U.S. auto dealers, accuse Mahindra & Mahindra of misrepresentation, fraud and conspiracy.
According to the lawsuit Mahindra defrauded hundreds of U.S. auto dealers and left with over $60 million in cash and trade secrets.
“Mahindra told the dealers that its light trucks and SUVs were ready for delivery to the U.S. market,” said attorney Michael Diaz. “However, Mahindra intentionally delayed certification of its vehicles after obtaining the dealership fees and trade secrets, and began pursuing other partners in the U.S. and elsewhere in clear violation of their commitments.”
The lawsuit was filed by dealerships in New Hampshire, Florida, California, New Jersey, and Washington, on June 4th, 2012, in U.S. District Court in Atlanta, against Mahindra & Mahindra, Ltd, and Mahindra USA, Inc.
According to the lawsuit, Mahindra urged dealers to pay initial dealership fees, undertake marketing on Mahindra’s behalf, display platforms and showcases, built Mahindra showrooms, and hire additional employees.
At an Atlanta automotive show in 2007, attended by 400 U.S. dealers, Mahindra presented promotional videos of the company’s cars, showcasing their durability and ability to be driven on different terrains, also promising that Mahindra’s four-door truck will reach America by 2008 and the two-door truck and SUV by 2009. Mahindra obtained $9.5 million in fees from the dealers, continuing to reassure them that its certification process was on target.