Indian truck line is the new kid in town

Unless you drive one of its tractors, Mahindra & Mahindra Ltd. is an unfamiliar name. That should change as the company enters the U.S. truck market by year’s end. Two Hampton Roads automobile dealers have bought territories: Beach Ford Lincoln Mercury for Suffolk and Cavalier Auto Group for Chesapeake, Norfolk, Portsmouth and Virginia Beach.

"We really wanted it if we could get the entire market," said Steve Klimkiewicz, vice president of Cavalier Auto Group, which will open showrooms on the site of its wholesale used car store on Military Highway in Chesapeake and in Saturn of Virginia Beach's used car showroom on Laskin Road.

Beach Ford Lincoln Mercury will set up a showroom in Suffolk in part of the 80,000-square-foot building that houses Barton Ford Lincoln Mercury's service and body shop.

Both Klimkiewicz and Tom Barton III, president of Beach Ford Lincoln Mercury, said the initial franchise fee of $195,000 made taking on Mahindra compelling.

"It's a bit of a gamble, but I think it'll be worth it," Barton said.

Klimkiewicz agreed.

"The risk is relatively low, and it's a manufacturer that's a relative success," he said.

Initially, Mahindra will offer a pickup truck similar in size to a Dodge Dakota. Rear- and all-wheel-drive models with two or four doors will be offered. Standard features will include a six-speed automatic transmission, power windows and locks, keyless entry, air conditioning, four-wheel-disc antilock brakes and electronic stability control.

Come 2011, the company plans to offer a revised version of its Scorpio SUV.

Considering sagging truck sales, why would anyone want a truck franchise? Easy. Mahindra's trucks are powered by diesel engines.

It's part of the market larger automakers have steered away from. Nine diesel models from Chrysler, Ford, General Motors, Honda, Nissan and Toyota that were planned for the next two model years have been shelved, leaving a gap in the market.

Mahindra says its engine uses common-rail diesel technology found in Mercedes-Benz and BMW vehicles. The system's fuel injection differs from traditional diesels, giving the vehicle gasoline-engine performance, traditional diesel fuel economy and lower emissions.

But diesel engines cost more to build than their gasoline counterparts. German luxury automakers use their brands' higher price to absorb the cost. In Mahindra's case, that cost can be absorbed using cheaper labor in India.

The EPA hasn't released fuel economy numbers, but Klimkiewicz said mileage is expected to be in the low 30s.

"With everything we saw with the spike in gas prices, I think we'll see a demand for it," Klimkiewicz said.

Barton said the truck will fill a hole in the market that should've been filled by Ford.

"For a long time, we've been hoping Ford would build small diesel Ranger pickup, but there's been little if any change," he said.

While prices haven't officially been announced, Barton said the Mahindra truck is expected to be priced around $22,000.

"Typically, if you're talking diesel, you're talking a premium, but it will be priced comparably with other small to midsize pickups on the market," he said.

But he likes the price for another reason.

"I think part of the problem with Ranger is that if you load up a Ranger, you're competing with low-end F-150s," Barton said. "This is an alternative."

Aaron Bragman, research analyst at IHS Global Insight, said the automaker will find it challenging to lure buyers.

"If they're trying to build off the customer base they already have in tractors, they may find some takers," Bragman said. "But it's hard to sell a diesel truck in a market that largely is walking away from SUVs and diesels."

Barton disagreed.

"From everything we can tell, it will be a great alternative for someone who doesn't need a full-size pickup," he said.