Global Vehicles alleges Mahindra delayed EPA certification on their built-in-India pickup trucks to purposely cancel the contract granting exclusive rights for distribution in the United States. Now Global Vehicles is fighting back — by placing a $35 million order?!
Here's what Global Vehicles is saying:
Global Vehicles believes that Mahindra purposely delayed the EPA certification process so it could invoke a contract clause that would allow it to walk away if the truck could not be certified for sale in the United States. Global Vehicles extended the deadline for certification three times, with the latest deadline set at June 11, 2010.
Mahindra submitted its certification paperwork to the EPA about 10 days after the June 11 deadline, and announced in an Aug. 20 press release that its vehicles were certified for sale. At the same time, Mahindra posted a two sentence statement on its website stating that its relationship with Global Vehicles had ended.
Mahindra demanded the clause at the eleventh hour before the contract was signed in 2006 because it expressly wanted to limit its losses if the trucks could not be certified for sale here. Earlier this year, well before the June deadline, Global Vehicles asked Mahindra to remove the clause because it was no longer applicable and they refused. Global Vehicles later asked Mahindra for another extension but was again refused.
"We trusted Mahindra when they said they wanted to cap their losses if the vehicle couldn't be sold here," said Perez. "We patiently waited and accommodated Mahindra through years of delays and kept an extremely powerful distribution network intact while the factory worked through the complicated task of meeting U.S. emissions standards. We did this because we believed we were all working toward the same goals. Now Mahindra is trying to change the rules. We delivered our end of the contract, and we're ready to get down to business."
To show their commitment to the sale of Mahindra pickups, Global Vehicles plans to place a $35 million-plus factory order today for U.S.-spec Mahindra TR20 and TR40 pickup trucks to begin the launch of the brand in the United States. The order's designed to do one of two things — if it's accepted, Global Vehicles says it means that Global Vehicles is still the exclusive importer. If it's not accepted, Global Vehicles claims it means that Mahindra may not be bargaining in good faith — and somehow (we're not sure yet exactly how) — it will show that Mahindra killed the contract illegally.
Whatever it ends up showing, it's definitely an interesting chess move on the part of Georgia-based Global Vehicles. We're looking forward to seeing the next one.
What can we say — we love a good slap-fight. Especially over compact diesel pickup trucks.
More details over here at PickupTrucks.