India’s Mahindra has opened the first new automotive vehicle assembly plant in Southeast Michigan since Detroit’s Jefferson Jeep plant 25 years ago and, like Jeep, will start by producing an off-road vehicle.
Longer-term plans include on-road vehicles including a compact pickup and SUV, perhaps under the Ssangyong South Korean brand that Mahindra bought in 2011.
Another enticing idea: a premium electric supercar by Pininfarina, the Italian car designer that Mahindra bought in 2015. It would be yet another competitor for Tesla. And head of Mahindra Automotive North America Rick Haas was Tesla’s director of engineering for the Model S before he joined Mahindra. Chairman of the Mahindra Group Anand Mahindra said although Pininfarina is exploring building a premium EV, there is no timeframe for that project.
At an event to mark the opening of the new assembly plant in Auburn Hills, Michigan, executives said production has begun of the 2018 Mahindra Roxor Offroad but kept the “off-highway” compact vehicle under a tarp. The unveiling and further details must wait a few more months.
What we do know is the Roxor has a ladder frame and all-steel body and rides on a new global platform engineered by Mahindra. It will be offered in two versions: a work SUV for farmers, miners, and ranchers who could use it on their land and who already have on-road vehicles in their garages, and a more recreational off-road version aimed at motorsports. It is likely a four-passenger vehicle.
Mahindra Group Chairman Anand Mahindra said the Roxor creates a new subsegment because it is more rugged than other work vehicles. Haas said the Roxor has done well in consumer clinics and focus groups, and they gained valuable feedback such as the need to include a PTO (power takeoff unit) for the implements that farmers will attach.
Initial production is on a single shift at the new headquarters of Mahindra Automotive North America in Auburn Hills, which now also houses the engineering staff that was in Troy, Michigan. A second shift could be added in the first quarter of 2018. Ultimately the plant could go to annual production of 12,000 vehicles on three shifts.
Workforce will grow from 170 people today to 250 by the end of the year and 700 by 2020, increasing the $230 million investment to $600 million. The Troy facility will keep a small staff making engineering prototypes.
Initial volume is for India, but the Roxor is a global vehicle and will eventually be available in the U.S.
The next step in the company’s growth is on-road vehicles. Mahindra’s new global platform will produce a compact pickup and an SUV in April 2020, said Rajan Wadhera, executive vice president of the Automotive Division. They will be built and sold in India first and then rolled out to other markets, including the U.S., but there is no timeframe yet.
The most logical way to introduce passenger vehicles in the U.S. is through the SSangyong brand, Mahindra said. Hyundai and Kia have paved the way by showing South Korean brands offer value and quality. The decision is up to the Ssangyong board, but it is an idea being actively reviewed, Mahindra said. Their sale in the U.S. is not imminent, but “we have the right products in the future we could use here.”
Entering the market likely requires a dealer/distribution network beyond the one that sells Mahindra tractors today. But executives have not ruled out using motorsports or tractor outlets especially as tractor dealers now sell the Retriever utility vehicle.
The multifaceted Mahindra also has an electric scooter manufacturing plant in Ann Arbor, Michigan, that makes the GenZe electric bike and scooter.
And Mahindra is among the five finalists to win a $5 billion contract with the U.S. Postal Service to supply about 180,000 vehicles over five years. Mahindra’s right-hand-drive prototype is being evaluated and tested. The automaker is not allowed to talk about it in these final months of decision-making. If Mahindra gets the contract, it would mean investing in another plant. But it would also provide brand exposure and help gauge U.S. reaction before investing in passenger cars for this market.
Mahindra said he does not see a downside to being a small player right now. Case in point: he expressed admiration for Tesla CEO Elon Musk, who didn’t take no for an answer when he decided to create a new automaker. “How many people told Elon Musk, ‘You don’t have any hope of getting into the car business?’”
Mahindra said he likes the idea of creating a footprint by starting small, building something people must have—in this case the Roxor—and then start scaling up, potentially through Ssangyong. “The old days where you need scale for everything are gone.”
Even still, Mahindra is always looking for acquisitions and partnerships, recently picking up a Finnish and two Turkish companies for its tractor business.
A partnership was recently formed with Ford to find synergies in their operations in India by sharing product development and the cost of parts and technology.
Mahindra Automotive first put its stake on American soil four years ago with seven employees at the new North American Technical Center in Troy after researching potential sites of engineering talent around the world. Their first project was a new multipurpose vehicle for India. Overall, Group Mahindra has more than 30 plants and development centers in the U.S. today, employing about 3,500 people.
Mahindra started as a steel trading company in 1945 and branched into carmaking with a license to make Willys Jeeps for the India market. Mahindra still makes the Jeeps that are sold in India as the Thar. The brand is known for rugged SUVs, and the Scorpio became popular on India’s bad roads.