Ten years ago, an American friend who visited India roundly cursed an Indian-made SUV in which she travelled, calling it a “lousy tin box.” Truth is, it was a lousy box, even though it may have been made of steel. 

Indian automakers have come a long way since and to, give just one example, Mahindra & Mahindra’s Scorpio is a top-class sport utility vehicle. Scorpio and other Indian autos are the result of world-class manufacturing skills, achieved over the years by supplying ancillaries to demanding automakers around the world, including the Big Three in Detroit. And now, at least a couple is ready to take on the Big Three themselves in the world’s biggest market for cars.

In the next two years, Mahindra & Mahindra’s Scorpio, modified as a pick-up truck to target a larger market segment; and the Nano, the world’s cheapest car, will enter the US market. What tickles me most about these launches is the timing. M&M, for example, has been studying the US market for over three years, and it may not have seemed like the best of ideas then. But when it actually launches it will, coincidentally, be when Detroit is dying and seems like a smart move.

Each of the Big Three faces enormous challenges. GM is in bankruptcy and selling off brands to survive tomorrow; Chrysler has been taken over by Fiat but that is no real guarantee for its success. Remember, Chrysler’s failed merger in the 1990s with Germany’s Daimler; and Ford appears far better but faces some of the same challenges that have grounded GM and Chrysler.

 

Bloomberg yesterday detailed M&M’s plan in the US. What is clear is the Indian auto maker has done its home work particularly well and, like Japanese makers who made the first dent in the US auto industry in the 1980s, captured the twin advantages – cost and quality. The cost part comes naturally to Indian manufacturers but the quality came from meeting rigorous standards of automakers across the world. M&M’s own Mahindra Systech, Bharat Forge, Sona and Amtek are a few that have been trailblazers, creating a world-class auto ancillaries industry. Now, some have parlayed those strengths into designing top-class autos.

Scorpio will enjoy an edge not only over American-made pickup trucks but also over several Japanese brands. “Toyota’s petrol-engine Tacoma, the best-selling small pickup in the U.S., gets 26 mpg on the highway and can carry 1,570 pounds in its bed,” according to Bloomberg, whereas the Scorpio will give at least 30 mpg and still “carry a payload of at least 2,600 pounds. 

Does this mean M&M can give Toyota and the other rivals a run for their money? Of course, so longer as it can get its act together on emission standards, service quality and dealer network because American users are demanding.

The Nano’s entry into the US market is an interesting one. Americans love big cars, and clearly don’t buy small cars. So, it remains to be seen if a small car, especially one that calls itself the Nano, is something more than mere wonder. I don’t think Ratan Tata expects to sell hundreds of thousands of Nanos to Americans. He would be content to sell a few thousand of them. I think he seeks to leverage the global appeal, and curiosity, of the Nano to build a stronger brand for India as a whole, and may also be satisfied if he can sell many more of the Jaguars and Land Rovers, the luxury cars the Tata Group acquired last year.