Mahindra plant in Michigan spells opportunity for Canadian suppliers

DETROIT -- India's Mahindra & Mahindra Ltd. on Thursday said it plans to build a 400,000-square-foot auto assembly plant near Detroit, and that’s welcome news to Ontario parts makers, says the association representing them.

Mahindra & Mahindra has scheduled a news conference for Nov. 20 in the Detroit suburb of Auburn Hills, Mich., with local political leaders, according to an advisory sent by Mahindra North America. 

The facility would be the first new auto plant in the region in more than 25 years.

“Canadian suppliers employ over 15,000 people in 50 plants in Michigan and this would be a great opportunity for their American operations,” Canadian Automotive Parts Manufacturer’s Association President Flavio Volpe said. “Depending on volume of activity and type of final product assembled, Canadian-based suppliers could represent 25 per cent of the parts mix whether they originate from Ontario, Michigan or surrounding states.”

U.S. Secretary of State Rex Tillerson hinted at Mahindra’s plans on Oct. 25 in New Delhi, Bloomberg reported. Mahindra plans to build off-road utility vehicles in the plant, The Times of India reported at the time. Mahindra's advisory didn't indicate when production would begin.

Mahindra has been attempting to enter the U.S. automotive market for more than 10 years, which included plans for a pickup truck and a possible retail network of more than 300 dealers. But those plans derailed in 2010 and ended up in litigation. 

Dealers sued Mahindra in 2012, claiming the automaker "pocketed more than $9.5 million, more than a $100 million worth of dealer trade secrets to utilize for their future entrance into the U.S. market, and a strong market foundation gained at the expense of the dealers' 'free' promotion of Mahindra's brand name around the U.S."

Mahindra denied the dealers' claims, placing blame for the failure of plans to sell its pickups here on its former U.S. distributor, Global Vehicles U.S.A. Inc. of Atlanta. The current status of that litigation was not immediately clear. An amended complaint was filed by six dealerships in 2016.

In 2014, Mahinda announced plans to expand its technical center in the Detroit area, adding about 110 engineering jobs.