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Indian Automaker Picks Detroit For R&D Facility

The research and development campus currently employs 80 engineers.

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Despite the much-publicized problems facing Detroit in recent years, the Motor City evidently maintains its considerable clout in the global auto industry.

The Detroit Free Press reports that Indian automaker Mahindra & Mahindra evaluated sites in Europe and California after company officials decided that a new engineering center would need to be located outside of India.

Ultimately, however, the company selected a site in nearby Troy, Michigan to house what is now the Mahindra North American Technical Center.

Haas told the paper that Detroit is "the true epicenter for automotive development and testing" and that "it was easy to convince people" to set up shop in Michigan.

Read more: Outsourcing isn't about low labor costs anymore.

The research and development campus currently employs 80 engineers and expects to expand.

In addition, the first Mahindra electric scooters are expected to roll off the line at a new plant in Ann Arbor, Michigan this fall, and the company could eventually open a vehicle manufacturing operation in the U.S.

Not only has the company discussed entering the American market for years, but Mahindra is in the running for a massive contract to build new vehicles for the U.S. Postal Service.

Haas said that space costs in the U.S. are cheaper than in India — which helps overcome the gap in labor costs between the two nations — and said that the move to Troy represents a reversal of the outsourcing pattern that's long seen jobs migrate from the U.S. to India.

"Most companies locate R&D in India," Haas said. "We're doing the opposite."

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