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Mahindra-Fiat faceoff: M&M says Thar supply ramp-up bigger worry than dispute over Jeep Wrangler

While the average production rate of Mahindra Thar hovers around 3,000 units per month, it gets twice the number of bookings here, stretching the waiting period.

May 31, 2021 / 11:08 AM IST
 
 
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Earlier this month Mahindra & Mahindra (M&M) withdrew plans to launch its blockbuster model Thar in Australia after Fiat Chrysler Automobiles (FCA) moved the Federal Court alleging design infringement.

Though the launch of the off-roader in Australia was on the cards with its local subsidiary inviting consumer interest online, FCA moved in quickly to block Thar’s entry claiming that the made-in-India SUV borrows the registered design of the Jeep Wrangler. Jeep belongs to FCA.

This isn't the first time that the two companies have been at loggerheads. Both were involved in a long-drawn court battle in the US concerning the design of the Mahindra Roxor SUV which FCA claimed also infringed on one of its iconic models--Willy’s Jeep. M&M had to make heavy alterations to the design of the Roxor to be able to sell in the US market.

When asked if exports of the Thar would be mired in court battles in every country the model debuts in, Anish Shah, Managing Director and Chief Executive Officer, Mahindra Group said, M&M’s priority is to satisfy domestic demand before taking SUV export markets.

Talking to Moneycontrol Shah said: “At this moment we have so much demand for Thar in India that we need to make sure that we meet the customer requirements here first before we will think about the international markets. We are on a fairly strong footing overall but we cannot predict what anyone else will contest.”

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FCA alleges that Thar’s design and styling, including the front grille, front fender and bumper is uncannily similar to its iconic off-roader Jeep Wrangler. The Italian-American automaker sought to restrain M&M from launching the Thar in Australia as well as provide at least 90 days written notice if it wanted to launch the model in that country. M&M agreed to FCA’s demands. Australia was to become one of the first countries to receive the Thar.

A semiconductor shortage has kept M&M from ramping up production of the Thar to bring supplies on par with demand. While the average production rate per month of the Thar hovers around 3,000 units (January to April), it gets twice the number of bookings every month, stretching the waiting period.

“People booking the Thar today will get (deliveries) in the second quarter of 2022. We continue to get 6,000 bookings per month (for the Thar) in spite of a 10-12 month waiting. Clearly, there is no thought process to think about exports at the moment,” said Rajesh Jejurikar, Executive Director, automotive and farm equipment sector, M&M.

With German parts supplier Bosch, the exclusive supplier of semiconductors to M&M, stating that chip shortages will continue well into 2022, increasing the output of the Thar and other M&M models is expected to be a tall order.

“We did not plan to go to Australia. When we plan to launch the Thar in Australia, we will plan that with all the rationale. We are on a fairly strong footing (currently). We shall address that question when we get to that point,” Shah said, responding to a question if the Thar exports carry a risk of being blocked by FCA.



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Swaraj Baggonkar
first published: May 31, 2021 10:50 am
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