News and Views About the Auto sector in India

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

More than fifty percent buyers rely on credit facilities to make vehicular purchases. Not surprising, the increase in rates and better credit controls have led to a fall in sales figures across various vehicle types. All lead automobile companies like Maruti, Mahindra, Tata Motors and Hero Honda have witnessed fall in sales for the month of May as compared to the previous year.

- Chillibreeze Business Research Team

Two-wheelers market growth may slow down

Hero Honda CEO Pawan Munjal is wary of the rising interest rates and credit controls impacting the two wheeler sales volumes.

Stricter credit controls have led to the consumer restricting or postponing purchases. Sales of motorcycles dipped by 7.8 per cent year-on-year in April to 504,738, and the total two-wheeler market was down 4.8 per cent at 618,161.

June 1, 2007
Financial Times via Business Standard

India on Wheels

Formula I enthusiasts and young engineers from the IIT share the dream of making India a Formula one destination- using different strategies.

One group, including the likes of Vijay Mallya and Chandrababu Naidu want to bring Formula I racing to Delhi whereas the engineers from IIT are taking their Formula I prototype, AXLR8R, annual international competition in California.

There is a school of thought that auto racing would encourage auto business and Indian designers and manufacturers towards innovation.

June 1,2007
Times of India

Mahindra Renault's Logan sells 2,786 units in May

Logan has sold of 2,786 units in May 2007. This wide bodied car by Renault was launched by Mahindra in April 2007 and sales are expected to increase once production and regional launches are ramped up.

June 1, 2007
PTI via Economic Times

Maruti domestic vehicle sales up 10% in May

Maruti Udyog Ltd sold 59,400 vehicles in May 2007, including 3,448 units of exports. The domestic market in May is up 10% from same month last year. All segments of Maruti cars witnessed growth in sales except the Maruti 800, whose sales fell 19.1%.

June 1, 2007
Economic Times

Tata Motors May sales dip four per cent

The month of May saw a four percent dip in sales of Tata Motors’ passenger, commercial and medium & heavy vehicles as compared to last year. This was primarily due to increase in interest rates. Except sales of utility vehicles (Sumo & safari), all other categories saw decrease in sales. Compared to last year, there was a marginal fall in exports also.

June 1, 2007
PTI via Economic Times

Piaggio to invest E65 mn in Indian ops

Piaggio Vehicles, India is setting up a diesel engine manufacturing plant near Pune. Its parent company, Piaggio, Italy would be investing E65 million in a backward integration project. The Pune facility, with a capacity to produce 2 lakh engines annually, would serve as an international hub to service the requirements of the company, both in the three-wheeler and four-wheeler segments. The company has major plans for the southern region markets to markets its light weight trucks.

June 1, 2007
Economic Times

Ashok Leyland to sell 500 used vehicles under Altrux

Ashok Leyland is targeting to sell 500 used commercial vehicles as the Altrux brand. Altrux will be marketed through TVS, Ashok Leyland's dealer, which has a network of 15 outlets.

The market for used trucks is estimated at 77,000 per annum. The company will purchase used Ashok Leyland vehicles from the market and re-condition them. All such vehicles would come with a six-month warranty.

This is the first commercial vehicle manufacturer to foray into the sale of used vehicle space.

May 30, 2007
PTI via Economic Times

Snootier the car, quirkier the requests

Customised cars are happening and a few lakhs don’t really matter.

Common demands from luxury car buyers include bluetooth phones for the rear seat, night vision and voice control, adaptive drive and headlights, adjustable and ventilated seats, entertainment systems for the rear seat, hi-fi systems and specialised speakers.

Those who drive the Mercs and BMWs need panoramic sunroof, multi-contour seats, night view assist, bluetooth car mobiles for the front and rear, iPod connectivity in all car acoustics, run-flat tyres, leather upholstery embossed with personal or company logos.

CEOs on the move can have theirs fitted with a refrigerator, fax machine, a laptop, DVD players, gaming consoles and electromagnetic partitions for privacy.

May 30, 2007
Source: Economic Times

Mahindra says profit falls but outlook is good

Mahindra & Mahindra Ltd, India's biggest tractor and utility vehicle maker, said on Monday quarterly profit fell 26.5 per cent, in line with expectations, on lower exceptional income and as higher interest rates weighed.

Mahindra said it planned two new vehicles -- a sports utility vehicle and and another in the cargo-passenger segment. Mahindra has a joint venture with France's Renault to make the no-frills Logan sedan in India, and has an alliance with Renault and Nissan Motor Co for a greenfield project in southern India to make 400,000 vehicles. Mahindra also holds 51 percent in another joint venture for commercial vehicles with Navistar International

May 29, 2007
Source: Economic Times

BMW to source components from India

May 29, 2007

BMW plans to set up its International sourcing office with an expat incharge. The company has a sourcing office at Chennai for its India operations.

The sourcing team is expected to visit India to shortlist components that can be sourced from India.

May 29, 2007
Source: Economic Times

GM to introduce more brands in India

General Motors plans to introduce Cadillac, Pontiac, Saab, Vauxhall in India, to capture a 10 per cent share in the passenger vehicle market by 2010.

GM has recently launched the Chevrolet Spark mini-car.

May 28, 2007
Source: Economic Times

Motown to race on plant-to-port autobahns

The government plans to develop three dedicated corridors linking roads, railways and ports to provide seamless connectivity for vehicular exports. Auto manufacturers have been pressing for better infrastructure at ports to handle vehicles. The Railways are currently working on a dedicated rail corridor for automobile transportation between Gurgaon and Mumbai port. A similar corridor is being planned between Ludhiana and Kolkata and dedicated highway is being considered between Gurgaon and Delhi

May 26, 2007
Source: Economic Times