Mahindra Eyes U.S. Truck Production To Avoid Chicken Tax

June 1, 2009
2009 Mahindra Pik Up

2009 Mahindra Pik Up

India’s Mahindra & Mahindra is headed to the U.S. with hopes to sell more than 10,000 vehicles per annum once sales kick off at the end of the year. The company’s first model will be an imported diesel pickup truck but eventually Mahindra intends to assemble vehicles in the U.S. in a bid to avoid duties.

Mahindra is not looking for full scale production but rather sees itself assembling complete knockdown kits, or CKDs, despite the practice being relatively rare in North America. Volvo did it once during the early 1990s, and now Mahindra is poised to do the same.

The process involves piecing together pre-packaged modules shipped in crates from India as opposed to building the vehicles completely from scratch. The benefit is that it will allow the company to avoid the protectionist 25% ‘chicken tax’ imposed on imported pickup trucks since the 1960s.

Mahindra's private U.S. distributor, Global Vehicles U.S.A. Inc., expects to sell in low volumes to start and will absorb the tax for now. Once demand picks up, however, Global Vehicles U.S.A. sales chief Pawan Goenka said local assembly could begin just six months after the initial launch. If the plan goes ahead, Mahindra would start assembling its CKD kits for its pickup truck using idle capacity at another automaker’s plant.

Pictured above is Mahindra’s current Pik Up, a compact pickup truck available in both single and dual-cab configurations and either RWD or 4WD modes. A 2.5-litre common-rail turbodiesel with a modest output of 105hp and 182lb-ft of torque is the only engine option.

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