Domestic car sales rise nearly 26 per cent

After a period of gloom, the auto industry bounced back in August, registering a 25.59 per cent growth in domestic passenger car sales, as compared to the year-ago period, industry data released Tuesday showed.

According to the Society of Indian Automobile Manufacturers (SIAM) data, 120,669 units were sold last month, compared to 96,082 units in August 2008.

SIAM said two-wheeler sales similarly surged 25.11 per cent to 776,777 units from 620,883 units.

Sales of commercial vehicles increased for the second consecutive month, growing 18.48 per cent to 40,624 units in August from 34,289 units in the year-ago period.

The cumulative production data for April-August shows that the passenger vehicles segment grew at 11.97 per cent while sales of medium and heavy commercial vehicles declined 23.54 per cent.

Light commercial vehicles grew at 21.75 per cent, SIAM said.

Three-wheelers sales recorded a growth rate of 12.09 per cent and that of passenger carriers by 20.93 per cent.

The overall automobile sector exports grew 3.18 per cent in April-August, though exports of passenger vehicles dipped.

"August registered robust sales due to the pre-festive season buying," said consultancy Angel Broking.

"Easier availability of credit, lower interest rates and higher consumer confidence in the last few months also boosted sales," it added.

Mercedes-Benz launches Actros in India

NEW DELHI: German auto maker Mercedes-Benz today launched a new version of its truck Actros in the country priced at Rs 65 lakh (ex-showroom,Pune).

"The new Mercedes-Benz Actros will be a valuable partner for the vibrant Indian mining and infrastructure operators and we have high expectations from this product in India," Mercedes-Benz India Managing Director and CEO Wilfried Aulbur said in a statement.

The company has sold over six lakh Actros trucks in more than 100 countries since the truck's inception in 1996, the company added.

Daimler’s Hero truck JV buyout plan goes to CCEA

NEW DELHI: The government on Tuesday referred to CCEA a proposal of German commercial vehicle maker Daimler to buy out its erstwhile partner Hero Group’s entire 40% stake in a joint venture to produce trucks in India.

 

According to an official release, Daimler’s proposal to increase its stake to 100% has been recommended to Cabinet Committee on Economic Affairs (CCEA) for consideration as the initial approval was granted by the CCEA.

It's not the length that matters: Toyota, Honda

NEW DELHI: Japanese carmakers Toyota and Honda Motors have asked the Indian government to change the criteria of classifying a car as ‘small’ that attracts lower taxes in the country.

The two automakers have said that fuel efficiency, emission norms and passenger safety should be used to classify a car as small to avail lower excise benefits rather than the length of the vehicle.

The opinion of these global carmakers have now divided the Indian automobile industry, which under the banner of Society of Indian Automobile Manufacturers (Siam), has been demanding that length should define a small car rather than the engine size. Siam has maintained that fuel and engine capacity should not be included in the definition of a small car.

Toyota, which has announced fresh investment of Rs 3,800 crore last year to make India its small car global manufacturing hub, has asked for change in the existing policy.

In a presentation to the prime minister’s principal secretary, TKA Nair, TMC’s senior managing director and member of the board Akira Okabe said, “Our basic philosophy is start small and grow big. We are looking at the small car to grow volumes in India and the criteria of 4-metres of vehicle length should be removed from the small-car definition.”

Under the government policy, a small car with 4-metre length along with 1,200 cc petrol or 1,500 cc diesel engine attracts a lower 8% excise duty as against 20% duty and Rs 15,000 additional levy in case of all other cars made in India.

Toyota is looking at a new second plant near Bangalore to make small car, which would rollout in the domestic market in early 2011. It also plans to make India its export hub for the proposed global small car project and export cars by 2012. In the first phase of production the company would roll out 70,000 units annually.

On the same lines, Honda Motor which operates in India through a joint-venture, Honda Siel Cars India (HSCI) has sought to make fuel efficiency and automotive safety as the sole criteria for small cars in India. “Ideally there should not be any regulation on the length of the car in India as any good car will be based on performance and global safety standards. We are launching a new small car in 2011-12 which will confirm to Indian government’s current small car definition, but following global automotive standards would help India emerge as a real hub to make cars for the global markets.”

Hero Honda rescues Honda from skidding in recession

Japanese auto major Honda, the only global automobile company to survive the downturn with a small growth, says it owes its sales growth to the top-gear performance of Indian joint venture Hero Honda. Honda Siel Cars India president and CEO Masahiro Takedagawa told ET NOW that Hero Honda’s performance has helped Honda buck the global skid riding on the demand for small, commuter motorcycles.

“It’s true...since September last year, the entire global industry has been impacted a lot and Honda is no exception,” Mr Takedagawa said.

“We were damaged in the US, Europe and Japan. The Chinese, Asian and Latin American markets were so-so. It’s the commuters motorcycle business in Asia, particularly India, that has supported our business both in terms of profitability and growth. That’s the main reason why Honda is showing a small but still positive growth,” he added.

Honda Motor Corp in the first quarter ended June 09 of the current financial year clocked a $77.64 million net income, among the only two auto companies worldwide to do so. Fellow Japanese auto major Suzuki also drove home a positive profit growth in the same quarter at nearly $22 million. Like Honda, Suzuki
Motor Corp’s growth and profitability tally is thanks to its top-gear run in India with Maruti Suzuki.

Unsurprisingly, Honda sees no reason to disturb the applecart in the motorcycle market in India, now or after 2014 when the technical agreement with Hero group come up for renewal. “Since last year, Hero Honda has been showing lifetime records every month,” Mr Takedagawa said.

“Our business is showing good growth, profitability and giving good dividends. As a result the share price of Hero Honda is at record high. So logically there is no reason for us to split,” Mr Takedagawa said categorically.

Like Honda, Suzuki too has already gone on record to admit the importance of its Indian arm in the global pecking order. In an earlier chat with ET NOW, Maruti MD Shinzo Nakanishi said: “Maruti is definitely becoming more and more important in the Suzuki stable given that it’s net sales had risen 14% during the last fiscal, a period that saw Suzuki’s net sales fall 14% to ¥3.05 trillion.”

Hero Honda’s performance all through the downturn not only bucked the industry trend but also set records. It hit a million units for the first time in the first quarter of this fiscal. It managed to keep its operating margins up, using its tax-free manufacturing facility in Haridwar (Uttarkhand) and the relief in raw material prices to improve its profitability substantially. Its sales growth, which beat the industry average at FY09’s 12% clip, doubled to 25% in the first quarter of this fiscal.

Maruti's DZire crosses one lakh sales mark

NEW DELHI: The country's largest car maker, Maruti Suzuki India, today said its entry level sedan 'DZire' has crossed the one lakh units mark in sales within 18 months of launch.

"MSI today achieved a cumulative sale of one lakh units of the DZire," a company spokesperson said.

The company had launched the DZire in March 2008 in both petrol and diesel variants priced between Rs 4.49 lakh and Rs 6.70 lakh.

This follows the company's recent milestones, including achieving 80 lakh units of cumulative production for all its brands, followed by roll-out of one lakh units of its KB-series engines and launch of the 1,00,000th units of its flagship export model 'A-Star'.

The company has scaled up production of DZire from 4,000 units initially to 7,000 units a month now, the spokesperson added.

"Yet the car is having a waiting period of up to four months," he added.

The entry-level sedan competes in the A-3 segment with cars like Tata's Indigo, Ford's Fusion, Hyundai's Accent and General Motors' Aveo.

MSI has a market share of 38.6 per cent in the A-3 segment during the April-August period of this fiscal, up from 27.2 per cent during the same period last year.

Ford to up India output by over 30 pc ahead of festive season

NEW DELHI: American car major Ford said it will increase vehicle production in India by over 30 per cent from this month to meet increased demand in the upcoming festival season.

"We have been producing about 130 vehicles a day but this will be increased to 174 vehicles a day this month," Ford India President and MD Michael Boneham told reporters here.

He said demand has increased for its entry level sedan Ikon, which was given a facelift last November, mid-sized sedan Fiesta and also for SUV Endeavour.

The company today launched an advanced version of sports utility vehicle Endeavour, priced between Rs 15.99 lakh and 17.99 lakh (ex-showroom, New Delhi).

Boneham, however, said the company expects its overall vehicles sales in 2009 to remain more or less similar that in the last year at around 31,000 units.

"While things are improving, we also need to be a bit cautious ... while the Indian government has done a good job to boost the auto sector, issue like extra Rs 15,000 duty on big cars need to be addressed," he said.

Ford India last year announced a USD 500 million investment plan spanning over three years to expand its manufacturing facility, setting up of a new diesel engine plant and also on new product development, including a small car for the Indian car market.

Ford to invest $500 m to ramp up Chennai unit

NEW DELHI: Ford India Motor, the fully-owned subsidiary of the US auto major Ford Motors, will be one of the major production hubs for the parent company’s operations in the Asia-African region, said Ford India MD and president Michael Boneham.

Ford India is investing $500 million to ramp up its Chennai plant’s production capacity to 2-lakh vehicles by 2010. These vehicles, including a new small car that will debut in the domestic market next year, will also be exported to Africa and the Asia-Pacific markets.

The US-based Ford Motors, which has not taken any financial bailout package from the US government like its peers GM and Chrysler, is developing China, Thailand and South Africa, as the other major manufacturing hubs. The Indian arm already exports partially made kits of the Ford Ikon that are assembled in South Africa as fully-made cars and the Fiesta mid-size sedan to South East Asia. It is also setting up a new engine plant with an initial capacity of 60,000 units that will also be exported to different overseas markets.

Volkswagen may assemble Audi Q5 in India

Audi, the luxury car maker from the Volkswagen group, is considering the local assembly of the Q 5, an SUV. Although company officials declined to specify the model, auto industry experts said it would be the Q5, making this the third car that the luxury car maker will assemble in the country.

Audi has a plant at Shendra, near Aurangabad, in Maharashtra, which it shares with group company SkodaAuto.

“We already assemble the A4 and the A6 and we are thinking of assembling an SUV. There will be no change in the price since every product is launched already priced at the CKD (local assembly) price. We do not differentiate between CBU and CKD prices,” said Martin Birkner, head of marketing, Audi India.

Having sold 1,128 cars in the first eight months of this year, which is a 62% rise over the comparable period last year, Mr Birkner said they intend to bring in new models next year, having introduced three this year. This will add to the seven products from its stable of in the country.

“Next year, at the Delhi Auto Show, we will bring our concept car, what we call the show car,” Mr Birkner said. Industry expectations are that this will be the open top version of the Audi R8 super car, which is to be displayed at the Frankfurt Motor Show that starts on September 15. Also to be shown at the Frankfurt show is the electric car from Audi and that too is likely to find a place at the Delhi show.

He added, “We sold 350 units of the Audi Q 7 SUV last year and are targeting 450 units this year, having already sold 300 units so far. In India, the market still wants SUVs.”

Audi launched an upgraded version of the popular Q7 SUV earlier this month, priced between Rs. 53.4 lakh and Rs 1 crore, on road. In Pune, the dealer sells around 14 Audis every month (the Q7 alone comprising 40% of these, taking on the north Indian market where such vehicles have traditionally done well.