Mahindra faces US lawsuit for allegedly 'duping' auto dealers

Indian auto major Mahindra and Mahindra has fallen into legal trouble overseas.

According to a release by PR newswire, US automobile dealers have filed a lawsuit against the Indian multi-utility vehicle, tractors and truck manufacturer, accusing it of "duping hundreds of US auto dealers and walking away with more than $60 million in cash and trade secrets".

Through "false representations", Mahindra is alleged to have lured US dealers into making investments and promoting Mahindra's brand name.

[caption id="attachment_334108" align="alignleft" width="380" caption="Through "false representations", Mahindra is alleged to have lured US dealers into making investments and promoting Mahindra's brand name. Reuters"][/caption]

According to the lawsuit, Mahindra began laying the groundwork to enter the US market back in 2007 at an Atlanta automotive show. After pitching promotional videos and showcasing the durability of its vehicles, Mahindra obtained $9.5 million in fees from dealers.The dealers also undertook marketing activities, built Mahindra showrooms and hired additional personnel, the release said.

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"Over the next two years, Mahindra continued to reassure them that its certification process was on target, while in fact it was delaying submitting its documentation to regulators as a pretext for terminating its agreements," said attorney Michael Diaz, managing partner of Miami-based Diaz Reus & Targ, which is leading the plaintiffs' legal team of Gary Davidson, Brant Hadaway, Carlos Gonzalez and Sumeet Chugani, according to PR newswire.

Read the entire press release here