Manu P Toms, Hindustan Times
Mumbai, April 29, 2011
A rising farm economy is driving tractor sales to new highs. Going by a conservative estimate, it is set to cross half a million unit sales this financial year. The tractor industry foresees a 10 to 15% increase in growth over the record 482,000 units it clocked last fiscal. A host of measures by the government such as loan waiver, increased lending to farm sector and national employment guarantee scheme increased liquidity and tractor sales grew faster in the recent years.
A Standard Chartered report says tractor buyers' dependence on lending has reduced from 90% to 65%.
"Increase in rural income levels, better farm output and good rainfall in the last few years boosted tractor sales. The industry grew by 20% in the last fiscal. That too, on a high base created by the 30% growth in the year before," said Sanjeev Goyle, senior vice president, Mahindra Farm Equipment Sector.
M&M, the industry leader sold 202,000 units, holding 42% market share.
The buoyancy has led to new capacity additions by major industry players, particularly focusing the under-penetrated southern states. M&M's 100,000-capacity Zaheerabad plant will be commissioned in 2012. TAFE increases production. Escorts and Sonalika are opening warehouses and sales centres in south India.
M&M bets big on growing sales of its low-cost small tractor Yuvraj. Escorts launched five new tractors last year while Sonalika commissioned a new factory in Patna.
Another important factor that drove tractor sales is labour shortage caused by the NREGA.
Despite India being the largest tractor market, the penetration levels still remain low at 19 per 1,000 farmers.
Friday, April 29, 2011
Hyundai and Tata follow Maruti to take village roads
Manu P Toms , Hindustan Times
Mumbai, April 10, 2011
Maruti’s success to sell 249,000 cars in rural India has led its rivals Hyundai and Tata Motors to emulate its strategy.
Maruti’s 3,600 rural development sales executives (RDSEs) — each one posted in every taluka in India — together sold more than a fifth of its total sales. Determined to end Maruti’s complete dominance in rural market, Hyundai will now deploy 1,000 sales executives, while Tata Motors will have 210 ‘special Nano dealers’ in small district centres.
Maruti has found a promising rural market for cars, what chief general manager Shashank Srivastava calls “a surprise discovery”, when urban-focused sales approach faced challenges in the recession-hit 2009. It loosely classified geographies beyond the limits of top 100 cities as rural areas and counts sales facilitated by RDSEs posted in those regions as rural sales.
From a mere 9% of its total sales in FY 09 it grew to 16% in FY 10. In FY 11, rural sales accounted for roughly 22% of Maruti’s domestic sales. In volume terms, this conveys an even more ebullient story — from 65,000 units to 139,000 units, which leapt to 249,000 units in the just-ended fiscal.
“Alto and Wagon R are the largest selling models in rural areas,” said Srivastava. Good rainfall, better farm output, growing non-agricultural income, improving infrastructure all contribute to the spurt in car sales in these predominantly agrarian regions.
“For this fiscal, we expect rural market will account for 25% of our total sales,” he said.
Maruti’s closest rival Hyundai also sees a similar trend. The company does not strictly track rural sales. But, it sees that semi-urban and rural sales together now account for 31% of its domestic sales against 29% last fiscal. The company is strengthening its presence in these regions by adding 36 outlets more in semi urban and rural areas.
By 2011 end, Hyundai will have 275 outlets in these regions.
Mumbai, April 10, 2011
Maruti’s success to sell 249,000 cars in rural India has led its rivals Hyundai and Tata Motors to emulate its strategy.
Maruti’s 3,600 rural development sales executives (RDSEs) — each one posted in every taluka in India — together sold more than a fifth of its total sales. Determined to end Maruti’s complete dominance in rural market, Hyundai will now deploy 1,000 sales executives, while Tata Motors will have 210 ‘special Nano dealers’ in small district centres.
Maruti has found a promising rural market for cars, what chief general manager Shashank Srivastava calls “a surprise discovery”, when urban-focused sales approach faced challenges in the recession-hit 2009. It loosely classified geographies beyond the limits of top 100 cities as rural areas and counts sales facilitated by RDSEs posted in those regions as rural sales.
From a mere 9% of its total sales in FY 09 it grew to 16% in FY 10. In FY 11, rural sales accounted for roughly 22% of Maruti’s domestic sales. In volume terms, this conveys an even more ebullient story — from 65,000 units to 139,000 units, which leapt to 249,000 units in the just-ended fiscal.
“Alto and Wagon R are the largest selling models in rural areas,” said Srivastava. Good rainfall, better farm output, growing non-agricultural income, improving infrastructure all contribute to the spurt in car sales in these predominantly agrarian regions.
“For this fiscal, we expect rural market will account for 25% of our total sales,” he said.
Maruti’s closest rival Hyundai also sees a similar trend. The company does not strictly track rural sales. But, it sees that semi-urban and rural sales together now account for 31% of its domestic sales against 29% last fiscal. The company is strengthening its presence in these regions by adding 36 outlets more in semi urban and rural areas.
By 2011 end, Hyundai will have 275 outlets in these regions.
Wednesday, April 27, 2011
Rolls Royce plans a plug-in hybrid
Manu P. Toms, Hindustan Times
Mumbai, February 25, 2011
Close on the heels of announcing its first electric car in super-luxury segment, Rolls Royce said it will come out with a hybrid as well. "Next is a plug-in hybrid. We are working on it. We are entering into discussion with our customers (about a hybrid Rolls)," Torsten Muller-Otvos, CEO, Rolls Royce Motor Cars told HT.
Rolls Royce's parent-company BMW has developed ActiveHybrid that combines gasoline engine and electric motor. Rolls could use this technology.
The company's global sales doubled and Indian sales increased nearly seven-fold mainly on the back of the less pricey Ghost (including customs duty, the car costs R2.5 crore in India whereas Rolls Royce Phantom is priced R3.5 crore upwards). When asked if the company is looking at lower-priced models in the wake of Ghost's success, Otvos said "No. Rolls Royce will always remain highly exclusive. We will not go below €200,000. We are not in the direction of pushing volumes".
The entrepreneurial boom that produced many billionaires make India a promising market for Rolls, according to Otvos.
"The youngest Rolls Royce owner happens to be a 24-year old Indian," he said. However, he declined to give details of this customer for privacy reasons. Otvos, in his visit to India will most probably sign up two more dealerships - one in south and another in north.
Mumbai, February 25, 2011
Close on the heels of announcing its first electric car in super-luxury segment, Rolls Royce said it will come out with a hybrid as well. "Next is a plug-in hybrid. We are working on it. We are entering into discussion with our customers (about a hybrid Rolls)," Torsten Muller-Otvos, CEO, Rolls Royce Motor Cars told HT.
Rolls Royce's parent-company BMW has developed ActiveHybrid that combines gasoline engine and electric motor. Rolls could use this technology.
The company's global sales doubled and Indian sales increased nearly seven-fold mainly on the back of the less pricey Ghost (including customs duty, the car costs R2.5 crore in India whereas Rolls Royce Phantom is priced R3.5 crore upwards). When asked if the company is looking at lower-priced models in the wake of Ghost's success, Otvos said "No. Rolls Royce will always remain highly exclusive. We will not go below €200,000. We are not in the direction of pushing volumes".
The entrepreneurial boom that produced many billionaires make India a promising market for Rolls, according to Otvos.
"The youngest Rolls Royce owner happens to be a 24-year old Indian," he said. However, he declined to give details of this customer for privacy reasons. Otvos, in his visit to India will most probably sign up two more dealerships - one in south and another in north.
'Nano misunderstood as a cheap product'
Manu P Toms, Hindustan Times
Geneva, March 02, 2011
Tata Motors CEO & MD Carl Peter Forster spoke to HT about the auto maker's future plans for Jaguar Land Rover in India, China partnership, joint venture with Fiat and small wonder Nano on the sidelines of the Geneva Motor Show. Excerpts: . What is the road ahead for Jaguar Land Rover in India?
We will start with Freelander hopefully in June. Other Jaguar Land Rover products might follow. We will increase the number of JLR dealerships. We are already in ten cities and we will increase this to 13.
Other luxury car manufacturers such as BMW, Mercedes Benz and Audi sell 3,000-5,000 units a year in India. Are you anywhere close to these levels?
We have to do a little bit of catch up. We are not in this volume game. They are trying to be number 1 in luxury market and we are not. Luxury market is not run by numbers but the strength of the brand, technology and tradition. And later on volumes will follow.
Lots of things are being talked about your partnership with Fiat in India. It is said you are redrawing your retail strategy...?
We are in the middle of a very open discussion on how we can make things work better and how we can improve volumes. Improving retail sales is part of our discussion. We believe that we are overburdening our dealers with too many different products. At the same time, we want to continue our relation with our good partners. We need to develop a new model over time. Not just retail strategy, everything including product- sharing and part-sharing are discussed.
Have you addressed customer concerns about Nano? A recent survey said customers are least satisfied with Tata cars.
We are not hearing any complaint. People are happy with Nano. If we look into the survey Nano is trailing little bit.
What about Nano sales?
Last month we sold 8,262 units, which is a good growth. I think Nano is misunderstood as a cheap product. The product needs to be rightly communicated in the market. One idea is to showcase Nano as one of the most fuel-efficient cars.
What is the future plan for the electric Indica, which you are launching in the UK?
We will deliver 80 units of Vista EVX to fleet operators in the UK. We will begin very small and gain experience. We will see how the electric power train technology develops. As of now there is no money to be made there. Initially this will be confined to the UK market.
(The writer's trip to Geneva was sponsored by Tata Motors)
Geneva, March 02, 2011
Tata Motors CEO & MD Carl Peter Forster spoke to HT about the auto maker's future plans for Jaguar Land Rover in India, China partnership, joint venture with Fiat and small wonder Nano on the sidelines of the Geneva Motor Show. Excerpts: . What is the road ahead for Jaguar Land Rover in India?
We will start with Freelander hopefully in June. Other Jaguar Land Rover products might follow. We will increase the number of JLR dealerships. We are already in ten cities and we will increase this to 13.
Other luxury car manufacturers such as BMW, Mercedes Benz and Audi sell 3,000-5,000 units a year in India. Are you anywhere close to these levels?
We have to do a little bit of catch up. We are not in this volume game. They are trying to be number 1 in luxury market and we are not. Luxury market is not run by numbers but the strength of the brand, technology and tradition. And later on volumes will follow.
Lots of things are being talked about your partnership with Fiat in India. It is said you are redrawing your retail strategy...?
We are in the middle of a very open discussion on how we can make things work better and how we can improve volumes. Improving retail sales is part of our discussion. We believe that we are overburdening our dealers with too many different products. At the same time, we want to continue our relation with our good partners. We need to develop a new model over time. Not just retail strategy, everything including product- sharing and part-sharing are discussed.
Have you addressed customer concerns about Nano? A recent survey said customers are least satisfied with Tata cars.
We are not hearing any complaint. People are happy with Nano. If we look into the survey Nano is trailing little bit.
What about Nano sales?
Last month we sold 8,262 units, which is a good growth. I think Nano is misunderstood as a cheap product. The product needs to be rightly communicated in the market. One idea is to showcase Nano as one of the most fuel-efficient cars.
What is the future plan for the electric Indica, which you are launching in the UK?
We will deliver 80 units of Vista EVX to fleet operators in the UK. We will begin very small and gain experience. We will see how the electric power train technology develops. As of now there is no money to be made there. Initially this will be confined to the UK market.
(The writer's trip to Geneva was sponsored by Tata Motors)
Frugal Tata Pixel bound for India too?
Manu P. Toms, Hindustan Times
Geneva, March 02, 2011
The Europe-specific new Nano - Tata Pixel - the concept of which was launched at the Geneva Motor Show may also come to India. The new car may consider the demands of Indian market, Tata group chairman Ratan Tata told HT on the sidelines of the unveiling of this "small city car" at Geneva. Answerin g a question if Tata Pixel will also consider Indian customers' interests he said "It may. But you must always remember this car is still at a concept stage".
Given the 29 km per litre mileage, improved comforts and sophistication the Pixel can be a huge attraction for Indian customers as well.
While unveiling the three metre-long four seater diesel car along with Ratan Tata, Carl Peter Forster, MD and CEO of Tata Motors said the company is planning an electric version of Tata Pixel. "It can one day become an electric city car," he said.
The Pixel is positioned as "a small city car for Europe". Fuel economy and maneuverability are highlighs of the new small car from the Tata stable.
(The writer's trip to Geneva was sponsored by Tata Motors)
Geneva, March 02, 2011
The Europe-specific new Nano - Tata Pixel - the concept of which was launched at the Geneva Motor Show may also come to India. The new car may consider the demands of Indian market, Tata group chairman Ratan Tata told HT on the sidelines of the unveiling of this "small city car" at Geneva. Answerin g a question if Tata Pixel will also consider Indian customers' interests he said "It may. But you must always remember this car is still at a concept stage".
Given the 29 km per litre mileage, improved comforts and sophistication the Pixel can be a huge attraction for Indian customers as well.
While unveiling the three metre-long four seater diesel car along with Ratan Tata, Carl Peter Forster, MD and CEO of Tata Motors said the company is planning an electric version of Tata Pixel. "It can one day become an electric city car," he said.
The Pixel is positioned as "a small city car for Europe". Fuel economy and maneuverability are highlighs of the new small car from the Tata stable.
(The writer's trip to Geneva was sponsored by Tata Motors)
SsangYong to strengthen Mahindra's hybrid ride
Manu P Toms, Hindustan Times
Mumbai, March 21, 2011
Mahindra & Mahindra’s acquisition of Korean SUV maker SsangYong will strengthen its electric and hybrid vehicle projects. Both Mahindra and SsangYong have been planning joint product development in the area of alternative fuel technology. ‘‘We have formed two technical teams to align the resear ch and development of both Mahindra & Mahindra and SsangYong in electric vehicle and hybrid technology,’’ Pawan Goenka, president automotive and farm equipment sector, M&M told HT.
SsangYong announced an electric version of its crossover Korando and a hybrid compact SUV at the Geneva Motor Show. ‘‘Just as SsangYong has its own hybrid and electric projects, Mahindra too has made some progress in this field. Mahindra Reva is coming out with a four-seater electric car NXR. Mahindra is developing a hybrid Scorpio,’’ said Goenka.
SsangYong has claimed that its pure electric drive system, run on a high voltage lithium battery pack, will offer a speed up to 150 km per hour and a drive range of 180 km. The company said this would be first seen on the crossover Korando.
SsangYong’s hybrid technology will have a short distance drive up to 60 kms under battery power and a back-up of internal combustion engine for the longer drive. A five-seater vehicle, slightly smaller than Korando, will come with this drive system.
Mumbai, March 21, 2011
Mahindra & Mahindra’s acquisition of Korean SUV maker SsangYong will strengthen its electric and hybrid vehicle projects. Both Mahindra and SsangYong have been planning joint product development in the area of alternative fuel technology. ‘‘We have formed two technical teams to align the resear ch and development of both Mahindra & Mahindra and SsangYong in electric vehicle and hybrid technology,’’ Pawan Goenka, president automotive and farm equipment sector, M&M told HT.
SsangYong announced an electric version of its crossover Korando and a hybrid compact SUV at the Geneva Motor Show. ‘‘Just as SsangYong has its own hybrid and electric projects, Mahindra too has made some progress in this field. Mahindra Reva is coming out with a four-seater electric car NXR. Mahindra is developing a hybrid Scorpio,’’ said Goenka.
SsangYong has claimed that its pure electric drive system, run on a high voltage lithium battery pack, will offer a speed up to 150 km per hour and a drive range of 180 km. The company said this would be first seen on the crossover Korando.
SsangYong’s hybrid technology will have a short distance drive up to 60 kms under battery power and a back-up of internal combustion engine for the longer drive. A five-seater vehicle, slightly smaller than Korando, will come with this drive system.
Range Rover Evoque set to hit India in early 2012
Manu P Toms, Hindustan Times
Mumbai, March 23, 2011
The Tatas are all set to bring a smaller and a fuel efficient Land Rover - the Range Rover Evoque - to India by early next year, after its global debut in the middle of this year. About the India entry of the upcoming Evoque, Carl Peter Forster, managing director and CEO, Tata Motors said ''Probably not this year. Probably, early next year.''
The tentative timeframe for the India entry put out by the company puts to rest on speculations that its India launch will be simultaneous with its global launch in mid-2011.
Tata-owned British luxury car maker Jaguar Land Rover (JLR) has been working on smaller and fuel-efficient models to meet the toughening emission norm challenges and to increase volume. Range Rover Evoque, a luxury-SUV which aims an ambitious fuel economy of 21 km per litre and 120 g/km CO2 emissions, will be launched in major markets such as UK and US this year.
For JLR globally, a smaller sedan will follow a smaller SUV launch. The details of a smaller Jaguar, competing against Mercedes C Class and BMW 3 series will be launched soon. It is speculated that the car will be called Jaguar XS.
The assembly of Freelander, the launch of Evoque and expansion of dealerships to more than a dozen will help JLR improve its position in the luxury car market. Jaguar Land Rover, which sold around 250 units in India in 2009-10, is trying hard to catch up with established luxury players such as Mercedes Benz, BMW and Audi in India.
Mumbai, March 23, 2011
The Tatas are all set to bring a smaller and a fuel efficient Land Rover - the Range Rover Evoque - to India by early next year, after its global debut in the middle of this year. About the India entry of the upcoming Evoque, Carl Peter Forster, managing director and CEO, Tata Motors said ''Probably not this year. Probably, early next year.''
The tentative timeframe for the India entry put out by the company puts to rest on speculations that its India launch will be simultaneous with its global launch in mid-2011.
Tata-owned British luxury car maker Jaguar Land Rover (JLR) has been working on smaller and fuel-efficient models to meet the toughening emission norm challenges and to increase volume. Range Rover Evoque, a luxury-SUV which aims an ambitious fuel economy of 21 km per litre and 120 g/km CO2 emissions, will be launched in major markets such as UK and US this year.
For JLR globally, a smaller sedan will follow a smaller SUV launch. The details of a smaller Jaguar, competing against Mercedes C Class and BMW 3 series will be launched soon. It is speculated that the car will be called Jaguar XS.
The assembly of Freelander, the launch of Evoque and expansion of dealerships to more than a dozen will help JLR improve its position in the luxury car market. Jaguar Land Rover, which sold around 250 units in India in 2009-10, is trying hard to catch up with established luxury players such as Mercedes Benz, BMW and Audi in India.
Nano's second coming
Tata Motors is grappling with smoke and fire as it prepares to retail its low-cost car..
MANU P. TOMS
To sell Nano we need to think out of the box.
Ratan Tata at the Tata Motors' annual general meeting on September 1, 2010.
O ne-and-a-half-years after its awe-inspiring launch amidst frenzied media attention and sales to select customers thereafter, Tata Motors finds it has to deal with certain marketing challenges as it prepares to finally retail the Nano.
A dozen reported incidents of the Nano catching fire or smoke coming out of its parts has taken some shine off the low-cost engineering wonder that it is. Going forward, the critical question will be whether Tata Motors has completely addressed the concerns related to the product.
Satish Sawant, the 36-year old software professional in Mumbai whose freshly bought Nano went up in flames a few kilometres past the showroom, now demands a Rs 15-lakh compensation for the mental trauma he and his family suffered. Sawant is approaching the court to get his grievance redressed. “After the incident everyone kept quiet. Somebody needs to understand the pain we felt. I want to know if they will accept responsibility for this,” he said.
“Sawant has already received a full refund for his car, along with the accessories and even the interest on the loan he had taken to make the purchase, in settlement of all his claims. As far as Tata Motors is concerned, this is a finality,” said the company spokesperson. The company investigation found remnants of a foreign object on the hot exhaust system in his car “which most probably led to combustion”.
After the first three cases of fire/smoke were reported, the company initiated a ‘pre-emptive check' on all Nanos in October 2009. This was followed up by an internal investigation and by replacing the vendor who supplied the combination switches which sparked the fire.
However, despite repeated assurances from Tata Motors, the problem persisted as evidenced in three similar incidents this year, including Sawant's case. The latest was reported on August 27 in Delhi, four days before the annual meeting of Tata Motors' shareholders in Mumbai.
The Nano catching fire had apparently come up for discussion at the AGM. Ratan Tata, Chairman of Tata Sons, assured investors there was nothing to worry about.
“There are four or five cases of the Nano catching fire. We are going through a detailed investigation of each of them,” Tata said. “As and when we are able to determine the problem, we will make a statement. As far as I am concerned, there are 50,000 Nanos in the market. Four or five cases (of fire) do not indicate there is a problem with the car,” he added. Ironically, on that very day smoke came out of the three-month-old Nano of M. Venkatachalam of Coimbatore, Tamil Nadu. “Even after reading articles and news of Nanos catching fire, I boldly decided to buy a Nano, which is the first car in my life, because it is a car conceived in India by an Indian company. Even now I do not lose heart,” Venkatachalam, a retired bank employee, wrote to this correspondent.
Two days later there came a letter saying his complaint had been redressed. “It was due to a short circuit in the starter motor, which they replaced. I am satisfied,” he said.
Many customers like him who admired the Tatas opted for the Nano. K. P. Janardan from Mumbai wrote to Ratan Tata as he found the company's response on all these incidents unsatisfactory.
He believes Tata Motors should have written to each customer who booked a Nano, explaining the cause of fire, the remedial action taken and reassuring everyone of its safety. Having failed to elicit a satisfactory response from the company, Janardan now demands a refund of his booking amount of Rs 95,000. He refused to take delivery of the car allotted to him.
While the shroud over the issue turned off some of the customers, there are others who still vouch for the Nano. Ashok Vichare, the first customer, maintains the Nano is a good car. Ashish Balakrishnan, the second customer to whom Ratan Tata handed over the Nano key, loves his car although he had encountered a problem — the car was not starting under cold conditions — in November last year (which was addressed).
Both Vichare and Balakrishnan said they drive 22 km on a litre of petrol, which makes Nano the most fuel-efficient gasoline-run car in the country. Many experts, including the ones who participated in the 15,000 km Nano Superdrive, gave positive reviews.
Many believe the quality issues are teething troubles. “For Nano, the key thing is how quickly they are going to address these issues. Tata Motors was making Nano from a temporary facility so far. Now the mother plant in Sanand is up and running. The full supply chain is ready. I don't think such issues will repeat themselves,” says Abdul Majeed, Auto Practice Leader, PricewaterhouseCoopers India.
He believes the Nano still has huge potential as a growing market is ready to absorb large volumes. The low penetration of four-wheelers – just nine for a 1,000 people – and the demographic dividend will work to its advantage. “The annual two-wheeler sales is 13 million. If you capture five per cent of its share, it will be more than 500,000,” he said. According to him, the cost-consciousness of Indian customers and the economies of scale that the Tatas possess are advantages. The top-end version of the Nano at Rs 1.85 lakh will be nearly Rs 50,000 cheaper than Maruti Alto, its nearest rival.
Many think the Nano appeals not just to two-wheeler customers but to other car owners too as many who already own one have booked this small car.
This view is largely shared by other analysts as well. The bad press for the fire incidents doesn't seem to have shaken their confidence in the Nano. A recent JD Power article said, “The Nano is projected to hold the No 2 spot in 2011 after Tata ramps up production.” Maruti Alto, the largest selling car in India, clocked 2.4 lakh units last year.
However, to sustain the business model in the sub-segment in which Nano operates, the manufacturers need to sell at least 2.5 lakh to 3 lakh units a year, according to Majeed.
The two-week initial Nano booking drive in April 2009 touched a little over two lakh, of which a substantial number was cancelled. After the despatch of about 60,000 units to select customers, the early excitement may have subsided. But one should watch out for interesting promotions to reignite passion.
The company had conducted a 26-day Nano Superdrive, touching 36 cities in June, to highlight the car's safety and efficiency. The company offered test drives besides a celebration for Nano owners in every city it passed through. From July, Tata Motors offered test drives to prospective customers at many of its dealerships. The company had tested the waters for open sales by launching bookings in Kerala during Onam which evoked a fairly good response.
For the Tatas, after steadying the Jaguar Land Rover business, infusing new life into the commercial vehicles sector, driving the Fiat joint venture into a profit zone and rejuvenating the rest of the passenger car portfolio, the next big challenge is to ensure that the Nano races past huge volume milestones. And that before others catch up with equally inexpensive models.
Originally published in Business Line on October 7, 2010
MANU P. TOMS
To sell Nano we need to think out of the box.
Ratan Tata at the Tata Motors' annual general meeting on September 1, 2010.
O ne-and-a-half-years after its awe-inspiring launch amidst frenzied media attention and sales to select customers thereafter, Tata Motors finds it has to deal with certain marketing challenges as it prepares to finally retail the Nano.
A dozen reported incidents of the Nano catching fire or smoke coming out of its parts has taken some shine off the low-cost engineering wonder that it is. Going forward, the critical question will be whether Tata Motors has completely addressed the concerns related to the product.
Satish Sawant, the 36-year old software professional in Mumbai whose freshly bought Nano went up in flames a few kilometres past the showroom, now demands a Rs 15-lakh compensation for the mental trauma he and his family suffered. Sawant is approaching the court to get his grievance redressed. “After the incident everyone kept quiet. Somebody needs to understand the pain we felt. I want to know if they will accept responsibility for this,” he said.
“Sawant has already received a full refund for his car, along with the accessories and even the interest on the loan he had taken to make the purchase, in settlement of all his claims. As far as Tata Motors is concerned, this is a finality,” said the company spokesperson. The company investigation found remnants of a foreign object on the hot exhaust system in his car “which most probably led to combustion”.
After the first three cases of fire/smoke were reported, the company initiated a ‘pre-emptive check' on all Nanos in October 2009. This was followed up by an internal investigation and by replacing the vendor who supplied the combination switches which sparked the fire.
However, despite repeated assurances from Tata Motors, the problem persisted as evidenced in three similar incidents this year, including Sawant's case. The latest was reported on August 27 in Delhi, four days before the annual meeting of Tata Motors' shareholders in Mumbai.
The Nano catching fire had apparently come up for discussion at the AGM. Ratan Tata, Chairman of Tata Sons, assured investors there was nothing to worry about.
“There are four or five cases of the Nano catching fire. We are going through a detailed investigation of each of them,” Tata said. “As and when we are able to determine the problem, we will make a statement. As far as I am concerned, there are 50,000 Nanos in the market. Four or five cases (of fire) do not indicate there is a problem with the car,” he added. Ironically, on that very day smoke came out of the three-month-old Nano of M. Venkatachalam of Coimbatore, Tamil Nadu. “Even after reading articles and news of Nanos catching fire, I boldly decided to buy a Nano, which is the first car in my life, because it is a car conceived in India by an Indian company. Even now I do not lose heart,” Venkatachalam, a retired bank employee, wrote to this correspondent.
Two days later there came a letter saying his complaint had been redressed. “It was due to a short circuit in the starter motor, which they replaced. I am satisfied,” he said.
Many customers like him who admired the Tatas opted for the Nano. K. P. Janardan from Mumbai wrote to Ratan Tata as he found the company's response on all these incidents unsatisfactory.
He believes Tata Motors should have written to each customer who booked a Nano, explaining the cause of fire, the remedial action taken and reassuring everyone of its safety. Having failed to elicit a satisfactory response from the company, Janardan now demands a refund of his booking amount of Rs 95,000. He refused to take delivery of the car allotted to him.
While the shroud over the issue turned off some of the customers, there are others who still vouch for the Nano. Ashok Vichare, the first customer, maintains the Nano is a good car. Ashish Balakrishnan, the second customer to whom Ratan Tata handed over the Nano key, loves his car although he had encountered a problem — the car was not starting under cold conditions — in November last year (which was addressed).
Both Vichare and Balakrishnan said they drive 22 km on a litre of petrol, which makes Nano the most fuel-efficient gasoline-run car in the country. Many experts, including the ones who participated in the 15,000 km Nano Superdrive, gave positive reviews.
Many believe the quality issues are teething troubles. “For Nano, the key thing is how quickly they are going to address these issues. Tata Motors was making Nano from a temporary facility so far. Now the mother plant in Sanand is up and running. The full supply chain is ready. I don't think such issues will repeat themselves,” says Abdul Majeed, Auto Practice Leader, PricewaterhouseCoopers India.
He believes the Nano still has huge potential as a growing market is ready to absorb large volumes. The low penetration of four-wheelers – just nine for a 1,000 people – and the demographic dividend will work to its advantage. “The annual two-wheeler sales is 13 million. If you capture five per cent of its share, it will be more than 500,000,” he said. According to him, the cost-consciousness of Indian customers and the economies of scale that the Tatas possess are advantages. The top-end version of the Nano at Rs 1.85 lakh will be nearly Rs 50,000 cheaper than Maruti Alto, its nearest rival.
Many think the Nano appeals not just to two-wheeler customers but to other car owners too as many who already own one have booked this small car.
This view is largely shared by other analysts as well. The bad press for the fire incidents doesn't seem to have shaken their confidence in the Nano. A recent JD Power article said, “The Nano is projected to hold the No 2 spot in 2011 after Tata ramps up production.” Maruti Alto, the largest selling car in India, clocked 2.4 lakh units last year.
However, to sustain the business model in the sub-segment in which Nano operates, the manufacturers need to sell at least 2.5 lakh to 3 lakh units a year, according to Majeed.
The two-week initial Nano booking drive in April 2009 touched a little over two lakh, of which a substantial number was cancelled. After the despatch of about 60,000 units to select customers, the early excitement may have subsided. But one should watch out for interesting promotions to reignite passion.
The company had conducted a 26-day Nano Superdrive, touching 36 cities in June, to highlight the car's safety and efficiency. The company offered test drives besides a celebration for Nano owners in every city it passed through. From July, Tata Motors offered test drives to prospective customers at many of its dealerships. The company had tested the waters for open sales by launching bookings in Kerala during Onam which evoked a fairly good response.
For the Tatas, after steadying the Jaguar Land Rover business, infusing new life into the commercial vehicles sector, driving the Fiat joint venture into a profit zone and rejuvenating the rest of the passenger car portfolio, the next big challenge is to ensure that the Nano races past huge volume milestones. And that before others catch up with equally inexpensive models.
Originally published in Business Line on October 7, 2010
Fuel efficiency grades for automobiles on the anvil
Manu P. Toms
Mumbai, Nov. 29 Automobiles in India would be graded by their fuel efficiency once the Government agency completes its work on the subject. The Petroleum Conservation Research Association (PCRA), the energy auditing agency under the Ministry of Petroleum and Natural Gas, is formulating fuel efficiency standards for the automobile sector.
This is being carried out in collaboration with the Bureau of Energy Efficiency (BEE) under the Ministry of Power.
Mileage standards
The mileage standards for the cars will be set on the basis of the engine capacity and the vehicle brands will be graded according to their conformity to the set standards, sources in the PCRA said. However, the agency may not be able to stop the market entry of the vehicles which are non-compliant to the mileage standards. But the acceptance of lower-graded vehicles, in terms of mileage standards, will be left to the market’s judgement. “Setting standards for car manufacturers won’t be easy.
“This will be done in consultation with the Society of Indian Automobile Manufacturers, Automotive Research Association of India and others,” an official in the PCRA said.
Emission norms
The emission norms also will be tightened in parallel to the initiatives on fuel efficiency front. By 2010, Bharat Stage IV for will be introduced in the cities where Bharat Stage III for emission norms is now in place.
Similarly, emission standards will be upgraded to Bharat III in places where it is currently Bharat II.
“We will blend the emission standards and fuel efficiency standards. The formulation of the broad set of standards will be done in consultation with various agencies like auto manufacturers and oil companies,” said Mr Ravi Capoor, Joint Secretary and Executive Director of PCRA.
“About 50 per cent of the total oil and gas consumption goes into transport sector. Certain energy efficiency initiatives are imperative in the context of rising fuel prices and carbon emission. India spent about Rs 2 lakh crore for crude oil import in last fiscal. We target to reduce energy spending by at least two per cent,” Mr Capoor said.
“When a litre of petrol is burnt, it will emit carbon dioxide (CO2) equivalent to 2.5 litres, a major cause of global warming. According to the IPCC report, eight years is the window the world has been given to make behavioural changes,” he said.
“In Delhi, the car users spend Rs 994 crore annually on oil by just waiting to go from red signal to green signal. There must be an awareness campaign to press people to switch off engines when they are in traffic islands,” Mr. Capoor said.
“The Government has spent Rs 53,000 crore on subsidies to oil companies in the last fiscal. The amount will be around Rs 75,000 crore in the current fiscal,” he said.
(This article was published in the Business Line print edition dated November 30, 2007)
http://www.thehindubusinessline.com/todays-paper/article1676221.ece?ref=archive
Mumbai, Nov. 29 Automobiles in India would be graded by their fuel efficiency once the Government agency completes its work on the subject. The Petroleum Conservation Research Association (PCRA), the energy auditing agency under the Ministry of Petroleum and Natural Gas, is formulating fuel efficiency standards for the automobile sector.
This is being carried out in collaboration with the Bureau of Energy Efficiency (BEE) under the Ministry of Power.
Mileage standards
The mileage standards for the cars will be set on the basis of the engine capacity and the vehicle brands will be graded according to their conformity to the set standards, sources in the PCRA said. However, the agency may not be able to stop the market entry of the vehicles which are non-compliant to the mileage standards. But the acceptance of lower-graded vehicles, in terms of mileage standards, will be left to the market’s judgement. “Setting standards for car manufacturers won’t be easy.
“This will be done in consultation with the Society of Indian Automobile Manufacturers, Automotive Research Association of India and others,” an official in the PCRA said.
Emission norms
The emission norms also will be tightened in parallel to the initiatives on fuel efficiency front. By 2010, Bharat Stage IV for will be introduced in the cities where Bharat Stage III for emission norms is now in place.
Similarly, emission standards will be upgraded to Bharat III in places where it is currently Bharat II.
“We will blend the emission standards and fuel efficiency standards. The formulation of the broad set of standards will be done in consultation with various agencies like auto manufacturers and oil companies,” said Mr Ravi Capoor, Joint Secretary and Executive Director of PCRA.
“About 50 per cent of the total oil and gas consumption goes into transport sector. Certain energy efficiency initiatives are imperative in the context of rising fuel prices and carbon emission. India spent about Rs 2 lakh crore for crude oil import in last fiscal. We target to reduce energy spending by at least two per cent,” Mr Capoor said.
“When a litre of petrol is burnt, it will emit carbon dioxide (CO2) equivalent to 2.5 litres, a major cause of global warming. According to the IPCC report, eight years is the window the world has been given to make behavioural changes,” he said.
“In Delhi, the car users spend Rs 994 crore annually on oil by just waiting to go from red signal to green signal. There must be an awareness campaign to press people to switch off engines when they are in traffic islands,” Mr. Capoor said.
“The Government has spent Rs 53,000 crore on subsidies to oil companies in the last fiscal. The amount will be around Rs 75,000 crore in the current fiscal,” he said.
(This article was published in the Business Line print edition dated November 30, 2007)
http://www.thehindubusinessline.com/todays-paper/article1676221.ece?ref=archive
The Ace that Tata served
Tata Motors' Ace has made entrepreneurs of its customers at the lower reaches of the pyramid..
MANU P. TOMS
Basant Yadav came to Mumbai 15 years ago. The search for a livelihood forced him to migrate to the metro which he had seen only in Bollywood movies.
He started as a driver on daily wages in the Mumbai suburb of Goregaon, more than 1,000 km away from his hometown in Uttar Pradesh. In the next three years, he graduated to being the owner-driver of a secondhand Bajaj Tempo. The small-scale industries in Goregaon offered him good business. In 2000, he bought a Tata 407 on loan, this time a fresh buy from the showroom.
When Tata launched the sub-one tonne Ace light truck in 2005, Basant Yadav was one of the first three buyers. Small units of textiles, toys and furniture spread across the Goregaon industrial area fuelled his transport business.
His Ace trucks ferry goods to and from small towns in Maharashtra such as Ratnagiri and Chiplun. Carrying the movables of those returning to their hometowns, these four-wheel small trucks have travelled from Mumbai to as far as Jabalpur and Indore, claims Yadav.
Delivering the goods:Basant Yadav who owns nine Aces, with one of his vehicles.
Now, Basant Transport Service (BTS) which he jointly runs with his four younger brothers, has 17 vehicles, nine of which are Aces. “In the narrow lanes of Mumbai suburbs, the Ace is an ideal goods carrier. It can get through the congested streets fairly easily,” he says.
“It has got flexibility and multiple utility. I get numerous calls asking for the mini truck every day, that is why from one Ace in 2005 I now have nine,” he says. “Every year he buys one or two Ace from us,” testifies Sumeet, a sales person with Bafna, a Tata Motors dealer in Mumbai.
Basant Yadav's is not a lone story. Five years ago when the Ace was launched, it caught the fancy of many small-time transporters, poultry owners, laundry men, vegetable vendors and scrap dealers across India. And this small truck, advertised by Tata Motors as the ‘ Chota Haathi' (small elephant capable of big things), has been a companion in many a successful entrepreneurial journey at the clichéd bottom of the pyramid.
Ace is one product for Tata Motors where product engineering, marketing strategy and branding have worked perfectly well. Five years in existence and the Ace's sales have crossed five lakh.
When Ace, the country's first four-wheel mini truck was launched in 2005, it broke open a new segment of sub-one tonne small commercial vehicles.
It got an immediate market reception as it became the single largest brand for Tata Motors in less than 18 months of its launch. The Tatas have been ruling the small commercial vehicle segment for the last five years, thanks to the Ace which breaks its sales records each passing month, with interesting new variants being added to the portfolio from time to time.
Tata Motors sold 1.6 lakh vehicles on the Ace platform in the last fiscal. “This fiscal, we expect sales will cross 2.25 lakh units,” Ravi Pisharody, President (Commercial Vehicles), Tata Motors told BrandLine.
Having identified an opportunity in the big gap in the market space between three-wheeler pick-ups and six-wheel light trucks such as Tata 407, Tata Motors had intensely worked on the concept of a mini-truck.
The project officially kicked off in December 2000. Extensive market research and a robust tradition in truck-making came in handy for Tata Motors. Five years down the line, the company came out with the first four-wheel truck, powered with a 700 cc two-cylinder version of the first generation Indica engine, developed in-house.
Timely launch
“The Tatas have the knack of coming up with the right product at the right time, be it Indica, Sumo or Ace,” says S. P. Singh, co-ordinator of the Indian Foundation of Transport Research and Training (IFTRT). “Indica and Sumo were not technologically outstanding products. Yet these vehicles established themselves in the market as they responded to the needs of people. In the case of Ace, besides a thorough market understanding, the Tatas took a lot more care on the product side.”
“The distribution and retailing pattern in the cities was shaping up in a distinct way where everyone wanted things, be it fridges, TVs or vegetables, to be delivered at their doorstep. In the narrow congested city lanes, Ace proved to be flexible, comfortable and fuel-efficient,” he said.
Having got the product ready, Tata Motors pulled out all the stops to ensure the success of Ace. It first wooed the three-wheeler owners. The change in their social profile ‘ Rickshawaale se motor malik' was the attraction.
Ace had a strong appeal in the rural markets too where bullock carts and muddy paths gave way to small pick-ups and tarred roads.
With many first-time users, particularly the unemployed youth, turning into owner-drivers Ace became a preferred vehicle for last mile transportation.
To reach out to potential buyers in interior India, Tata Motors opened 600 small sales outlets at the tehsil/district level, taking the total sales touch points to over 1,000. Another smart move was to facilitate vehicle financing with tie-ups with 117 banks – mainly public sector, Gramin and co-operative banks spread across rural India.
“When Ace was launched it was the only product in that segment of low tonnage trucks. Tatas obviously got the first-mover advantage,” says Vaishali Jajoo, Senior Analyst, Angel Broking. According to her, the structural change that happened in transport with the introduction of the ‘hub and spoke' model in cities — where heavy trucks ferry things up to a certain point on the outskirts from where small vehicles take it to the delivery point — worked to the advantage of Ace.
“There is still a huge market for the product. However, since every player has jumped on to it, interesting competition will be played out. The economic growth, particularly the retail activity, will drive the mini truck segment,” she says.
All along the amazing ride of the Ace, Tata Motors has shown savvy product diversification skills. Currently, the Ace family has its original base model mini truck, a passenger carrier in Magic, a CNG-run version, Ace Ex with the fuel-efficient start-stop technology and Super Ace with one tonne payload. Product innovation continues as the Tatas come out with a four-seater people carrier Magic Iris. The vehicle is being test-marketed currently. A 0.5-tonne truck is set to be launched anytime soon.
The success of Ace, a mini truck with sub-one tonne payload at Rs 2.5 lakh price point, has attracted other manufacturers too. Now Mahindra, Force Motors and Piaggio have come out with similar products. Ashok Leyland too is considering an entry into this segment.
“The market requirement is bound to be much higher. The segment will surely grow. The micro enterprising facilitated by small trucks paves the way for huge employment generation,” says IFTRT's Singh.
Sitting at his office-cum-bedroom – an extension of his chawl - adorned with the photographs of his parents and grandfather, Yadav finds it difficult to answer all the calls he gets on his three mobile phones, mostly for hiring his vehicles.
This is precisely why Tata Motors is looking out for a second plant for Ace, besides ramping up the capacity of the Pantnagar plant to 2.75 lakh units a year.
Originally published in Business Line on September 9, 2010
MANU P. TOMS
Basant Yadav came to Mumbai 15 years ago. The search for a livelihood forced him to migrate to the metro which he had seen only in Bollywood movies.
He started as a driver on daily wages in the Mumbai suburb of Goregaon, more than 1,000 km away from his hometown in Uttar Pradesh. In the next three years, he graduated to being the owner-driver of a secondhand Bajaj Tempo. The small-scale industries in Goregaon offered him good business. In 2000, he bought a Tata 407 on loan, this time a fresh buy from the showroom.
When Tata launched the sub-one tonne Ace light truck in 2005, Basant Yadav was one of the first three buyers. Small units of textiles, toys and furniture spread across the Goregaon industrial area fuelled his transport business.
His Ace trucks ferry goods to and from small towns in Maharashtra such as Ratnagiri and Chiplun. Carrying the movables of those returning to their hometowns, these four-wheel small trucks have travelled from Mumbai to as far as Jabalpur and Indore, claims Yadav.
Delivering the goods:Basant Yadav who owns nine Aces, with one of his vehicles.
Now, Basant Transport Service (BTS) which he jointly runs with his four younger brothers, has 17 vehicles, nine of which are Aces. “In the narrow lanes of Mumbai suburbs, the Ace is an ideal goods carrier. It can get through the congested streets fairly easily,” he says.
“It has got flexibility and multiple utility. I get numerous calls asking for the mini truck every day, that is why from one Ace in 2005 I now have nine,” he says. “Every year he buys one or two Ace from us,” testifies Sumeet, a sales person with Bafna, a Tata Motors dealer in Mumbai.
Basant Yadav's is not a lone story. Five years ago when the Ace was launched, it caught the fancy of many small-time transporters, poultry owners, laundry men, vegetable vendors and scrap dealers across India. And this small truck, advertised by Tata Motors as the ‘ Chota Haathi' (small elephant capable of big things), has been a companion in many a successful entrepreneurial journey at the clichéd bottom of the pyramid.
Ace is one product for Tata Motors where product engineering, marketing strategy and branding have worked perfectly well. Five years in existence and the Ace's sales have crossed five lakh.
When Ace, the country's first four-wheel mini truck was launched in 2005, it broke open a new segment of sub-one tonne small commercial vehicles.
It got an immediate market reception as it became the single largest brand for Tata Motors in less than 18 months of its launch. The Tatas have been ruling the small commercial vehicle segment for the last five years, thanks to the Ace which breaks its sales records each passing month, with interesting new variants being added to the portfolio from time to time.
Tata Motors sold 1.6 lakh vehicles on the Ace platform in the last fiscal. “This fiscal, we expect sales will cross 2.25 lakh units,” Ravi Pisharody, President (Commercial Vehicles), Tata Motors told BrandLine.
Having identified an opportunity in the big gap in the market space between three-wheeler pick-ups and six-wheel light trucks such as Tata 407, Tata Motors had intensely worked on the concept of a mini-truck.
The project officially kicked off in December 2000. Extensive market research and a robust tradition in truck-making came in handy for Tata Motors. Five years down the line, the company came out with the first four-wheel truck, powered with a 700 cc two-cylinder version of the first generation Indica engine, developed in-house.
Timely launch
“The Tatas have the knack of coming up with the right product at the right time, be it Indica, Sumo or Ace,” says S. P. Singh, co-ordinator of the Indian Foundation of Transport Research and Training (IFTRT). “Indica and Sumo were not technologically outstanding products. Yet these vehicles established themselves in the market as they responded to the needs of people. In the case of Ace, besides a thorough market understanding, the Tatas took a lot more care on the product side.”
“The distribution and retailing pattern in the cities was shaping up in a distinct way where everyone wanted things, be it fridges, TVs or vegetables, to be delivered at their doorstep. In the narrow congested city lanes, Ace proved to be flexible, comfortable and fuel-efficient,” he said.
Having got the product ready, Tata Motors pulled out all the stops to ensure the success of Ace. It first wooed the three-wheeler owners. The change in their social profile ‘ Rickshawaale se motor malik' was the attraction.
Ace had a strong appeal in the rural markets too where bullock carts and muddy paths gave way to small pick-ups and tarred roads.
With many first-time users, particularly the unemployed youth, turning into owner-drivers Ace became a preferred vehicle for last mile transportation.
To reach out to potential buyers in interior India, Tata Motors opened 600 small sales outlets at the tehsil/district level, taking the total sales touch points to over 1,000. Another smart move was to facilitate vehicle financing with tie-ups with 117 banks – mainly public sector, Gramin and co-operative banks spread across rural India.
“When Ace was launched it was the only product in that segment of low tonnage trucks. Tatas obviously got the first-mover advantage,” says Vaishali Jajoo, Senior Analyst, Angel Broking. According to her, the structural change that happened in transport with the introduction of the ‘hub and spoke' model in cities — where heavy trucks ferry things up to a certain point on the outskirts from where small vehicles take it to the delivery point — worked to the advantage of Ace.
“There is still a huge market for the product. However, since every player has jumped on to it, interesting competition will be played out. The economic growth, particularly the retail activity, will drive the mini truck segment,” she says.
All along the amazing ride of the Ace, Tata Motors has shown savvy product diversification skills. Currently, the Ace family has its original base model mini truck, a passenger carrier in Magic, a CNG-run version, Ace Ex with the fuel-efficient start-stop technology and Super Ace with one tonne payload. Product innovation continues as the Tatas come out with a four-seater people carrier Magic Iris. The vehicle is being test-marketed currently. A 0.5-tonne truck is set to be launched anytime soon.
The success of Ace, a mini truck with sub-one tonne payload at Rs 2.5 lakh price point, has attracted other manufacturers too. Now Mahindra, Force Motors and Piaggio have come out with similar products. Ashok Leyland too is considering an entry into this segment.
“The market requirement is bound to be much higher. The segment will surely grow. The micro enterprising facilitated by small trucks paves the way for huge employment generation,” says IFTRT's Singh.
Sitting at his office-cum-bedroom – an extension of his chawl - adorned with the photographs of his parents and grandfather, Yadav finds it difficult to answer all the calls he gets on his three mobile phones, mostly for hiring his vehicles.
This is precisely why Tata Motors is looking out for a second plant for Ace, besides ramping up the capacity of the Pantnagar plant to 2.75 lakh units a year.
Originally published in Business Line on September 9, 2010
Monday, April 11, 2011
Hyundai and Tata follow Maruti to take village roads
Manu P Toms , Hindustan Times
Mumbai, April 10, 2011
Maruti’s success to sell 249,000 cars in rural India has led its rivals Hyundai and Tata Motors to emulate its strategy. Maruti’s 3,600 rural development sales executives (RDSEs) — each one posted in every taluka in India — together sold more than a fifth of its total sales. Determined to end Maruti's complete dominance in rural market, Hyundai will now deploy 1,000 sales executives, while Tata Motors will have 210 ‘special Nano dealers’ in small district centres.
Maruti has found a promising rural market for cars, what chief general manager Shashank Srivastava calls “a surprise discovery”, when urban-focused sales approach faced challenges in the recession-hit 2009. It loosely classified geographies beyond the limits of top 100 cities as rural areas and counts sales facilitated by RDSEs posted in those regions as rural sales.
From a mere 9% of its total sales in FY 09 it grew to 16% in FY 10. In FY 11, rural sales accounted for roughly 22% of Maruti’s domestic sales. In volume terms, this conveys an even more ebullient story — from 65,000 units to 139,000 units, which leapt to 249,000 units in the just-ended fiscal.
“Alto and Wagon R are the largest selling models in rural areas,” said Srivastava. Good rainfall, better farm output, growing non-agricultural income, improving infrastructure all contribute to the spurt in car sales in these predominantly agrarian regions.
“For this fiscal, we expect rural market will account for 25% of our total sales,” he said.
Maruti’s closest rival Hyundai also sees a similar trend. The company does not strictly track rural sales. But, it sees that semi-urban and rural sales together now account for 31% of its domestic sales against 29% last fiscal. The company is strengthening its presence in these regions by adding 36 outlets more in semi urban and rural areas.
By 2011 end, Hyundai will have 275 outlets in these regions.
Mumbai, April 10, 2011
Maruti’s success to sell 249,000 cars in rural India has led its rivals Hyundai and Tata Motors to emulate its strategy. Maruti’s 3,600 rural development sales executives (RDSEs) — each one posted in every taluka in India — together sold more than a fifth of its total sales. Determined to end Maruti's complete dominance in rural market, Hyundai will now deploy 1,000 sales executives, while Tata Motors will have 210 ‘special Nano dealers’ in small district centres.
Maruti has found a promising rural market for cars, what chief general manager Shashank Srivastava calls “a surprise discovery”, when urban-focused sales approach faced challenges in the recession-hit 2009. It loosely classified geographies beyond the limits of top 100 cities as rural areas and counts sales facilitated by RDSEs posted in those regions as rural sales.
From a mere 9% of its total sales in FY 09 it grew to 16% in FY 10. In FY 11, rural sales accounted for roughly 22% of Maruti’s domestic sales. In volume terms, this conveys an even more ebullient story — from 65,000 units to 139,000 units, which leapt to 249,000 units in the just-ended fiscal.
“Alto and Wagon R are the largest selling models in rural areas,” said Srivastava. Good rainfall, better farm output, growing non-agricultural income, improving infrastructure all contribute to the spurt in car sales in these predominantly agrarian regions.
“For this fiscal, we expect rural market will account for 25% of our total sales,” he said.
Maruti’s closest rival Hyundai also sees a similar trend. The company does not strictly track rural sales. But, it sees that semi-urban and rural sales together now account for 31% of its domestic sales against 29% last fiscal. The company is strengthening its presence in these regions by adding 36 outlets more in semi urban and rural areas.
By 2011 end, Hyundai will have 275 outlets in these regions.
Women push sales of unisex scooters
Manu P Toms,
Hindustan Times Mumbai, April 05, 2011
The motorbike, the preferred rugged ride of young men, has competition and if latest figures are anything to go by, the scooter has zoomed past it, powered by women. The demand for the unisex scooter — the one without gears and clutch — has outstripped demand. Scooters sold faster than motorcycles in 2010-11, clocking 40% against the bikes’ 27%, industry executives said.
As many as 1.9 million scooters were sold last fiscal, apparently with an extra push from women.
Honda’s Activa, which tops the sales, has a waiting period of a year, said dealers in Mumbai.
“This supply shortage is across India. The new plant, which will come up in August, will help us meet demand,” said NK Rattan, head of marketing, Honda Motorcycles and Scooters India (HMSI), which has a 45% market share.
Despite making close to 650,000 Activas, HMSI is facing a backlog of 200,000.
The 40% growth rate would be sustained for some time, said HS Goindi, president, marketing, TVS Motors, whose three
models sold 425,000 units last year. “With demand growing, we, too, are facing some manufacturing constraints.”
Hero Honda’s Pleasure clocked an unprecedented 360,000, while new entrant Mahindra & Mahindra saw its sales more than double to 158,733 in the last fiscal.
Hindustan Times Mumbai, April 05, 2011
The motorbike, the preferred rugged ride of young men, has competition and if latest figures are anything to go by, the scooter has zoomed past it, powered by women. The demand for the unisex scooter — the one without gears and clutch — has outstripped demand. Scooters sold faster than motorcycles in 2010-11, clocking 40% against the bikes’ 27%, industry executives said.
As many as 1.9 million scooters were sold last fiscal, apparently with an extra push from women.
Honda’s Activa, which tops the sales, has a waiting period of a year, said dealers in Mumbai.
“This supply shortage is across India. The new plant, which will come up in August, will help us meet demand,” said NK Rattan, head of marketing, Honda Motorcycles and Scooters India (HMSI), which has a 45% market share.
Despite making close to 650,000 Activas, HMSI is facing a backlog of 200,000.
The 40% growth rate would be sustained for some time, said HS Goindi, president, marketing, TVS Motors, whose three
models sold 425,000 units last year. “With demand growing, we, too, are facing some manufacturing constraints.”
Hero Honda’s Pleasure clocked an unprecedented 360,000, while new entrant Mahindra & Mahindra saw its sales more than double to 158,733 in the last fiscal.
Saturday, August 14, 2010
Sunday, January 24, 2010
Robust rural market fuels car sales
Rising income levels, easy credit and better roads push up numbers.
BUSINESS LINE, JAN 24, 2010
Manu P. Toms
Mumbai, Jan. 24
Car makers are making greater inroads into rural markets with industry majors reporting 50-100 per cent rise in sales in such regions in the current fiscal.
Market leader Maruti Suzuki's rural sales more than doubled to 1.16 lakh cars in April-December. Others such as Hyundai, GM and Mahindra & Mahindra have also seen higher growth.
For Maruti the share of rural sales this year increased to 16 per cent from 9 per cent last year.
Hyundai, the second major player, noticed that the shares of its tier-2 and tier-3 markets' sales – largely rural and semi-urban – grew to 29 per cent from 23 per cent.
Both manufactures together hold 70 per cent of the Indian car market.
“We did better than the car industry in general, largely because of our rural focus. The contribution of rural India in our overall sales is growing year by year,” said Mr Mayank Pareek, Executive Officer, Maruti Suzuki.
Maruti has loosely classified areas beyond the top-80 cities as rural market and has been carrying out sales promotion activities in tie-up with schools, panchayats and local clubs.
Holding on to its rural focus, the company recently launched the multi purpose vehicle Eeco at an attractive Rs 2.6-3 lakh price range.
“Our sales in the top-10 markets have declined from 53 per cent to 46 per cent. However, in tier-2 and tier-3, we are growing,” said Mr Arvind Saxena, Senior Vice-President, Sales & Marketing, Hyundai Motor India Ltd.
The easy ride of car makers, whose combined sales this fiscal is 25 per cent up at 16 lakh units, has got a strong push from rural India and this bears testimony to the rising income in villages.
“The Indian car makers have identified a ‘prosperous rural customer segment',” said Mr Kapil Arora, Partner, Automotive Practice, Ernst and Young India. “In relation to its size, rural India still remains largely under-penetrated, and clearly demand is growing there. Aspirations are growing along with rising prosperity. The macro-economic factors such as easy credit and improving road connectivity in interiors also contribute to the sales growth,” he said.
“If the top-eight cities used to contribute 60 per cent of the total sales and 40 per cent the rest earlier, it is the other way around now,” said Mr P. Balendran, Vice-President, General Motor India.
Mr Rajesh Jejuricker, Chief of Operations, Mahindra & Mahindra, has a similar view. “We continue to see a robust growth in rural and semi-urban markets. This year our overall sales grew by 35 per cent. The rate of growth is even higher in non-metro markets,” he said.
manu@thehindu.co.in
BUSINESS LINE, JAN 24, 2010
Manu P. Toms
Mumbai, Jan. 24
Car makers are making greater inroads into rural markets with industry majors reporting 50-100 per cent rise in sales in such regions in the current fiscal.
Market leader Maruti Suzuki's rural sales more than doubled to 1.16 lakh cars in April-December. Others such as Hyundai, GM and Mahindra & Mahindra have also seen higher growth.
For Maruti the share of rural sales this year increased to 16 per cent from 9 per cent last year.
Hyundai, the second major player, noticed that the shares of its tier-2 and tier-3 markets' sales – largely rural and semi-urban – grew to 29 per cent from 23 per cent.
Both manufactures together hold 70 per cent of the Indian car market.
“We did better than the car industry in general, largely because of our rural focus. The contribution of rural India in our overall sales is growing year by year,” said Mr Mayank Pareek, Executive Officer, Maruti Suzuki.
Maruti has loosely classified areas beyond the top-80 cities as rural market and has been carrying out sales promotion activities in tie-up with schools, panchayats and local clubs.
Holding on to its rural focus, the company recently launched the multi purpose vehicle Eeco at an attractive Rs 2.6-3 lakh price range.
“Our sales in the top-10 markets have declined from 53 per cent to 46 per cent. However, in tier-2 and tier-3, we are growing,” said Mr Arvind Saxena, Senior Vice-President, Sales & Marketing, Hyundai Motor India Ltd.
The easy ride of car makers, whose combined sales this fiscal is 25 per cent up at 16 lakh units, has got a strong push from rural India and this bears testimony to the rising income in villages.
“The Indian car makers have identified a ‘prosperous rural customer segment',” said Mr Kapil Arora, Partner, Automotive Practice, Ernst and Young India. “In relation to its size, rural India still remains largely under-penetrated, and clearly demand is growing there. Aspirations are growing along with rising prosperity. The macro-economic factors such as easy credit and improving road connectivity in interiors also contribute to the sales growth,” he said.
“If the top-eight cities used to contribute 60 per cent of the total sales and 40 per cent the rest earlier, it is the other way around now,” said Mr P. Balendran, Vice-President, General Motor India.
Mr Rajesh Jejuricker, Chief of Operations, Mahindra & Mahindra, has a similar view. “We continue to see a robust growth in rural and semi-urban markets. This year our overall sales grew by 35 per cent. The rate of growth is even higher in non-metro markets,” he said.
manu@thehindu.co.in
Commercial vehicles sector sees light at the end of tunnel
BUSINESS LINE, DEC 30
Manu P. Toms
Mumbai, Dec. 30
The commercial vehicle industry, which took a battering for much of 2008 and 2009, has reason to believe that the worst is over now.
Sales of buses and trucks, which had hit the bottom of the barrel last year, have now been improving month by month. “The commercial vehicle industry is heading for an overall 10 per cent negative growth in 2009.The current indications suggest a 20 per cent growth in 2010.
However, it is still lower than the 2007 levels,” said Mr Somnath Bhattacharjee, Vice-President, Sales & Marketing, Volvo Eicher.
Commercial Vehicles
Unlike the passenger vehicle sector, which staged a quick turnaround following the Centre's stimulus package, commercial vehicle sales have been trailing from the year-ago period till August this year. “This industry is the first to be hit in a downturn and the last to recover,” quipped Mr Dilip Chenoy, Director-General, Society of Indian Automobile Manufacturers.
Incidentally, LCV (light commercial vehicle) sales are back on track with a 20 per cent growth while medium and heavy CVs, which were the worst hit, are still not out of the woods yet.
“Although the cut in excise duty, reduction in interest and greater liquidity brought down the acquisition cost, stricter appraisal norms for getting truck loans hit vehicle financing. Truck operators, particularly, first time buyers found it difficult to get finance,” said Mr Bhattacharjee.
According to him, the lower increase in freight rates (around five per cent instead of 10 per cent in a normal year) hit the bottom line of fleet operators who did not buy as many trucks as they would have normally.
In addition, the slowdown in construction and mining and delays in awarding mining licences and construction projects affected sales of tippers and dumpers, says an Ernst & Young report on commercial vehicles.
The year also saw manufacturers either keeping projects on hold or walking out of joint ventures. For instance, the Hero group parted ways with Daimler in their proposed commercial vehicle alliance.
Likewise, the LCV joint venture between Ashok Leyland and Nissan is now in the stage of “optimising investments and using available facilities (read as the Leyland plant in Hosur and the Nissan unit near Chennai) in the first phase”.
The positive news in the year included Tata Motors launching its World Truck series while VE and Mahindra Navistar will follow suit with their new range next year. The Centre-sponsored JNNURM (Jawaharlal Nehru National Urban Renewal Mission) subsidised bus purchases by municipal corporations which led to over 10,000 vehicles being procured by civic bodies.
It now looks as if 2010 augurs well for the industry. “The general sense of optimism is increasing with each passing month.
The increase in foreign capital inflows is positive for the economy which is showing signs of revving up again. And this is great news for the commercial vehicle industry which is dependent on economic activity,” said Mr Rakesh Batra, Automotive Sector Leader, Ernst & Young, India.
Manu P. Toms
Mumbai, Dec. 30
The commercial vehicle industry, which took a battering for much of 2008 and 2009, has reason to believe that the worst is over now.
Sales of buses and trucks, which had hit the bottom of the barrel last year, have now been improving month by month. “The commercial vehicle industry is heading for an overall 10 per cent negative growth in 2009.The current indications suggest a 20 per cent growth in 2010.
However, it is still lower than the 2007 levels,” said Mr Somnath Bhattacharjee, Vice-President, Sales & Marketing, Volvo Eicher.
Commercial Vehicles
Unlike the passenger vehicle sector, which staged a quick turnaround following the Centre's stimulus package, commercial vehicle sales have been trailing from the year-ago period till August this year. “This industry is the first to be hit in a downturn and the last to recover,” quipped Mr Dilip Chenoy, Director-General, Society of Indian Automobile Manufacturers.
Incidentally, LCV (light commercial vehicle) sales are back on track with a 20 per cent growth while medium and heavy CVs, which were the worst hit, are still not out of the woods yet.
“Although the cut in excise duty, reduction in interest and greater liquidity brought down the acquisition cost, stricter appraisal norms for getting truck loans hit vehicle financing. Truck operators, particularly, first time buyers found it difficult to get finance,” said Mr Bhattacharjee.
According to him, the lower increase in freight rates (around five per cent instead of 10 per cent in a normal year) hit the bottom line of fleet operators who did not buy as many trucks as they would have normally.
In addition, the slowdown in construction and mining and delays in awarding mining licences and construction projects affected sales of tippers and dumpers, says an Ernst & Young report on commercial vehicles.
The year also saw manufacturers either keeping projects on hold or walking out of joint ventures. For instance, the Hero group parted ways with Daimler in their proposed commercial vehicle alliance.
Likewise, the LCV joint venture between Ashok Leyland and Nissan is now in the stage of “optimising investments and using available facilities (read as the Leyland plant in Hosur and the Nissan unit near Chennai) in the first phase”.
The positive news in the year included Tata Motors launching its World Truck series while VE and Mahindra Navistar will follow suit with their new range next year. The Centre-sponsored JNNURM (Jawaharlal Nehru National Urban Renewal Mission) subsidised bus purchases by municipal corporations which led to over 10,000 vehicles being procured by civic bodies.
It now looks as if 2010 augurs well for the industry. “The general sense of optimism is increasing with each passing month.
The increase in foreign capital inflows is positive for the economy which is showing signs of revving up again. And this is great news for the commercial vehicle industry which is dependent on economic activity,” said Mr Rakesh Batra, Automotive Sector Leader, Ernst & Young, India.
Car-makers accelerate on Govt gas
BUSINESS LINE, DEC 24, 2009
Manu P. Toms
Mumbai, Dec. 24
Record sales, 30 new launches and companies reporting historically high quarterly profits – the passenger car industry could not have asked for more.
“A year that I don't think anyone would have expected,” says Dr Pawan Goenka, President, Auto Sector, Mahindra & Mahindra, who is the President of the industry body, Society of Indian Automobile Manufacturers (SIAM).
In fact, 2009 was a tumultuous year for the global auto industry, which witnessed the world's largest car maker General Motors filing for bankruptcy, Toyota posting a net loss for the first time in 70 years ,and car sales falling in most of the mature markets. And, yet, the Indian car market showed a 20 per cent growth.
The high double-digit growth comes immediately on the heels of a year ridden with inflation, credit squeeze and the global slowdown – factors that threatened to put a spoke in domestic car sales.
Industry officials attribute the domestic growth to the Union Government's stimulus package comprising an excise duty cut and Cenvat reduction, besides a slew of other measures to ease the credit situation.
“The first three months of the 2009 calendar year were months of apprehension. In April, May, June we saw very decent growth. In October, November it bumped up. Overall, if we look at it in terms of profit growth and volume growth, it has been a very good year. A year that I don't think anyone would have expected,” says Dr Goenka. According to him, the combined effect of the stimulus package, low interest rate and low commodity prices saw customers coming back to the showrooms.
According to Mr Rakesh Batra, Partner and National Leader, Auto Practice, Ernst & Young, the Indian passenger vehicle volumes will cross two million units in the current financial year.
Innovation
Tata Nano - The People's Car
The year 2009 is marked by not just the robust sales posted by individual companies but also by the product innovation skills exhibited by the Indian manufacturers.
It also saw the much-awaited commercial launch of the world's least expensive car, Tata Nano. Around 15,000 Nanos are out on the street ever since Tata Motors began the delivery of the car in July. While the company is busy ramping up the capacity at the makeshift Nano plant in Pantnagar and readying up its Sanand plant for small car, close to 1.5 lakh customers are waiting for their turn to drive away the ‘People's Car'. This year, Tatas took another important step by starting the retail of its British luxury models Jaguar and Land Rover in India.
Keeping in line with the Centre's Automotive Mission Plan to make India the global small car hub, car exports topped three lakhs during the calendar year. Riding on the scrappage incentive scheme in Europe, where fuel efficient small cars caught the fancy of customers, Hyundai Motor India and Maruti Suzuki enjoyed better overseas sales.
“India's significance at the global level is increasing. India surpassed China in the number of cars exported,” said Mr Batra.
“Various players, including Toyota, Ford and Hyundai, have announced their plans to make India a manufacturing hub for small cars. The GM-Reva tie-up shows that India's contribution at the global level goes beyond the low-cost-manufacturing,” he said.
Small car revolution
The small car revolution in India continues with companies breaking their own sales records month by month. In November, Maruti and Hyundai recorded their highest ever monthly sales at 88,000 and 55,000 units respectively.
Another significance of the year is the car industry's increasing penetration into the rural markets. Maruti, which consistently enjoyed good sales through out the year, sees increasing rural sales as one of the key factors. “Our strategies worked really well. We are present in all segments of the small car market and we had three launches in last 12 months. Alto at 2.6 lakh units continues to be largest selling model in India,” said Mr Mayank Pareek, Executive Officer, Maruti Suzuki.
Going forward, the increasing raw material price, likely fiscal measures to control inflation that will lead to an interest rate hike which in turn will affect EMIs (equated monthly instalments) and the cost escalation that comes with new emission norms – all suggest the going might not be as smooth as it used to be. However, according to Dr Goenka, auto companies that made good profits during the year are able enough to absorb some of the pressures. “I see no dark clouds as there is no slackening of demand,” he says.
According to rating agency CARE (Credit Analysis & Research Ltd), among households that can afford a car, the penetration is as low as 45 per cent. With many more entering into the bracket of households that can afford a car, the demand scenario looks strong for the next few years. The last thing car-makers want now is a reversal of stimulus measures as everybody wants the momentum to continue
Manu P. Toms
Mumbai, Dec. 24
Record sales, 30 new launches and companies reporting historically high quarterly profits – the passenger car industry could not have asked for more.
“A year that I don't think anyone would have expected,” says Dr Pawan Goenka, President, Auto Sector, Mahindra & Mahindra, who is the President of the industry body, Society of Indian Automobile Manufacturers (SIAM).
In fact, 2009 was a tumultuous year for the global auto industry, which witnessed the world's largest car maker General Motors filing for bankruptcy, Toyota posting a net loss for the first time in 70 years ,and car sales falling in most of the mature markets. And, yet, the Indian car market showed a 20 per cent growth.
The high double-digit growth comes immediately on the heels of a year ridden with inflation, credit squeeze and the global slowdown – factors that threatened to put a spoke in domestic car sales.
Industry officials attribute the domestic growth to the Union Government's stimulus package comprising an excise duty cut and Cenvat reduction, besides a slew of other measures to ease the credit situation.
“The first three months of the 2009 calendar year were months of apprehension. In April, May, June we saw very decent growth. In October, November it bumped up. Overall, if we look at it in terms of profit growth and volume growth, it has been a very good year. A year that I don't think anyone would have expected,” says Dr Goenka. According to him, the combined effect of the stimulus package, low interest rate and low commodity prices saw customers coming back to the showrooms.
According to Mr Rakesh Batra, Partner and National Leader, Auto Practice, Ernst & Young, the Indian passenger vehicle volumes will cross two million units in the current financial year.
Innovation
Tata Nano - The People's Car
The year 2009 is marked by not just the robust sales posted by individual companies but also by the product innovation skills exhibited by the Indian manufacturers.
It also saw the much-awaited commercial launch of the world's least expensive car, Tata Nano. Around 15,000 Nanos are out on the street ever since Tata Motors began the delivery of the car in July. While the company is busy ramping up the capacity at the makeshift Nano plant in Pantnagar and readying up its Sanand plant for small car, close to 1.5 lakh customers are waiting for their turn to drive away the ‘People's Car'. This year, Tatas took another important step by starting the retail of its British luxury models Jaguar and Land Rover in India.
Keeping in line with the Centre's Automotive Mission Plan to make India the global small car hub, car exports topped three lakhs during the calendar year. Riding on the scrappage incentive scheme in Europe, where fuel efficient small cars caught the fancy of customers, Hyundai Motor India and Maruti Suzuki enjoyed better overseas sales.
“India's significance at the global level is increasing. India surpassed China in the number of cars exported,” said Mr Batra.
“Various players, including Toyota, Ford and Hyundai, have announced their plans to make India a manufacturing hub for small cars. The GM-Reva tie-up shows that India's contribution at the global level goes beyond the low-cost-manufacturing,” he said.
Small car revolution
The small car revolution in India continues with companies breaking their own sales records month by month. In November, Maruti and Hyundai recorded their highest ever monthly sales at 88,000 and 55,000 units respectively.
Another significance of the year is the car industry's increasing penetration into the rural markets. Maruti, which consistently enjoyed good sales through out the year, sees increasing rural sales as one of the key factors. “Our strategies worked really well. We are present in all segments of the small car market and we had three launches in last 12 months. Alto at 2.6 lakh units continues to be largest selling model in India,” said Mr Mayank Pareek, Executive Officer, Maruti Suzuki.
Going forward, the increasing raw material price, likely fiscal measures to control inflation that will lead to an interest rate hike which in turn will affect EMIs (equated monthly instalments) and the cost escalation that comes with new emission norms – all suggest the going might not be as smooth as it used to be. However, according to Dr Goenka, auto companies that made good profits during the year are able enough to absorb some of the pressures. “I see no dark clouds as there is no slackening of demand,” he says.
According to rating agency CARE (Credit Analysis & Research Ltd), among households that can afford a car, the penetration is as low as 45 per cent. With many more entering into the bracket of households that can afford a car, the demand scenario looks strong for the next few years. The last thing car-makers want now is a reversal of stimulus measures as everybody wants the momentum to continue
Skoda plans clean drive with LPG, Greenline engines
Manu P. Toms
Mumbai, Jan. 21
Czech carmaker Skoda will launch LPG (liquefied petroleum gas) variants of its cars retailed in India. It is also planning to introduce its ‘Greenline engines' known for their low emissions and high fuel efficiency.
The first LPG option will be made available in the Laura. Mr Thomas Kuehl, Board Member, Skoda India, told Business Line that this would be a factory-fitted LPG engine, which will also offer petrol as an option. However, he did not indicate when this variant would debut in the market.
The company will, likewise, be open to an LPG option for the Fabia hatchback though Mr Kuehl said it was “too early to say” when this would happen.
As a result, Skoda is likely to create the infrastructure needed for manufacturing LPG cars at its Aurangabad plant. It will also join a growing list of carmakers which offer LPG options in their product offerings right from Maruti Suzuki (Wagon R and 800) and Hyundai (Santro and Accent) to General Motors India (Spark) and Tata Motors with the Indica Xeta.
Skoda is upbeat about its Greenline engines, especially with cleaner fuel norms scheduled to be implemented nationwide from April 1. These engines emit less carbon dioxide than conventional ones and have been doing well in Europe. Now, with Bharat Stage 3 and 4 petrol and diesel to be retailed in the coming months, Skoda believes the timing is right.
“We have Greenline engines which can be introduced in all our models. We are thinking about bringing them to India but nothing is finalised,” said Mr Kuehl. The likelihood of erratic BS 3 fuel supplies for some months could have also prompted Skoda to take one thing at a time.
The carmaker, which launched its second boutique showroom in the country in Mumbai, plans to increase its dealerships to 75 (from 65) by the end of this calendar
Mumbai, Jan. 21
Czech carmaker Skoda will launch LPG (liquefied petroleum gas) variants of its cars retailed in India. It is also planning to introduce its ‘Greenline engines' known for their low emissions and high fuel efficiency.
The first LPG option will be made available in the Laura. Mr Thomas Kuehl, Board Member, Skoda India, told Business Line that this would be a factory-fitted LPG engine, which will also offer petrol as an option. However, he did not indicate when this variant would debut in the market.
The company will, likewise, be open to an LPG option for the Fabia hatchback though Mr Kuehl said it was “too early to say” when this would happen.
As a result, Skoda is likely to create the infrastructure needed for manufacturing LPG cars at its Aurangabad plant. It will also join a growing list of carmakers which offer LPG options in their product offerings right from Maruti Suzuki (Wagon R and 800) and Hyundai (Santro and Accent) to General Motors India (Spark) and Tata Motors with the Indica Xeta.
Skoda is upbeat about its Greenline engines, especially with cleaner fuel norms scheduled to be implemented nationwide from April 1. These engines emit less carbon dioxide than conventional ones and have been doing well in Europe. Now, with Bharat Stage 3 and 4 petrol and diesel to be retailed in the coming months, Skoda believes the timing is right.
“We have Greenline engines which can be introduced in all our models. We are thinking about bringing them to India but nothing is finalised,” said Mr Kuehl. The likelihood of erratic BS 3 fuel supplies for some months could have also prompted Skoda to take one thing at a time.
The carmaker, which launched its second boutique showroom in the country in Mumbai, plans to increase its dealerships to 75 (from 65) by the end of this calendar
Nissan to export India-made small car from August
BUSINESS LINE, JAN 20
Manu P. Toms
Mumbai, Jan. 20
Japanese automaker Nissan will begin exporting its small car, Micra, from its Chennai plant to Europe within two months of its launch in India. The production line of the car is being transferred from the UK as part of Nissan's business plan for the Indian market.
“Following the India launch in June, we will start exporting the Micra by August,” Mr Kiminobu Tokuyama, Managing Director and CEO, Nissan Motor India, told Business Line on the sidelines of the launch of its luxury sports car, 370Z.
“The Micra will have a dominant share in our targeted exports of 110,000 units for 2011,” he added. Given that Nissan sells close to one lakh units of Micra annually across Europe, it will account for over 90 per cent of its exports from India in the immediate future.
Mr Tokuyama said that Nissan had also wrapped up production trials of the car in the Chennai plant. The company is taking the cue from Hyundai and Suzuki, which have made India the export hub for their European offerings including the i10, i20 and A-Star.
Suzuki is contract-manufacturing the A-Star (under the brand name Pixo) for Nissan and meant for Europe. Nissan's joint venture with Ashok Leyland will, incidentally, focus on sub-four tonne light commercial vehicles. The company's newly launched 370z, with two variants – the six-speed Synchro Rev Match and seven-speed manual shift mode – priced at Rs 53.5 lakh and Rs 54.5 lakh (ex-showroom Delhi) is part of its plan to import four cars here by 2012 and showcase the Nissan brand.
Nissan plans to sell two to four units of the 370z every month.
It will also increase the number of dealerships from eight to 30 by the end of this year, going up to 55 by 2012.
Manu P. Toms
Mumbai, Jan. 20
Japanese automaker Nissan will begin exporting its small car, Micra, from its Chennai plant to Europe within two months of its launch in India. The production line of the car is being transferred from the UK as part of Nissan's business plan for the Indian market.
“Following the India launch in June, we will start exporting the Micra by August,” Mr Kiminobu Tokuyama, Managing Director and CEO, Nissan Motor India, told Business Line on the sidelines of the launch of its luxury sports car, 370Z.
“The Micra will have a dominant share in our targeted exports of 110,000 units for 2011,” he added. Given that Nissan sells close to one lakh units of Micra annually across Europe, it will account for over 90 per cent of its exports from India in the immediate future.
Mr Tokuyama said that Nissan had also wrapped up production trials of the car in the Chennai plant. The company is taking the cue from Hyundai and Suzuki, which have made India the export hub for their European offerings including the i10, i20 and A-Star.
Suzuki is contract-manufacturing the A-Star (under the brand name Pixo) for Nissan and meant for Europe. Nissan's joint venture with Ashok Leyland will, incidentally, focus on sub-four tonne light commercial vehicles. The company's newly launched 370z, with two variants – the six-speed Synchro Rev Match and seven-speed manual shift mode – priced at Rs 53.5 lakh and Rs 54.5 lakh (ex-showroom Delhi) is part of its plan to import four cars here by 2012 and showcase the Nissan brand.
Nissan plans to sell two to four units of the 370z every month.
It will also increase the number of dealerships from eight to 30 by the end of this year, going up to 55 by 2012.
Future growth for Bharat Forge will be India-led: Baba Kalyani
BUSINESS LINE, JAN 9
Manu P. Toms
Mumbai, Jan. 9
By expanding into the non-automotive space, Bharat Forge — one of the world's largest forging companies — expects to bounce back to its earlier levels of profitability. With its large exposure to overseas markets, the forging company saw business going slow in the last few quarters. It declined 37 per cent to Rs 434 crore for the second quarter of the current fiscal.
However, with the robust domestic growth, product diversification and revival in overseas markets, the company hopes to do well. “In the next two-three quarters it (business) will come back to normal,” said Mr Baba Kalyani, Chairman and Managing Director, Bharat Forge, in a recent interaction. Excerpts:
Now you are aggressively targeting business from the non-automotive space. What is the strategy behind this move?
We have set a target of 40 per cent of our sales from the non-automotive space by 2012, and we are pretty much on target. The ratio currently is 21:79 and is moving towards 30 per cent.
Being the largest auto component exporter, how did the downturn in the global market affect your business?
Quite badly, our export numbers have come down. Last year, degrowth started in October 2008. At that time it went down to 20 per cent. Then it started slowly picking up. We are probably now running at 60 per cent (of 2007 levels). We are gaining momentum in this not because markets are coming back but because we are getting customers. We are hopeful that in another two-three quarters it will come back to normal.
How are your overseas plants doing as those markets are still not out of the woods?
We have restructured our overseas plants to what demand we see. They are running at a lower capacity but they will run profitably. We have taken a lot of restructuring costs this (financial) year.
How did you readjust yourself to the downturn?
The good thing is the Indian market is doing exceedingly well. Fundamentally, it is not that it is a recession and that after three years it is going to be back to be normal. What is really happening in the industry is it is resetting itself. The whole industry is going to get reset.
The US was producing 16.5 million vehicles in 2007. It came down to 10 million in 2009. Nobody is betting that it will get back to 16 million in three years. It may be 12 million. So the whole supply industry has to readjust to that. That is the reality in the US and Europe. But in India and China and emerging markets we are growing at a faster rate than we thought.
What is the contribution of exports to your overall revenue?
On an average our export (ratio) is 40:60. When export is at its peak 60 per cent of the sales will be exports and in times like this it will be 40. Going forward, it will be more India-led growth because non-automotive side – power plants and nuclear business – will be Indian.
What is the outlook for the overseas markets?
North America is reviving slow but steady. At least it is no longer going in the south direction.
In Europe, we see a revival but it is largely because inventory has gone out of the system in 2009.
In 2009, the downturn in Europe was extremely bad not because the demand went down that much but because the stocks were high.
Now there are no stocks in the system and we see real demand. Although it is lower than what was before it is higher than 2009 levels. But, I think in Europe, the pain is not over yet. It will be another two-three years before it will get back to recovery.
Manu P. Toms
Mumbai, Jan. 9
By expanding into the non-automotive space, Bharat Forge — one of the world's largest forging companies — expects to bounce back to its earlier levels of profitability. With its large exposure to overseas markets, the forging company saw business going slow in the last few quarters. It declined 37 per cent to Rs 434 crore for the second quarter of the current fiscal.
However, with the robust domestic growth, product diversification and revival in overseas markets, the company hopes to do well. “In the next two-three quarters it (business) will come back to normal,” said Mr Baba Kalyani, Chairman and Managing Director, Bharat Forge, in a recent interaction. Excerpts:
Now you are aggressively targeting business from the non-automotive space. What is the strategy behind this move?
We have set a target of 40 per cent of our sales from the non-automotive space by 2012, and we are pretty much on target. The ratio currently is 21:79 and is moving towards 30 per cent.
Being the largest auto component exporter, how did the downturn in the global market affect your business?
Quite badly, our export numbers have come down. Last year, degrowth started in October 2008. At that time it went down to 20 per cent. Then it started slowly picking up. We are probably now running at 60 per cent (of 2007 levels). We are gaining momentum in this not because markets are coming back but because we are getting customers. We are hopeful that in another two-three quarters it will come back to normal.
How are your overseas plants doing as those markets are still not out of the woods?
We have restructured our overseas plants to what demand we see. They are running at a lower capacity but they will run profitably. We have taken a lot of restructuring costs this (financial) year.
How did you readjust yourself to the downturn?
The good thing is the Indian market is doing exceedingly well. Fundamentally, it is not that it is a recession and that after three years it is going to be back to be normal. What is really happening in the industry is it is resetting itself. The whole industry is going to get reset.
The US was producing 16.5 million vehicles in 2007. It came down to 10 million in 2009. Nobody is betting that it will get back to 16 million in three years. It may be 12 million. So the whole supply industry has to readjust to that. That is the reality in the US and Europe. But in India and China and emerging markets we are growing at a faster rate than we thought.
What is the contribution of exports to your overall revenue?
On an average our export (ratio) is 40:60. When export is at its peak 60 per cent of the sales will be exports and in times like this it will be 40. Going forward, it will be more India-led growth because non-automotive side – power plants and nuclear business – will be Indian.
What is the outlook for the overseas markets?
North America is reviving slow but steady. At least it is no longer going in the south direction.
In Europe, we see a revival but it is largely because inventory has gone out of the system in 2009.
In 2009, the downturn in Europe was extremely bad not because the demand went down that much but because the stocks were high.
Now there are no stocks in the system and we see real demand. Although it is lower than what was before it is higher than 2009 levels. But, I think in Europe, the pain is not over yet. It will be another two-three years before it will get back to recovery.
Bharat Forge to invest Rs 1,500 cr in non-auto biz
--------------------------------------------------------------------------------
Looking ahead
The investments will be made in the next three years
Foray in non-auto biz complete with launch of ring rolling facility
Power equipment manufacturing plant set up with Alstom at Mundra
--------------------------------------------------------------------------------
BUSINESS LINE, TUESDAY, JAN 5, 2010
Manu P. Toms
Baramati, Jan. 4
Bharat Forge Ltd plans to invest Rs 1,500 crore to expand its non-automotive business.
Mr Baba N. Kalyani, Chairman and Managing Director of Bharat Forge, said the investments will be made over the next three years. He said that the fund will be raised partly through internal accruals and the balance through debt and equity.
He was speaking on the sidelines of the inauguration of the company's Ring Rolling facility at Baramati in Maharashtra, on Monday. The new plant will make rings for sectors such as wind energy, defence and oil and gas.
For Bharat Forge, which had a turnover of Rs 4,850 crore in last fiscal, about 80 per cent of the revenue comes from its supply of equipment to automotive manufacturers and engine makers while the rest comes from non-automotive sectors.
Going forward, the company aims to increase the revenue share from its non-automotive business to 40 per cent.
Mr Kalyani said that first phase of the company's foray into non-automotive business is complete with the commissioning of the Ring Rolling facility at Baramati. Bharat Forge has invested Rs 500 crore in the first phase which includes the setting up of an open die press in Pune and a crankshaft and ring rolling facility in Baramati. The crankshafts and rings are manufactured for locomotives, power plants and construction equipment.
“The first phase was to make parts up to 40-50 tonnes. The second phase is to take this to up to 500 tonnes,” he said.
“This new facility will act as a catalyst to further accelerate Bharat Forge's revenue growth and de-risking its business model besides diversifying its non auto business. We have received strong customer response for domestic and international applications,” said Mr Kalyani.
Bharat Forge is now setting up a power equipment manufacturing plant jointly with French company Alstom at Mundra in Gujarat.
“We have just started construction of our plant in Gujarat to manufacture turbines and generators up to 800 MW capacity,” said Mr Kalyani.
The Mundra facility targets business from the nuclear power sector as the country is gearing up to set up many more nuclear power plants.
Looking ahead
The investments will be made in the next three years
Foray in non-auto biz complete with launch of ring rolling facility
Power equipment manufacturing plant set up with Alstom at Mundra
--------------------------------------------------------------------------------
BUSINESS LINE, TUESDAY, JAN 5, 2010
Manu P. Toms
Baramati, Jan. 4
Bharat Forge Ltd plans to invest Rs 1,500 crore to expand its non-automotive business.
Mr Baba N. Kalyani, Chairman and Managing Director of Bharat Forge, said the investments will be made over the next three years. He said that the fund will be raised partly through internal accruals and the balance through debt and equity.
He was speaking on the sidelines of the inauguration of the company's Ring Rolling facility at Baramati in Maharashtra, on Monday. The new plant will make rings for sectors such as wind energy, defence and oil and gas.
For Bharat Forge, which had a turnover of Rs 4,850 crore in last fiscal, about 80 per cent of the revenue comes from its supply of equipment to automotive manufacturers and engine makers while the rest comes from non-automotive sectors.
Going forward, the company aims to increase the revenue share from its non-automotive business to 40 per cent.
Mr Kalyani said that first phase of the company's foray into non-automotive business is complete with the commissioning of the Ring Rolling facility at Baramati. Bharat Forge has invested Rs 500 crore in the first phase which includes the setting up of an open die press in Pune and a crankshaft and ring rolling facility in Baramati. The crankshafts and rings are manufactured for locomotives, power plants and construction equipment.
“The first phase was to make parts up to 40-50 tonnes. The second phase is to take this to up to 500 tonnes,” he said.
“This new facility will act as a catalyst to further accelerate Bharat Forge's revenue growth and de-risking its business model besides diversifying its non auto business. We have received strong customer response for domestic and international applications,” said Mr Kalyani.
Bharat Forge is now setting up a power equipment manufacturing plant jointly with French company Alstom at Mundra in Gujarat.
“We have just started construction of our plant in Gujarat to manufacture turbines and generators up to 800 MW capacity,” said Mr Kalyani.
The Mundra facility targets business from the nuclear power sector as the country is gearing up to set up many more nuclear power plants.
Subscribe to:
Posts (Atom)
