Alpharetta
importer bringing Indian cars to U.S.
By
DAN CHAPMAN
The Atlanta Journal-Constitution
Published on: 02/04/07
Coming
soon to a car dealer near you — Indian SUVs. Say what?
India is
the latest Asian tiger ready to leap into the world's most lucrative
auto arena. By 2009, Americans hunting for automotive bargains might
find Mahindra & Mahindra's utility vehicles alongside Fords and Chevys.
Global Vehicles USA Inc., an Alpharetta auto importer and distributor,
holds the exclusive right to sell the Indian SUVs, crossovers and pickup
trucks to dealers across the country. Allan Vigil will make room on his
Morrow lot for the six-speed, diesel-burning, four-wheel-drive vehicles.
"The Indians are coming and why not? Hell, everybody else is here,"
Vigil, Georgia's largest Ford dealer, said last week. "I've been a Ford
guy for 30 years and this is the first time I'll bring anything in other
than Ford products."As if the U.S. auto industry didn't have enough
problems. Buffeted by Japanese and Korean competition, U.S. carmakers
hemorrhage red ink like stuck pigs. Ford lost $12.7 billion last year.
Mahindra,
which has already captured one-fourth of the U.S. tractor market, is
taking a page from its North Asian brethren by offering snazzy vehicles
at decent prices (about $25,000 for an SUV) with good mileage (35-39
mpg). In the process, India lets the world know there's another player
on the global block. "Indian companies are going abroad and doing pretty
well," said Ash Thakker, chairman of the Georgia Indo-American Chamber
of Commerce. "They can stand on their own against international
competition."
Big
plans
High gas prices and pollution have caused America's love affair with
SUVs to wane. Perez says a cheaper, more energy-efficient SUV will
rekindle this country's passion for big vehicles. So far, 205 dealers
east of the Mississippi agree. Negotiations are under way with the
Georgia Ports Authority to bring 40,000 of Mahindra's SUVs, crossovers
and pickup trucks through Brunswick to be ready for sale in late 2008.
Perez expects to sell 100,000 of the vehicles by 2011. By then, he hopes
300 dealers will make room on their lots for the Indians. Global vehicle
revenue, pegged at $400 million the first year, should nearly quadruple
by 2011. The company hopes to quintuple its 24-member work force by
then, too. Global is scouring the Alpharetta region for an auto parts
distribution warehouse. Perez says "it's a very good possibility,
depending on demand" that Mahindra will build an assembly plant in the
United States. South Carolina's governor has already alerted him to
possible sites, he says, adding that he hopes to meet with Georgia Gov.
Sonny Perdue this week. "This could happen very quickly," Perez added.
Industry experts, though, dismiss the hype. Mahindra must first overcome
the perception, held by many Americans, that India remains a backward
country where quality takes a back seat to frugality. India's per-capita
GDP, after all, is less than one-tenth the U.S. average ($43,500). The
United Nations ranks India No. 126 (out of 196 countries) on its "human
development index." There's an emotional element in purchasing a car.
And in selling a car, image is huge," said Bernard Swiecki, senior
project manager for the Center for Automotive Research, a not-for-profit
think tank in Michigan. "Value isn't enough. You never overcome a
reluctance in the market with just cheap prices. The vehicle itself has
to meet expectations." Perez recently displayed the Mahindras outside his
Alpharetta office. •A 2006 Scorpio SUV, on sale in Europe, Australia and
South Africa, with room for seven people and a stylish diesel air scoop
on its hood. Leather seats. CD player. Six-speed automatic transmission.
Price: mid-$20,000 range.
•A
four-door, deep-bedded, sport recreation vehicle "designed for the
younger generation," according to Perez. Price: a couple thousand
dollars less than the SUV. Perez, like industry experts, predicts
budget-conscious consumers will replace SUVs with SRVs.
•A
long-bed, two-door pickup truck. Price: $21,000-22,000. All of the
vehicles will be four-wheel drive, turbo-charged with "clean diesel"
technology and get up to 39 miles per gallon. "That's the biggest thing
we're selling," Perez said. Already popular in Europe, diesel vehicles
are expected to make up 10 percent of sales by 2015, according to J.D.
Power, triple today's numbers. Power himself labels Mahindra's
all-diesel push "an innovative approach." The company awaits U.S.
government approval for its diesel engine.
Targeting Indians
A
niche product, Mahindra plans to sell only 100,000 vehicles a year in
the United States within three years. Ford, by comparison, sold nearly 3
million vehicles last year. But Global Vehicles, with an initial $40
million marketing budget, will also target consumers not typically
singled out by national ad campaigns: the growing, educated,
increasingly wealthy Indian-American population. Nearly 80,000 Indians
live in Georgia, according to the U.S. Census Bureau. Thakker estimates
they own 8,000 businesses, including hotels, gas stations, convenience
stores, medical and engineering firms.
"I live
in Eagle's Landing and I see a lot of Indians, and they're driving
mostly foreign cars," said Vigil, who paid Global $125,000 for a
Mahindra franchise. "They may be very loyal to a brand made in their own
country."
Quality
and price, not nationalism, will more likely influence Indian-American
consumers, Thakker says. India's growing prominence in manufacturing and
technology should, tangentially, help boost SUV sales. India's economy
grew 8.5 percent last year. Total U.S.-India trade has jumped nearly a
third the last few years to $17 billion. Displaced U.S. workers are
familiar with India's low-wage, high-quality information-technology
sector. The country's steel, auto parts and textile industries zoom. The
Georgia Department of Economic Development may open a trade office in
India by 2009. "We have started making a name for ourselves in
technological areas so people are aware of Indian industry and
expertise," said Mohoni. "We will try to build on that."
The
AUTOMART Family is
pleased to announce that they will offer the new Mahindra vehicles
to the Southeast Texas and Southwest Louisiana areas!
