The long running dispute between Indian carmaker Mahindra & Mahindra and US distributor Global Vehicles USA and has taken another turn following Global Vehicles withdrawal of a lawsuit in the US courts.
Global Vehicles CEO John Perez has reportedly decided to let a British arbitration panel decide whether his company will distribute Mahindra’s pick-ups in the US. The arbitration action was taken around the same time last year that Perez filed a federal case in Atlanta to try and force Mahindra to proceed with its delayed US launch.
That federal case was taken in July with Global Vehicles alleging that the carmaker had twice missed deadlines to launch its pickups in the US despite Global Vehicles having spent nearly $35m in signing up around 350 dealers. Through the lawsuit Global Vehicle was seeking to stop Mahindra from selling its vehicles through any other dealer in the US.
Things became heated in September 2010 when Mahindra then said it would “make other arrangements for distribution” to dealers in the US and rejected what it called an “invalid order” for pick-up trucks from its “former distributor”. The Indian carmaker went as far to suggest the order was part of “Global Vehicles' continued attempt to manipulate the press to damage Mahindra's reputation” and engage in “PR theatrics”.
But last week the British arbitrators based in London insisted the US case be dropped before they would rule on Perez's complaint, whereupon it was withdrawn. A tribunal will now be held in August this year.
Mahindra, meanwhile, has had its own problems after receiving a US fuel economy rating significantly below the one it had promised to dealers. The EPA has rated the vehicle capable of 19 mpg in the city and 21 mpg on the highway, similar to the Ford F series and far below the 30 mpg promised. Neither company has commented on how this may affect sales of the vehicles when they finally reach the US.