While many US companies outsource production in China, India and other Asian countries, now a major Indian automaker has decided to reverse the procedure – putting crucial automotive engineering work in America’s motoring capital – Detroit.
What’s more interesting, Mahindra & Mahindra doesn’t even sell any vehicle on the US market and the automaker decided to expand its global vehicle development prowess to cater for the lack of sufficient talent at home in India. According to Richard Haas, chief executive officer of the Mahindra North American Technical Center, established in Troy, Michigan, said the company scouted locations in places such as Germany, Italy, England, and California before settling on Detroit as the US capital of automotive development and testing. The location already employs around 80 people and Mahindra has also established an electric scooter manufacturing facility in Ann Arbor that will deliver its first vehicles starting November. The two locations represent a combined investment of around $30 million.
More importantly for Mahindra, the Indian company has entered the bid for the US Postal Service vehicle contract, a $5 billion enterprise that would see the winner deliver 180,000 vehicles a year for half a decade. The company wanted since 2010 to start selling SUVs and pickups but the Mumbai-based automaker has deferred them for the time being towards a not yet established point in the future. “Most companies locate R&D in India. We’re doing the opposite by putting it in the U.S.” commented Richard Ansell, vice president of marketing at the Mahindra North American Technical Center.