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
Vol. 12 No. 31
w w w.am o n l i n e.i n
24 September 2012
SPECIAL
COMMERCIAL VEHICLES Pg 18-22
50 Pages
` 50
INTERVIEW SERVICE CONSISTENCY IS KEY IN LUXURY SEGMENT Devdutta Chandavarkar, Mercedes Benz India Pvt Ltd
Pg 08
Atul Auto steps into 0.35 tonne segment with ‘Gemini’, plans four-wheeler CV Anand Mohan Rajkot
R
ajkot based Atul Auto’s first 0.35 tonne threewheeler will hit the market by mid-January, 2013. The product is tentatively named ‘Gemini’ derived from the Gem, the company’s existing model. The 0.35 tonne segment is the biggest three-wheeler number churner, accounting for about 50 percent of the entire threewheeled segment. At present, Bajaj RE is the largest player in the segment. On the avenues that this product could open up for the
company, Director, Atul Auto, Niraj Chandra said, “Exports too are mostly dominated by these small three-wheelers, especially passenger vehicles, and that too mostly powered by petrol engines.” Greaves Cotton, Atul Auto’s engine supplier, provides a 435cc diesel engine to the company, which is used in all the company’s current range. Industry sources reveal that Greaves may be developing a 200-225cc petrol engine that will power the company’s latest 0.35 tonne offering. But initially, the three-wheeler will only be powered by the existing diesel unit till the petrol engine is production ready.
The new 0.35 tonne product will share most bits including the engine with the Gem thus making it cost effective. It will also share the 0.5 tonne Gem’s assembly line and once the petrol variant is introduced, another line will be added for which provision is being made on the factory floor. Atul’s Rajkot facility operates on a single shift and churns out around 27,000 units per annum. The company is gradually ramping up production and is planning to build 48,000 units by November 2012, just in time for its 0.35 tonner rolling off the line. The company is looking to grow its revenues to `1,000 crore
by 2016 from current turnover of around `300 crore. Chandra is counting on new launches, geographic expansion and the new three-wheeler to aid in the growth process.
Four-Wheeler Segment When asked about the lack of other verticals to rely on, in case of any instability in the threewheeler segment, Vice President, Finance, JV Adhia said, “We are looking to have a presence in the four-wheeler commercial vehicle segment too in the next few years.” He also revealed that the research on the project is done and within the next two-three years, the company will launch
a four-wheeled cargo mover with around one-tonne capacity which will be followed by a passenger carrier. Atul Auto was looking at setting up a plant for manufacturing four-wheeled commercial vehicles near Ahmedabad but land prices soared multifold in the past few years due many OEMs looking to set up shop in Gujarat. The land price escalation didn’t make the project viable for the company due to which plans for the new plant were kept on hold. Once the 0.35 tonne threewheeler is launched, Atul Auto will be searching for land for the four-wheeled vehicle.
Acquisition of Scooters India Shelved The company had plans to purchase Scooters India but after a year of pursuing the government to get details on the Lucknow based company, “we did not get any response from them,” said Adhia. He added, “We were looking to buy Scooters India because with numerous outlets, we could have catered to Eastern and Central India which would have reduced logistical costs drastically but after a lack of response, we decided to stop spending time and energy on it.”
Notice to car makers on anti-competitive practices
DATA MONITOR Top 5 2W Makers Company
Aug-11
Aug-12
Change
HML
487,616
431,739
-11.46%
HMSI
152,336
209,164
37.30%
Bajaj Auto
226,559
195,093
-13.89%
TVS
163,705
135,493
-17.23%
Suzuki
26,148
36,524
39.68%
Top 5 2W Exporters Company
Aug-11
Aug-12
Bajaj Auto
111,495
109,259
Change -2.01%
TVS
26,479
15,227
-42.49%
HMSI
8,247
13,463
63.25%
HML
16,038
12,062
-24.79%
IYM
9,556
10,214
6.89%
* Source: SIAM/ ** Excluding exports/ *** all sub segments considered/ ^ excluding MRPL
Our Bureau Mumbai
T
he Compet it ion Commission of India (CCI) recently sent notices to 17 car makers on the alleged anti-competitive practice of selling spare parts at high prices to consumers through the authorised channels. CCI is likely to have a hearing on the matter next month. CCI is pursuing the case under Section 4 of the Competition Act that relates to abuse of dominant position by enterprises. The probe was conducted after a complaint was filed with the CCI last
year against certain carmakers for allegedly abusing their dominant market position by selling spare auto parts to customers at high prices. As per the complaint, the carmakers were accused of abusing their dominant position by making available spare parts only through their authorised dealers, who in turn sell such parts at high rates. CCI has the mandate to eliminate practices that have adverse impact on competition and protect the interests of consumers. Generally, CCI refers the complaints related to anti-competitive practices for further investigation by its
The carmakers were accused of abusing their dominant position by making available spare parts only through their authorised dealers, who in turn sell these at high rates Director General, before taking any action. According to industry estimates, independent service chains have around one percent
share in the `25,000 crore aftermarket service and spares industry. The aftermarket service industry includes over `6,000 crore of body shop and `15,000 crore service and spares work. It is growing at a compound annual growth rate of over 20 percent. Independent workshops account for a third of the servicing market In developed markets like UK, France and Germany. The European Commission has passed a regulation ‘Right to Repair’ making it mandatory for all OEMs to make spares available in the open market, which has brought down servicing costs for consumers.