News and views about the Auto sector in India

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

Tata Motors continues with its flip flop on launch of its small car, the company has now announced that it will be on time. In order to combat slow demand on account of high interest rates, Maruti Udyog has extended its discount offer till the end of August 2007. Suzuki has also embarked on a promotional offer for its Zeus motorcycle on the occasion of Onam. Meanwhile, M&M, LML, HM and Reva are on a zoom. Renting of luxury cars is picking up and Societe Generale is the latest car rental service to start operations in India.

- Chillibreeze Business Research Team

Car rental cos roll out luxury wheels
Car rental companies in India are increasing the number of luxury cars in their fleet of vehicles. The percentage of luxury cars in the total fleet of rented cars for organized players is expected to increase to 5%-10% from 2%-3%. This can be attributed to increase in demand for luxury vehicles by corporate clients and hotels, and growth in the tourist segment. Luxury cars such as Mercedes, BMW and Audi are in rage now as compared to Toyota Corolla and Honda CRVs in the past. The Commonwealth Games to be held in the country is also likely to boost the demand for luxury cars in the car rental segment.
August 20, 2007
Source: Economic Times

Maruti raises discounts to drive car sales
Maruti Udyog Limited, the leading manufacturer of small cars, has extended its ‘Smile India Smile’ offer till the end of August 2007. The program was initially slated for August 1-15 2007. Under the extended program, the company has increased discounts and bonuses to Rs 12,000-45,000 from Rs 7,000-30,000. The extension of the discount offer, which includes Alto and Esteem sedan, is intended to enhance sales amidst sluggish demand due to soaring interest rates.
August 18, 2007
Source: Financial Express

HM rolls out premium SUV Montero
Hindustan Motors has launched the Mitsubishi Montero sports utility vehicle (SUV) in the Indian market. The launch of the Rs 29.7 lakh premium SUV has been driven by the buoyant demand in the premium vehicle market in the country. Presently, Hindustan Motors has introduced the SUV in the country through imports. It plans to start local production of the vehicle once the volumes pick up. Meanwhile, the company will also introduce other Mitsubishi vehicles such as Outlander SUV and Grandis premium segment minivan-cum-sedan in 2007.
August 18, 2007
Source: Times of India

Tatas to roll out small car in time
Tata Motors’ small car project will meet the scheduled June 2008 deadline, as against the delay announced recently. This development is evident from the alerts the company is sending out to its component suppliers, which include both Tata group companies and non-Tata component manufacturers. Tata Motors is sending out feelers to its component suppliers to be ready with their products. The company’s Tata group component suppliers include Tata Ryerson, Tata Bearings, Tata Johnson Controls Automotive and Tata Toyo Radiator. Among the non-Tata component suppliers for the Singur venture are Lumax for lighting, Sona Koyo for steering assembly, Shriram Pistons for engine pistons, Rico Auto for clutch assembly and Bosch for engine kit.
August 18, 2007
Source: Economic Times

Reva gears up for mass market
Reva Electric Car Company, the Bangalore-based manufacturer of the environment-friendly electric car Reva, is leaping into the mass market. The company has stated that it has completed the test marketing phase for its Reva car, which has so far sold 2,000 units in India and Europe. The company is planning to sell 30,000 cars in 2008.
August 17, 2007
Source: Just-Auto.com

Mahindra Ramps Up Sales Target
Mahindra and Mahindra (M&M) is aiming to reach its third one-million sales mark in the next 5 years. M&M introduced its first vehicle in 1947 and touched the first one-million sales mark in 50 years. In the next 10 years the company sold its second one-million vehicles. M&M’s new target, which will include both domestic and overseas sales, will be supported by aggressive marketing and brand building strategies. Furthermore, the company will also expand its international bases through new assembly lines and launch a premium sports utility vehicle, the new Ingenio premium multi-utility vehicle, light commercial vehicles, heavy-duty trucks and trailers.
August 17, 2007
Source: Society of Indian Automobile Manufacturers through Business Standard

Societe Generale car rental arm to drive into India
Societe Generale, the French banking company, will begin rental operations in the Indian car rental sector through its automotive rental division. The bank’s move is driven by the thriving Indian car rental sector, which is expected to grow further on the back of the flourishing international tourism and corporate rentals sector. Societe Generale, which will face competition from majors like Hertz, Avis, Leaseplan, Europcar and SIXT in the Indian car rental sector, is expected to begin its operations with a fleet of 1,100 cars. It also has major growth plans for the following years.
August 16, 2007
Source: Economic Times

Suzuki set to ride Onam season with promotional offers
Suzuki Motorcycle has started a promotional campaign for its Zeus motorcycle in Kerala during the Onam festival season. The Zeus is offered in three variants with contemporary styling and performance. The campaign, which will go on till August 27, 2007, has the slogan ‘No petrol worries from this Onam to the next’. As the slogan hints, customers purchasing the motorcycle during the campaign will get free petrol worth Rs 4,000. Further, customers will also be eligible for zero percent finance and exchange offers at all Suzuki dealers in Kerala. In addition to offers for the purchasers of the Zeus, Suzuki Motorcycle’s campaign also provides the test riders of the motorcycle a chance to participate in the daily lucky draw.
August 16, 2007
Source: Dance with Shadows

LML launches Vespa NV SPL and Select II scooters
Lohia Machines Limited (LML) has launched two brands of its 150cc Vespa scooter, namely NV SPL and Select II. The launch, which has happened after a gap of 14 months for LML, has been encouraged by the revived scooter sector in the country and its success on the exports front. The new Vespa brands have an on-road price tag of Rs 35,000 and will be offered through two dealers in Delhi. LML is aiming to sell 500 units of the new brands in the next few months. It intends to set foot in the profitable and mass-volume market after its operations are completely revived.
August 16, 2007
Source: Dance with Shadows

Amara Raja Batteries to invest Rs 65 cr for enhancement
Amara Raja Batteries Limited will invest Rs 65 crore for improving the capacity for its industrial VRLA Battery. The investment plan has been approved at the company’s board meeting. The funding for the investment will be through internal accruals and term loans. The company intends to implement the capacity expansion in phases.
August 15, 2007
Source: Economic Times

Hindalco to ride into car market
Hindalco Industries, the largest aluminium company in India, will enter the car industry with supplies for high-grade aluminium products for the body-in-white segment for cars, chiefly including the outer body and side panels. The company’s foray into the car industry comes at a time when the global aluminium sector is propagating the use of aluminium in cars to reduce the weight of the car and thus reduce fuel consumption. Presently, steel contributes to 60% of the total metal used in making the body of a car. Hindalco’s latest move will be in affiliation with Novelis, which was recently acquired by Hindalco’s parent company, Aditya Birla.
August 15, 2007
Source: Economic Times

Bajaj trims vendor base to cut costs
Bajaj Auto is seeking to reduce costs in the competitive market, as well as prime itself for its proposed overseas manufacturing venture by cutting down the number of its vendors. In the beginning of 2007, when the new motorcycle unit in Pantnagar was opened, the company cut down the number of its vendors from 170 to 16. Bajaj’s new philosophy is based on the Japanese maxim that smaller number of dedicated vendors will lead to economies of scale and viability for the vendors and just-in-time approach for the manufacturer.
August 15, 2007
Source: Economic Times

HC restrains Atlas Products from using 'Atlas'
Atlas Products Private Limited has been restrained by the Delhi High Court from using ‘Atlas’ as part of its corporate or trade name in respect of bicycles and bicycles parts. The company has been manufacturing cycles under the ‘House of Atlas’ trademark since 2002. The ban has happened as a result of a suit filed by Atlas Cycles (Haryana) Limited, the leading bicycle manufacturer, which has been manufacturing bicycles under the ‘Atlas’ trademark since 1952.
August 15, 2007
Source: Economic Times