Sep
22
2009
News & Events

M&M Monsoon Blues

Business Standard

The Mahindra and Mahindra stock has had a strong run, gaining 164 per cent between March and now, compared with a rise of 87 per cent for the Sensex. However, over the past months, the price has remained more or less flat. That’s mainly because of concerns that a less-than-normal monsoon in four or five states could hurt sales of farm equipment, a profitable business for the company.
 
Tractors now account for around half the company’s sales and even if a sizeable share of tractors is now used for non-agricultural purposes, a weak monsoon could result in a fall in demand. Tractor volumes in August were somewhat dull, rising 2 per cent year-on-year, though it’s true they came off a high base and, as industry watchers point out, there was also a seasonal effect.
 
In the current year, tractor volumes should rise 6-8 per cent. In the June quarter, the profitability of the division was strong with an EBIT (earnings before interest and tax) margin of nearly 17 per cent.
 
Of course, the farm segment included numbers for Punjab Tractors, which was merged with M&M in August last year and, therefore, the results were not strictly comparable with those for the June 2008 quarter. Even on a stand-alone basis, M&M’s tractor volumes weren’t as robust as they were in July. Exports were also disappointing.
 
However, M&M’s utility vehicles did well in August, posting a remarkable growth of 42 per cent year-on-year, driven by all models, which resulted in automotive volumes increasing by 15 per cent.
 
At the current price of Rs 836, the stock trades at 13.7 times estimated 2009-10 consolidated earnings.
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Sep
22
2009
News & Events

Magna could Steer Opel to low-cost Route in India

With Magna International of Canada now in the driver’s seat at Opel, there is not likely to be any dramatic impact on the Indian landscape in terms of a slew of models hitting the roads.
 
What is more likely to happen, though, is that the country could emerge a low-cost sourcing hub for critical components to Opel in Europe.
 
Transfer to India

And if Nissan’s much publicized move to transfer production of the Micra from the UK to India is anything to go by, there is no reason why an encore cannot be done with some models of Opel, especially from the Belgium plant which is reportedly in some trouble.
For most carmakers, especially in Europe and North America, the way forward is to keep costs in check which, in turn, necessitates inexpensive production bases.
 
Production hub

Observers say Magna Steyr, the subsidiary of Magna International and a contract manufacturer for Daimler and BMW among others, would be perfectly placed to steer Opel through its Indian arm which has been here since the 1990s.
 
This, they add, could even take the form of a global low-cost car which could use India as one of its production hubs, on the lines of what other European automakers such as Fiat, Volkwagen and Skoda have planned using the supplier base here which offers the ideal mix of reliable quality at affordable costs.
 
However, in the case of Opel, it will take a while before a full-fledged India blueprint is in place. After all, Magna would need some time to settle down in its new role and grapple with the immediate problems of cutting costs and pruning manpower. Sourcing components from low-cost countries is inevitable but even here, East Europe could take precedence over India.
 
'No stranger'

The Opel brand is no stranger to this country. When its erstwhile owner, General Motors first set up shop here in the mid-1990s, the Opel Astra was its offering to the Indian customer. The car carved a niche for itself in the upper mid-size segment and there was a premium tag attached to it. However, GM could not quite build on this advantage and successive Opel-branded models hardly made an impact.
The American carmaker shifted to the Chevrolet badge by end-2000 and the Opel chapter was soon forgotten as models from Korea made their way into India. With Magna in charge and GM relegated to the second place, it will be interesting to see how quickly it can seize the India advantage for Opel.
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Sep
22
2009
News & Events

Maruti ropes in Madhavan as brand face of Wagonr

Business Standard

The country's largest car maker, Maruti Suzuki India said it has roped in Bollywood actor R Madhavan as the brand face for its popular hatchback WagonR as it aims to increase sale of the car in South India.
 
The company said it carried out a consumer study before signing the actor and his signing would help increase the brand equity of WagonR nationally and more specifically in the southern parts of India.
 
“We feel that associating with a personality such as Madhavan will certainly reinforce the brand values of WagonR at an all-India level. Additionally, the tie-up is going to give a boost to WagonRs key performance indicators in key southern cities such as Bengalaru, Hyderabad, Chennai, Cochin,” Maruti Suzuki Chief General Manager, Mr Shashank Srivastava said.
 
WagonR is among the most popular models from MSI with average monthly sales of 12,000 units and a cumulative customer base of 7.45 lakhs.  “Going forward, we feel, the brand shall have an exceptional foothold in the Southern market as well. Given the popularity of Madhavan in the South, the masses will relate to the brand more strongly with a local icon becoming the face of the brand,” he added.
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Sep
22
2009
News & Events

India,China & Brazil are future auto HUBS

The Financial Express

India, China, Mexico, Brazil and eastern European countries will soon emerge as 'new Detroit's' in the global automotive industry on the back of low costs of labour and rising customer base, a report by Deloitte's Global Manufacturing Industry Group said.
 
According to the report, 'A new era: Accelerating towards 2020-an automotive industry transformed', high-cost exporting countries will witness domestic capacity dipping and vehicle production migrating to low-cost centers across India and China and other locations in the regional trade zones of North American Free Trade Agreement and the European Union.
 
"While cost of labour in the emerging markets continues to be a fraction of that in the developed world, there is a growing demand from these countries. To take advantage of the increasing population in emerging markets, original equipment manufacturers (OEMs) will continue to shift more of their production to be closer to their biggest source of new customers," Kumar Kandaswami, senior director, Deloitte, said.
 
It is estimated that Greater China and South America will represent more than 50% of growth in global light vehicle production, which is pegged at over 70 million units worldwide by 2015.
 
Consequently, by 2020, fewer cars will be imported from outside a trade zone (e.g. from Korea to the US or from Japan to the European Union). Even the cars with foreign labels will be manufactured regionally, the report said.
 
India has the lowest cost of labour in the world at $1 per hour followed by China ($2 per hour), Mexico ($3 per hour), eastern Europe ($4 per hour) and Brazil ($5 per hour).
 
According to Deloitte, the consumer trend in India would be guided by factors such as price, fuel economy and life cycle of vehicles. “The Indian economy is shifting towards low-cost cars and we could see some big jumps in the so-called Nano segment. While, India will remain a huge entry-level car market, there will also be more demand for luxury segment cars from the middle class,”
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Sep
22
2009
New Launches & Upcoming Cars in India

Car firms put SUV launches in Top Gear

Business Standard Customers now have many reasons to look beyond luxury sedans. Land Rover will launch Freelander 2, its compact sports utility vehicle (SUV), in India. Expected to be priced at Rs 35 lakh (net of taxes), it will be the cheapest Land Rover in the country.


But Tata Motors (owner of the British marquee brand) may be termed a late entrant in the Great Indian SUV carnival. Last week, the country saw the launch of two SUVs the new version of Ford Endeavour and the Nissan X-Trail Earlier this month, German car maker Audi began selling an upgraded version of the popular Q7SUV, priced between Rs 53 lakh and Rs 1 crore.


The carnival was kicked off by Toyota with its Rs 18.45 lakh Fortuner diesel SUV. The rush for it was so much that the company was forced to ask dealers to stop taking new bookings. Since then, the auto giant has increased production by 50 per cent and is hoping to sell 4,500 SUVs by the end of next year, giving it a 50 per cent share of the mid-market SUV segment.


Nissan is already planning to launch its expensive Murano, a mid-size crossover SUV that offers the riding comfort of a car while carrying the macho looks of an SUV. The home-grown players also arent far behind. While Tata Motors is readying for a completely new vehicle based on a new platform, Mahindra and Mahindra (M&M) has committed to a premium SUV by 2010-11.


Pawan Goenka, president (automotive) at M&M, says: We currently have a market share of about 65 per cent in the entry SUV segment and we need to continue to innovate if we have to maintain our lead.


The new SUV will debut in the last quarter of 2011 and will be made at Chakan (near Pune). It will be positioned a notch higher than the flagship Scorpio and is being built on a completely new platform at a cost of Rs 700-800 crore, excluding the cost of the plant, Goenka says.


But is the market big enough to justify such a frenzy? Currently, the combined market for the mid-segment (Rs 15-30 lakh) and premium (Rs 30 lakh and above) SUVs is just about 12,000-13,000 units. Not a huge number, but experts say demand for this class of vehicles has covered quite a distance after Tata Motors launched the country’s first indigenous SUV, the Sierra, way back in 1991.


Analysts say the SUV market holds the potential of growing fast in the long term, with the road network getting better and more and more people driving across cities. The launch of new models and the buzz it creates will put SUVs on the super-fast track, they say.

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An article by Mahindra FirstChoice No Comments
Sep
22
2009
News & Events

The ABC of Q7s Makeover

The Hindu

Audi has recently released the slightly face-lifted Audi Q7 3.0 TDI. Mechanically, the refreshed Q7 is very similar to the outgoing model, which means the 3.0-litre V6 turbo-diesel still puts out 240bhp and 56kgm of torque and sends power to all four wheels via a six-speed automatic transmission.
 
What’s new in this car is the new brake energy recovery system. Its functioning is based on one principle, when you brake or when you are coasting, the kinetic energy you are carting is converted into electrical energy and temporarily stored in the on-board electrical system battery. When you accelerate hard, the stored charge in the battery supports the cars electrical system, reducing the load on the alternator and marginally improving fuel economy. At least, that’s the theory. All Q7s now get this feature. The system works so non-intrusively that if you weren’t told about it, you wouldn’t realize its there.
 
On the exterior, the Audi has received new headlights and even sports Audis LED daytime running lights. The turn indicators are now LEDs, there’s the subtle redesign for the grille, notably the thick chrome vertical highlights, the front and rear bumpers and their under-protectors are marginally altered, the door moldings are new as are the tail-lights, which are now LEDs.
 
On the inside, the small upgrades to the well-constructed interior allow it to keep pace with the ever-rising standards in this area. Improvements can be seen in the overall appearance and finish of the instruments and switchgear. What’s more is the new interior mood-lighting and the latest version of the MMI infotainment system which comes with a 10GB internal hard-drive.
 
We are happy that the designers at Audi haven’t tweaked around with the qualities we loved about the Q7. The functional interiors, the armchair-like seats and the smooth, refined diesel engine are exactly how we remember them. This car came with the standard 18-inch wheels and we can confirm that these are the ones to go for. The Q7 with the 20-inchers we drove a few months ago had a noticeably imbalanced ride. The handling is good for a car this big and theres adequate grunt from the engine.
 
However some of the features that could narrow your eyes are the engine and transmission that exhibit a bit of lag and need a moment before they spool up. This means that when you are trying to have a bit of fun behind the wheel you could possibly find yourself mid-corner in a higher gear which can be a downer. By the time the transmission downshifts, the corners long gone. Also, as cool as Q7s panoramic sunroof may be, we dont think it actually makes sense given our hot climate.
 
Still, these minor flaws do nothing to diminish the overall appeal of the mighty Q7. Its a well-built, comfortable and a practical full-size SUV and this face-lift only serves to highlight these features.
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