Is the U.S. Ready for Indian Vehicles?

Thursday, August 13, 2009 by Guest Blogger

The first vehicle from India will go on sale in the U.S. early next year, several months later than its original 2009 launch date. Mahindra & Mahindra will launch the yet-to-be named diesel powered pickup through distributor Global Vehicles U.S.A. Inc with a 50,000 annual sales target. This sales goal seemed aggressive for a compact pickup with no brand recognition, so I did some analysis to find out how realistic it would be for the Mahindra pickup to reach 50,000 units annually.

The Mahindra pickup will enter the U.S. pickup market at a turbulent time. The entire pickup market has been contracting since 2004 and the compact pickup market, which the Mahindra pickup will likely complete in, is dominated by the Toyota Tacoma. When I looked at sales trends from Polk's new vehicle registration data, I found that the Toyota Tacoma had a 53% share in the compact pickup market for the first five months of 2009. And, no other compact pickup besides the Tacoma had sales above 45,000 in 2008. The market size, competition and the fact that the Mahindra pickup is the only diesel fueled pickup in the compact pickup segment makes the 50,000 sales target a stretch goal for an established brand, let alone a new brand unknown to many Americans.

Jan-May 2009 Market Share by Model in Compact Pickup Truck Segment

Polk just released a Polk View titled "Is the U.S. Auto Market Ready for Indian Vehicles?" The Polk View discusses topics relating to Mahindra & Mahindra entering the U.S. market including recommendations for initial launch markets, a market entry analysis on the Mahindra Scorpio SUV that will launch in late 2010 or 2011, and likely reception of both of these vehicles in different U.S. markets.

I invite you to read the Polk View and let me know your thoughts about how the Mahindra pickup will fare in the U.S.

Posted by Margaret Zewatsky, Global Market Analyst, Polk (08.13.2009)

Comments for Is the U.S. Ready for Indian Vehicles?

Friday, August 14, 2009 by Joe:
Don't ya love people who invent their own logic. Polk says:"However, no compact pickup sold in today’s U.S. market runs on diesel, so Mahindra & Mahindra may have to overcome consumer resistance to urchasing a diesel vehicle." One can almost imagine Polk saying no one would buy a hybrid because no one has bought them yet, the year before then came out. Shucks Henry, no one is going to buy that car. LOL
Friday, August 14, 2009 by Margaret Zewatsky:
I appreciate the honestly of your post. That statement is not only based on the lack of a diesel offering in the Compact pickup segment. We also see that diesel pickup sales dropped nearly 25% in 2008 from 2007 (when diesel fuel prices hit a high last July of $4.76.) Even though diesel fuel prices have come down 50+%, consumers haven't yet made a return to the fuel type based on year-to-date sales numbers. Pickup consumers are showing their acceptance of flex fuel options in 2009 based on Polk's sales numbers. As hybrid options become more readily available in the pickup segment, I think that consumers will shift more of the traditional diesel and gasoline sales to alternative fuels.
Saturday, August 15, 2009 by Hank:
I drive a Nissan pickup I bought 16 years ago. I discovered the Mahindra truck because I have been searching for a compact diesel pickup for the past several years, to replace it. I would like to "buy American", but Detroit is not offering what I want and further, the line is already blurry on what constitutes a domestic auto- I think the Nissan was assembled in Tennessee. Who knows where the parts were manufactured-and that goes for Ford and the rest of them, too. Thanks to lobbyists and protectionist lawmakers our auto manufacturers have not had to stand on their own, and consequently are too weak to make it without the prop of the taxpayer. The Mahindra is subject to a 25% tariff and still is considered a threat- I think that speaks volumes. I don't know if I'll end up buying one, but I'm sure going to be looking.
Tuesday, August 25, 2009 by Chris Mason:
If the truck has good eye appeal and reasonable performance along with what will obviously be a low price, it will sell initially. If the reliability is poor, it will then crash. If the reliability proves to be good, then they may have a winner. I am interested to see how both Indian and Chinese cars do here. In the end, it is more about the product than anything.
Wednesday, September 9, 2009 by Larry B.:
If they build it cheaply enough they will come. Isn't that the Walmart way? Americans will overlook a lot of things, brand loyalty, styling, safety, and even quality when the price is right. Surely the Indian manufacturer will have a decided price advantage that will make almost all consumers take a strong look. When will the American Government start protecting American Industry from outsiders that invest nothing into research and technology? 50,000 is extremely optimistic, but in the current economy if its priced significantly below the Tacoma you may have buyers from other categories snapping them up.

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