Indian Automotive news

Warren Buffet enters India through Auto Insurance

noreply@blogger.com (santosh harakamani) — Wed, 23 Mar 2011 06:42:00 +0000

Legendary investor Warren Buffet’s Berkshire Hathaway is making its entry in to India through Auto insurance. Buffet who’s investment philosophy has been to remain within circle of competence is highly successful through its Insurance and reinsurance business.

Gecko the lizard, hallmark of Geico Insurance in US reminds me of my stint with Auto Insurance in US. When Gecko started popping up on TV and urging to check how much you could save on the car insurance through Geico, I cold not escape the temptation like any car owner. True to its claim, the quote was surprisingly lower to be believed. Called the customer service to make sure and remained with it for about 3 years. The first time talked to agent was to verify and then on it was purely an online business.

Geico, is one of the poster boys of BH’s portfolio now.

Berkshire Hathaway has put its foot on Indian market through online Insurance distribution model at berkshireinsurance (dot) com. It has no significant content presently and would be launched on 25^th March by the man himself who is touring India (first visit) on his philanthropy drive.

Presently in India the FDI for insurance is 26% , which BH feels a lot smaller by it's standards to invest as they believe the amount of efforts required for 26% is same as 50% or 60%. So may be that is the reason for them to be an agency than an insurance company themselves yet.

But I am sure it is the space to watch for millions of auto insurers in India.

VW, Honda, Hundai to be questioned on the grounds of fair price practice for the spare parts

noreply@blogger.com (santosh harakamani) — Tue, 15 Mar 2011 06:29:00 +0000

In an interesting move, CCI (competition commission of India), the agency that works as watchdog to hold fair price/trade and practices in India has ordered an enquiry in to Foreign automakers Honda/VW and Hundai. According to the complaints apparently by consumers, the auto spare parts are only available through the authorized dealer network and are sold at high price. They claim the parts are not available in normal retail outlets like parts from various Indian vehicle makers.

The availability and cost of genuine parts of these foreign brands are always an issue. If the claims are true, it is interesting to know the case for Hundai motors that is second highest selling brand in

India

now and has vast network and distribution system.

The other brands fairly lesser in sales, and often times the issues is to get the parts to be replaced in time. The dealers even order parts to replace. So it not sure why would they stack them at retailers or the retailer would be interested to stock them.

Honda has been facing issue in its aftermarket due to higher parts costs and has been struggling in sales, not necessarily due to the higher part cost, but it could be one of the prime factors when there is ample choice available for consumer. VW, started its journey through luxury segment and now it has Polo and Vento on market so might take a while to gain its spread.

However CCI, has ordered the investigation requesting a report within 45 days, so it would be interesting to know the outcome of report which most likely would not turned out anything significant.

TATA introducing Divo - Intercity luxury buses for India

noreply@blogger.com (santosh harakamani) — Thu, 10 Mar 2011 17:54:00 +0000

TATA motors, the largest CV maker of India has decided to add competition to Volvo and Mercedes in luxury intercity bus segment. TATA that owns Hispano Carrocera, the Spanish bus body building and bus maker is launching its luxury intercity model Divo by 1^st quarter of 2011.

TATA took 100% control of Hispano in 2009 by acquiring balance 79% of remaining stake making it 100% subsidiary called TATA hispano. TATA already has popular Globus model running on Indian roads with body built by hispano in Goa, India.

The Intercity luxury bus market is growing significantly with private and government owned corporations investing heavily in acquiring the fleets. Presently Volvo, the Swedish automotive major controls over 50% share in the segment followed by Mercedes. TATA, planning to price the Divo at around 10% less than the global brands and giving same luxury thinks it would position well in this segment.

Picture - TATA hispano

TATA Pixel - TATA motor's answer to futuristic urban transportation

noreply@blogger.com (santosh harakamani) — Thu, 10 Mar 2011 15:55:00 +0000

TATA motor’s newly showcased “PIXEL” looks as cool as its name itself. True to the name the car looks really made for the urban transport. The showcase of the concept came as surprise as Nano was pitted as TATA’s answer for global small car hunt. The car developed in its European Technology Centre looks elegant and seems to possess best engineering.

The car comes with a 1.2ltr, 3 cylinder turbocharged engine and offers just 3 meter turning radius. The engine is claimed to be highly fuel efficient and environment friendly. True to its claim for urban usage, the concept car offers the scissor styled door. Not sure in the commercial vehicle it would really be viable from commercial cost perspective. An electric variant also is on cards, however TATA is more keen to start its Indica EV running on European roads.

TATA as a car maker, has a lot of woes for its ambitions in India to capture the market share. However it seems to be making every good move to show its presence in European market. Undoubtedly TATA has made significant investments in its R&D/Engineering for PV segment from setting up an European Tech centre in suburbs of London, having seasoned Automotive professionals in engineering, management including its top management, collaborations. The much hyped Nano, really did not let TATA help realize it in terms of commercial success. TATA does not have enough models to fill the narrow segments on Indian road that is filled with best of the models from global car makers. Its Indica is by far the most popular model that helped TATA stand on its feet in PV segment following a series failed models. Like TATA, all pundits felt Nano would be a run away success due to its perceived low cost that was not there. Even if TATA tried to sell it at its hyped below $2500 price tag, it knows it can’t make money by selling at that price.

India is a tricky market, as majority of the middle class the whole world is looking at is cost sensitive but has very high aspirations. Adding about 100,000 or so more for a bigger car is not an issue for the people whom Nano was targeted. TATA tried various marketing campaigns to pitch its value for money theme but has not shown in the sales yet.

But all its investments and visions might payoff in Europe in next 4-5 years. As the European market is matured and has one need – Small and electric.

Pictures copy righted by TATA Motors.

Indian Automotive February 2011 sales - positive overall, negative exports and cautious moving further

noreply@blogger.com (santosh harakamani) — Mon, 07 Mar 2011 04:45:00 +0000

The February 2011 vehicle sales stood healthy in spite of increase in the car prices that the automakers are passing on to their customers time to time.

Barring Honda, all OEMs have shown positive growth and for Honda its been a disappoint phase. It announced a recall of its popular City sedan model due to a fault in a part of an Engine aggregator. The recall was the 2^nd of this model in one year. City has so far been Honda’s bread and butter. Honda posted a 22% Year on Year decline.

The Ford, VW, GM, Nissan have made significant sales numbers mainly due to their models in A1-A2 segment. Figo, Polo, Micra, Spark have all helped their companies make significant overall continued sales. The backlog for these models is also creeping up to 3-4 months now. The Etios from Toyota has also shown very good response from the market. Close to 5000 units are sold since its launch in mid Dec-2010. The segment wise gap has been narrowing due to launch of many new models and Martuti, Hundai are facing the heat due to this.

The luxury segment has been posting a steady growth with Mercedes leading the pack with its highest ever monthly sales.

The CV segment also has shown a positive growth Year on Year. The export numbers have declined across segment in Feb2011-compared the same month in 2010.

The industry was keenly watching the union budget for an anticipated hike in excise. However Government decided to keep the excise rate same. However there is a likely hood of yet another increase in Petrol price. The commodity prices have increased significantly and inflation is still a cause of concern for middleclass Indians who are potential customers for A1-A2 segments.

Highlights:

	Feb-11	Feb-10
Hundai Motors
growth	-4.77%
sales	52007	54610
domestic	32629	31001
export	19378	23609
Maruti suzuki
growth	15.50%
sales	111645	96650
domestic	101543	84765
export	10102	11885
GM
growth	126%
sales	11,111	4921
TATA motors
growth	12%
sales	77543	69427
Domestic	10%
	73039	66190
Export growth	39%
	4504	3237
PV growth	18%
	31909	26165
CV (domestic)growth	5%
	41130	39205
lcv	23498	21618
M&HCV	17632	17456
M&M
growth	20.00%
Domestic growth	20%
	31967	26580

PV growth	16%
	15439	13350
4W pickup growth	13%
	9903	8733
3W growth	57%
	5725	3641
CV	900	856
exports	1411	1314
Ashok Leyland
growth	25%
sales	9800	7869
domestic	8984	7092
export	816	777
Honda
growth	-22.83%
sales	4843	6276
Mercedes
growth	51%
sales	662	439
Toyota
growth	55%
cars, SUV	9308	5993
Ford
growth	188.00%
sales	9293	3223
Eicher
growth	29.00%
sales	3916	2780
skoda
growth	39.00%
sales	2512	1805
VW
sales	7077	422
Nissan
sales	2081	44

Indian Union budget 2011 cheers Automotive sector - National mission for EV, Hybrid vehicles

noreply@blogger.com (santosh harakamani) — Mon, 28 Feb 2011 09:23:00 +0000

The Union Budget 2011 brought lots of cheer for automotive sector and for EV/Hybrid vehicles in general.

The industry that has hit by high input cost, interest rates and higher fuel cost in recent past was nervous anticipating an increase in excise duty from present 10%. The industry has passed most of this cost to consumer and the last thing that it wanted is another hike that has to be passed on or get hit on margins. Due to the painful inflation

India

is reeling through an increase in excise was expected.

The biggest relief the Auto sector got is NOT in hike in excise tax. All Auto sector stocks cheered to be back in green.

The biggest reform that has been proposed is for a green transportation. The budget has proposed a National mission for EV and hybrid vehicles, that is expected to elaborate the investment and road maps. In Dec 2010, government had proposed incentive program for Electric vehicles.

Below are some highlights of the union budget 2011

(Courtesy: Indian union budget website)

Central Excise Duty to be maintained at standard rate of 10 per cent.
National Mission for hybrid and electric vehicle to be launched
Basic Custom Duty reduced for various items to encourage domestic value addition vis-à-vis imports, to remove duty inversion and anomalies and to provide a level playing field to the domestic industry. (To be know yet what are the items that would benefit)
Full exemption from basic Customs Duty and a concessional rate of Central
Excise Duty extended to batteries imported by manufacturers of electrical vehicles.
Concessional Excise Duty of 10 per cent to vehicles based on Fuel cell technology.
Exemption granted from basic custom duty and special CVD to critical parts/assemblies needed for Hybrid vehicles.
Reduction in Excise Duty on kits used for conversion of fossil fuel vehicles into Hybrid vehicles from 10% to 5%
Excise Duty on LEDs reduced to 5 per cent and special CVD being fully exempted.
Out right concession to factory-built ambulances from Excise Duty.

Indian Automotive Aftermarket - seeking new direction

noreply@blogger.com (santosh harakamani) — Mon, 21 Feb 2011 17:32:00 +0000

Since last couple of months there are two major reports unveiled on Indian aftermarket. The first one was by CII (Confederation of Indian Industries) the government’s premier front ending agency for Indian industries and McKinsey& Company. The second one by ACMA (Automotive component manufacturer’s Association). The CII report lays out the opportunities that exist within the Aftermarket sector in India and its market size. The ACMA report is trying to indicate the loss for the auto component makers due to counterfeit parts and its effort to educate customers on its impact.

The Indian Automotive industry has come a long way to become a $146billion market in revenues by 2016. Now India is 2^nd largest two wheeler market, 4^th largest CV market in the world and 3^rd largest PV market in Asia. However the automotive aftermarket industry has a long way to catch up. I remember the days over 15 years back when people were worried to leave their vehicles at service centers because the feeling was that, once the vehicle enters the workshop it never runs properly. People were skeptic on their original parts being replaced by spurious parts while given for servicing that is sold for a price and fuel being stolen. It was as important to have a good personal relationship with a technician at authorized centre or a neighborhood independent garage as to have a family physician!

Market scenario

According ACMA the Indian Aftermarket is now at around $7.5billion of which aftermarket services accounts for $2billion and the rest in spare parts. However according to the estimate by ACMA, a whopping 1/3 of the component market is plagued with counterfeit parts. So through the excise and other taxes it is estimated that government is loosing about $50million in revenue.

But realistically the counterfeit part problem should correct substantially due to the fact the new vehicle population has increased significantly in last 5 years and the vintage vehicles would be replaced by new vehicles. Earlier due to poor road conditions and high maintenance frequency, the owners most likely opted for cheap alternatives. However now better infrastructure and better quality vehicles on roads; there would be a lot more importance given to genuine parts. The counterfeit issue also is mainly geographical and seems more at semi-urban, rural places where the awareness is less and objective is to spend very less or nothing to maintain the vehicle. ACMA has announced very stringent measures to overcome the issue by developing programs to educate customers, and even planning to conduct raids on outlets promoting the grey market.

Over the years the aftermarket scenario has not changed much in terms dealing with dealers, transparency, expensive spares, lack of customer service mindset except that the market has grown tremendously. The market is still highly fragmented and long way to move towards getting organized. The service sector is mainly divided between OEM dealers, Authorized service centers, multi-brand service centers, independent garages and road side mechanics.

The aftermarket is the most significant phase to determine customer loyalty towards a brand. There are incidents where it is proved detrimental to OEMs due to poor aftermarket support. The global giant Fiat, in spite of fielding better cars like Uno and Palio faced the ire of customers for poor spare parts supply and service network clubbed with internal issues like labor during 1997-2004. Its operations in

India

were almost halted. Issues like high cost and waiting time to acquire the spare parts affected the sales of Ford’s Fiesta, which is a very competent model but lost out to its peers due to poor aftermarket reputation. Ford in India went through tough times in sales in spite of being in India over a decade now, until its launch of Figo. No one can deny the fact that for Maruti Suzuki to have a leadership positions since its existence is its vast service network across India and economical generic spare parts.

In spite of high growth across all segment and brands in industry, Fiat’s recent sales have stagnated or even on downwardly trend. After loosing its dealership network, Fiat was looking for a fresh entry in India market and joined hands with TATA motors. A JV was formed wherein Fiat will provide the engines to TATA cars and TATA will sell/service Fiat cars. In spite of good cars and having good business through it’s engines, the JV is a loss making entity. Fiat has not gained its foot hold, this despite of TATA being 3^rd largest car seller. The dealers form an integral part of OEM’s success and being a FIAT car owner, the primary factor I attribute for Fiat’s issues is its bad marriage with TATA for sales/service. TATA has pathetic reputation of having a CAB culture in its dealer service. TATA’s Indica is the highest selling car that is popularly used in CAB services and its customer service can not handle customer of different segment. My 1.5 years of interface with TATA for a lovely Fiat car has been nothing but frustration, agony and feeling of getting robbed every time I visited their dealer. Fiat has announced recently that it would test its own showrooms as a branding effort but sell the cars through TATA dealers. But this is unlikely to change the scenario since the issue is not for the brand image of Fiat but the sales and support.

I ran a small survey covering 50 individuals (Car owners) through common poll and individual feedbacks to know their preference after the warranty period is over. The results are pretty much mixed with 60% of respondents sticking to their dealer center and 40% of them deciding to leave them for an independent service provider.

It was not a comprehensive survey as I would have loved to run to analyze it more comprehensively to reason their choice. However the individual comments and feedbacks indicate the reasons.

Few factors that decide for individuals who want to continue at dealer are;

Increase in technology and electronics involved in modern vehicles make it not possible to move to independent service providers
Most of the people who decided to stick with dealers own foreign brands like Toyota, Honda. This clearly indicates that it is perceived that local service providers are not competent enough and do not have enough infrastructure
It is very important to gauge the experience during warranty period to decide to continue at the dealer centers

Majority of respondents who want to go to independent service providers are the owners of vehicles from Indian OEMs.

The challenges and trends

India

now has presence of almost all automotive OEMs across all segments and the space is getting narrower between the segments. So the OEM equation is changing rapidly now to gain customer loyalty. OEMs are lining up all sorts of attractive offers like extended warranties, extended free service periods, decreasing the service frequency with new generation oils etc towards minimum cost of ownership. This has not gone down too well with dealer community. With increase in land/wages cost, dealers don’t like to this fact since the warranty replacements don’t fetch them enough margins to sustain according to a works manager at a dealer. The manager forced me literally to pay for a warranty part on my car until I put my foot down firmly and refused pay saying to take it OEM. Finally he opened up with issues dealers are having by replacing the warranty parts. They are under lots of pressure from OEMs with loads of vehicles, increased work hours, with minimum salaries, and can not earn through sales of spares. Incidentally TATA cars recently lost two large dealers with over 10 years of relationship to a German OEM indicates the Indian OEM’s need for re-strategy.

The aftermarket is facing the same challenge as the whole Indian economy is reeling through; too much growth in too little time leading to insufficient skill sets, no proper processes, customer comes last in the rat race, no priority for customer support/satisfaction since the market is so big and there is no time to improve.

The land prices have increased significantly in India in recent past and complexity of new generation vehicles that need high capital investment in necessary equipments, technology and right set of bays for better payback period. It also can be seen that workforce including customer service are uneducated, unskilled and dealers don’t want to invest in skilled people or training them with a fear of loosing the staff. The skilled people are poached by dealers with foreign brands.

Multi-brand servicing a new trend:

There is clearly a large opportunities exists between branded dealers/ authorized service centers and local garages. This has lead to aftermarket getting more organized with independent service hubs taking retail chain models that serve multi-branded vehicles and offer branded spare parts priced between OEM parts and grey market.

Many big names have entered in to this segment and hopefully these can bridge the gap between the arrogance of dealer centers and hesitance to visit local garages due to spurious spare parts.

Here are some prominent ones present in India now;

Mahindra FirstChoice – This started as a used car division of Mahindra with certified used car sales and independent car evaluation services. Started in its first multi-brand servicing centre in 2008 under the brand Carxspace and has presently 9 workshops.

The centre claims full attention to its customers with minimum services handled in a day and claims offer a warranty for next 4000km for any repairs. Night only services sounds interesting concept and it also offers an alternate car to drive when the car is at service.

Mahindra itself is not very popular among mahindra vehicles owners, and is tough to this group to win the trust of independent customers. Advantage is that this is backed by strong Mahindra group and if does reasonably good then has good potential to capture the market.

Carnation –Started by Mr Jagadish Kattar, the person who led Maruti Udyog Limited from 1999 to 2007 started Carnation with a vision to setup a transparent service setup. Probably it needed an industry insider who understands the issues the OEMs face to gain the loyalty with fair aftermarket services.

Carnation seems to be doing all right moves to gain the customer confidence to at least try them. Good marketing (I rate them one of the best online presence), new services like Workshop on Wheel, a mobile service facility that could be a quite handy for corporate or housing societies. They have tied up with the European aftermarket giant Magneti Marreli for premium cars and also has tied up with the popular India Industrial design house DC design (of Mr Dilip Chabria) for customized car solutions.

Presently Carnation has 22 centers and operates in both ownership and franchise models. A good control would be needed to hold the vision with franchise model. However there may not be much alternative to capture the market going by its own exclusive hubs that could prove too expensive to expand.

Bosch – Bosch Car Services (BCS), the globally successful model of has been one of the most successful and early movers in this segment. It has around 450 stations operated through franchise model. Bosch in India is an OEM parts and equipment maker has a good integrated model for a better margins.

Castrol – A lubricant major has a line of service centers called PitStop. Its more like a quick check of pre-defined points, or a quick oil changing setup like many popular US chains. However it has given its name to many roadside mechanic shops that use their lubricants. I tried to visit some from the address given by them and could not even distinguish them like an organized center.

With India heading to become 5^th largest automotive nation, the highly fragmented market leaves a lot of space for the new entrants and consolidation. There is large scope to adopt technologies to seamlessly integrate customers within the aftermarket systems for more transparent experience, quick turn around, and preventive maintenance.

Mahindra launches two new HCVs

noreply@blogger.com (santosh harakamani) — Sat, 19 Feb 2011 15:27:00 +0000

The Indian truck market is getting spiced up with Mahindra Navistar launching 2 new models to Indian road. Mahindra the leading utility maker in

India

has its alliance with Navistar in US for the CV range of vehicles.

The new two models MN25 tipper and MN40 tractor trailer would soon be available through it’s around 220 dealers across

India

that its want to expand by another 100 in the next one year. Through these launches Mahindra claims now that it is a full range HCV player in India now.

Mahindra also announced strong Aftermarket plans by having mobile service stations for anywhere, anytime assistance, and a 24x7 multilingual call centre to attend the requests.

Picture courtesy – Mahindra

Daimler launches India specific truck and calls it BharatBenz

noreply@blogger.com (santosh harakamani) — Fri, 18 Feb 2011 05:57:00 +0000

Daimler AG, the biggest commercial vehicle player in the world, is playing India card by announcing its new brand of trucks for Indian market. Daimler has named it “BharatBenz”, “Bharat” is how the local Indians refer to the country

India

in native form. This move indicates the global players effort to catch the market share in India that is expected to grow dobule in size by 2020 and grew by 45% in 2010.

Daimler has its trucks in

India

since 2007 through its Passenger car division Mercedes-Benz built at Ranjangaon, outskirts of Automotive hub-Pune. Actros brand of Mercedes-Benz is present in India and is quite popular with the mining community. Daimler has its relationship with Indian Market since 1954 with stake in TATA motors, the number one CV maker of India. However Daimler ended it’s relationship in 2010 with its own ambitious plan to build trucks under Daimler trucks from its Chennai plant.

The BharatBenz range of trucks would roll from mid 2012, and would enter in 6 to 49 tons according to Daimler. It is also significant to note that BharatBenz would be its 5^th brand across the world.

Indian truck market has now presence of all top makers in the world with local truck makers TATA and Ashok Leyland leading the market share. Volvo, MAN, Iveco, Mahindra who sells HCV with its alliance with Navistar and soon see the LCV through its newly acquired Ssangyong in Korea.

Photo – The test units at Daimler test arena in Chennai India

Courtesy - Daimler AG.

Move About - A unique model for sustainable urban transportation mode

noreply@blogger.com (santosh harakamani) — Sun, 02 Jan 2011 09:45:00 +0000

Sustainable transportation has gained larger agenda now in many countries and specifically at micro level by local bodies like municipalities. Objective is to reduce the carbon footprint, reduce dependency on fossil fuels and easy maneuvering in city centrals.

So here is a series of some interesting initiatives and success stories that have and are taking place.

Move About AS – A company based out of Oslo

Norway

is one of the early movers to adopt Electric car pool programs through a membership programs. It has deployed Electric car fleet that are parked at various points of the city. The company has two models where individuals can become members who get access cards to the card. The user can book the car online easily indicting pickup time and duration and visit the closest point. A nominal charge will be made on hourly basis.

In another model, companies can book the fleet and employees on certain routes can pool the car to drive.

What makes this model more tempting and potentially successful is that it offers a zero emission, zero maintenance and zero ownership costs. Also since most of the cities offer substantial benefits for eco-friendly cars like no parking fees (since this is a major cost in city centers of hefty charges) and no congestion tax or emission tax and more over offers good flexibility than a public transport when required. There is no toll charges too! And the insurance is included.

Move about deploys the Think City cars and presently has a fleet of over 60 cars in Oslo. The operation now is extended to Gothenburg Sweden and Copenhagen Denmark with 5 cars each. Recently IKEA the furniture and home improvement retail giant has donated 5 Fiat 500 EVs to the fleet in Gothenburg to pledge its contribution to Environmental causes. (IKEA has funded a

Sweden

based battery technology company that is converting Fiat 500 in to Fiat 500 EVs.)

Hope to see this initiative moves many cities and gain popularity.

Incentive for EV makers - Will really charge the India EV market?

noreply@blogger.com (santosh harakamani) — Thu, 09 Dec 2010 10:55:00 +0000

The New and Renewable Ministry, of Indian Govt announced an incentive scheme for EV manufacturers in India amounting to INR4000, 5000 and 100,000 for low speed 2 wheeler, high speed 2 wheeler and EV car respectively. This could amount to 20-25% of prevailing ex-factory prices. The incentive comes with a tag of filling 30% of supply chain through locally developed parts.

SMEV (Society for Manufacturers of Electrical Vehicle) a consortium of EV, technology and aggregators announced, through the incentive they receive the EV makers might plan to pass on this further to the buyer that could fuel the sales of EV market in

India

However the optimism of officials at SMEV that this move could even double sales of EV in next year seems far fetched considering the ground realities in India that could support this growth.

The incentive program in itself may not serve much purpose without a proper roadmap since India does not have any policy framework related to EV growth yet. The incentive program itself is a halfhearted attempt that came so late compared to its global peers and

here are some fallacies why the Electrical Vehicles may not gain momentum in India.

A major benefit of EV is to Reduce dependency on Petroleum products – However India is fast becoming dumping ground for all OEMs in the world for the ICE based vehicles with companies churning their capacities like there is no Tomorrow. According to some statistics, around 100,000 electric vehicles exist in India, majority of them are two wheelers compared to car maker Maruti suzuki selling over 100,000 car per month. Emission taxes are predominantly imposed in Western countries now to curb the driving of cars where as in India the Petrol and Diesel are subsidized. The recent outburst from Environment Minister Jairam Ramesh to ban SUVs that are heavy on fuel consumption or asking them to sell the Diesel at un-subsidized price is the first vocal protest heard on this issue.

Need for Power - The basic challenge for India to promote EVs at this point is not the infrastructure or demand but the availability of Power itself. According to Expert committee at planning commission, for its target of 8-10% GDP growth until 2030 to eradicate poverty, Indian power growth has to be at least 6% on annual basis. So the primary focus for India now is to meet its power requirement. Govt of India setup this expert committee to draft a comprehensive energy policy to meet the challenge through Planning commission that sets plans for India covering 5 years span (presently India is in 11^th five year plan). All the energy demand recorded in the policy are for the Industrial, house hold, agriculture, rural electrification etc., and not for transportation need like charging EVs.

Another basic benefit of EV is for the Green cause to control emission – This makes it even trickier for India since around 70% of Power is generated using thermal power plant where coal is the primary source of energy. Since India has large Coal reserves, coal would continue to be the primary source till 2031-32 according to the energy report. So it may not make much sense to promote EVs on greener cause where they are charged by electricity that is generated by burning coal. Govt is putting enough thrust on investing in technology to reduce the carbonization due to burning coal.

There are some incentives offered by the Govt. like for 2 wheelers there is no registration required from the road transport authority, there by avoiding road tax. But from common person’s perspective EV is not fully ready to lure the customers due to its own challenges of cost/reliability and infrastructure like anywhere else in the world.

The present EV market scenario in India where there are around 15 players in 2 wheeler segment, however most of the parts sourced from the Chinese imports and assembled and sold in India. There are some isolated battery operated 3 wheelers (Auto rickshaws) which use Liquid batteries that are under the radar from environmentalists. The erstwhile Reva is now a Mahindra group company. But Reva was never a successful EV company with around 600 cars sold last year, about 300 in India despite of its 10 years of existence. But its capital is the IP that Mahindra would be interested to use for its small LCVs (sub ton category) mainly for export market. GM India had partnered with Reva for technology collaboration for Chevy Spark, but since the Mahindra took the control of Reva, the relationship ended. The Auto Major TATA has good amount of thrust on EVs with some of its models like Indica EV is scheduled to hit UK/Scandinavian market by 2011.

So the EVs to gain grounds on Indian Road seems quite far, may be as far as 2030, however one trend could be seen in near term is that, with some localized promotion by private industries/institutes who are investing in RE sources could use the vehicles for their organizational use within their premises. Even local Municipalities could take initiatives to tie up with private players to own some fleet..

Mercedes finally decides to enter in city bus segment

noreply@blogger.com (santosh harakamani) — Thu, 10 Jun 2010 16:16:00 +0000

Mercedes Benz, the number one CV maker in the world has finally decided to enter in to City bus segment. Volvo bus is the market leader with its bus being used in the Rapid transit systems at Bangalore and Delhi successfully since it first started its bus running on Bangalore roads in 2006. Presently the low floor, City buses from Volvo run in 10 cities but 80% of the total vehicles being in Delhi and Bangalore.

Mercedes that has the 2 and 3 axle tourist buses in India for some reason decided so late to look in to this segment especially the Indian Metro cities are getting make over for their infrastructure and has strong blessing from Government with funds for urban development. The market is expected to grow at around 15-20% and events like the commonwealth Games would trigger the spike in demands.

Never the less this would trigger some competition to Volvo that has around 30% premium in pricing than its Indian competitors, TATA and Ashok Leyland due to its better quality, life and maintenance terms is expected to get to compete with Mercedes on the same lines.

Sales momentum continues in May’10

noreply@blogger.com (santosh harakamani) — Tue, 08 Jun 2010 17:30:00 +0000

The automotive sales momentum continued during the month of May in spite of increased prices.

Maruti hit records with per month sales of crossing 100,000 cars first in the history. Ford and GM continued their growth rate of over 150% with their Figo and Beat respectively.
Toyota has introduced a special edition of Innova for its 5th year since its most successful model in India.

The luxury segment also has seen a great momentum with Mercedes and Audi clocking over 100% growth.

Honda is the only company that again seen a negative growth.

TATA motor’s Sanand plant in Gujrat started rolling out the NANO which it hopes to cover the backlogs.

Hyundai motors caught in to an ugly row with labor dispute taking in to effect of closing the production for 2 successive days in June.

In June the Petrol and Diesel prices are rumored to be hiked by Rs3 could impact the sales. However the upbeat Indian services sector has over shadowed the inflation as people are upbeat in their spending.

	May-10	May-09
Hundai Motors
growth	7.00%
sales	46808	43624
domestic	27151	23503
export	19657	20121
Maruti suzuki
growth	29.70%
sales	102175	79872
domestic	90041	70785
export	12134	9087
GM
growth	61%
sales	8225	5109
TATA motors
growth	41%
sales	56799	40196
cars	39.00%
sales	21326	16563
exports	3978	1804
lcv	17615	13740
M&HCV	13860	5405
cvs	31475	23004
M&M
growth	69.00%
sales	28486	16866
three wheeler
	6641	2703
utility vehicles	19.00%
	18940	12620
logan	450	427
cv growth	17.00%
cv sales	1005	831
exports	1068	285
Ashok Leyland
growth	97%
sales	6502	1977
domestic	5973	1697
export	529	280
Honda
growth	-0.15%
sales	4067	4073

Mercedes
growth	112%
sales	410	193
Audi
sales	200	121
Toyota
growth	77%
cars, SUV	6050	3924
Ford
growth	300.00%
sales	8080	2168
Eicher
growth	44.00%
sales	2801	1233
domestic	2488	1128
exports	313	105

Mahindra in final league to bid for Ssangyong Motors

noreply@blogger.com (santosh harakamani) — Fri, 04 Jun 2010 18:04:00 +0000

Mahindra & Mahindra is selected for final level bidding for the troubled Korean automaker Saangyong Motors. Mahindra is one of the last 6 companies in the race that includes a fellow Indian company Dunlop; a tyre manufacturing company, Nissan with its JV partner Samsung Korea, Seoul Invest a south Korean PE company, Daewoo Bus and an undisclosed Korean investment arm.

Toyota’s plan to gear up to meet demand in India

noreply@blogger.com (santosh harakamani) — Fri, 04 Jun 2010 17:53:00 +0000

Toyota Kirloskar Motors in India indicated its plan to enter in to engine manufacturing and R&D facility in India soon. The much anticipated Etios that is modeled to suit to Indian conditions is expected to hit the roads in Early 2011. When it was displayed at Delhi Auto expo early this year it was announced to be launched by end of this year. It is Toyota attempt to capture the popular segment which is dominated by Maruti Swift and Hundai i10, i20 with price range of 4.5 lakh to 6 lakh. The Etios would have both hatchback and sedan versions in 1.2 and 1.5 ltr Petrol version.

Presently Toyota has Corolla Altis, Camry, Fortuner and its most popular MPV Innova models in India. A special edition of Innova was launched last week to commemorate the launch of Innova 5 years ago. Innova has over 30% market share in MPV segment and market leader.

GM India lays roadmap for LCV launch

noreply@blogger.com (santosh harakamani) — Thu, 27 May 2010 16:20:00 +0000

GM India, through its JV with SAIC in China has finalized the time frame to roll out the 1 tonne capacity LCVs on Indian road by end of 2011. Presently GM has presence on car market in India. Last couple of years has been tough on GM but end of 2009 and 2010 has been cheerful with the launch of its new Beat.

The JV has been news for quite some time now by inducting senior executives of SAIC on to GM Indian board. After it’s successful stint in China, GM seems to be trying to exploit its relationship with SAIC to expand its offerings beyond car market in India.

GM India now makes its own plan for Electric cars

noreply@blogger.com (santosh harakamani) — Thu, 27 May 2010 15:43:00 +0000

On the brink of Mahindra buying the stake in REVA electric vehicle company, GM India announced its own plan to work on Electric cars from US. Last year GM India had come to an agreement to work with REVA for technology alliance for its Spark version.

The new move came as a set back for GM India as Mahindra a leading auto maker in India.

Mahindra enters in to Electric space with a stake in REVA

noreply@blogger.com (santosh harakamani) — Thu, 27 May 2010 15:33:00 +0000

Indian leading utility vehicle maker Mahindra is in news again, this time by acquiring 55.2% stake. The new entity would be called Mahindra Reva Electric vehicle Company.

Mahindra, clearly the a great success story in Indian automotive scenario in recent times had been putting all the right foundations towards reaching the global markets. Mahindra is the leading utility and tractor market in India has a partnership with Navistar for M&HCV sector, has recently put maxximo, a sub ton category utility vehicle. Mahindra’s attempt to enter in to passenger car segment was not so successful with its divorce with Renault with a failed model Logan. The pickup version of Scorpio is all set to be launched in US market by the end of 2010.

Having stake in Reva, puts Mahindra in to the league of Indian auto markers

attempt to enter the attractive global electric vehicle market. TATA motors the Indian auto giant has made its preparation by acquiring the Norwegian electric car marker. It is planning to launch the EV Indica in UK and Scandinavia by the end of this year and the EV Nano in US by next year.

Mahindra’s proposition is to use the REVA technology, especially it’s drive-train technology. The Maxximo might soon be coming in EV version as REVA it self not a very successful in selling its cars in spite of its presence since 1994 as Electric ca company. REVA also has been in news since last year after it came with an agreement with GM India to help GM with EV technology for GM India’s plan for spark electric version. By then it was quite evident that REVA started looking for different options to position it self in the market, either as a technology company or ready to be acquired. The present stake sale has put the agreement with GM India in to side ways. However Mr Anand Mahindra has expressed that Mahndra is ready honor the agreement to offer the technology.

Sale of REVA also marks the end of an era for REVA that started its initiative in EV domain in 1994 and was one of the early movers in this area to bring in cars on road. Presently REVA mentions it has presence in 24 countries and around 3000 cars on Road.

It clearly mentions that REVA was never a successful car company (in growth) however the persistence to continue in the field over this period in it self is an achievement and its Name being taken amongst very few EV companies in the world can’t be denied.

Mahindra Pickup to be launched in USA by Dec 2010

noreply@blogger.com (santosh harakamani) — Wed, 19 May 2010 16:29:00 +0000

The much awaited launch of Pickup model in US finally seems to be happening. According to company announcement the Pickup truck that is built on its most popular Scorpio model would be launched by end of this year. When the Mahindra Pickup runs on US roads, that would make the model to be the first Indian vehicle on US roads.

The launch has marred with delays due to the compliance issues for US safety and emission standards. According to the company news, the vehicle would be made available as TR20 (2 door) and TR40 (4 door) version with Mahindra it self as the name of the vehicle. The vehicles would be exclusively distributed by Global Vehicle USA (http://www.gv-usa.com/)

Picture Courtesy- Mahindra

Volkswagen ramping up to beat the competition

noreply@blogger.com (santosh harakamani) — Tue, 04 May 2010 16:30:00 +0000

VW India is planning to enter in to A3 segment with its new model Vento by 3rd quarter of this year. This segment is dominated by Honda City and has very less competition. The new car is going to be built on the same platform as that of its small car Polo. The significant strategy is to bring a Diesel version in this segment that is lacking.

VW also is planning to ramp up the production of Polo to meet the over bookings. Presently Polo has about 3 months waiting time. VW has state of the art plant at Chakan close to Pune with an annual capacity of 110000 cars. The skoda “Fabia’ is also rolled of the same plant.

Bulk selling; the new trend - 115 Mercedes cars sold in one day

noreply@blogger.com (santosh harakamani) — Tue, 04 May 2010 14:46:00 +0000

The bulk booking seems to be a buzz now in India that started in residential properties where like minded people joined together and negotiated with builders. Now an Whooping 115 Mercedes cars were booked in one go by what is known as Aurngabad group through a dealer in Pune. However the negotiations are believed to be done with the OEM directly due to the size of the deal.

In the month of April Mercedes sold 321 units across Inda, not sure this includes the sale of this bulk order.

Aurangabad is historically an industrial city with companies like Videocon having base there. The group is said to have consisted of industrialist, lawyers, Doctors, developers.

Momentum continues - April 2010 Automative sales figures

noreply@blogger.com (santosh harakamani) — Tue, 04 May 2010 14:43:00 +0000

The April month carried a good momentum in sales form YoY basis however, the sales numbers are lower from Month on Month. Rising raw material cost and gas prices are being passed to the customer, however it appears to be the market has some more room to take this cost.

The highlight of the sales is for Ford and GM with their new aggressively priced models Figo, Beat. Both Companies are now ramping up production to meet the demand by adding second shifts. The higher sales in these models have also eaten away the share of Hundai Motors from i10, i20 space.

Honda has recorded a decline in sales consecutively since March 2010.

	Apr-10	Apr-09
Hundai Motors
growth	28.10%
sales	52020	44370
domestic	28501	22247
export	22123	23519
Maruti suzuki
growth	29.70%
sales	93058	71748
domestic	80034	64857
export	13024	6891
GM
growth	200%
sales	10601	4823
TATA motors
growth	52%
sales	57202	37518
cars	72.27%
sales	23102	13410
exports	3137	1261
lcv	17806	14245
M&HCV	13157	4869
cvs	30963	22847
M&M
growth	13.21%
sales	26043	23004
three wheeler
	5876	2972
utility vehicles	-2.43%
	17998	18447
logan	303	550
cv growth	32.72%
cv sales	860	648
exports	856	387
Honda
growth	-19.54%
sales	5928	7368
Toyota
growth	77%
cars, SUV	6001	3386
Ford
growth	270.00%
sales	7509	2034
Mercedes
growth	200%
sales	321	178

Mahindra & Mahindra eying Korean SUV maker?

noreply@blogger.com (santosh harakamani) — Mon, 26 Apr 2010 16:25:00 +0000

According to market buzz; M&M, the utility vehicle leader in India is looking to bid for Korean SUV maker Saangyong Motor. M&M is one of India’s great auto stories looking to expand its global footprint is sitting on very healthy cash and keen to acquire potential companies bringing synergies to its portfolio and strategic road map. The most popular brand of M&M SUV, Scorpio is slated to debut in USA as a pickup this year.

Saangyong is 4th largest auto maker of South Korea, however went through rough patches due to the global slowdown. Saangyong is potentially looking for a financial revival.

Nissan India start pilot for export of Micra

noreply@blogger.com (santosh harakamani) — Mon, 26 Apr 2010 16:02:00 +0000

Nissan Indian that started the state of the art facility in Chennai at a capacity of 400,000 cars at full capacity started its test for export market in Europe. The Micra on its all new V flatform is planned to be shipped to over 100 countries in Europe, Middle east, Africa and India.

According to news source PTI, The first batch of 6 cars were shipped from Ennore port with which Nissan had signed an MoU to support its export activities.

Indian Auto Market review for 2009-10

noreply@blogger.com (santosh harakamani) — Fri, 16 Apr 2010 17:43:00 +0000

Indian auto market closed with financial year 2009-10 on a healthy note across segments in both domestic as well as export markets. According the industry body SIAM, a healthy 20% growth was seen YoY basis.

The global auto market has seen the worst during the last 2 years with almost flat or negative growth. Indian market was no exception in 2008-09, however the growth started showing by Jan-2010. The CV segment was the worst hit as anticipated and the two wheeler segment did not have much of an impact.

The growth could be attributed to stimulus by Government with significant rebates, attractive interest rates. Also other factor is the introduction of an array of new models on Indian roads that kept the potential new buyers to still go with their buying plans coupled with significant dealer offers, lower interest rates. The bargains were hard to let go.

The two wheeler segment that controls the 76% of the market never saw an impact which indicates the confidence by the global car makers on Indian consumer market that is fairly young as majority of the two wheeler buyers are the youth.

It is interesting to observer the huge difference in the Passenger vehicle market that has about 15.86% to the two wheeler market which is a potential market to upgrade to the smaller car. This indicates the huge potential for the PV market to grow and no wonder India is now housing over 16 passenger vehicle OEMs.

Another interesting fact is that, in PV segment Maruti Suzuki controls over 67% with over 100,000 cars sold every month, of this 80% of the cars are its Estilo brand priced around Rs2,60,000. This endorses the fact why there are about 10 new small cars being waiting to enter Indian market by 2011. Even the premium car markets like Honda, Toyota could not resists the market potential.

Domestic Auto Market share by Segments for 2009-10
Segment	% share
Passenger vehicles	15.86
CV	4.32
Three Wheelers	3.58
Two wheelers	76.23

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Domestic Auto Market share by Segments for 2009-10
Segment	2008-09	2009-10
Passenger vehicles	1,552,703	1,949,776
CV	384,194	531,395
Three Wheelers	349,727	440,368
Two wheelers	7,437,619	9,371,231
Total	9,724,243	12,292,770

Domestic Auto Market share by Segments for 2009-10
Segment	2008-09	2009-10
Passenger vehicles	335,729	446,146
CV	42,625	45,007
Three Wheelers	148,066	173,282
Two wheelers	1,004,174	1,140,184
Total	1,530,594	1,804,619

Courtesy – SIAM

The 2010 AutoExpo at Delhi saw an over whelming response from global OEMs with their plans for Indian market with over 20 new models already on the roads.

Nano, dubbed as the cheapest car ever made from Indian CV leader TATA was launched this year with lots of expectations. However it hit speed breaker even before it started the booking; land row forcing the delay in launches and commencement of production, production issues causing delayed deliveries and poor response in booking. The recent fire incidents are adding to the list of the issues. The input costs have shot up over 4-8% and there is big possibility that the sub $2000 or Rs100,000 that was attached to Nano may not be a reality.

The year saw a lot of significant achievements for Indian OEMs. Maruti Suzuki rolled its millionth car that takes it to the global elite. Maruti Suzuki also overtook Suzuki Motors in terms of sales. The production most popular car on Indian market, Maruti 800 is stopped. Tata Motors became a great acquisition story with many strategic buyouts and alliances, TATA’s Land rover/Jaguar acquisition being the major one. TATA Nano is expected find place US and UK in electric versions by 2011 and The TATA Indica Electric version would be launched in UK and Scandinavia this year. Mahindra the utility vehicle leader will have its flagship Scorpio to be launched in USA as a pickup version.

However growth seen in 2009-10 was against a dull 2008-09 and 2010-11 might not see the same momentum. There is a significant increase in the raw material costs, the interest rates have increased due to the inflation, the union budget took out the excise holiday and EuroIV norm was introduced in 13 cities causing the increase in cost of technology. These costs are already transferred to the customers by increasing the costs of the vehicles. However even a double digit or close to double digit growth also is significant for the global majors that are struggling in western markets.