India: From automobile market to emerging vehicle manufacturing giant

India’s advantage as an ideal cost-competitive hub is the key

Onlookers gather at a pavilion during the 10th auto expo at Pragati Maidan in New Delhi recently.

The 2008 version of auto expo in New Delhi, which saw unveiling of world’s cheapest car Nano by Tata Motors, catapulted India’s image from just being an auto market to emerging auto-manufacturing giant. This faith of global players in the Indian auto market was further confirmed at the just concluded biennial mega event in New Delhi which saw Japanese auto majors Toyota and Honda unveiling their global strategic models, both compact cars, especially designed and developed for the Indian market.

And this was not all. Be it the mass market players like Maruti Suzuki, Hyundai and Tata Motors or those keen on tapping the fast-growing luxury segment like Skoda, BMW, Mercedes-Benz, Audi or Volkswagen — all were there at the mega show announcing India launch of their latest models and unveiling their concepts.

One automaker that presented itself as a ‘complete brand’ was General Motors, which is not only making efforts to tap the maximum selling compact segment but is also looking at the luxury segment.

Through the highly competitive pricing of its new compact car ‘Beat’, it could have triggered a price war in the mass selling segment.

The growing clout of Indian automakers was clearly underlined by a recent survey by leading consultancy firm KPMG, which said that global automotive market share winners over the next five years would include various new Chinese and Indian vehicle manufacturers, along with leaders like Hyundai/Kia, Toyota, Honda and Volkswagen.

From the current ranking of 11th largest passenger car market, India will jump to the seventh spot in the next five years. And it is not just about cars; India is also world’s second largest two-wheeler market and fourth largest commercial vehicle market, besides emerging as a quality component manufacturing base with low-cost advantage. So, auto experts were not at all surprised with Honda’s decision to export crucial components from its new plant in Rajasthan to its headquarters in Japan, while Hyundai and Suzuki Motors have already made India as their export hubs.

Concept vehicles

For the record, the week-long show, jointly organised by the Automotive Component Manufacturers Association (ACMA), the Society of Indian Automobile Manufacturers (SIAM) and the Confederation of Indian Industry (CII) since 1986, saw participation of over 2,100 exhibitors and launch of 25 new models (the biggest ever so far), besides unveiling of over two-dozen concept vehicles. It was a huge hit as far as footfalls were concerned as almost 20-lakh auto-enthusiasts, apart from those eyeing serious business opportunities, witnessed the extravaganza.

The auto show also helped companies gauge the mood of their Indian customers and accordingly plan their future launches in the booming market that recorded growth despite economic slowdown even as the markets in the U.S. and Europe fared badly.

One segment that has caught everybody’s attention is the scope of battery-operated cars. It was precisely for this reason that some major carmakers like General Motors, Renault, Hyundai, Tata Motors and Maruti Suzuki announced their plans to bring “green cars” in the near future. India is also being seen as a major source of e-cars for global markets.

On the other hand, the commercial vehicle segment saw global players like Volvo, Navistar, Tata Motors, Ashok Leyland and Mercedes-Benz renewing their focus on the Indian market, thanks to the boom in the infrastructure sector and consistent economic growth.

India is also poised to emerge as a major destination for hi-end biking, besides consolidating its position as mass bike market and its major exporter.

The entry of iconic Harley Davidson brand and Ducati bikes in India are examples of it, while other players like Ducati, Yamaha, Suzuki and Honda are bullish on the idea.

Similarly, the presence of component manufacturers in huge numbers, which included dedicated stalls from countries like China, Germany and Italy did not surprise Indian industry.

Besides seeing huge domestic potential, emergence of India as a manufacturing hub for exports has prompted them to make a beeline for the sub-continent. Interestingly, the domestic auto component industry is targeting a six-fold growth in exports by 2016.

Pointing out that component sourcing by both domestic and global auto majors turned out to be a major activity at this year’s show, ACMA President Jayant Davar said, “India’s advantage as an ideal cost-competitive hub is the key, and this is going to prop up component exports in a big way in the years to come.” From around $20 billion in 2009, 20 per cent of which would be exports, Indian auto component industry is likely to touch $45 billion, of which 50 per cent would be from exports.

New Bajaj Pulsar 135 LS

‘The new vehicle will meet the challenges thrown by heavy urban traffic’

The Bajaj Auto Pulsar 135LS vehicle was launched at a glittering programme in Vijayawada on Sunday amidst a dance performance by artists to suit the mood of the occasion.

The first launch of this initial version was stated to be in 2001 and the latest came out with added features to win the favour of customers.

Equipped with a light-weight yet rigid frame and aided by Nitrox shock absorbers, the new vehicle from the Bajaj Auto would meet the challenges of traffic thrown by urban heavy traffic, said Bajaj officials.

Addressing a press conference on the occasion, Bajaj Regional Manager Sadanand Swamy said that with the addition of the latest version, the company went another step ahead in enhancing the pleasure of biking to the customers.

A first

He said that the light sports vehicle was the first of its kind bike being introduced for the first time in the country.

It has got the state of the art 4-valve DTS-I engine which delivers 13.5 ps power.

Company’s vision

Mr. Swamy said that the Pulsar brand is strongly associated with the sports segment in this country and the company’s vision is to make India a country of bikers from a country of commuters.

He said that the bike will be manufactured from the Chakan Plant and will have a capacity of 35,000 bikes per month. The price of Pulsar 135LS is Rs. 52,025 ex-showroom.

Maruti introduces Eeco

Maruti Suzuki India on Thursday launched its brand new multi-purpose vehicle ‘Eeco’ that has been specifically designed for India. The spacious ‘family car’ comes with a flexi design, offering 7-seater and 5-seater options, and is priced between Rs. 2.59-lakh and Rs. 2.89-lakh, a move that could trigger price war in the entry-level segment.

The car comes with a new 1200cc petrol engine that promises 73 bhp power and 15.1 km a litre of fuel efficiency, while meeting Bharat Stage-IV emission norms. “Our engineers have specially developed the Eeco with new powerful engine and a new transmission system to meet the diverse consumer aspirations that look for a vehicle that fit a large family and at the same time provides flexibility for dual use,” Managing Director and CEO Shinzo Nakanishi said after unveiling the new car at the 10th auto expo here.

Mr. Nakanishi said the new car had a superior suspension that allowed for a smooth and comfortable ride on rough Indian roads. Stating that the company had invested Rs. 60 crore in developing the new car, he said their team of engineers worked on the car for over two years, subjecting it to various rigorous tests regarding safety, stability, durability and passenger comfort. “Eeco represents the growing expertise of Maruti Suzuki engineers to develop vehicles in India which is also in line with parent Suzuki Motor Corporation’s vision of turning India into a global hub for small car design,” he added.

Maruti is also planning to unveil a concept electric version of the new vehicle, Eeco Charge, that will be showcased during the Commonwealth Games later this year. The company has, however, ruled out introduction of diesel or alternative fuel variant of Eeco in near future, neither it is going to phase out its another MUV, Versa.

Green is the theme at the New Delhi auto expo

ENVIRONMENT-FRIENDLY: President and Managing Director of General Motors India, Karl Slym (left) and Deputy Chairman of REVA Electric Car Company Chetan Maini, with the E-Spark electric car manufactured by GM India at the auto expo in New Delhi.

With concern over vehicular emissions rising, auto majors are fast shifting their focus towards greener electric and hybrid vehicles, besides providing customers the option of owning a car run by cheaper and low-emission fuels such as CNG and LPG. Signs of things to come are clearly visible at the 10th Auto Expo where almost every carmaker has showcased the future green offerings.

Be it the mass-market players — Maruti, Hyundai, Tata Motors — or the foreign auto major — General Motors, Toyota Honda — all are betting big on green cars, not only for India but also for the overseas market. At the expo, Toyota has launched the latest version of world’s largest selling hybrid car, Prius, in the Indian market, besides introducing Altis CNG and Innova CNG, besides showcasing Camry hybrid.

“The Prius today is the world’s most successful hybrid with cumulative sales of nearly 15-lakh units.

“We will continue to popularise environment-friendly vehicles in India to further our efforts to help save the environment,” Toyota Kirloskar Motor Deputy Managing Director Sandeep Singh told The Hindu.

Similarly, its Japanese counterpart Honda Motor has showcased its concept sporty hybrid car, ‘CR-Z’, besides announcing plans to focus more on hybrid and alternative fuel technologies.

Another auto major that has made a strong statement through the expo is the U.S.-based General Motors that has unveiled the electric version of compact car Chevrolet Spark, developed in technical collaboration with Bangalore-based Reva Electric Car Company that is providing battery technology to GM for introducing a range of electric cars for Indian and overseas markets.

GM has showcased the much-awaited Hybrid Volt electric vehicle with extended-range capability, Aveo CNG and Spark LPG.

“The government should seriously think about providing incentives to owners of cars driven on alternative fuel and cut high taxes and duties to encourage adoption of such eco-friendly vehicles. The government needs to incentivise both producers and consumers of eco-friendly cars,” said General Motors India President and Managing Director Karl Slym.

Another major attraction of the auto show has been the launch of Hyundai’s i10 electric, which is likely to be introduced in India next year, besides tapping the huge potential for greener vehicles in overseas markets, particularly in developing countries.

Similarly, India’s largest carmaker Maruti Suzuki has showcased hybrid concept of SX4 sedan and electric version of the newly-launched van Eeco.

Tata Motors is also planning electric version of Nano, targeted at overseas markets.

Apart from carmakers, manufacturers of bikes and buses have also their keenness in using greener technologies in their vehicles.

BMW, Audi and Mercedes-Benz showcase their new products

SKY IS THE LIMIT: Wilfried G. Aulbur, Managing Director and Chief Executive Officer, Mercedes Benz India, with the company’s new car SIS AMG while Audi unveiled its Sportback concept car (picture at below) in New Delhi on Tuesday.

NEW DELHI: Luxury carmakers have unveiled high-end sedans and sports utility vehicles (SUVs) at the ongoing Auto Expo here, eyeing growing sales in the segment. While Germany’s BMW has launched Gran Turismo, X6M and 760Li, Audi has introduced the powerful diesel SUV Q7 4.2 TDI, besides unveiling the limited edition of A6 2.7 TDI to celebrate 100 years of the luxury carmaker.

The limited edition BMW Gran Turismo is priced at Rs.63 lakh and its 100 units would be available for sale. Similarly, Coupe X6 M and BMW 760 Li is priced over Rs.1 crore, while X6 M will come at Rs.1.30 crore and 760 Li at Rs.1.29 crore. BMW plans to launch MMW X1 by the end of 2010 that would be manufactured at the Chennai facility. BMW India President Peter Kronschnabl said the company would bring in more investments in India through further capital investment in its plant to boost production and also begin financial services. Significantly, BMW became the top luxury car-seller in India in 2009 by selling 3,619 units, securing 40 per cent market share. Similarly, Audi’s A6 2.7 TDI will be available at Rs.37-lakh. “In 2009, Audi India registered a 58 per cent growth. This success was attained through the launch of the A6, Q5, Q7 and expansion of footprint across India through new dealership openings in Mumbai, Ahmedabad and Kochi,” said Audi India Managing Director Benoit Tiers. Audi is expecting to sell 2,300 units this year, which will be up about 40 per cent from last year.

Another luxury carmaker, Mercedes-Benz showcased two new cars — SLS AMG Desert Gold priced at around Rs.2-crore, besides displaying the M-Class Luxury edition as well as the E-Coupe.

Volkswagen has also unveiled its high-end luxury car Phaeton, priced at Rs.75 lakh, while its Czech subsidiary Skoda has introduced much-awaited SUV Yeti. “Indian customers of Phaeton would have the option of visiting the facility in Germany and see their cars being manufactured and customised,” said Volkswagen Group Sales India, Member of the Board of Directors, Neeraj Garg.

French car manufacturer Renault is planning to launch two models in India in 2011, which will be rolled out from its upcoming plant in Chennai. “We will be launching our luxury car ‘Fluence’ and our crossover ‘Koleos’ by mid-2011. All these cars will be produced at our Chennai facility,” said Renault India General Manager and Managing Director Marc Nassif.