I N D I A ’ S N O . 1 M A G A Z I N E F O R A U T O M O T I V E N E W S , V I E W S & A N A LY S I S
Auto Monitor ekly e W
Vol. 12 No. 29
10 September 2012
w w w.am o n l i n e.i n
FOCUS
32 Pages
CORPORATE
MACHINING
SOMBRE MOOD MARKS ACMA’S ANNUAL SESSION Pg 08
Pg 12
Auto sector looks for strategic boost
NEWS IN BRIEF A ‘Sunny’ day for Renault in India
Our Bureau New Delhi
Our Bureau New Delhi
R
enault India launched its fifth product, the new Scala sedan in four variants, two each with petrol and diesel engines recently. The base price for petrol engines is `6.99 lakh while the fully loaded model is `7.85 lakh. The diesel engine base model is `8.69 lakh and `9.57 lakh for the top model. The vehicle is a re-badged Nissan Sunny, yet it is dearer by around `one lakh over the latter. The French manufacturer is expecting to launch an automatic version in a few months. “Compact sedan will remain a high volume selling
segment in India, so we hope to get a good response, while there is a great potential in the belowPulse segment where we will see our products in the future,” said Managing Director, Renault India, Marc Nassif. The Sunny has sold well for Nissan, averaging around 2,500 units per month, thus Renault will expect the Scala to succeed to equal measure if not better.
DATA MONITOR Top 5 3W makers Company
Jul-11
Jul-12
` 50
Change
BAL
17,390
18,114
4.16%
Piaggio
16,552
15,746
-4.87%
M&M
5,395
5,149
-4.56%
ATUL AUTO
2,212
2,509
13.43%
TVS
1,072
1,251
16.70%
Top 5 3W-Exporters Company
Jul-11
Jul-12
Change
BAL
28,227
17,178
-39.14%
TVS
2,218
2,050
-7.57%
Piaggio
1,370
1,237
-9.71%
M&M
341
452
32.55%
Force Motors
-
126
#DIV/0!
* Source: SIAM/ ** Excluding exports/ *** all sub segments considered/ ^ excluding MRPL
T
he uncertainty in the auto sector reverberated at the 52nd Annual Convention that focussed on the ‘Auto Industry: India In The Changing World Order’ held in New Delhi recently. The event saw policy makers and OEMs discussing effective ways to tide over the looming economic uncertainty in India. Though wide ranging discussions on major issues kept the participants engaged, the convention fell short of providing any tangible direction. In his opening remarks, SIAM President, S Sandilya touched upon four key issues that were uppermost on the minds of automobile manufacturers present at the convention. He highlighted the absence of firm resolve from the government’s side on the long term direction for the auto industry and perception
of dilution of the Automotive Mission Plan 2016 due to issues relating to governance and implementation. He further pointed out that a clear direction regarding the fuel price differential between petrol and diesel and phased transition to Bharat Stage IV emission norms across the country would provide required reassurance to the auto manufacturers. He added that the government needed to pursue energy security in an earnest manner for reliable supply of fuel to drive automotive sector’s growth in the coming years. Finally, he emphasised on the implementation of policies to jump start infrastructure development in the country for current and future transport and mobility needs of the country. He also expressed disappointment at the pushback of Goods & Services Tax (GST) implementation due to lack of consensus and stressed on its importance for smoother
movement of goods across states, thus directly and indirectly benefitting the auto sector. Sandilya referred to subdued industry growth that led to successive downward SIAM revisions in the sales forecast. While 2012-2013 first quarter growth in the PV segment reached 9.71 percent, there was a fall in the heavy goods carrier. He also stressed on the need to address the dynamics of growth in all segments as they dip into negative territory (with Q1 decline of 17.88 percent). He drew a parallel to this sector’s 2008 performances. “Emerging markets including Brazil, Russia and China along with India have been facing uncertain growth scenario in the automotive sector over the last few months,” pointed out Executive Director-Commercial Vehicles, Tata Motors, Ravi Pisharody during his address while emphasising the need for infrastructure related spending to spur growth.
Senior VP, Truck Joint Ventures, Volvo AB and Board Member, VE Commercial Vehicles, Philippe Divry suggested measures like mandatory scrapping of old trucks and other vehicles in order to jumpstart wider implementation of stricter emission norms, safety regulations and investment in road development projects for speedy revival of the auto sector, especially the commercial vehicle segment. Union Minister, Kamal Nath pointed out that the large number of young customers in India are aspiration-minded customers with significant disposable incomes at their command and hence are an attractive market for global automobile majors. He said the that his ministry is seeking to provide incentives for rapid adoption of IT-enabled traffic management systems across growing urban centres in the new urban renewal mission plan under implementation.
India forges German trust Nabeel A Khan New Delhi
T
here may be a volley of questions over India’s development stor y, however, German car makers—Volkswagen AG and Mercedes-Benz India strengthened their commitment and enhanced their investment plans towards the country. Volkswagen will invest around `700 crore over the next two years to increase its output while luxury car maker Mercedes will boost its investment to `850 crore by 2014. It will scale up the initial investment of `250 crore to over `600 crore with the setting up of its own paint shop with waterbased painting facilities. The new paint shop is targeted to be operational by October 2012 and has an annual capacity of 20,000 units (which can be extended up to 40,000 units annually). V W’s investments will be made in group companies such as Volkswagen India, Skoda India and Audi India to improve facilities and conducting minor model changes. A part of the investment will also go to its production facil-
ities in Aurangabad and Chakan. VW has a 130,000 annual production capacity at Chakan, where it manufactures the Polo and the Vento and Skoda’s Fabia and Rapid models. The Aurangabad facility has a 6,000 unit annual capacity and makes hi-end models such as Superb, Laura, Jetta and Passat. Volkswagen recently said it had put its `2,000 crore expansion plan on hold due to lack of clarity on the Maharashtra government’s recent rollback of tax incentives. This may prompt the company to invest in other states. “The state government’s policy decision was not encouraging, so we are continuing to put investments in Maharashtra on hold,” said President & MD Volkswagen India, John Chacko. Audi is setting up a dedicated production unit at the Aurangabad plant of Volkswagen Group firm Skoda in order to meet increasing demand in the Indian market. The company, which assembles sedans A4 and A6 along with SUV Q5 at the Aurangabad plant, is looking at additional capacity of 3,000 cars a year at the new unit. Audi will
start the assembly of SUV Q7 by the end of this year and might consider the same for Q3 from next year. Audi India is targeting to sell around 8,000 units this year and is expecting a 20 percent jump in sales by 2013. Skoda is also targeting a fourfold rise in sales to reach 1.7 lakh cars sales annually in the next five years. The carmaker hopes to achieve a market share of around four percent from the current 1.5 percent (approx) in sales. Talking about its investment plans, Managing Director & CEO, Mercedes-Benz India, Peter T Honegg said, “The investment of `850 crore will help us strengthen our production and operational capabilities with regards to our existing products and our exciting and aggressive product offensive, which we are readying for the Indian market. This investment will enable Mercedes-Benz India to be future ready.” Presently Mercedes-Benz India locally manufactures its f lagship sedans the C-Class, the E-Class and the S-Class in its plant in Chakan, near Pune. With Daimler AG recognising
Peter T Honegg, Managing Director & CEO, Mercedes-Benz India
the emergence of high potential growth markets including India, Mercedes-Benz India will earn the distinction of being amongst the first markets to start assembling the new M-Class, outside Daimler AG’s parent SUV plant in Tuscaloosa/Alabama, the US. Mercedes-Benz India through its dealer partners already carries an investment of over `80 crores spread across its 31 showroom and 41 service outlets located in 31 Indian cities. It is also aggressively and strategically expanding its network reach which is the densest by any luxury car maker in India.