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Mahindra & Mahindra Ltd. (500520.BY) is proceeding with plans to enter the U.S. market with the launch of a pickup truck, despite declining sales in the world's biggest automobile market.

"We will be launching the Scorpio pickup by this year-end," Pawan Goenka, president of Mahindra's automotive business, told Dow Jones Newswires late Tuesday.

He said also that the bankruptcy filing of General Motors Corp. (GM) may hit auto parts companies in India supplying the U.S. auto maker.

He declined to say if Mahindra would be interested in acquiring any GM assets.

Mahindra's pickup will be based on its Scorpio platform. The company produces sport-utility vehicles (SUVs) using the same platform.

Mahindra, India's biggest maker of SUVs, aims to market the Scorpio as a cheaper and more fuel-efficient alternative to larger pickups sold by GM, Ford Motor Co. and other U.S. automakers.

The company will ship fully built units of the Scorpio pickup from India that will be marketed by U.S.-based Global Vehicles Inc.

U.S. car sales fell an estimated 34% in May to 925,824 vehicles. The annualized selling rate for the entire market was 9.91 million vehicles, according to market research firm Autodata Corp.

While significantly higher than April's annualized pace of 9.32 million vehicles, and the highest rate so far this year, it is still well below the year-earlier level of 14.26 million.

Goenka said Mahindra doesn't have an immediate plan to manufacture the Scorpio pickup in the U.S. and the company hasn't fixed any timeframe to introduce the Scorpio SUV to the U.S.

GM Woes May Hurt India Auto Parts Makers

"If GM delays payments to its suppliers, they will be adversely affected," Goenka said.

Any financial worries at the auto parts companies could affect Mahindra as some of them also supply Mahindra, he said.

An Indian auto parts group said Tuesday that local component makers are likely to face a higher risk of their outstanding payments being delayed by GM because of the bankruptcy.

Vishnu Mathur, executive director of the Automotive Component Manufacturers Association of India, said parts suppliers to GM could be hit as the U.S. company may now reduce purchases as it restructures.

ACMA members exported $3.6 billion worth of parts in the fiscal year ended March 31, 2008, of which 27% was to the U.S. - including to vendors there and direct sales to GM, Ford and Chrysler LLC.

Karl Slym, GM's president and managing director for India, said Tuesday that the bankruptcy and the current global economic slowdown will delay the auto maker's plan to purchase about $1 billion of auto parts from India by 2010.

GM sourced about $500 million of auto parts, such as casting and machining components, from India in 2008.

-By Santanu Choudhury, Dow Jones Newswires: +91-11-4356-3305; santanu.choudhury@dowjones.com