepped in to represent dealers in New Hampshire, Florida, California, New Jersey and Washington in a lawsuit filed Monday in U.S. District Court in Atlanta.

"Mahindra told the dealers that its light trucks and SUVs were ready for delivery to the U.S. market," maintains Diaz Reus in a press release. "However, Mahindra intentionally delayed certification of its vehicles after obtaining the dealership fees and trade secrets, and began pursuing other partners in the U.S. and elsewhere in clear violation of their commitments."

"Through their false representations, the defendants lured the U.S. dealers into making investments and promoting Mahindra's brand name," said Diaz. "Mahindra is going to learn that trying to outsmart the dealers was a serious mistake, as we will aggressively seek justice for our clients."

This is not the first lawsuit tied to Mahindra's fortunes in the States. Last year, Global Vehicles USA, the firm looking to be the brand's distributor in the U.S., lost a British arbitration ruling that effectively squelched any hopes of bringing the TR20 and TR40 pickups to this market any time soon.

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U.S. Automobile Dealers Sue Indian Truck Manufacturer For Fraud And Conspiracy

ATLANTA, June 5, 2012 /PRNewswire/ -- U.S. automobile dealers from across the country filed a lawsuit yesterday accusing the Indian truck manufacturer Mahindra & Mahindra, Ltd. and its U.S. counterpart of fraud, misrepresentation, and conspiracy. The lawsuit alleges that Mahindra duped hundreds of U.S. auto dealers and walked away with more than $60 million in cash and trade secrets. Then Mahindra simply reneged on its promises, according to attorney Michael Diaz, the managing partner of Miami-based Diaz Reus & Targ, who leads the plaintiffs' legal team of Gary Davidson, Brant Hadaway, Carlos Gonzalez and Sumeet Chugani.

"Mahindra told the dealers that its light trucks and SUVs were ready for delivery to the U.S. market," said Diaz. "However, Mahindra intentionally delayed certification of its vehicles after obtaining the dealership fees and trade secrets, and began pursuing other partners in the U.S. and elsewhere in clear violation of their commitments."

The mass tort lawsuit was filed in U.S. District Court in Atlanta (#KH199170-3) on June 4, 2012 against Mahindra & Mahindra, Ltd, and Mahindra USA, Inc. by dealerships in New Hampshire, Florida, California, New Jersey, and Washington. Dealers across the country paid initial dealership fees, undertook marketing on Mahindra's behalf, built Mahindra showrooms, display platforms and showcases, and hired additional personnel, all at Mahindra's urging, according to the lawsuit.

"Through their false representations, the defendants lured the U.S. dealers into making investments and promoting Mahindra's brand name," said Diaz. "Mahindra is going to learn that trying to outsmart the dealers was a serious mistake, as we will aggressively seek justice for our clients."

According to the lawsuit, Mahindra began laying the groundwork to enter the U.S. market and build a nationwide dealer network in 2004. In a high-profile move to court the U.S. dealers, Arun Jaura, a senior Mahindra executive, attended an Atlanta automotive show in 2007 where he repeatedly proclaimed, "I love America!"

At that show, which was attended by about 400 U.S. dealers, Mahindra executives presented promotional videos that showcased its vehicles' durability, purportedly showing them being driven on different terrains. Jaura also provided a set time-line for introducing Mahindra's four-door truck to the U.S. market at the end of 2008, and Mahindra's two-door truck and SUV in the third quarter of 2009.

Mahindra's pitch was highly successful. Ultimately, it obtained $9.5 million in fees from the dealers, according to the lawsuit. Through a barrage of press releases, sales pitches, advertisements, and news articles orchestrated by Mahindra, Jaura's comments were subsequently used to entice more U.S. dealers to agree to carry Mahindra's vehicles.

Over the next two years, Mahindra continued to reassure the U.S. dealers that its certification process was on target, while in fact it was delaying submitting its documentation to regulators as a pretext for terminating its agreements, Diaz added.

"Mahindra repeatedly failed to live up to its obligations," Diaz explained. "Now, after spending millions of dollars on behalf of Mahindra, the U.S. dealers have nothing to show for their time and energy other than a series of false promises."


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    • 1 Second Ago
  • 25 Comments
      Daniel D
      • 2 Years Ago
      When one bunch of crooks try and rip off another group of crooks, you know there is going to be trouble.
      telm12345
      • 2 Years Ago
      1983 called - they want their trucks back.
      Xedicon
      • 2 Years Ago
      Yeah... did they really think these things were going to sell? The pickup stats are umm... not so great. Most people wouldn't buy one when RAM is offering Hemi powered full size pickups in the low 20s (Tradesman anyone?). Sure it's a lot bigger but that's the point - it's bigger, more powerful and doesn't cost all that much more. I'd bet it's cheaper to own too with higher parts availability and a better dealer network. Looks a lot nicer too. Better resale value is a certainty. Why would anyone buy the tiny under powered inefficient ugly Mahindra pickup?
        • 2 Years Ago
        @Xedicon
        [blocked]
      1guyin10
      • 2 Years Ago
      Unleash the hounds!! In a future textbook this will be a case study in how not to do business.
        • 2 Years Ago
        @1guyin10
        [blocked]
      • 2 Years Ago
      [blocked]
      Zak
      • 2 Years Ago
      You mean to tell me that US dealerships actually thought that people were going to line up to buy cars and trucks that are made in India???
        • 2 Years Ago
        @Zak
        [blocked]
        The Wasp
        • 2 Years Ago
        @Zak
        US dealerships sell tractors made in India by this company...is it unreasonable to think that some people who buy tractors might also buy trucks?
      MechE
      • 2 Years Ago
      Good, M&M should pay up. I can't believe how badly they screwed this whole process up. Even though these trucks were awkward looking and questionable in the reliability and safety departments, I was excited about a small and economical pick-up with diesel power. Even if the truck was no good I was hoping it would at least create a reemergence in this segment. Then the EPA rating turned out to be crap. And then the price turned out to be too high. Then they delayed, delayed, delayed. What a shame. Without the economy and price advantages this truck was pointless. And now there will be no reason for other brands to look into this segment.
      MechE
      • 2 Years Ago
      Good, M&M should pay up. I can't believe how badly they screwed this whole process up. Even though these trucks were awkward looking and questionable in the reliability and safety departments, I was excited about a small and economical pick-up with diesel power. Even if the truck was no good I was hoping it would at least create a reemergence in this segment. Then the EPA rating turned out to be crap. And then the price turned out to be too high. Then they delayed, delayed, delayed. What a shame. Without the economy and price advantages this truck was pointless. And now there will be no reason for other brands to look into this segment.
        Xedicon
        • 2 Years Ago
        @MechE
        You know who could pull it off perfectly... Jeep. Make a Wrangler pickup with the 2.8 diesel that's been spotted under a few Wrangler hoods. I sell a leg to own one of those!
      Brandon Jackson
      • 2 Years Ago
      I must be the only person on the planet who fails to understand why this truck that looks to be ripped right out of 1986 is so damn important.
        Rob J
        • 2 Years Ago
        @Brandon Jackson
        It was SUPPOSED to be a small, fuel efficient, cheap diesel. There are scores of people on the internet who are CERTAIN that there is a MASSIVE demand for these vehicles. Of course I doubt any of these people would buy one an there is shockingly little actual demand but that doesnt stop them.
          • 2 Years Ago
          @Rob J
          [blocked]
        A_Guy
        • 2 Years Ago
        @Brandon Jackson
        Midsize diesel that claimed to return 30 mpg.
      The Wasp
      • 2 Years Ago
      I wish Mahindra would have just tried to sell these through dealers already selling Mahindra tractors.
      desinerd1
      • 2 Years Ago
      LOL. So many people complaining about the looks. It's a pickup truck, not a sports car. Go complain about the looks of MINI Cooper or VW CC or something.
      imoore
      • 2 Years Ago
      This isn't entirely Mahindra's fault. They didn't exactly plan to sell this truck in the states because it wasn't built to US standards. That would be the recently released Genio pickup and XUV 500 which should appear within the next three years. They were brought into this by GV-USA and its Founder, Alex Perez, who was trying to pacify his dealer network after the Crosslander deal with the Romanian government blew up in his face. When Mahindra finally found out who they were dealing with, they called off the whole deal. So we're looking at two parties involved: One, Perez, who was trying to cover his butt for making shady promised, and two, Mahindra, who could have and should have dealt with the dealers much more professionally than they did. They are going to have to do a lot of damage control before they can attempt to sell their cars over here, but someone needs to make Perez and GV-USA pay up too, considereing they never paid back all the deposits the dealers coughed up for the Mahindra and Crosslander franchises-and many of these guys involved in the suit were also Crosslander dealers.
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