Report: Mahindra intentionally voided contract with U.S. distributor

Filed under: Budget, Truck, Government/Legal

Mahindra Pik-Up

Formerly just a suspicion that had been whispered about, Global Vehicles USA CEO John Perez has uttered it out loud: Mahindra is thought to have delayed the EPA certification of its Pik-Up so that it could break its contract with GV USA. For four years now, GV has had a contract be the exclusive distributor of the Pik-Up in the United States. However, now that the trucklet has finally received EPA approval, Mahindra voided its contract with GV and hasn’t announced any alternative.

Perez says the issue goes back to a sunset clause that Mahindra requested be inserted into the original contract. The belief at the time was that this was for Mahindra to protect itself: if the trucks weren’t ready for the U.S. within three years then everyone could walk away and Mahindra wouldn’t be open to lawsuits.

According to Perez, the Pik-Up was ready for certification late last year – before the end of the sunset clause – and that the delay from then to now was engineered by Mahindra to break its contract. Reportedly, Mahindra wanted to alter some of the dealer arrangements with GV, and when GV declined, Mahindra put up a wall and refused to communicate. GV felt compelled to sue, but Mahindra went ahead with voiding the contract based on exceeding the time frame. What a mess.

We’re no attorneys, but we’d be surprised if this didn’t hold up Pik-Up sales for quite some time while the U.S. court system – and arbitration in London – gums things up further. Who knew such a little truck could haul so much subterfuge and skullduggery?


Report: Mahindra intentionally voided contract with U.S. distributor originally appeared on Autoblog on Fri, 10 Sep 2010 19:03:00 EST. Please see our terms for use of feeds.

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