Most shoppers go to Ann Street Auto Sales searching for late-model used cars. But by next spring, the 50-year-old dealership at 1970 Alpine Ave. NW turns a corner, becoming the region's first new-car source for three diesel-powered vehicles from India.
Mahindra & Mahindra, better known among agricultural circles for its line of farm tractors, is on the brink of selling its Scorpio seven-passenger SUV and two models of utilitarian pickups as early as March, said David Brock, the dealer's general manager. He's heading the expansion into new car sales at Ann Street Auto, and saw the Mahindra line in Atlanta last fall.
"Their main SUV, the Scorpio, is a seven-passenger comparable to the Explorer, or a little bigger," Brock said. "They'll all come with direct-injection diesels, so they're very, very clean for the environment, and a lot higher on gas mileage." How high? In the 32 to 35 mpg range, Brock said. "It's almost double anything out there right now," he said. Mahindra's U.S. distributor, Global Vehicles, is based in Alpharetta, Ga.
But the India automaker already plans to bring pickup assembly to an Ohio plant as soon as next year, Brock said. He expects the Scorpio to sell in the $24,000 range, with the two yet-unnamed trucks in the $20,000 range. The biggest market may be in the farm community, where Mahindra tractors are the No. 3 seller in the U.S. Brock initially investigated a Romanian automaker, but that deal fell through. He is less enthused about the prospect of autos from China.
"I don't think they'll be here for a while," Brock said. "There's a lot of cars out there that are a lot cheaper in other nations. But by the time you add the expense of making them work in the U.S. market -- anti-rollover, air bags, ABS brakes -- I just don't see it happening down the road."
Newcomers to the U.S. car market face fierce odds, especially when they try to set up a dealership network. That's the biggest challenge for Chenfang, Mahindra or any other automaker not yet stateside, auto analyst Grand Rapids Erich Merkle said.
Although a car from China could sell for less than $10,000 here, Merkle said, Toyota Motor Co. already has the small Yaris in place to compete with it. The Yaris starts at $12,000, but it has a big advantage over Chenfang: a big dealer network. "Buyers know Toyota is going to be here. They brought the Yaris over here as a defensive move against any Chinese automaker coming into the market," Merkle said.
The Mahindra SUV and basic pickups might appeal to a niche crowd, Merkle said.
"The vehicles are a little on the crude side; they don't have all the comfort and convenience features," said Merkle, a Crowe Chizek analyst.
"They look more like a piece of farm equipment than anything else." The tractor business is the key to the new line's success, Brock said. Mahindra already has two tractor plants in the U.S. and has been in the market for 10 years. "I really believe they're growing at the grassroots," he said.
As for reliability, Brock said, he realized Kia and Hyundai first imported lower-quality cars "until they got their act together." But Mahindra won't go that route. "They're not going to bring over an inferior product," Brock said.
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