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 ns Tur w No
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Vol. 12 No. 21
16 July 2012
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FOCUS
24 Pages
` 50
CORPORATE
NEW MATERIALS Pg 11
Logistics Convergence To Lead To Emergence Of Stronger Players, Better Service Standards Shantanu Bhadkamkar, Chairman, FFFAI
Pg 8
Sonalika to reap more from exports
NEWS IN BRIEF Greaves Cotton to power Atul Auto three-wheelers
G
reaves A ut om ot i v e Eng i nes Busi ness, part of Greaves Cotton Limited, has entered into a seven-year agreement with Atul Auto for supply of diesel engines for their three-wheeled diesel vehicles. Currently, Greaves engines power Atul Smart, Atul Shakti and Atul Gem.
Eco-Friendly Engines Greaves Automotive Division has a wide portfolio in automotive engines with production of over 4.5 lakh engines annually. These eco-friendly light diesel engines are supplied to major automotive players like Piaggio, M&M, Tata Motors, Scooters India among others. The company’s manufacturing units are located at Ranipet in Tamil Nadu and Aurangabad in Maharashtra. The company has enrolled over 1200 authorised dealers.
Nabeel A Khan New Delhi
S
onalika Group owned International Tractors Ltd (ITL) is looking at more than doubling its revenue in the next two years and major chunk of contribution is expected from the exports of tractors. The company has recently set-up assembly units in three countries and is gearing to set-up an assembly plant in Argentina. Following approval of its tractor engines by Environmental Protection Agency, Washington, it will start exporting to the US also in a couple of months. Initially, the tractors will be exported as Completely Built Units (CBUs) to the US and after weighing larger opportunities, it may consider setting-up an assembly plant. It sees great demand potential in US and recently a delegation from US has visited company’s plants in India. The biggest positive point for Sonalika in the US market
will be its price competitiveness and hopes to sell around 1,000 units in the first year. The other new markets where it is going to export tractors are Brazil, Chile and Turkey. The deal has almost been finalised and the exports will start in the next two months. Sonalika expects to sell total 2,000 units in Brazil, Chile and Turkey this year. ITL currently earns around 10 percent of its total revenue from export business which is likely to go up to 20 percent of its total revenue from the current 10 percent by 2014. Sonalika Group’s revenue stood at around `5,000 crore in the last fiscal and it hopes to touch `10,000 crore by FY14. The group’s business interest includes manufacturing of farm equipment, cranes, cars and utility vehicles. The company has recently developed mini trucks that will be launched next year. ITL is a leader in the tractor industry in India and sells it in over 60 countries. It created a new landmark in Sri Lanka by
exporting more than 500 units in the last financial year. “We may even exceed our turnover target of `10,000 crore by FY14. The growth will mainly come from the export of tractors. We are entering into new international markets to export tractors and exploring more such markets. Currently, we are present in 58 countries,” Sonalika Group, Chairman, LD Mittal told Auto Monitor. The company has set-up assembly units in marketing and trading alliances with local partners in three new countriesNigeria, Cameroon and Algeria. The tractors have already started rolling out from these plants a couple of months ago. Each plant has an initial capacity of around 20,000 units a year. The tractors will also be exported to the surrounding countries from these plants. The total investment in these countries is around `100 crore by Sonalika Group, while a total of around `60 crore was put in by three local partners from each country.
The main mechanism and technology of the tractors will be exported out of India as CKD while some of the components like battery, tyres will be procured locally. In India, the company hopes to grow by around 20 percent and does not see any impact of the slowing economy. “The tractor sector has become a positive business—it is not exclusively used for agriculture, but put to multiple usages by adding a few attachments ,” stated Mittal. The group has also expanded its units in order to increase the production capacity from 60,000 to 100,000 tractors due to a strong demand across the globe. Around 7,000 units of tractors were exported in FY12 while in the same fiscal the total sales stood at around 51,000 tractors. In the domestic market, it sees lots of unexplored places and most of them are in the southern part of the country where it is going to establish a new dealers network.
Fiat may introduce Jeep, 500X in India Our Bureau New Delhi
F
iat is planning to bring its sports utility vehicle (SUV) brand Jeep and 500X to India. Utility vehi-
DATA MONITOR Top 5 Car Makers Company
Jun-11
Jun-12
Change
Maruti
70,020
83,531
19.30%
Hyundai
30,402
30,450
0.16%
Tata Motors
26,184
22,551
-13.87%
M&M
17,863
22,448
25.67%
12,034
14,700
22.15%
TKM
Top 5 Car Exporters Company
Jun-11
Jun-12
Change
Hyundai
22,129
23,904
8.02%
Maruti
10,278
13,066
27.13%
Nissan
9,072
12,864
41.80%
Ford
2179
1024
-53.01%
Tata Motors
706
767
8.64%
* Source: SIAM/ ** Excluding exports/ *** all sub segments considered/ ^ excluding MRPL
cle segment grew by 50 percent in April-June 2012 compared to the like period in the previous year, according to SIAM data. “A number of Sports Utility Vehicle (SUV) or SUV-like products are coming to India. The segment is growing and there is lot of excitement. The next probable brand from Fiat-Chrysler that could come to the Indian market is Jeep,” Senior Vice President (Commercial), Fiat India Automobiles Ltd (FIAL) Enrico Atanasio said during an event in Delhi recently. The Jeep will be coming to India as
CBU initially. However, these new products would be considered for launch only after the company sets-up about 70-80 exclusive showrooms. To further strengthen its presence in the country, the company is currently in the process of having its own commercial operations, such as sales and after sales business, after ending its distribution association with Tata Motors earlier this year. The Italian car major hopes to open 70 to 80 independent dealerships across India by March 2013. It will dismantle all dealerships which are with
Fiat Starts New Campaign In India Fiat India Automobiles recent ly started a new theme campaign, ‘Italian Technological Marvels’ at its Fiat Caffe. The initiative is to showcase a host of Italian engineering innovations for the next two months. The inventions across fields have been on display, especially the inventions sig-
nificant from an automotive perspective, such as electric motors, batteries, bearings, internal combustion engines & microprocessors which were projected on the screens at the Caffe. The campaign will also feature Fiat’s inventions of the common rail direct injection technology & 1.3L Multijet SDE.
Enrico Atanasio, Senior VP- Commercial, Jayant Deb, Head-Engineering & Design and Gurpratap Boparai, Head- Fiat Powertrain at Techno Season, Fiat Caffé
Tata Motors by the middle of next year. However, if the entrepreneur wants to own the Fiat dealership, they can have it but in a separate operational set up. “Fiat has decided to create a fully-owned company to take care of car sales and parts. It is being incorporated and in a couple of days, we will finalise the name and I will be serving as the Managing Director of that new entity,” Atanasio added. Fiat and Tata Motors had ended their distribution alliance
formed in 2007 for sales and service of Italian firm’s vehicles in India in May. However, the JV company will exist and manufacture all cars and engines. It will be a 100 percent manufacturing setup. Currently, Fiat has 166 joint showrooms with Tata Motors, besides 179 workshops across 126 locations. Fiat is also mulling on utilising the Indian plant for export to markets in Asia Pacific as well as other right hand drive countries in the world.