US distributor sues M&M over delay

  • PTI, Washington
  • |
  • Updated: Jun 16, 2010 22:54 IST

With Mahindra & Mahindra (M&M) missing two deadlines since 2009 to launch its pick-up truck in the US, the auto maker's exclusive American distributor has slapped a lawsuit against the company.

Atlanta-based distributor Global Vehicles (GV), in the lawsuit filed before a district court, has alleged inordinate delay in the launch of the truck, based on M&M's SUV Scorpio platform.

"M&M has learned that GV has filed a lawsuit in the US. GV has also initiated a separate arbitration proceedings. Mahindra believes these actions to be without merit and will contest them," an M&M spokesperson said.

M&M and GV entered into a pact in September 2006 and Mahindra proposed to launch the pick-up truck in 2009. However, this got delayed over regulatory clearances and it revised the deadline to beginning of this fiscal year, which too was missed.

GV said in its lawsuit filed on June 14 that the company spent close to $35 million in preparation for the launch, adding, US dealers have also spent more than $60 million in franchisee fees for the right to sell M&M vehicles. It has also asked the court to prevent M&M from selling its vehicles through any other dealer.

However, an M&M spokesperson said, "Mahindra remains committed to launching its products in the US market."

 

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