Is the design of Roxor—Mahindra and Mahindra’s off-road utility vehicle sold in the US—stolen from the Jeep of Fiat Chrysler Automobiles? That’s what Fiat has claimed before the US International Trade Commission (USITC) which would now launch an investigation into Fiat’s claim of intellectual property rights infringement.
The USITC, in a statement said, it will set a target date for the probe. The development is crucial for Mahindra because at stake is the auto major’s 14-year-old plan to sell utility and commercial vehicles in the US, which first started in 2004.
What is Roxor?
The Roxor is an off-road utility vehicle assembled by Mahindra Automotive North America (MANA). Roxor is a version of Mahindra Thar SUV, a product that enjoys quite a fan following in India. The idea was to re-engineer an already successful product by aligning it to the needs of the American masses. Mahindra plans to invest $600 million in its Roxor unit in the US.
What is the complaint?
In its August 1 complaint at the USITC, Fiat Chrysler has claimed that Roxor copies appearance and design of Jeep, the iconic brand owned by Fiat Chrysler Automobiles. It claims the Roxor copies the boxy body shape with flat-appearing vertical sides and rear body ending at about the same height as the hood, according to Bloomberg. “They are a nearly identical copy of the iconic Jeep design. In fact, the accused product was ‘modeled after the original Willys Jeep,” says Fiat Chrysler.
Why is Fiat Chrysler complaining?
Fiat Chrysler is afraid that the Roxor might give a tough fight to its own Jeep brand. It claims that a cheaper Roxor gives Mahindra cost advantage as Mahindra imports knocked-down kits to the US from India where they are manufactured at a lower cost. According to Bloomberg, Fiat Chrysler has become increasingly reliant on its Jeep product line. The company reported its highest ever July sales for Jeep brand vehicles, up 16 per cent, to power the company’s overall 5.9 per cent jump from a year ago. Fiat Chrysler’s complaint says that Mahindra’s “substantial foreign manufacturing capacity combined with its demonstrated intention to penetrate the United States market and harm FCA’s goodwill and business.”
What Fiat Chrysler wants
Fiat Chrysler had not made a monetary claim in the complaint but was seeking to block Mahindra Automotive from importing any parts or components into the United States that infringe upon Fiat Chrysler’s intellectual property rights.
What does Mahindra say?
Mahindra has dismissed Fiat Chrysler’s complaint as without merit. It claims that the two companies have a long licensing relationship going back to the 1940s. It claims that the licensing relationship includes the original agreement with Willys and a 2009 agreement with Chrysler Group LLC, a Fiat Chrysler predecessor.
“Our actions, products, and product distribution (including Roxor) both honor the legacy of the relationship and the terms of our agreements with FCA ( Fiat Chrysler Automobiles),” said Rich Ansell, a spokesman for Mahindra’s North American unit. “Mahindra has been co-existing with FCA (and the Jeep brand) for over 25 years in India and in many other countries.”
Mahindra had filed a complaint at a Michigan Federal Court, asking it to block Fiat from participating in the USITC claim. It also filed a public interest statement with the USITC, explaining how it was in the public interest for the ITC to rule against Fiat and in favor of Mahindra.
Mahindra has “categorically rejected the notion that the ROXOR was an imported low quality “knock-off” kit car”. “We are asking the court to block Fiat from participating in the ITC claim – an injunction – because of the fact that they agreed in 2009 to never bring such claims if we use a grille that they approved. The ROXOR uses that grille. We are also arguing that Fiat is using the ITC case to harm our ROXOR business by creating negative publicity, damaging our reputation and our stature in the marketplace,” a Mahindra statement said.