Mahindra has withdrawn its bid to supply trucks to the US Postal Service (USPS). The annoncement came in today's Q1 FY2021 results. The company has written off the investment it had made towards this project. Mahindra was one of only three manufacturers chosen from a pool of 15 applicants to move on to this stage in the process, which will be funded by the USPS and include an extensive period of testing and evaluation. Mahindra had advanced to the prototype stage in the competition for the United States Postal Service's (USPS) Next Generation Delivery Vehicle (NGDV) contract. The Postal Service's NGDV contract called for the supply and support of up to 180,000 new postal vehicles over the course of 20 years, and could approach a potential worth of over $20 billion.
The Postal Service's NGDV contract called for the supply and support of up to 180,000 new postal vehicles
Mahindra Automotive North America (MANA), a subsidiary of Mahindra, had plans to set up a plant in Michigan, US and a letter of intent to do so was signed last year in August. Speaking about the write off Anish Shah, Group CFO, Mahindra, said, “We have chosen not to participate in the bid for USPS and we had invested a small amount which would have been in preparation to winning the bid and hence that amount has been written off.”
Mahindra's selection as a finalist may, in part, be due to its history of building righthand drive commercial vehicles with a capacity for handling demanding conditions. Mahindra's contract bid was also likely fortified by their presence in Southeast Michigan—Mahindra North American Technical Center (MNATC) – and that has been leveraged to its advantage.
Mahindra had already said that it will not make any further investment in Ssangyong and also decided to shut down the GenZe operations by the end of 2020. The company is clearly looking at a strategy where in it is closely monitoring its businesses and strategic partnerships. In fact, the company has said that it is looking at an 18 per cent return on equity on investment from MANA and its other partnerships. We'll know more about it soon.
