Toyota kicks off ‘Go Rural' drive

Source: The Hindu Business Line Toyota will have rural India on its radar as it expands the market for its Etios hatchback and sedan this year. 

The company launched an initiative called ‘Go Rural' in the last quarter of 2011 where a pilot study was carried out in the eastern region.

Cars were put on display in the Durgapur area in West Bengal and the response was encouraging enough for Toyota to understand that smaller centres in India were critical to its growth.

“This was the beginning of our ‘Go Rural' drive. We had our dealers try out something similar in other parts of the country where cars were showcased on select days in a month. We were amazed to see that brand Toyota had so much goodwill despite our relatively negligible presence,” Mr Sandeep Singh, Deputy Managing Director of Toyota Kirloskar Motor, told Business Line.

By February, the ‘Go Rural' momentum had intensified with a growing list of interested customers.

There were 160 bookings last month and Toyota has targeted at least 500 more each month between now and end-July. It also hopes to have in place 25 dealerships in these smaller centres by the end of this year, going up to twice as much in 2013.

“This is top priority for us especially when we have been perceived as a city-centric player. It was justified then considering that we largely had the Corolla and Innova to offer. However, the Etios is a mass range product and we just cannot afford to miss rural India,” Mr Singh said.

Interestingly, a section of buyers in this part of the country have also expressed interest in more expensive options like the Fortuner and Innova. However, Toyota is focusing largely on the Etios especially when it plans to roll out 80,000 cars this year.

This number will grow to over 1.5 lakh units in 2013 which means the dealership network will have to extend to every nook and corner of India. The rural drive is not unique to Toyota with Maruti and Hyundai having kicked this off a lot earlier.

Other carmakers are also following suit rapidly especially when customers here are quite open to trying out new brands unlike the big cities where the loyalty factor is more pronounced.

“People in smaller towns have enough and more money at their disposal to buy a car. They also know precisely what they want in a vehicle,” Mr Singh said. Companies such as Toyota are beginning to realise that it makes greater sense to tap these regions when growth prospects for the automobile industry are still uncertain this fiscal.

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Old, unfit, out of condition and ailing cars to get off Indian roads and head for the junkyard

Source: www.rushlane.com  

A new regulation issued by the Government of India will soon see all out of condition cars being dumped. This new ruling has made it mandatory for private cars and motorcycle owners to subject their vehicles to an annual fitness regiment whereby they will be issued a certificate stating the road worthiness of their vehicles. Unfit vehicles which entail a fine or could even get sent to the junkyard.

In a bid to reduce old and obsolete private cars on Delhi streets, the Supreme Court has appointed Environment Pollution – Prevention and Control Authority (EPCA) to put all private cars through a fitness test. These old and run down vehicles are causing havoc on Delhi streets by spewing exhaust and stalling thereby leading to traffic jams.

Chairman of the EPCA Mr. Bhure Lal has held meetings with officials and implored them to take action against such vehicles aged three and above as is done in the UK. There are over 700,000 cars on Delhi streets with about 1,300 being added every day. Till date the Registration Certificate was sufficient proof of the fitness of the vehicle but hence forth the car will be put through as series of test for which owners will have to take their vehicle to an authorized mechanic for a fitness test. Wonder when the authorities will do something similar about public owned vehicles on Indian streets.

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Skoda Auto pumps in Rs.300 crores to augment production activities in India

Source: www.rushlane.com 

Skoda Auto, the Czech Auto group has invested Rs.300 crores into their Indian operations to augment production and increase sales. The company will also be working out a new product portfolio so as to ensure that volumes are pumped up in Indian markets.

India is one of the company's major markets for future growth and besides investments has also appointed Mr. Sudhir Rao as the new Managing Director while Kamal Basu of Saatchi and Saatchi will be the new Head of Marketing and Ashish Deshpande will be Head of Sales. It will be their combined efforts that will help Skoda India to take faster decisions and take into account the changing needs of the market.

This additional investment will also go towards expansion of the company's Aurangabad plant. Skoda has created a strong image within the country but still has to work on an effective pricing plan so as to attract a larger section of buyers. If vehicles like Citigo pricing is looked into, and launched for the Indian auto market, it will see tremendous success in the country. Skoda will also be expanding their dealer base within the country so as to reach out to customers and pull in larger volumes.

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No takers for small cars in big country

Source: Mail Today Do Indians buy small cars because they love the convenience of small cars? The answer is an emphatic ‘no’. Although small cars make up an overwhelming 50 per cent of passenger vehicle sales, the car-buying public still associates a larger vehicle with greater prestige.

Hence the last few years have seen the creation of the premium hatchback category, and have sounded the death knell for cars such as the Maruti 800 and even to some extent the Tata Nano.

 A decade ago, when one talked about the entry point for buying a car, the Maruti 800 figured high on the list. In the 1980s and 90s, people would often wait for up to five years, before their ‘booking’ got them a new car. The situation has not changed much today, and sometimes you have to wait up to nine months to get your dream car, yet the choices on offer are much more. The Maruti 800 is now not sold in cities, which need to comply with Bharat Standards IV (BS-IV), but you’ll run into it occasionally.

The diminutive Maruti 800 was the entry level till the early 21st century, but buyers today want more. They don’t want to start with an 800-level car; they want to move on to the premium hatch category, which Maruti pioneered back in 2005, when it launched the Swift. Recalls Mayank Pareek, Maruti’s Managing Executive Officer (Marketing and Sales): “When we launched the Swift initially, we had reservations because we were opening up a new, more expensive segment. But within days the Swift became a bestseller and we have not looked back since.” Other players, seeing Maruti’s success, rushed in.

One of the early entries was Hyundai’s i20, which gained brownie points for its futuristic looks and an engine that did well. The older car was replaced by the new i20 some time back. Says Hyundai Motor India Limited Director (Marketing and Sales) Arvind Saxena: “The i20 was always popular, and the new car has met with a tremendous response. There was a long waiting period for some months, but with our investments in new areas such as diesel engine manufacturing, we expect the waiting period for the new-gen i20 to come down to a month.”

When the Nano was introduced with much fanfare a couple of years ago, environmentalists screamed that it would choke urban roads, without realizing that the market had moved on. Nobody wants to buy a car that comes with a ‘cheap’ tagline.

Entry-level cars are a strict no-no; even for the upper models, people prefer to go for variants loaded with features rather than the vanilla versions. Says Deepak Kapoor of Marketing Times, a top Maruti dealership: “These days, nobody wants to look at the basic LXi or LDi models.”

Automotive retailing has come a long way in India. The entry-level envelope has been pushed in a manner that nobody wants a ‘basic’ car. The popular sentiment is in favour of at least a vehicle like the Alto or the i10 — and that too because three-box sedans are quite expensive and in many places parking is at a premium.

First-time buyers are also looking closely at the premium hatchback segment, as easier availability of finance has meant that people can now dig deeper into their pockets. Even as entry-level cars are getting reinvented into a segment bigger and pricier than before, the darling of the masses is what is classified as the premium small car. With Middle India becoming aspirational, small is no longer beautiful. It’s premium small that has grabbed people’s imagination.

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Toyota unveils first all electric SUV

Source: The Economic Times Toyota unveiled Monday what it says is the first all-electric sports utility vehicle (SUV) on the market, a version of its popular RAV4 with a top range of 100 miles and minimum six-hour charge time.

The car will be sold initially only in California with a base price of $49,800, and the Japanese car company hopes to sell a relatively modest 2,600 units over the next three years.

Toyota Motor Sales USA executive Bob Carter said the company believes the car will "attract sophisticated early technology adopters, much like the first-generation Prius," Toyota's pioneering hybrid car launched 15 years ago.

"It's all about blending the best of two worlds... The all-new RAV4 EV marries the efficiency of an EV with the versatility of a small SUV -- in fact, it is the only all-electric SUV on the market," he added.

The car, which costs more than twice as much as the gas version of the RAV4 and would have difficulties with out-of-town driving for any distance, may struggle to find a mass appeal.

"It's designed for consumers who prioritize the environment and appreciate performance," said Carter, adding that the new car will go on sale later this summer in San Francisco, Los Angeles, Orange County and San Diego.

"We look forward to seeing how the market responds," he added, unveiling the car at the 26th annual Electric Vehicle Symposium in Los Angeles.

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Renault-Nissan to roll out 2.5 lakh cars this year

Source: Hindu Businessline The Renault-Nissan car plant near Chennai is set to nearly double its output for the third year with a production of 2,50,000 cars this year.

The unit set up by Renault Nissan Automotive India commissioned its second production line in March to achieve the fully committed capacity of over 400,000 cars a year. With this, the Rs 45 billion investment by the Renault Nissan Automotive India beats the deadline for full capacity by three years, according to Koji Takei, Senior Vice-President of the company.

Next week, it will launch the `Evalia`, a passenger car that is set to ferry New Yorkers around as it will be inducted into the city`s taxi fleet next year. The other launch will be the Duster, a SUV.

In 2010, the company manufactured 75,000 cars, and in the next year 1.35 lakh units.

With the full installed capacity, for 2013 there are `major expectations of growth on a global basis, but the plans are yet to be finalised.

There is still head room to expand its marketing to match the capacity, pointed out Takei. Of the 1.35 lakh units, the company exports nearly 70% of its production with about 39,000 units being sold in the domestic market.

This is primarily because it is still expanding its sales outlets.

The 640-acre facility has adequate land area to accommodate a major expansion in line with demand, he said.

Renault-Nissan is inviting its component suppliers to set up shop closer to Chennai to increase speed of delivery.

Nearly a 100 companies supply parts for the cars and half of them are close to Chennai.

The others are in Delhi, Bangalore and Pune which poses a logistics challenge. It takes nearly a week to transport the parts from Delhi, he said.

Takei was addressing a meeting organised by the Japanese External Trade Organisation, an agency that promotes overseas investments by Japanese companies.

The Oragadam plant, which employs over 5,000 workers, has achieved global best standards in quality thanks to the local skilled manpower. There are eight expatriates in the top level management and 10 from here.

The company`s policy is to make the top management completely in the hands of local skills in 5-10 years, he said, highlighting the advantage of setting up the unit in Chennai, which has earned a reputation as a hub of automobile production with global manufacturers such as Hyundai, Ford and BMW.

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Nissan checks out what Indian women drivers want

Source: The Economic Times Ms Rena Sofue of Nissan Motor Company was in India some months ago to check out what women wanted in their cars.

The company had carried out a study with female customers in Delhi, Mumbai and parts of Gujarat. The feedback showed that the choice of a small car like the Micra had more to do with tight traffic conditions and narrow roads.

“Women in India want more features like parking sensors and sound systems, greater comfort and better visibility in their (Nissan) cars,” Ms Sofue told. They also prefer automatics and often cited examples of the Hyundai i10 and i20 in the study.

All these are important inputs to Ms Sofue, who is Manager of Nissan's Attractiveness Creation Group for Women headquartered in Japan. Her mandate is to check out how women across the globe perceive the Nissan brand. The India study has been more than an eye-opener and she reiterates that the company will address these needs articulated by the women in the study.

“We want them to enjoy their lives better with our cars. There are about 30 per cent women drivers on an average for the Micra and Nissan wants to increase this substantially in the next five years across its models in India,” Ms Sofue says.

The Attractiveness Creation Group has also worked extensively across Asia and some of the findings have been interesting. For instance, even while Indian women are increasingly becoming part of an active workforce, Nissan has found that China is ‘more advanced' when it comes to the ratio of working women and cars.

“Japan and Korea have a lower working ratio while India has the lowest level of working women in Asia,” Ms Sofue says. The number here is also lower than in Thailand and the Philippines. In China, nearly 80 per cent of women in the age group of 25-40 work fulltime and “it is very hard to find housewives”.

From Nissan's point of view, the working ratio of women is a key indicator to gauge demand for cars. “In most parts of Asia, the family plays a big role in buying the car. However, in China, a woman trusts her friend's opinion and often test drives her car at the friend's place and not at a dealership,” Ms Sofue says.

Equally, in China, it is not uncommon to find a wife with a car, while the husband has nothing for himself.

“At times, she buys another car, but this is for her father to drive in,” she quips.

The Nissan team also drew some interesting findings from its Asia research on cars.

“There are large joint families and the concept of people travelling together in a car is common. This includes parents and a young couple with a child too,” Ms Sofue says.

Today, with more women in Asia studying and working, comfort and mobility are top priorities. “Men do not want women to travel in crowded buses and trains for safety and social reasons. The best option is personal mobility like a cycle, scooter or car,” she says. 

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Eon, Verna drive Hyundai April sales up 11%

Source: Hindu Business Line Hyundai has posted an 11 per cent rise to 35,070 units in domestic sales for April, led by strong demand for the Verna sedan and hatchbacks such as the Eon, i10 and the new i20.

 However, exports were down 4.3 per cent to 19,536 units on the back of subdued demand in Europe.

Mr Arvind Saxena, Director for Marketing and Sales, Hyundai Motor India, said, “Consumer confidence continues to be weak, prices went up following the excise hikes in the Budget and interest rates are yet to come down. Given the present conditions it’s a challenging market.”

In April, sales of the hatchback range (Eon, Santro, i10, i20) stood at 44,891 units, while the Accent and Verna together sold 9,579 units. The recently launched sixth generation Sonata sold 66 units, while the Santa Fe SUV found 70 homes.

Most other carmakers had posted moderate growth in April sales, with expectations of an improvement only after the first half of the fiscal. This has been attributed to advanced purchases in March as model prices went up after the Budget announcements. Also, certain States have increased road and entry taxes last month.

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Volkswagen won’t cut prices to boost sales

Source: www.rushlane.com  Premium carmaker Volkswagen India has ruled out price cuts on its cars though sales continue to dwindle and growth slowed down to snail’s pace compared with industry leaders.

Instead, it is looking at firming up after-sale processes like dealer interaction, servicing and offering an additional fuel option in the form of compressed natural gas (CNG) to scale up sales from current stagnant levels of around 7,000 units per month.

The German carmaker’s sales grew just two per cent to 20,644 cars on a relatively low sales base in a revived car market during January to March against an industry average of 21 per cent at 637,731 cars.

“We need to find answers as our sales are not up to industry benchmarks such as Maruti Suzuki and Hyundai. We have to sit back and see how we are doing qualitative things like customer interaction and after-sales,” accepted Neeraj Garg, director- passenger cars, Volkswagen group.

Volkswagen is offering freebies up to Rs 50,000 on its petrol cars and has recently started freebies on its diesel cars as well by offering insurance free worth about Rs 15,000 on its diesel variants of Polo and Vento.

Industry rivals such as Maruti Suzuki, Hyundai, Toyota and General Motors, are not offering any freebies on diesel cars with huge demand backlogs leading to significant waiting periods. Garg claimed that the low sales growth was on the back of presence in just 40 per cent of the passenger car market.

Japanese premium carmaker Honda that operates in same segments such as Volkswagen, had to cut prices of its cars last year by over Rs 1 lakh on its compact cars such as Jazz and City to compete on a bigger scale with the big players.

Its monthly sales have now crossed 10,000 units this year compared with average of 5,000 units last year. “We will not resort to price cuts because of brand positioning. I don’t know if Honda is earning profit on its cars (after price cuts),” Garg responded. Volkswagen Group aims to sell one million cars in India by 2018 (including group brands Skoda and Audi) compared with about 111,623 cars in 2011.

While the cream of the industry, including Maruti Suzuki, Hyundai, Tata Motors and General Motors, lined up a slew of car launches this year, Volkswagen does not have any significant launches that may propel growth.

Garg said VW’s cars like Polo and Vento are still new as they were launched just one to two years ago. At the time of launch during 2010-11, VW had failed to live up to the hype of its cars in terms of sales despite spending huge sums on advertising because Polo and Vento had a long waiting period — as long as eight to nine months — deterring buyers from purchases. The issue was low production due to ‘quality’ build up in its production processes.

“The small car segment is very competitive and if a manufacturer wants to create a dent in this market, it has to create value-for-money perception for its products. Unless customers are concerned about value propositions, it is very difficult to make a dent in this highly competitive segment,” said Abdul Majeed, auto practice leader, PwC. The Volkswagen Polo costs about Rs 4.67 lakh and sells about 3,500 units a month since its launch against the leader Maruti Suzuki refurbished Swift that’s priced at Rs 4.22 lakh selling more than 20,000 units a month, compared with previous year levels of 12,000 units per month.

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Skoda Fabia Scout hatchback launched for a price of Rs 679000 in Indian car market

Source: www.rushlane.com   The new Fabia Scout from Skoda is being offered with new features which are yet to be seen on a vehicle in this segment. It has more than a few leading features of enhanced safety, utmost comfort and high class efficiency that are unmatched in a vehicle in its category. 

 Its spacious interiors and high class of materials used appeals to the urban dweller that has upped his limits of what is looked for in a vehicle today. Performance and dependability are no longer the only attributes of what a buyer looks for in a vehicle.

The modern buyer puts equal stress on quality, luxury and opulence while selecting a vehicle and will not go wrong with the new Skoda Fabia Scout. Here one can see dual airbags, integrated audio player, power windows, remote controlled locking system and tinted glasses projecting the Fabia Scout as a tough and sporty vehicle.

Skoda Fabia Scout will be introduced with a petrol and diesel engine and prices will range from Rs.6.79 lakhs to Rs. 8.10 lakhs – ex showroom New Delhi.

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Car makers wary of diesel decontrol

Source: Hindustan Times The centre’s fresh reiteration to decontrol diesel has put many car makers in a fix as they have gone ahead with increasing diesel vehicle capacities. The lack of clarity in terms of timeframe and extension of decontrol, too bothers them.

“We don’t know when this will be implemented,” R C Bhargava, chairman, Maruti Suzuki told.

“We should be allowed to work in an environment where there is policy certainty. Rules should not be changing everyday.”

Many others, including Maruti Suzuki and Hyundai, are in the process of ramping up their diesel car production following heavy demand. With petrol becoming costlier by R26 than diesel, petrol car sales declined 15% while diesel car sales surged by 35%.

Maruti decided to increase its diesel car production from 240,000 to 400,000 units a year while Hyundai increased the production of diesel variants of i10 and Verna by 50% to 10,500 units per month.

Bhargava, however, welcomed the move to remove fuel subsidy. “Huge shift towards diesel cars will come to an end. There will be a balance between diesel and petrol cars,” he said.

Some industry officials say even if the diesel price is freed up it will not entirely change the dynamics. “Currently it is 70:30 (where diesel and petrol options are available). It is not going to reverse,” said Neeraj Garg, director, passenger car division, Volkswagen. “We have the flexibility to make necessary changes in production.”

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Volkswagen India sales up by 21.6%

Source: Economic Times With its headquarters in Pune, Maharashtra, the Volkswagen Group is represented by three brands in India: Volkswagen, Audi and ŠKODA.

Audi achieved a growth of 40.8% and delivered a total of 2,269 cars this quarter as compared to 1,611 cars during the same period last year. ŠKODA delivered 11,505 cars showing a growth of 40% as compared to the deliveries of 8,217 cars during the January to March period last year. The Volkswagen brand delivered 20,352 cars in the said period with 11.6% growth as compared to 18,244 cars during the same period last year.

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