News and views about the Auto sector in India

Weekly news updates on trends and happenings in the Indian Automobile Industry

Tata Motors, DaimlerChrysler and Bajaj Auto are planning huge investments. TVS Motor is all set to launch 11 new models by April 2008. The Indian auto components industry is gaining high visibility globally and attracting investments. However, on a low note, interest rates and heavy monsoons are affecting vehicle sales. Maruti Udyog has come up with a discount offer to battle soaring interest rates and increase sales.

- Chillibreeze Business Research Team

Ceat to transfer investment undertakings to CHI
Ceat Tyres India Limited’s shareholders have approved a scheme that proposes to transfer the company’s investment undertaking to CHI Investments Limited. As per the proposed scheme, the investment transfer will result in Ceat’s shareholders getting 75 shares of Ceat and 25 shares of CHI Investments for every 100 shares they hold in Ceat.

Presently, Ceat and CHI Investments are filing their petitions before the Bombay High Court. The scheme will materialise once it is approved by the Bombay High Court.

August 5, 2007
Source: Economic Times

Maruti offers discounts to boost car sales
Maruti Udyog Limited, which holds almost 50 percent of the country’s small car market, has launched a “Smile India Smile” scheme. Under the scheme, the company will offer discounts between Rs 7,000 and Rs 30,000 on most of its models, including Alto and Esteem sedan. The scheme, which will be offered throughout the country, will be available from August 1-15 2007.

According to Maruti Udyog, the scheme is aimed at battling the soaring interest rates that are hampering vehicle sales. Offering dealer incentives is also part of the company’s strategy in limiting the impact of high interest rates on its vehicle sales.

August 5, 2007
Source: Economic Times

Tata Motors set to drive in world's largest bus plant
Tata Motors, the leading bus manufacturer in India, will put up a fully-built bus plant that is pegged to be the world’s largest. The company is considering Karnataka and Goa as the potential sites for setting up the new plant.

The proposed integrated plant, which could assist Tata Motors emerge as the world’s leading bus manufacturer, is expected to come up in 2008. It will have an initial capacity of 7,000 fully-built buses and luxury coaches per year. To achieve this, Tata Motors has already entered into a joint venture with Marcopolo, Brazil’s largest mass manufacturer of fully-built buses.

In the second phase of expansion, Tata Motors will join hands with Hispano Carrocera, the Spanish company which is Europe’s largest super-luxury bus manufacturer.

Both ventures will provide Tata Motors with the design and technical expertise to cash in on the increasing demand for fully built luxury buses and coaches in India and abroad.

August 4, 2007
Source: Economic Time

DaimlerChrysler sees brisk sales of Mercedes in India
DaimlerChrysler has recorded 22 percent year-on-year increase in the sales of its Mercedes-Benz luxury cars in India to 1,500 units during January-July 2007. The sales of the premium car have risen in spite of the high interest rates that have affected sales in the Indian auto sector.

DaimlerChrysler is positive about the country’s robust economic growth and is looking at widening its consumer base through financing schemes. The company has recently introduced a new finance scheme with ICICI Bank Limited. At this backdrop, DaimlerChrysler is investing $67 million in a Pune plant with a capacity to make 5,000 Mercedes cars annually.

August 3, 2007
Source: NDTV

India’s automotive components industry grows up
The automotive components industry of India is gaining high visibility and significance at the global level. This can be attributed to the enormous amount of international technology and expertise inundating the industry following the deregulation of the country’s economy in 1990.

Further, the following advantages offered by India are also attracting foreign investments to the industry.

• India’s strategic location between Europe and Asia
• Availability of highly skilled and well-trained engineers
• Low-cost locations
• Robust manufacturing and engineering background
• Strong steel industry
• Fluency of the Indians in speaking English, making communication easier

August 3, 2007
Source: Justauto.com

Bajaj Auto plans new 10 bn rupees plant
Bajaj Auto Limited, the second largest motorbike manufacturer of the country, has presented the Government of Uttarkhand with a proposal to invest Rs 10 billion in a new plant in the state.

Bajaj Auto intends to make three wheeler and four wheeler vehicles in the Uttarkhand plant. The plant was inaugurated in April 2007, but the company had put off its opening from April 2008 to 2008-2009 on account of poor vehicular demand and towering interest rates. The plant has an initial capacity of 1 million units and an expandable capacity of 3 million units.

August 2, 2007
Source: Reuters via Financial Express

Geometric plans automotive electronics buy
Geometric Software Solutions Company Limited, the software firm providing engineering services and product lifestyle management services, is considering acquiring an automotive electronic services company.

Geometric Software Solutions is aiming at a $10-25 million acquisition deal and looking for a company with vast intellectual property and synergies focused on the automotive sector. The company has chosen acquisition against internal development, as it would be time-consuming to institute the new portfolio from within.

August 2, 2007
Source: Reuters via Financial Express

Auto sales skid in July barring few companies
The month of July 2007 witnessed declining sales in the Indian automobile industry, due to heavy monsoons and towering interest rates.

Hyundai Motor India Limited recorded an 8 percent year-on-year fall in its domestic sales to 15,003 units, while Honda Siel Cars India reported a 17 percent year-on-year drop in its sales to 4,533 units. Meanwhile, Skoda Auto suffered an 18 percent plunge in its domestic sales to 845 units.

On the other hand, Maruti Udyog Limited (MUL), General Motors (GM) and Mahindra & Mahindra (M&M) recorded a growth in their sales. While MUL’s sales increased by 18.3 percent, GM’s sales got bigger by 87 percent and that of M&M went up by 49 percent.

The two-wheeler segment also experienced plunge in sales during the month. Hero Honda had a year-on-year sales plunge of 14.5 percent, while its competitor, Bajaj Auto Limited had a 7 percent year-on-year drop in its motorcycle sales, including exports.

August 1, 2007
Source: Economic Times

Hero Honda sales dip 14.5 pc in July
Hero Honda, the largest bike manufacturer in India, has recorded two-wheeler sales of 2,01,191 units in July 2007. The figures represent a drop of 14.5 percent compared to 2,35,314 units in July 2006.

The fall in sales has been attributed to the monsoons and increasing interest rates. The company is confident that the sales will retread to the growth track with the onset of the festival season in the country.

August 1, 2007
Source: Economic Times

TVS to launch 11 models by April ’08
TVS Motor Company will introduce 11 new models by April 2008. The new suite will comprise of entry level and high-volume executive level motorcycles, a scooterette, an electric scooter, and two-stroke and four-stroke three wheelers. The new product line is expected to increase the company’s sales by 40,000 units a month, starting from October 2008.

August 1, 2007
Source: Economic Times