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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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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Jul
20
2009
News & Events

Start, Stop, Save

The Hindu

Mahindra Scorpio Hybrid now comes with the Start/Stop system that improves fuel efficiency, writes Hormazd SorabjeeMahindra's Start/Stop system developed jointly by Mahindra and Bosch is so good, it won Autocar's Innovation of the Year award for 2009. After first testing this system - dubbed by Mahindra as the Micro Hybrid in the Bolero - last year, we found no discernible improvement in fuel economy.
 
However, we knew this clever yet uncomplicated system had the potential to deliver significant fuel savings with a little bit of fine-tuning, and this time around, it's been fitted to Mahindra's flagship Scorpio.
 
The Start/Stop system functions through a very simple process. When the car is stationary and idling (in neutral with no foot on the clutch), the engine waits for a few seconds before switching off automatically. Press the clutch and before you can select first gear, the engine fires up and you are ready to go.
 
The logic is clear cut - switch off the engine and you burn no fuel - ask any cab driver!
The hardware is pretty compact and sits deep inside the engine bay. All it consists of is a beefed-up starter motor to cope with the stress of frequent starting, an uprated alternator and a stronger battery to handle the extra electrical load. The crankshaft sensor sends information to the ECU, which in turn decides when to start or stop the engine.
 
What's crucial here is the interval between selecting neutral when stationary and the engine shutting down. In the Bolero we previously tested, Mahindra had set an agonising 10-second delay which proved too long even during rush-hour traffic as cars constantly inched forward; so remaining completely stationary for more than 10 seconds is not that frequent. Okay, clogged intersections and major junctions can keep you waiting for several minutes, but more often, you are ready to move almost immediately after the engine shuts down. This really defeats the purpose of the Start/Stop system.
 
To register an improvement in fuel economy, the engine should idle less, and hence needs to shut off more frequently. We felt the idling time shoud be reduced to five seconds, which is exactly what Mahindra has now done. But has it made a difference? We tested the new Scorpio Start/Stop system for over 1,000km in Mumbai city, with the system switched on and off (there's a button on the dash which disables the Start/Stop function, and the Scorpio runs normally) to get a precise comparison.
 
In Start/Stop mode, the Scorpio returned a frugal 11.5kpl, a near one kpl improvement (0.9 to be precise) in normal mode. That's a pretty impressive figure for a piece of kit that costs just around Rs 4,000. The biggest flaw in this system is that the air-con stops working when the engine switches off. Even the music system resets every time you restart the engine. Hybrid cars such as the Civic Hybrid don't have such problems as the additional run off on electric motor is powered by a bank of batteries.
 
The Start/Stop system or micro hybrid which costs a fraction, makes much more sense in the Indian context as compared to the pricing of the wallet-crunching Civic Hybrid. Now, if only they can find a way to keep the air-con running.
 
In Start/Stop mode, the Scorpio returned a frugal 11.5kpl, a near one kpl improvement (0.9 to be precise) in normal mode. That's a pretty impressive figure for a piece of kit that costs just around Rs 4,000. The biggest flaw in this system is that the air-con stops working when the engine switches off. Even the music system resets every time you restart the engine. Hybrid cars such as the Civic Hybrid don't have such problems as the additional run off on electric motor is powered by a bank of batteries.
 
Technical data :
Price Rs 10.60 lakh (on-road Mumbai)
Length: 4430mm
Width: 1817mm
Height: 1975mm
Wheelbase: 2680mm
Turning circle: 11.2m
Kerb weight: 2510kg
Engine 4-cyls in-line, 2179cc, turbodiesel. Installation Front, transverse, rear-wheel drive
Power 120bhp at 4000rpm
Torque 29.5kgm at 1800-
2800rpm/ Gearbox
5-speed manual
Fuel tank 60 litres
Brakes (F/R) Ventilated
discs / drums
Tyre size 235/70 R16
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Jul
20
2009
News & Events

Jazzing it up

The Hindu

Honda has realised that a lot of customers for the Jazz might want more than a puny 1.2-litre engine. Considering the fact that the Jazz shares its platform with the Honda City, Honda is now considering slotting the 1.5-litre 110bhp engine from the City under the Jazz’s bonnet too, but not before 2010.
 

 

This engine would definitely transform the Jazz’s performance, but will add an estimated Rs. 70,000 to the price.
 

 

Honda also plans to offer an automatic transmission option with the 1.5-litre powerplant. With this option, the Jazz could be dearer by over Rs. 1 lakh.
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Jul
20
2009
News & Events

Maruti to ramp up production by sept

The Hindu Business Line

Mumbai, July 18 Maruti Suzuki, which has been averaging monthly sales of around 75,000 units during the April-June period of this fiscal, is likely to ramp up production by 25 per cent towards September to meet the Diwali season demand.
 
"We are expecting the company to roll out at least 90,000 cars a month by end-September and maintain the momentum through November," top ancillary suppliers to Maruti told Business Line.
 
In the process, they add, the carmaker is poised to touch sales of one million units this fiscal, which marks a significant jump from nearly eight lakh units in 2008-09.
 
"All the company's products are doing roaring business especially the A-Star, the Ritz, the Swift and the Alto. We have our order books full," said a supplier, who did not wish to be identified.
 
In a nutshell, Maruti is not going to give up its leadership slot in a hurry, despite the healthy competition emerging in the market.
"By the end of the day, it offers customers a heady mix of value for money (even in used cars), sales and service support. In addition, the company has been churning out new products that have sustained customer interest," another supplier said.
 
Market observers maintain that the Tata Nano could end up eating into a share of Maruti's market share but that is going to take some time.
 
In the first place, production of the Nano for this fiscal will be confined to barely 45,000 cars from Tata Motors' interim plant at Pantnagar. Numbers will increase during 2009-10 when the Sanand facility in Gujarat is up and running but even then bridging the gap with an aggressive market leader will take some time longer, they say.
 
Exports look strong

What has been equally heartening for Maruti is the fact that its exports have been surging lately to account for at least 15 per cent of its total output and tipped to rise even further in the coming months. This has largely been propelled by Europe's scrappage schemes (especially in Germany, France and the UK) which have increased demand for fuel-efficient cars.
 
The company has also been going flat out on its rural drive and sales here are also taking up 15 per cent of production. The focus here will only sharpen in the future through a host of schemes intended to woo buyers in these markets.
 
"Maruti has constantly been in the forefront for innovative finance schemes which have targeted specific customers such as teachers, lawyers, journalists, policemen and even panchayat chiefs. The lessons have been handy in evolving new retail initiatives to push sales," sources said.
 
In the midst of this buoyancy, there are some issues to ponder over.  There is a huge demand for Maruti's diesel cars but dealers say delivery schedules are still under some pressure thanks to the company's export commitments to east Europe.
 
There is also a degree of apprehension that with a slew of models, some could be marginalised but then, as experts say, this is only inevitable.  "The idea is to constantly keep buyers eager and excited. Not all products may work but the ones that do will make all the difference in the leadership stakes," they aver.
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Jul
20
2009
News & Events

Hybrid cars to carry forward Delhi's 'Green' games Mantra

The Indian Express

The Delhi government will open another chapter in its efforts to go green during the Commonwealth Games next year - by introducing hybrid cars.
 
The first hybrid car, to run alternately on petrol and electric energy, will be put together by a group of students from the Delhi College of Engineering (DCE). The college has received Rs 20 lakh from the Indian Oil Corporation (IOC) for the effort.
 
DCE director P B Sharma told Newsline that a team of eight undergraduate students from disciplines like electronics, mechanical and electrical engineering, will create a hybrid car out of a Maruti Esteem. Maruti Udyog has already given the car to the college. "We have expertise in developing a hybrid car," Sharma said. "We made the first hybrid, single-seater, which won us a prize in the US in 2005.
 
"This project will take our innovation forward." The team of students will work on the project for the next few months and will also be graded on it. The students will be led by Sharma and another faculty member, S Maji.
 
Sharma said the car will be developed in such a way that it could set a precedent for commercially-viable hybrid cars.
 
According to Delhi government officials, the hybrid car will be displayed at a Commonwealth Games venue during the event and may even be used to give joyrides. An official said: "Apart from showcasing our cultural and historical heritage to athletes and spectators arriving in Delhi, we would also like to project to the world our commitment towards the environment."
 
The team of students will work on the project for the next few months and will also be graded on it. The students will be led by Sharma and another faculty member, S Maji.
 
Sharma said the car will be developed in such a way that it could set a precedent for commercially-viable hybrid cars.
According to Delhi government officials, the hybrid car will be displayed at a Commonwealth Games venue during the event and may even be used to give joyrides. An official said: "Apart from showcasing our cultural and historical heritage to athletes and spectators arriving in Delhi, we would also like to project to the world our commitment towards the environment."
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Jul
20
2009
New Launches & Upcoming Cars in India

Maruti launches CNG Alto

The Hindu Business Line,New Delhi
Maruti Suzuki has launched in Delhi and the National Capital Region a CNG version of the Alto that costs Rs 43,545 more than the petrol version. This is the first model of the company with a CNG variant. However, the CNG kit will be fitted only in new Alto cars before delivery to the customer from the dealerships. The retrofitted CNG kit, which has a 12-kg tank with a capacity of 7-7.5 kg gas, offers a running cost of around Rs 1 for a kilometre. The company offers a warranty of two years or 40,000 km on the model, the same as on its non-CNG variant

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Jul
19
2009
New Launches & Upcoming Cars in India

Fiat bets on Rs 3.99l tag to drive grande Punto

Times of India

Fiat India rolled out the Grande Punto hatchback on 17th June09 with an aggressive price Rs 3.99 lack (ex-showroom Delhi), pitching it against segment leaders Suzuki Swift and i10, while pricing it way below Hyundai i20 and Honda Jazz.
 
The company will offer the car with three engine options - 1200 cc Petrol, 1400cc petrol and 1300 cc multijet diesel engine. Grande Punto is Fiat's latest offering after the Linea sedan and is expected to drive volumes. Fiat hopes to start with average sale of 2000-2500 units, nearly double to that of Linea. "We believe that the B Plus segment (premium hatchback) in India has been undertapped and consumers are increasingly looking forward to driving world renowned, international brands," said Fiat India Head - Rajeev Kapoor. Market analysts said Fiat has chosen to opt for an aggressive pricing for the Punto as it is upbeat after the encouraging response to Linea despite the market slowdown. Economics of scale has also made it possible for the company to price the car cheaper. Fiat is making cars at a new factory at Ranjangaon in Maharashtra in a JV with Tata Motors and the companies are sharing engines across models, enabling bulk purchases from suppliers helping them better bprices for raw materials and spaeatrs.
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