Automotive Industry Report

India
Automobile Industry Updates
In this issue:
Automobile Industry Updates
Regulatory Update
Issue No 6
'We need uniform excise duty
on cars'
August 2009
Effects of Recession
Global slump oiled Indian auto Regulatory Update

wheels
Tata Motors takes Rs 329 cr hit 'We need uniform excise duty on cars'
Hero Honda rescues Honda Mahindra and Mahindra (M&M) is the first home-grown auto maker to enter the US,
from skidding in recession the world‘s most competitive car market. Much of the credit for Pawan Goenka,
Mercedes' India sales may be President, Automotive Sector, Mahindra & Mahindra making M&M a global company,
less this year with the launch of its pick-up trucks and a yet-to-debut sports utility vehicle (SUV) in
Tata Motors may sell 15% in fin the US market, goes to its president for automotive sector Pawan Goenka. He has
arm
now taken over as the president of Society of Indian Automobile Manufacturers.
Recovery still far away for More
commercial vehicle
manufacturers
Press Release Effects of Recession
Mahindra Renault targets to sell

1200 units of Logan in north Global slump oiled Indian auto wheels
The India auto industry came of age and emerged as a global ―strategic market‖
Maruti sells nearly 85,000
vehicles in Aug 2009 when recession drove auto giants into panic in the first world. India and China which
Tata Motors sales soar 14 pc in were hailed as the ―next great frontiers‖ for companies globally. And the small car,
August long the backbone of the Indian market, proved big, keeping demand going in the
Audi sales up 69 per cent in domestic market while also helping spread across the globe
August More
BMW to foray into financing
biz; to invest $50 mn Tata Motors takes Rs 329 cr hit
Car sales rise 26% in India Tata Motors posted a consolidated first-quarter loss after sales of its British marque
India speeds past China in auto brands Jaguar and Land Rover (JLR) suffered in the wake of a global downturn, but
exports expressed confidence of a speedy turnaround. Analysts said the results were in line
M&M may soon be world’s No. with expectations.
1 tractor co India‘s largest vehicle maker reported a consolidated net loss of Rs 329 crore for the
Volkswagen may assemble fiscal first quarter as against profit of Rs 720 crore in the year-ago period.
Audi Q5 in India
More
7 auto testing centres to make
India an auto hub on cards
Hero Honda rescues Honda from skidding in recession
Indian co to be in top 6 Japanese auto major Honda, the only global automobile company to survive the
carmakers of the world by 2020:
Study downturn with a small growth, says it owes its sales growth to the top-gear
performance of Indian joint venture Hero Honda. Honda Siel Cars India president and
Commercial vehicle makers CEO Masahiro Takedagawa told ET NOW that Hero Honda‘s performance has
gear up for price hikes
helped Honda buck the global skid riding on the demand for small, commuter
Maruti plans KB Series engines motorcycles.
for entry level, A segment cars
More
General Motors, Reva to jointly
make electric vehicles
Mercedes' India sales may be less this year
Sales of luxury cars robust in German auto major Mercedes-Benz, facing a stiff competition to retain its number
Gujarat on Dussera
one spot in the segment in the country, today said its sales in India this year could be
At Rs 3,400 cr, record auto loan
disbursal in Sept lesser than last year.
"I don't see higher sales this year. During the first half of 2009, our sales were
Replacement market props up
Indian tyre sales impacted just like other players in the industry but we hope for a momentum in the
second half and also a robust growth in 2010," Mercedes-Benz India Managing
New Product Director and CEO Wilfried Aulbur told reporters here.
Ford plans to bring Rs 3 lakh- More
plus small car
Mercedes-Benz to launch new Tata Motors may sell 15% in fin arm
variants in India
Tata Motors is planning to sell about 10-15% equity stake in its subsidiary Tata
Ford Endeavour gets a facelift Motors Finance to raise funds for reducing its debt, according to two persons familiar
Maruti Suzuki to relaunch with the development. India‘s largest maker of commercial vehicles said it would sell
power-packed SX4 equity stakes in various subsidiaries as part of a plan to reduce the company‘s Rs
Nissan to launch sports car 24,000-crore debt.
Z370 in India in 2010
The stake sale in the unlisted firm could likely fetch Tata Motors about Rs 200 crore,
Audi rolls out its latest sports which would value the wholly-owned subsidiary at about Rs 1,300 crore to Rs 2,000
utility vehicle Q7 in India
crore.
Honda Siel launches new Civic More
Nissan launches 2 new cars in
India Recovery still far away for commercial vehicle manufacturers
Mercedes unravels its new E- The economic and financial crisis has a far-reaching effect on the European
Class
commercial vehicle industry. The drop in economic activity and transport has pushed
Honda launches the new City truck production down to half of pre-crisis levels and there are no real signs of
priced at Rs 8.37L-10.24L
recovery in sight.
Volkswagen's Polo to hit Indian More
market
Industry Competition Press Release
M&M may buy Kirloskar Oil's

stake in Swaraj Engines Mahindra Renault targets to sell 1200 units of Logan in north
Mahindra Renault is hoping to sell 1200 units of Logan in northern region in the
Volvo Car sees good demand
for luxury cars in India current fiscal.
Mercedes targets Rs 145 cr The company, which is a joint venture between Mahindra & Mahindra and Renault,
revenue from truck sales has also launched new variants of Logan Play which carry price tag of Rs. 5.49 lakh
M&M may decide on US plant for petrol and Rs. 6.79 lakh for diesel version.
by mid-2010 More
India will build Ford's Figo
Maruti sells nearly 85,000 vehicles in Aug 2009
Nissan plans compact car hub
in Chennai Maruti Suzuki India Limited, India's car market leader, sold a total of 84,808 vehicles
Ford India doubles Chennai

plant capacity in August 2009, growing 41.6 percent in the month. This includes exports of 14,847
Suzuki to spend $215 million on units, the highest ever monthly export in the company's history. A company release
new Haryana factory said it had sold a total of 59,908 vehicles in August 2008.
Volkswagen India plans to More
double distribution network
Tata Motors sales soar 14 pc in August

International Updates
Automaker Tata Motors today posted 14.24 per cent jump in its total sales during
Tata arm gets 10 mn pound August at 49,810 units, compared with 43,600 units the same month in 2008. The
loan from UK Govt
homegrown firm's total passenger vehicles sales in the domestic market grew by
India in spotlight at Frankfurt
auto show 11.33 per cent at 17,364 units last month, against 15,597 units in the same month
last year, the company said in a statement.
Reva launches new car models
at Frankfurt Motor Show More
M&M to enter US market in 1st

quarter of 2010 Audi sales up 69 per cent in August
German luxury car-maker Audi India on Wednesday said it has achieved an
Tata Motors lines up Rs 160 cr
electric Indica Vista project impressive sales growth of 69 per cent by clocking a sale of 171 cars in August
JLR plans to shut down UK

compared to 101 units in the same month a year ago.
plant, pump in 800 mn pounds More
China – Automobile Production

to Reach 16 Million by 2012 BMW to foray into financing biz; to invest $50 mn
Luxury car maker BMW on Wednesday announced an investment of about Rs 250
crore to set up a financing subsidiary in the country to serve the credit needs of retail
customers, fleet owners and dealers, for which it has sought regulatory approval.
More
Car sales rise 26% in India

Car sales in India rose an annual 26 percent in August, an industry body said on
Tuesday, with demand boosted by new launches and availability of cheaper loans.
More
India speeds past China in auto exports

China may be the world's shop floor, but India is rolling it out faster when it comes to
automobile exports.
India exported a total of 2.30 lakh cars, vans, SUVs and trucks between January and
July 2009, a growth of 18% even as China‘s exports tumbled 60% in the same period
to 1.65 lakh units.
More
M&M may soon be world’s No. 1 tractor co

Mahindra and Mahindra (M&M) will end this fiscal year as the world‘s number one
tractor company by volumes, a company official said. ―If we take the volumes of one
legal company — not all subsidiaries or international operations — we might well be
number one this year,‖ said Anjanikumar Choudhari, president of the farm equipment
division at the automobiles-to-finance-to-IT conglomerate. M&M and subsidiary
Swaraj (earlier Punjab Tractors) are expected to sell about 1.5 lakh tractors this year,
while the mother entity of the world‘s largest tractor maker John Deere sells around
1.1 lakh units a year.
More
Volkswagen may assemble Audi Q5 in India

Audi, the luxury car maker from the Volkswagen group, is considering the local
assembly of the Q 5, an SUV. Although company officials declined to specify the
model, auto industry experts said it would be the Q5, making this the third car that the
luxury car maker will assemble in the country.
Audi has a plant at Shendra, near Aurangabad, in Maharashtra, which it shares with
group company SkodaAuto.
More
7 auto testing centres to make India an auto hub on cards

The ministry of heavy industries is setting up seven Auto Testing Centres to make
India an auto hub, according to Ambuj Sharma, joint secretary in the heavy industry
ministry.
He said cars would be tested in these centres before they are rolled out on the roads.
In these auto testing centres, car manufacturers belonging to Indonesia, Malaysia
and Thailand would be allowed to test their products as part of the government
attempt to invite more foreign direct investment participation in the automobile sector.
More
Indian co to be in top 6 carmakers of the world by 2020: Study

At least one Indian company will be among the top six carmakers that would
dominate the global auto industry by 2020, a study by global consultancy firm Deloitte
said.
Releasing a study 'A New Era: Accelerating toward 2020 -- An Automotive Industry
Transformed', the firm said the car industry would see a massive capacity building in
low-cost locations like India and China as manufacturers shift base from developed
regions.
More
Commercial vehicle makers gear up for price hikes

Commercial vehicle makers, which have put on hold a hike in product prices despite
a sharp rise in input costs, are not in a position to hold out for long. They are keen on
passing on the increase from October 1, buoyed by a sharp pick-up in sales.
More
Maruti plans KB Series engines for entry level, A segment cars

The country's largest car maker Maruti Suzuki is mulling changing all engines in its
range of entry level and A-plus segment cars to the latest KB Series engine which it
unveiled last year, a top company executive said.
Currently, the new series of engines is being used in the latest models of the Maruti
stable - Estilo, Ritz and the 'A' Star.
More
General Motors, Reva to jointly make electric vehicles
The Indian arm of General Motors (GM) Thursday said that it is partnering Bangalore-
based electric car maker Reva to develop and produce electric vehicles for the Indian
market.
According to General Motors India managing director Karl Slym, the initiative was "in
line with government objectives to reduce fossil fuel dependence".
More
Sales of luxury cars robust in Gujarat on Dussera

Gujarat has witnessed a surge in luxury car sales on the auspicious occasion of
Dussera, notwithstanding the economic slowdown.
"People here have the craze of buying vehicles on Dussera as it is considered to be
an auspicious day and traditionally high sales have been recorded on the day of this
festival," vice-president of Benchmark Cars Paras Somani said.
More
At Rs 3,400 cr, record auto loan disbursal in Sept

With auto sales zooming, auto financiers too are back with a bang. The top eight auto
financiers disbursed loans worth Rs 3,400 crore in September—the highest for a
month in the past two years—led by impressive auto sales, new launches and return
of confidence among potential car buyers. Auto finance leader HDFC Bank has
registered over 40% growth in loan disbursement in September from a year ago,
while other leading players such as Kotak Mahindra Bank, SBI, Canara Bank, PNB
and Bank of Baroda have also seen a growth of 25-35 %.
More
Replacement market props up Indian tyre sales

The tyre market here has been growing by nearly 10-12% Y-o-Y, thanks to the
replacement segment, which accounts for roughly 75% of revenues of the industry.
And contrary to popular belief, despite the brief slowdown, it is the commercial vehicle
(CV) category that has provided a much-needed fillip to the tyre industry. Says Arnab
Banerjee, executive director, (sales, marketing & outsourcing) at CEAT: ―CV tyre
sales have a strong correlation with the GDP of the country.
More
New Products
Ford plans to bring Rs 3 lakh-plus small car

Ford has started work on a new low-cost small car to sell in fast-growing markets like
India, China, Eastern Europe and South America. The company is investing around
$500 million fresh money in India for building small car and engine manufacturing
capacity.
More
Mercedes-Benz to launch new variants in India
Mercedes-Benz (MB) India plans to launch new variants of its models in the coming
months and the company was currently seeing an upswing in its sales, a key official
said on Tuesday.
Director, Sales and Marketing of MB India, Debashish Mitra, however, declined to go
into the details on the proposed new variants and merely commented: "You (media)
will hear from us a number of times this year (on new variants)".
More
Ford Endeavour gets a facelift

Ford India on Wednesday launched the new design look Endeavour 3.0L with 5-
speed automatic transmission and an array of contemporary features that give the
new Ford Endeavour fresh appeal.
More
Maruti Suzuki to relaunch power-packed SX4

Passenger car leader Maruti Suzuki India has stopped manufacturing its most
expensive car SX4, the mid-sized sedan, reinforcing the widely-held belief that the
small car leader does not have the expertise to make and market big cars.
Maruti will relaunch SX4 within a fortnight with a new 1.6-litre engine which will have a
much higher pick-up. It will be more expensive than the current top-end Zxi variant,
which comes at Rs 7.5 lakh (ex-showroom Delhi).
More
Nissan to launch sports car Z370 in India in 2010

Nissan Motor will roll out its new sports car 'Z370' in India in 2010 as part of its
strategy to offer more variants to the Indian customers."Nissan will launch its sports
car Z370 in the Indian market and is expected to be rolled out in January 2010,"
Hover Automotive India (marketing partner of Nissan, India), vice-chairman, G M
Singh told reporters today during the launch of new dealership here.
More
Audi rolls out its latest sports utility vehicle Q7 in India

German premier car maker Audi on Thursday announced the launch of its latest
sports utility vehicle (SUV) Audi Q7, which will be available with three engine variants.
The three variants of the car, which will be available in 11 colours, will cost Rs 55.2
lakh, Rs 53.4 lakh and Rs 29.9 lakh in showrooms in Maharashtra.
More
Honda Siel launches new Civic

Honda Siel Cars India (HSCI) Ltd on Tuesday launched the new Honda Civic. The
new Civic has a curved 5 Point Metallic Front Grille and restyled front bumper which
the company believes gives the car a sportier look. Also new are the stylized ‗Dark
Smokey Headlights & Crystalline Octagonal Tail Lights‘. The audio system of the new
Civic comes equipped with a USB port together with the CD player. An intelligent fuel
economy indicator has been introduced in the new Honda Civic to enable the
customer to achieve the good fuel efficiency.
More
Nissan launches 2 new cars in India

Nissan Motor Co launched two new car models in Mumbai Wednesday, part of an
aggressive India expansion plan by Japan's third-largest automaker.
`Ìndia is the single biggest country in Nissan's investment plan in 2009,'' said
Kiminobu Tokuyama, chief executive and managing director of Nissan Motor India
Pvt. Ltd.
More
Mercedes unravels its new E-Class

German luxury car maker Mercedes Benz on Wednesday launched a brand new
version of its sedan E-Class in India priced at Rs 46.98 lakh (ex-showroom, Delhi).
The new E-Class comes with a 3.5 litre V-6 petrol engine, which would be locally
assembled here. The company has so far sold a total of 11,000 units of the existing
E-Class in the country. Mercedes Benz India had last month launched a special
edition of its sedan C-Class also in an attempt to boost sales.
More
Honda launches the new City priced at Rs 8.37L-10.24L

Honda Siel Cars India on Tuesday launched a new feature packed Honda City 1.5V
and the new Honda City 1.5S with brand new beige interiors.
The new variant of the Honda City has been launched as part of the Great Honda
Fest promotion.
More
Volkswagen's Polo to hit Indian market

European luxury car manufacturer Volkswagen on Friday said its proposed small car
was "well on track" and would hit the Indian market by next year.
The small car, Polo, a hatchback model would compete with B+2 segment,
Volkswagen India (Passenger car) director Neeraj Garg told reporters here.
More
Industry Competition
M&M may buy Kirloskar Oil's stake in Swaraj Engines

Mahindra & Mahindra Ltd is planning to up its stake in Swaraj Engines by buying out
Kirloskar Oil Engines' stake in the latter, the Business Standard reported on Friday.
Swaraj Engines was formed in technical collaboration with Kirloskar Oil, which
currently holds 17.39 percent stake in the firm.
More
Volvo Car sees good demand for luxury cars in India

The Indian unit of Volvo Car Corp, a subsidiary of Ford Motor Co, expects industry
sales of luxury cars to rise to about 10,000 this year from about 7,000 last year and to
keep growing in double-digits for some years. "India has a bigger population and has
more dollar millionaires than Russia... I see no reason why (luxury cars) should not go
to 2-3 percent of the market," he said.
More
Mercedes targets Rs 145 cr revenue from truck sales

Mercedes-Benz India Ltd hopes to sell about 240 trucks in India during 2009 which is
estimated to translate into Rs 145 crore revenue for the segment. During 2008, it sold
about the same number of vehicles. It now feels that the market will improve only in
2010 when growth is likely.
More
M&M may decide on US plant by mid-2010

Mahindra & Mahindra Ltd wants to decide within months of its US market launch
whether to set up an assembly plant there, the head of its automotive division told
media.
"By mid-2010 we want to make a decision about whether to produce in the US or not,"
Pawan Goenka said on Tuesday on the sidelines of the Frankfurt Motor Show.
More

American carmaker, Ford Motor, plans to make India its manufacturing hub for its
small car Figo it showcased on Wednesday for the Asia Pacific market. Ford has
targeted 2 lakh cars for India by 2010. After unveiling the Figo in Delhi, Ford‘s
president and CEO Alan Mulally said: ―The global market is shifting towards smaller
cars and India has a predominant advantage with a 70% market for compact cars.
With Figo, we plan to get a larger chunk of the premium hatchback market, both in
India and overseas.‖
More
Nissan plans compact car hub in Chennai

Japan‘s Nissan Motor plans to make India one of its key manufacturing locations for
its compact cars, which include products such as Micra, a senior official said.
―Low operational costs and the growing importance of India in compact car
manufacturing make it an attractive proposition to make India a hub,‖ said K
Tokuyama, MD & CEO, Nissan Motor India.
More
Ford India doubles Chennai plant capacity

Ford India, whose automobile manufacturing facility in Chennai functioned with zero
automation so far, is investing US $ 500 million in ramping up and modernising the
facility, including introducing a 30% automation in its operation.
The company has also recruited 400 workers at its plant, in preparation for the launch
and production of its new 'small car' model by early 2010. By then, the plant capacity
would be doubled from its present 1 lakh per annum to 2 lakh per annum.
More
Suzuki to spend $215 million on new Haryana factory

Japan's Suzuki Motor said it plans to invest about 20 billion yen ($215 million) to build
a new car factory in India, aiming to upgrade its production facilities in the face of
growing competition.
Suzuki, which controls about half the Indian car market through unit Maruti Suzuki
India Ltd, said late on Saturday that the new facility would come on-line as early as
2011 and have an annual output capacity of about 250,000 cars.
More
Volkswagen India plans to double distribution network

German auto giant Volkswagen is planning to double its distribution network in India
and increase brand spend before its much awaited entry into the country's small car
segment early next year, a top official said here Friday.
More
International updates
Tata arm gets 10 mn pound loan from UK Govt

Auto major Tata Motors on Friday said its wholly-owned European subsidiary, Tata
Motors European Technical Centre (TMETC), has received a loan of £10 million
(approximately Rs 80 crore) from the British government to develop an electric vehicle
in the UK for a total investment of £25 million (Rs 195 crore).
More
India in spotlight at Frankfurt auto show

India, whose mode of transportation in antiquated cars was once referred to in
German industrial circles as the "world's bullock cart", is now being aggressively
courted by German automakers, seen by the enormous attention it received at the
International Motor Exhibition here.
More
Reva launches new car models at Frankfurt Motor Show

Reva Electric Car Company announced the launch of its model Reva NXR while
unveiling another variant Reva NXG, at the Frankfurt International Motor Show.
Reva NXR, a lithium-ion battery powered car is scheduled to go for production early
next year and Reva NXG's manufacturing is scheduled for 2011, a company
statement said.
More
M&M to enter US market in 1st quarter of 2010

Auto maker Mahindra & Mahindra on Thursday said it will begin US operations in the
first quarter of 2010 with two new variants of SUV Scorpio besides two vehicles in the
Indian market over the next six months.
The company also said reports about recall of some of its Scorpio and Xylo vehicles
are false.
More
Tata Motors lines up Rs 160 cr electric Indica Vista project

Indica Vista will, this year, become the second electric car to be exported from India
since the Maini Group started selling its Reva as G-Wiz in Europe about five years
ago.
Tata Motors will soon roll out its £20-million (Rs 160 crore) electric car project in
Norway and later scale it up for other Scandinavian markets. The Indica Vista EV has
been designed and developed by Tata Motors' UK subsidiary, Tata Motors European
Technical Centre.
More
JLR plans to shut down UK plant, pump in 800 mn pounds

Jaguar Land Rover (JLR), the British luxury carmaker owned by Tata Motors, on
Thursday said it will close one of its two West Midlands plants, introduce new
products and infuse funds in a bid to drive growth and return to profit.
The new strategy will focus on the medium and long-term requirement, but has an
―acute focus‖ on next year. It is aimed at global competitiveness, driving growth,
sustaining profitability and responding to the challenges of climate change, the JLR
statement said.
More
China – Automobile Production to Reach 16 Million by 2012

Our recently published report "China Automobile Sector Forecast to 2012" has found
that the auto sales in China surged to 7.2 Million in the first seven months of 2009, up
23% from the same period last year, despite adverse business conditions emanated
from the global economic slowdown. With the government‘s supportive policies, the
automobile production is expected to reach 16 Million by 2012
More
Back to Top
Regulatory Updates
'We need uniform excise duty on cars'

27 September 2009
The Economic Times
Mahindra and Mahindra (M&M) is the first home-grown auto maker to enter the US, the world‘s most competitive car
market. Much of the credit for Pawan Goenka, President, Automotive Sector, Mahindra & Mahindra making M&M a global
company, with the launch of its pick-up trucks and a yet-to-debut sports utility vehicle (SUV) in the US market, goes to its
president for automotive sector Pawan Goenka. He has now taken over as the president of Society of Indian Automobile
Manufacturers. In an interview with ET, Goenka discusses the prospects for the industry. Excerpts:
What is your agenda to take the Indian auto industry to next level?
Indian automobile industry should now focus on creating a brand image for itself in both domestic and international
markets. Like the governments in Europe, Japan and Korea that support auto makers to create strong domestic brands,
we need government support and self-innovating expertise in engineering to become a force to be reckoned with. Only
then will our products be taken seriously in developed markets.
Do you have a blueprint for that course?
We have outlined a 10-year Auto Mission Plan for the Indian auto sector to become $145 billion industry by 2016. When
we announced the plan in 2006, the industry was estimated at $36 billion. Over the past three years, we have grown to be
a $45 billion industry. All ingredients required for growth are there. For greater focus on overall brand building — both at
the level of SIAM and individual companies — we need greater cooperation to develop technology together, while
drawing clear lines to be competitive.
So will the focus be on exports?
We have been exporting around 14-15% of 1.3 million cars produced here and hope to raise that to 20-22% in a few
years. We plan to rev up our cars with improved quality and technology, and develop platforms conforming to global
standards. Some incentives could be accorded through tax sops and better infrastructure to promote exports and develop
India as a global manufacturing hub.
That brings us to the high taxation regime for the auto industry in India...
There has been a phased reduction in the past, but we need some critical rationalisation. Tax differential for different
segments of vehicles — 8% excise for smaller car against 20% for bigger models — should be replaced with uniform
excise. There are no real incentives for exporting cars from India; that needs to be accorded priority to make our products
cost competitive. We need to cut the cost of power and eliminate infrastructure bottlenecks.
What about automobiles propelled by alternative fuels?
Efforts are underway to develop alternative fuels and seven projects are under Pawan Goenka, President, Automotive
Sector, Mahindra & Mahindra implementation. Major ones are the National Hydrogen Energy Plan and National Hybrid
Propulsion Platform under which few automakers will jointly develop mild and semi-hybrids till the prototype stage to
display at the Delhi Commonwealth Games. We have a goal to drive a million vehicles on hydrogen in the country by
2020. The technology is available but makes it practical and affordable for the customers.
Are you looking at any corpus to develop the technology together?
There is no such plan to develop a corpus or a kitty for common technology development but under the National Hybrid
Propulsion Platform, the government has set aside Rs 200 crore. Industry will contribute in kind. The government is not
shying away from funding R&D projects, but the processes for that should be in place and like-minded people should
come together.
How does the Indian auto industry plan to beat the slowdown blues?
It has been a great learning phase, with each company having its own experience. They have become leaner and
efficient. While FY ‘09 was a bad year, the first quarter of the current fiscal has been good. We hope the upward trend will
continue. All the major segments such as cars, two-wheelers and three wheelers are expected to post double-digit growth
this fiscal. Trucks and buses may continue to struggle, but we are hopeful of a comeback by the end of the fiscal.
Do you feel the easing of interest rates on auto loans will help in early revival?
There has been a continuous slide in interest rates but we would be more comfortable at 10%. While PSU banks have
shown the way with single digit interest rate, a more competitive environment will help to ease the impact of interest
burden on customers.
Back to Top
Effects of Recession
Global slump oiled Indian auto wheels

14 September 2009
TNN
The India auto industry came of age and emerged as a global ―strategic market‖ when recession drove auto giants into
panic in the first world. India and China which were hailed as the ―next great frontiers‖ for companies globally. And the
small car, long the backbone of the Indian market, proved big, keeping demand going in the domestic market while also
helping spread across the globe. Companies like Ford, General Motors, Honda and Hyundai took a fresh perspective of
India, to learn the now-crucial basics of ―frugal engineering‖, making fuel efficient small cars at low cost.
―As companies and consumers across the globe try to cut costs, emerging giants can take even greater advantage of
their production models, based on cheaper local labour, lower costs and other such traits. In addition, they can fall back
on their domestic markets, which are still growing,‖ KPMG says in its update on the industry while forecasting ―growing
importance‖ for companies dominating these markets.
―The scrappage incentive has certainly helped all those passenger car makers in India who export to Europe as it spurred
demand for new cars, especially small, fuel-efficient compact cars,‖ Hyundai India MD HS Lheem said. The turmoil also
warned companies against over exuberance. ―It was a shock that called for some amount of introspection, and made
companies realise the importance of rationalisation of investments and capacities,‖ says Mohit Arora, who tracks the
Indian auto industry at JD Power's Singapore office.
Agrees Maruti MD S Nakanishi. ―The economic collapse told us, the corporates, that nothing is sacrosanct. If a big
corporate like Lehman can collapse, then why not others? The collapse was a clear message against invincibility. It told
us that in an ever dynamic world, there is only one way out, keep doing better than yesterday,‘‘ he said.
Back to Top
Tata Motors takes Rs 329 cr hit

1 September 2009
The Economic Times
Tata Motors posted a consolidated first-quarter loss after sales of its British marquee brands Jaguar and Land Rover
(JLR) suffered in the wake of a global downturn, but expressed confidence of a speedy turnaround. Analysts said the
results were in line with expectations.
India‘s largest vehicle maker reported a consolidated net loss of Rs 329 crore for the fiscal first quarter as against profit of
Rs 720 crore in the year-ago period. However, the financial performances are not comparable as JLR, which was
acquired in June last year for $2.3 billion, was not part of Tata Motors then.
―JLR is operating at much lower volumes than break-even point and the situation can take a while to change. Till then,
Tata Motors will continue to bleed,‖ said Mahantesh Sabarad, an analyst with Centrum Broking. Prior to the result
announcement, the Tata Motors stock closed flat at Rs 489.35 on a weak Mumbai market.
The adverse global market conditions have resulted in a 52% fall in sales volumes of JLR during the quarter. ―When
volumes are down so much, it is a challenge. We need a little bit of support from the market,‖ said Ravi Kant, vice-
chairman of Tata Motors. JLR‘s wholesale sale stood at 35,900 units while retail sale stood at 47,200 units. The new
models of JLR, which will be available in the second half of 2009, are expected to boost the company‘s sales.
―I have no doubt that JLR will be a profitable company when the markets revive. We are taking steps to offset losses in
retail and adjust stocks in line with retail sales,‖ he said.
In the June quarter, JLR posted a loss before interest, tax and exceptional items of Rs 873 crore after vehicle sales
plunged in its main markets such as the US, Europe and Russia.
Tata Motors has hired KPMG International and Roland Berger Strategy Consultants to help cut costs at the JLR units
after the global financial meltdown hammered demand for luxury products, reducing profits of Germany‘s BMW and
pushing Daimler into losses.
The luxury units need major cost reduction, the Tata Motors‘ chairman said in the latest annual report of the company that
makes the Nano, the world‘s cheapest car. JLR has slashed 2,200 jobs in recent months, reducing the workforce to
14,500. JLR will further reduce 300 jobs in a factory near Liverpool.
Employee costs surged 64% to Rs 2,044 crore while depreciation and amortization more than doubled to Rs 844 crore.
Total expenses rose 27% to Rs 16,700 crore. Tata Motors is looking to tie-up working capital funds for its JLR unit in the
next few weeks. "We have already tied up some funds from four banks. Discussions are on with some others. We hope
this will be completed in the next few weeks," said C Ramakrishnan, CFO, Tata Motors.
Mr Ramakrishnan said Tata Motors recently raised loan of pounds 340 million from European Investment Bank. JLR had
received working capital of pounds 150 million in the June quarter. Of this, Tata Motors provided pounds 50 million while
the balance was organised from Burdale Financial, Standard Chartered, GE and Bank of Baroda.
Tata Motors said it would look at capital raising through divestments and internal accruals. The company's consolidated
gross debt at the end of June stood at Rs 33,850 crore. JLR has entered the Indian market with its flagship showroom in
Mumbai and managed to sell 18 vehicles. It has got order for 40 vehicles. By March 2010, Tata Motors plans to have 6
JLR showrooms across India.
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Hero Honda rescues Honda from skidding in recession

9 September 2009
ET Now
Japanese auto major Honda, the only global automobile company to survive the downturn with a small growth, says it
owes its sales growth to the top-gear performance of Indian joint venture Hero Honda. Honda Siel Cars India president
and CEO Masahiro Takedagawa told ET NOW that Hero Honda‘s performance has helped Honda buck the global skid
riding on the demand for small, commuter motorcycles.
―It‘s true...since September last year, the entire global industry has been impacted a lot and Honda is no exception,‖ Mr
Takedagawa said.
―We were damaged in the US, Europe and Japan. The Chinese, Asian and Latin American markets were so-so. It‘s the
commuters motorcycle business in Asia, particularly India, that has supported our business both in terms of profitability
and growth. That‘s the main reason why Honda is showing a small but still positive growth,‖ he added.
Honda Motor Corp in the first quarter ended June 09 of the current financial year clocked a $77.64 million net income,
among the only two auto companies worldwide to do so. Fellow Japanese auto major Suzuki also drove home a positive
profit growth in the same quarter at nearly $22 million. Like Honda, Suzuki Motor Corp‘s growth and profitability tally is
thanks to its top-gear run in India with Maruti Suzuki.
Unsurprisingly, Honda sees no reason to disturb the applecart in the motorcycle market in India, now or after 2014 when
the technical agreement with Hero group come up for renewal. ―Since last year, Hero Honda has been showing lifetime
records every month,‖ Mr Takedagawa said.
―Our business is showing good growth, profitability and giving good dividends. As a result the share price of Hero Honda
is at record high. So logically there is no reason for us to split,‖ Mr Takedagawa said categorically.
Like Honda, Suzuki too has already gone on record to admit the importance of its Indian arm in the global pecking order.
In an earlier chat with ET NOW, Maruti MD Shinzo Nakanishi said: ―Maruti is definitely becoming more and more
important in the Suzuki stable given that its net sales had risen 14% during the last fiscal, a period that saw Suzuki‘s net
sales fall 14% to ¥3.05 trillion.‖
Hero Honda‘s performance all through the downturn not only bucked the industry trend but also set records. It hit a million
units for the first time in the first quarter of this fiscal. It managed to keep its operating margins up, using its tax-free
manufacturing facility in Haridwar (Uttrakahnd) and the relief in raw material prices to improve its profitability substantially.
Its sales growth, which beat the industry average at FY09‘s 12% clip, doubled to 25% in the first quarter of this fiscal.
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Mercedes' India sales may be less this year

23 September 2009
PTI
German auto major Mercedes-Benz, facing a stiff competition to retain its number one spot in the segment in the country,
today said its sales in India this year could be lesser than last year.
"I don't see higher sales this year. During the first half of 2009, our sales were impacted just like other players in the
industry but we hope for a momentum in the second half and also a robust growth in 2010," Mercedes-Benz India
Managing Director and CEO Wilfried Aulbur told reporters here.
The auto industry has been reeling under the global economic downturn since last year and began to look up only in the
past few months.
The company is facing intense competition from BMW, which has sold 2,305 units in the first eight months of the year.
Mercedes has managed to clock sales of sold 2,026 units in the same period.
Asked about the competition and the possibility of losing the number one spot in luxury segment to BMW, Aulbur said:
"Our focus in not on being the number one. Rather, we are focused on bringing new products to satisfy the needs of
Indian customers, while remaining profitable in our business."
In 2008, Mercedes-Benz had sold 3,625 units in the Indian market, compared with BMW's 2,908 units.
The company today launched a version of its sedan E-Class in the country priced at Rs 46.98 lakh (ex-showroom, Delhi).
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Tata Motors may sell 15% in fin arm

16 September 2009
The Economic Times
Tata Motors is planning to sell about 10-15% equity stake in its subsidiary Tata Motors Finance to raise funds for reducing
its debt, according to two persons familiar with the development. India‘s largest maker of commercial vehicles said it
would sell equity stakes in various subsidiaries as part of a plan to reduce the company‘s Rs 24,000-crore debt.
The stake sale in the unlisted firm could likely fetch Tata Motors about Rs 200 crore, which would value the wholly-owned
subsidiary at about Rs 1,300 crore to Rs 2,000 crore.
While it is learnt that Tata Capital, the group‘s finance arm, could buy the stake from Tata Motors, people connected with
the issue said the commercial vehicle maker has also sent feelers to other companies operating in the same industry.
―Tata Motors is committed to deleverage the company through divestments and capital raising at an appropriate time, but
specifics will be announced as and when we finalise (deals) on a case-to-case basis,‖ a spokesperson told ET.
―Tata Motors is continuing to pursue its divestment strategy to garner financial resources to bring debt levels down,‖ said
Mahantesh Sabarad of Centrum Broking. Tata Motors‘ commercial vehicle volumes are seeing an upward trend with light
commercial vehicle volumes growing 34% and overall truck volumes growing by 11% in the April to August 2009 period.
Meanwhile, Tata Capital is going all out to ramp up its consumer finance and advisory business in a bid to tap a growing
market. At an event to announce Tata Capital‘s future plans on Tuesday, its MD Praveen Kadle said there was ―good‖
demand for auto, housing and personal loans, and the company expects robust demand in the third and fourth quarters of
this fiscal year.
Tata Motors Finance is a specialised auto financing company formed in 2003, exclusively to finance sales of Tata Motors
vehicles. The slump in commercial vehicle sales engendered by the slowdown in the Indian economy following the global
financial crunch saw Tata Motors Finance reporting a net loss of about Rs 121 crore in the fiscal year ended in March,
2009. Its sales totaled Rs 1,014 crore.
Tata Motors‘ plan to sell its stake in subsidiaries comes soon after unconfirmed reports earlier this week that the
commercial vehicle maker proposes to raise around $400 million (about Rs 1,920 crore at current exchange rates)
through global deposit shares to pare down debt. Tata Motors has not commented on these reports.
The company sold a 15% stake in HV Axles for around Rs 65 crore and about 15% in HV Transmissions for about Rs 74
crore to Tata Capital in 2008.
The stake sales are aimed at strengthening Tata Motors‘ balance sheet, which has been stretched by the acquisition of
premium car brands Jaguar and Land Rover for $2.3 billion in June 2008. The company has close to $1.05 billion of debt
remaining, out of the $3 billion bridge loan it had taken for the acquisition. It paid about $2 billion using proceeds of a
rights issue, stake sales in other Tata group companies and funds raised through a non convertible debenture issue.
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Recovery still far away for commercial vehicle manufacturers

26 September 2009
The Economic Times
The economic and financial crisis has a far-reaching effect on the European commercial vehicle industry. The drop in
economic activity and transport has pushed truck production down to half of pre-crisis levels and there are no real signs
of recovery in sight.
Demand for commercial vehicles has fallen sharply, mirroring the lower economic activity and reflecting the difficult
financial situation of many transport companies. ACEA registrations data, published this morning, revealed a 37% drop in
new vehicle sales in Europe until August this year compared to January - August last year. Order intake for heavy trucks
stalled at around 25,000 in the first half of 2009, or 85% less than in the same period of 2008. This year's commercial
vehicle production is expected to halve at least. Whereas the bottom of the slope appears to have been reached, there
are no signs of a rapid improvement. Manufacturers expect a flat market until late into 2010.
Over the past year, commercial vehicle manufacturers have already taken numerous measures to adapt to the economic
turmoil, by laying-off of temporary workers, reducing shifts and cutting back working hours among other steps. Soon,
further-reaching measures may have to be taken to adjust to lower output levels. "The commercial vehicle industry is
facing the prospect of having to make fundamental changes to its operations", said Ivan Hodac, Secretary General of
ACEA.
The commercial vehicle industry is an important part of the European automobile industry and currently employs about
1.5 million people directly and indirectly in Europe. Its products are first choice around the world. The manufacturers'
advanced technologies are a clear industrial asset and essential in helping to achieve environmental objectives in the EU
and across the globe. "The commercial vehicle manufacturers make the products that their customers need and society
wants. Ways must be found to bridge the current exceptional crisis. Europe cannot afford to stand aside and let this
sector be at risk", said Hodac.
The ACEA commercial vehicle members are Daimler AG, DAF Trucks, Iveco SpA, MAN AG, Scania AB, Volkswagen AG
and AB Volvo. They produce trucks and engines in over ten EU countries, including Germany, France, Italy, Spain,
Sweden, the United Kingdom, Belgium, the Netherlands, Poland and the Czech Republic.
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Press Release
Mahindra Renault targets to sell 1200 units of Logan in north

23 September 2009
Business Standard
Mahindra Renault is hoping to sell 1200 units of Logan in northern region in the current fiscal.
"We are targeting to sell 1200 units of Logan in 2009-10 compared with 1150 units sold in last fiscal in north comprising
Punjab, Haryana, Himachal Pradesh, Jammu and Kashmir and Chandigarh," Company's Deputy General Manager,
Indrajeet Ghoshal told reporters here today.
Although the company expected to achieve flat growth in terms of sales from north, yet it was eying to improve its market
share in midsize segment from 8 per cent to 11 per cent by end of current fiscal in this region. "We wish to have 11 per
cent market share in midsize segment in northern region in 2009-10," Ghoshal said.
During the coming festival season, the company is offering special schemes which include car finance at a rate of 0.99
per cent or 6.99 per cent, LCD TV and two grand prizes of free Logan Play, to push up sales.
"The customers can avail these offers when they visit the showrooms for test drive," said Company's Senior Manager,
Jasjit Singh Bawa.
"We are targeting to sell 2000 units of Logan across the country during coming festival season," he said.
The company, which is a joint venture between Mahindra & Mahindra and Renault, has also launched new variants of
Logan Play which carry price tag of Rs. 5.49 lakh for petrol and Rs. 6.79 lakh for diesel version
"The new Logan Play adds a new dimension of fun and adventure to Logan's existing value proposition of space, fuel
efficiency and economy," said Ghoshal.
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Maruti sells nearly 85,000 vehicles in Aug 2009

1 September 2009
AGENCIES
Maruti Suzuki India Limited, India's car market leader, sold a total of 84,808 vehicles in August 2009, growing 41.6
percent in the month. This includes exports of 14,847 units, the highest ever monthly export in the company's history.
A company release said it had sold a total of 59,908 vehicles in August 2008.
Speaking to ET Now, Mayank Pareek, executive officer (marketing & sales), Maruti Suzuki said: ―Yes, last month broadly
we did around 64,000 domestic, so that has become 69,000 and export was around 11,000 last year that has become
15,000 this month. So month on month as well as YoY both we have a healthy growth and good thing is that growth is
coming in all segments across all geographies including big towns as well as rural markets, so this is a all-pervading
growth this month, that is what we have seen.‖
Maruti Suzuki's volume in the domestic A2 segment grew by 39.3 per cent. In the A3 segment the sales volume grew by
44.1 cent during the month as compared to sales in August 2008.
During the month the company crossed the milestone of 50,000 cumulative exports in this fiscal. A star is Maruti Suzuki's
flagship export model. A star, which was introduced internationally in January 2009, has been leading the export numbers
since introduction. The major markets for this model in Europe include Germany, UK, France and Netherlands.
In the last week of August 2009, the company introduced the Estilo with a bolder new look and the latest, 1-litre, BS-IV
compliant, K-series engine.
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Tata Motors sales soar 14 pc in August

1 September 2009
PTI
Automaker Tata Motors today posted 14.24 per cent jump in its total sales during August at 49,810 units, compared with
43,600 units the same month in 2008.
The homegrown firm's total passenger vehicles sales in the domestic market grew by 11.33 per cent at 17,364 units last
month, against 15,597 units in the same month last year, the company said in a statement.
However, its exports in August plummeted by 43.76 per cent at 2,684 units, compared with 4,772 units in the same month
last year, it added.
'Indica' range reported sales of 9,598 units, up 24 per cent over August, 2008, it said.
The 'Indigo' family, however, recorded sales of 2,656 units, a fall of 41 per cent over the same month last year. 'Sumo'
and 'Safari' accounted for sales of 2,609 units, a decline of 22 per cent compared with August last year.
In the commercial vehicles segment, sales in August in the domestic market stood at 29,762 units, compared with 23,231
units sold in the same month last year, up 28.11 per cent.
Light commercial vehicles sales during the month were at 18,644 units, up 42 per cent, while medium and heavy
commercial vehicle sales stood at 11,118 units, a jump of 10 per cent compared with August, 2008.
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Audi sales up 69 per cent in August

2 September 2009
PTI
German luxury car-maker Audi India on Wednesday said it has achieved an impressive sales growth of 69 per cent by
clocking a sale of 171 cars in August compared to 101 units in the same month a year ago.
The upward growth continued in August 2009 and has been strengthened by new launches, the Audi Q5, the new Audi
A6 and the introduction of three new engine offerings to the Audi A4, a company press release said.
The company sold 1,128 cars in the first eight months of 2009, surpassing last year's annual sales of 1,050 cars, a 62 per
cent growth, the release said.
"The first-half of 2009 was remarkable both in terms of sales and launching new products, Audi Q5, new Audi A6 and
three new engines of the Audi A4," Audi India Managing Director Benoit Tiers said.
"Audi India has strengthened its footprint through a dealer appointment in Kolkata and will soon be introducing the new
Audi Q7 in India," Tiers said.
Audi plans to significantly increase the number of models to 40 by 2015. Audi started its Indian arm production unit in
Aurangabad, Maharashtra, two years ago.
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BMW to foray into financing biz; to invest $50 mn

2 September 2009
PTI
Luxury car maker BMW on Wednesday announced an investment of about Rs 250 crore to set up a financing subsidiary
in the country to serve the credit needs of retail customers, fleet owners and dealers, for which it has sought regulatory
approval.
"We are going to invest USD 50 million (Rs 250 crore) over the next two years in the project. We have applied for the
NBFC status and we are hopeful of securing government permission by May 2010," BMW India President Peter
Kronschnabl told reporters here.
BMW sought the Non Banking Financial Company (NBFC) status for its proposed retail financing arm -- BMW Financial
Services India -- which would be a wholly-owned subsidiary of the BMW Group, on par with BMW India, and would be run
by a new head. It would be headquartered at Gurgaon.
BMW India sold 2,908 cars in 2008 and hopes to cross the 3,000 mark this year and the financing arm could help in
achieving this number.
The investment for the financing arm would be made by the Munich-based BMW Group, Kronschanabl said.
"I believe we will be competitive in the market. But at this moment I cannot say anything about issues like interest rate
and other technicalities," he said.
BMW Financial Services was established in 1993 and it has subsidiaries in 31 countries, besides presence in more than
60 nations across the globe.
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Car sales rise 26% in India

8 September 2009
REUTERS
Car sales in India rose an annual 26 percent in August, an industry body said on Tuesday, with demand boosted by new
launches and availability of cheaper loans.
Companies sold 120,669 cars during the month, compared with 96,082 cars a year earlier, data from the Society of Indian
Automobile Manufacturers showed.
Sales of trucks and buses, a barometer of economic activity, rose 18.5 percent from a year earlier to 40,624 units, the
data showed. Motorcycle sales rose 26 percent to 611,173 units from a year ago.
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India speeds past China in auto exports

8 September 2009
TNN
China may be the world's shop floor, but India is rolling it out faster when it comes to automobile exports.
India exported a total of 2.30 lakh cars, vans, SUVs and trucks between January and July 2009, a growth of 18% even as
China‘s exports tumbled 60% in the same period to 1.65 lakh units.
The Indian domestic market may be just 19% of China‘s — which has overtaken the US to become the world‘s largest —
but the ‗Made In India‘ tag, especially on small cars, has clearly acquired a global cachet, helping auto exports grow even
as other countries suffered a slump.
Industry experts pointed out that India scores due to its liberal investment policies and high quality manufacturing which
stems from its growing prowess in research and development.
India‘s biggest advantage is its edge in small cars and the way companies including global giants — are using the market
for selling, as well as developing, new compact models.
India itself presents a big opportunity in small cars given their big-volume status in the domestic market. But the global
recession and incentives offered for fuel-efficient low-emission vehicles in big markets like Europe and the US have also
made India a focal point for companies.
Cheap labour costs and especially-tailored lower manufacturing tax (8% excise duty) make small car manufacturing in
India a highly-competitive option which more and more companies are padding up for — Suzuki, Hyundai, Nissan,
General Motors, Toyota, to name a few. China, in contrast, is more of a big car producer and has been hit by the global
slump in demand following the economic recession.
"Among major reasons for India is a favourable investment regime. While India allows for 100% FDI in auto sector, in
China you can only be present through a joint venture with a local partner. If you use the country as a major export base,
you have to share the profits with your JV partner, which no company would like to do," said Rakesh Batra, National
Automotive Leader for E&Y in India.
And while sharing profits may be a major reason, analysts point out that sharing technology with the JV partner may also
be a cause of concern in China, considering the infamous expertise of its companies in culling out cheaper fakes at lower
costs, even as they may be of a lower quality. India also scores due to its superiority in research and development brains.
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M&M may soon be world’s No. 1 tractor co

8 September 2009
ET Now
Mahindra and Mahindra (M&M) will end this fiscal year as the world‘s number one tractor company by volumes, a
company official said. ―If we take the volumes of one legal company — not all subsidiaries or international operations we
might well be number one this year,‖ said Anjanikumar Choudhari, president of the farm equipment division at the
automobiles-to-finance-to-IT conglomerate. M&M and subsidiary Swaraj (earlier Punjab Tractors) are expected to sell
about 1.5 lakh tractors this year, while the mother entity of the world‘s largest tractor maker John Deere sells around 1.1
lakh units a year.
The only factor that can upset M&M‘s drive to the top this year is the impact of a poor monsoon. ―A great deal depends on
how sentiment evolves over the next few months post-monsoon period,‖ Mr Choudhari said.
He, however, claimed that the poor monsoon scenario has already been factored in and that the target was within reach
for the company that sold 63,000 units in the first five months of the fiscal. M&M sold 1.13 lakh units last year, including
eight months of sales of Swaraj, more than a third of the country‘s total sales of 3.03 lakh units.
Even without the ―single legal entity‖ disclaimer, M&M is within sniffing distance of John Deere in global sales, a partner in
a Delhi-based auto consultancy firm said.
M&M‘s Chinese ventures are expected to sell 30,000 units, taking its worldwide tally to 1,80,000. John Deere‘s global
combined sales are around 200,000 units annually, said the person requesting anonymity.
According to Mr Choudhari, the company has increased its market share in India to 42-43% from 35% earlier after
successfully turning around Punjab Tractors (now Swaraj) that it acquired two-and-half years ago. M&M has spent a total
of Rs 1,400 crore (including the deal price) on Swaraj and has recovered 50% of that already, he said.
The turnaround strategy included reducing dealer stocks, improved efficiencies at the plants, increased productivity per
man at its Mohali factory by more than 42%, rationalising staff and rolling out new products.
Dealer stocks are down from around six months (about 12,000 tractors) to less than a month, Mr Choudhari said. Dealer
outstanding are down to 17-18 days and the synergy in purchasing components and materials is already saving Rs 3,500
per tractor, he said. ―This year, on a cumulative basis, that saving will exceed Rs 4,000.‖
Mr Choudhari said he expects M&M to clock more than the industry trot of around 5-8% growth this fiscal despite the
drought in several parts of the country as it takes the top spot in the global pecking order.
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Volkswagen may assemble Audi Q5 in India

11 September 2009
The Economic Times
Audi, the luxury car maker from the Volkswagen group, is considering the local assembly of the Q 5, an SUV. Although
company officials declined to specify the model, auto industry experts said it would be the Q5, making this the third car
that the luxury car maker will assemble in the country.
Audi has a plant at Shendra, near Aurangabad, in Maharashtra, which it shares with group company SkodaAuto.
―We already assemble the A4 and the A6 and we are thinking of assembling an SUV. There will be no change in the price
since every product is launched already priced at the CKD (local assembly) price. We do not differentiate between CBU
and CKD prices,‖ said Martin Birkner, head of marketing, Audi India.
Having sold 1,128 cars in the first eight months of this year, which is a 62% rise over the comparable period last year, Mr
Birkner said they intend to bring in new models next year, having introduced three this year. This will add to the seven
products from its stable of in the country.
―Next year, at the Delhi Auto Show, we will bring our concept car, what we call the show car,‖ Mr Birkner said. Industry
expectations are that this will be the open top version of the Audi R8 super car, which is to be displayed at the Frankfurt
Motor Show that starts on September 15. Also to be shown at the Frankfurt show is the electric car from Audi and that too
is likely to find a place at the Delhi show.
He added, ―We sold 350 units of the Audi Q 7 SUV last year and are targeting 450 units this year, having already sold
300 units so far. In India, the market still wants SUVs.‖
Audi launched an upgraded version of the popular Q7 SUV earlier this month, priced between Rs. 53.4 lakh and Rs 1
crore, on road. In Pune, the dealer sells around 14 Audis every month (the Q7 alone comprising 40% of these, taking on
the north Indian market where such vehicles have traditionally done well.
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7 auto testing centres to make India an auto hub on cards
16 September 2009
ECONOMICTIMES.COM
The ministry of heavy industries is setting up seven Auto Testing Centres to make India an auto hub, according to Ambuj
Sharma, joint secretary in the heavy industry ministry.
He said cars would be tested in these centres before they are rolled out on the roads. In these auto testing centres, car
manufacturers belonging to Indonesia, Malaysia and Thailand would be allowed to test their products as part of the
government attempt to invite more foreign direct investment participation in the automobile sector.
Car manufacturers currently have to go to Europe and the US for testing their products, and this is for the first time that
India is setting up such centres with fully government-aided funds of Rs 1800 crore. These centres would become
operational by September 2011 in places like Manesar, Pune, Ahmed Nagar, and Raibarelli, among others.
Sharma disclosed this while inaugurating an Assocham-organized national summit on ‗Public Buying: Bringing
Transparency and Accountability‘ here on Wednesday.
He also said that the ministry of heavy industries is pressurizing the finance ministry to waive off Special Excise Duty
(SED) of Rs 15,000 and Rs 20,000, respectively, in cars with capacities ranging from 1500 CC to 2000 CC. The finance
ministry last year had levied the aforesaid SED on big fuel guzzler cars to contain carbon emissions in atmosphere.
―The ministry of heavy industries had last year also lobbied for the withdrawal of SED. But its request was turned down by
the finance ministry. We are again pressurizing the ministry to waive it off, for which provisions are likely to be
incorporated in next fiscal budget,‖ he said.
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Indian co to be in top 6 carmakers of the world by 2020: Study

17 September 2009
PTI
At least one Indian company will be among the top six carmakers that would dominate the global auto industry by
2020, a study by global consultancy firm Deloitte said.
Releasing a study 'A New Era: Accelerating toward 2020 -- An Automotive Industry Transformed', the firm said the car
industry would see a massive capacity building in low-cost locations like India and China as manufacturers shift base
from developed regions.
"Maybe six original equipment manufacturers (OEMs) would dominate the market and control 90 per cent of the structure
by 2020, of which one may be from India and another one or two from China," Touche Tohmastu India Senior Director
Kumar Kandaswami said.
He, however, did not name any specific company which could be in the global top six list and said it could be an entity
following mergers or acquisitions in the future.
Homegrown automakers like Tata Motors and Mahindra & Mahindra have already made their global aspirations public.
Supplier networks would also follow the trend, he added. "Cost is a big factor, as well as in the consolidation of the
industry. Besides the emerging economies have huge pool of trained manpower," Kandaswami said.
In India, there would be more focus on low-cost cars, while, at the same time more and more middle class consumers
would go for luxury segment four-wheelers.
"As a significant and growing market, it is interesting to see that India will be distinct in terms of some of the global
themes on account of the demographic and customer profiles," he added.
According to the study, Indian consumers are becoming more conscious about alternative fuels and green
technologies, although not everybody is as yet ready to pay for it.
India is likely to become a hub for small and compact cars due to various factors including growing domestic demand, low
labour cost and sound supplier network.
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 jump in the so-called Nano segment.
While, India would remain a huge entry-level car market, there would also be more demand for luxury segment cars
from the middle class," Kandaswami said.
However, a distinct luxury segment would evolve only after the car ownership rate in India reaches 20-25 care per
thousand people, from 10-11 cars per thousand people now, the study said.
By 2020, green technologies would come to dominate the car industry worldwide, with 20 per cent of the cars likely to be
'green cars' by that time, it added.
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Commercial vehicle makers gear up for price hikes

22 September 2009
The Economic Times
Commercial vehicle makers, which have put on hold a hike in product prices despite a sharp rise in input costs, are not in
a position to hold out for long. They are keen on passing on the increase from October 1, buoyed by a sharp pick-up in
sales.
According to industry executives, companies such as Tata Motors, Ashok Leyland and others are planning to raise prices
of their commercial vehicles in the range of 1-3%, which in value terms would mean a jump of the order of Rs 9,000 to Rs
15,000 for a truck or a wagon. The last price hike by truck firms was in July, which ranged between 2% to 2.5%.
But this time round, these price increases would apply only to commercial vehicles and not passenger cars, the
executives said, as auto makers are closely following the economic recovery. In August, sales of medium and heavy
commercial vehicles hit the upper circuit, with volumes growing by 4% to 17,345 units, while sales of light commercial
vehicles — which include the popular Ace and the Winger models — went up 32% to 23,279 units. For the April to August
period, commercial vehicles sales fell 2.19% to 1.75 lakh units, while light commercial vehicles grew 22% to 1.02 lakh
units and medium and heavy trucks dropped 23% to 72,341 units.
―We had been postponing price hikes as sales of heavy and medium CV were under pressure,‖ said a senior executive of
a large Mumbai-based commercial vehicle company. ―Discounts, incentives and reduced interest rates were being doled
out to push volumes,‖ he added, requesting not to be named as his company is still working out the exact quantum of a
price increase.
Although Tata Motors did not comment for this story, the country‘s largest commercial vehicle maker by sales has been
witnessing a sales rebound. ―We see a kind of improvement in truck sales,‖ vice-chairman Ravi Kant had said, adding
that Tata Motors is initiating a series of measures to boost sales.
The increase in product prices has been triggered by a rise in the price of steel — the main component of a truck or a
light commercial vehicle — which has gone up by almost 12% in the past three months through two price hikes. The
current price of hot rolled coils, the base category of steel, is at Rs 31,000 per tonne.
But most commercial vehicle makers had been absorbing the price hikes as they were unsure about the response to any
such move. The global liquidity meltdown added to their woes, which had led to a squeeze in demand for the auto sector.
The industry was hence reluctant to pass on the burden earlier, as it feared sales could be dented further.
―This is a good time to raise prices,‖ said an analyst from Mumbai-based brokerage. ―CV companies need to improve
profitability and with markets showing signs of a revival, this is the correct opportunity. Auto companies can expect an 8-
10% growth in the next two months,‖ he added.
The auto industry had also received a major boost from the government in the form of a stimulus package in December
2008 when the latter reduced excise duty from 16% to 8%. Also, as consumers can avail of a 50% depreciation benefit if
they make purchases by September 30, these twin measures have prompted many to make purchases. Volumes have
started looking up for light commercial vehicles and for the first time since August, medium and heavy commercial vehicle
sales are also on the way up. Lack of finance and high interest rates had also led fleet operators to postpone purchases.
With volumes picking up, truck manufacturers have started increasing production at various plants, said analysts.
Indications are that truck dealers across the country have been asked to pick up stocks before the price increase takes
place. Industry sales have been hit by rising interest rates in the past few months as more than 90% trucks are bought
through finance.
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Maruti plans KB Series engines for entry level, A segment cars

22 September 2009
PTI
The country's largest car maker Maruti Suzuki is mulling changing all engines in its range of entry level and A-plus
segment cars to the latest KB Series engine which it unveiled last year, a top company executive said.
Currently, the new series of engines is being used in the latest models of the Maruti stable - Estilo, Ritz and the 'A' Star.
Asked whether all the entry level cars would be equipped with the KB Series engine, Maruti Suzuki India Chairman R C
Bhargava told PTI that it could happen over a period of time.
"It will not happen immediately. We cannot do that. It will happen over a period of time", he said.
The KB Series engine, a part of the company's efforts to offer the latest technology to customers, is produced from the KB
Series engine plant at Gurgaon.
The all new, light-weight, engine series will be progressively introduced in other models over a period of next 3-5 years.
The KB engine plant at Gurgaon has an installed annual capacity of 240,000 engines.
To a query on investments proposed, he said, "we have to wait till the end of October. The whole project would come to
the Board by October and after that we have to decide how to go forward. So we have to wait till the end of October to
know what the investment is and what will come".
Maruti Suzuki India last year said it would shift production from a plant at the Gurgaon factory in Haryana, to the factory at
Manesar, 25 km to its south, also in the same state.
The plant at the Gurgaon facility will be gradually changed to a base for engine assembly and machining, while the
automobile assembly will be integrated at Manesar.
On the impact of the global meltdown, Bhargava said there were signs of recovery but cautioned that nobody has said
recovery has happened so far. "There are signs of recovery. It looks like recovery is happening but still nobody is saying
that recovery has happened. That is our problem. Until recovery happens I can't tell you how confident we are".
Responding to a query on vehicle sales, he said, "it is always smooth (for us) so far and I hope it continues to be smooth.
I can't predict that it will be on the same path. It may happen, it may not".
Stating that Maruti's strengths were its reach across the country, Bhargava said, "I think Maruti's strength is in that area in
terms of reach to customers and our ability to provide service to customers at reasonable rates all over the country. That
is what makes us generally to do better than any other (car) company".
He said September and October were always good months for Maruti and hoped that it would be continued to be so.
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General Motors, Reva to jointly make electric vehicles

24 September 2009
IANS
The Indian arm of General Motors (GM) Thursday said that it is partnering Bangalore-based electric car maker Reva to
develop and produce electric vehicles for the Indian market.
According to General Motors India managing director Karl Slym, the initiative was "in line with government objectives to
reduce fossil fuel dependence".
"We are going to work closely with the central and state governments in India to develop infrastructure for electric
vehicles charging and providing specific financial benefits to consumers," Slym said.
Describing electric vehicles as "a growth area around the global automotive industry", GM's president of international
operations Nick Reilly said: "This cooperation with Reva in India will accelerate GM's progress to meet the emerging
needs in many parts of the world."
Reilly said his company was pursuing several energy alternatives and advanced technology options to meet the
changing needs of customers around the world.
"Electrically driven vehicles, based on battery and hydrogen fuel cell technology, offer the best long-term solution for
providing sustainable personal transportation," he added.
The two companies have already started the feasibility study of GM's vehicle platforms to produce electric cars and are
expected to announce the details shortly.
Reva had launched its electric car in 2001.
GM India, which has been unaffected by the bankruptcy proceedings of its parent in the US, is central to the company's
global growth strategy.
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Sales of luxury cars robust in Gujarat on Dussera

28 September 2009
PTI
Gujarat has witnessed a surge in luxury car sales on the auspicious occasion of Dussera, notwithstanding the economic
slowdown.
"People here have the craze of buying vehicles on Dussera as it is considered to be an auspicious day and traditionally
high sales have been recorded on the day of this festival," vice-president of Benchmark Cars Paras Somani said.
A dealer outlet for Mercedes Benz also claimed to have sold around 45 units of the luxury car during this festival period in
Gujarat, till now. "We delivered 12 models of Mercedes Benz including E-Class and Special Edition C-Class on Dussera
today," Somani said. "So far, 45 Mercedes Benz have been sold from our outlet, this month," he added.
According to Sanjay Thakkar, Managing Director of Landmark, dealer of Honda car, this has been the best month ever for
sales.
"We are close to pushing around 100 cars comprising all models of Honda this month," Thakkar said.
Landmark has outlets in all major cities of Gujarat including, Rajkot, Surat, Mehsana.
Sales of Audi, which has around 48 per cent market share in luxury car segment of Gujarat was also robust on Dussera.
"Audi has 48 per cent market share in luxury car segment of Gujarat, which presently ranks second after Gurgaon in
sales," says Chhatwal said.
"Our outlet has been facing an out of stock situation since last three days, and we have been delivering the cars booked
prior to festival season," he added.
Sales of Audi in Gujarat have been projected to surpass the sales figure of Gurgaon by early next year, Chhatwal added.
Sales of Volkswagen has also soared during the period. According to Volkswagen sales head-Gujarat Ketul Thakkar, 28
units of the luxury car were delivered today. So far, 52 units of the car have been sold in Gujarat.
Meanwhile, the sales of small car also surged between 10 to 15 per cent this year as compared to the units sold on
Dussera last year.
"Due to revival after the slowdown we have witnessed a surge of 10 to 15 per cent in the sales of cars in middle and small
segment this Dussera as compared to the sales on the day last year," Ravi Suri of Cargo Motors said.
Cargo Motors is dealer outlet for Tata brand of cars, including Fiat.
According to industry estimates, around 100 units of Maruti got sold from the eight outlets of its four dealers.
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At Rs 3,400 cr, record auto loan disbursal in Sept

1 October 2009
The Economic Times
With auto sales zooming, auto financiers too are back with a bang. The top eight auto financiers disbursed loans worth Rs
3,400 crore in September—the highest for a month in the past two years—led by impressive auto sales, new launches
and return of confidence among potential car buyers.
The disbursement in September is 25% higher than the monthly average of Rs 2,700 crore seen in the past four months.
Auto finance leader HDFC Bank has registered over 40% growth in loan disbursement in September from a year ago,
while other leading players such as Kotak Mahindra Bank, SBI, Canara Bank, PNB and Bank of Baroda have also seen a
growth of 25-35 %.
This September is expected to mark a historic high in sales for the car industry. ―We had a terrific month after a long gap
as sales went much beyond our anticipated targets. We disbursed loans of over Rs 1,000 crore in September. The growth
momentum is expected to spill over to October,‖ HDFC auto loan head Ashok Khanna said.
Other bankers are equally upbeat. Kotak Mahindra Bank CEO Sumit Bali said, ―It seems the market is on fire. Sales have
virtually zoomed to the highest level in past few days with almost zero inventories at many car dealerships. Our loan
disbursal for the month has increased 50% to Rs 325 crore.‖
Consumer sentiment had turned weak and auto financiers became conservative on lending last September following the
collapse of US investment bank Lehman Brothers in the US. This coupled with early arrival of festive season, which is
governed by Hindi calendar, has led to massive yearon-year growth for auto loans.
A low-interest rate regime has also helped financier attract customers. The entry of PSU banks with aggressive single-
digit rate against the 10-12 % rate offered by private banks has expanded the market, especially in smaller towns and
rural areas.
―The demand for new cars from our branches in tier II & III towns has been very steady. There is a major jump in our total
loan allocations in September over August and much of that has come from these smaller markets,‖ said a senior SBI
executive preferring not to be named.
Carmakers are also benefiting from the easier availability of finance, registering a high double-digit growth. ―Customers
are actually benefiting from the extremely low interest rates offered by few PSU banks. We have noticed that the bulk of
customers who had postponed their purchases are again flocking to our dealers to buy new cars,‖ said Maruti‘s chief
general manager (marketing) Shashank Shrivastava.
A spate of new launches by car companies has also brought into the market more buyers and led to higher loan
disbursal. Over a dozen new cars were launched in September alone. The next few weeks will see many new launches
including Maruti‘s new SX4 and multi activity van-O 2, General Motors‘ Cruze sedan, Porsche Panamera, Volkswagen
Beetle and Polo, Ford Figo, Hyundai Santa Fee, BMW Z4.
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Replacement market props up Indian tyre sales

6 September 2009
The Economic Times
Selling something black, rubbery and round is a tough job. But tyre manufacturers in the country are not really worried.
Compared to stagnant markets in most developed countries, the Rs 22,500-cr Indian tyre market has been steadily
growing. And if these are cues, there are better times ahead.
The tyre market here has been growing by nearly 10-12% Y-o-Y, thanks to the replacement segment, which accounts for
roughly 75% of revenues of the industry. And contrary to popular belief, despite the brief slowdown, it is the commercial
vehicle (CV) category that has provided a much-needed fillip to the tyre industry. Says Arnab Banerjee, executive
director, (sales, marketing & outsourcing) at CEAT: ―CV tyre sales have a strong correlation with the GDP of the country.
But sales of CV tyres in the replacement category were not really affected by the slowdown because of demand from the
mining and infrastructure sectors.‖ And if tyre makers are to be believed, the numbers are slated to grow despite
problems in the export market.
There are mainly two reasons: Firstly, the increase in the number of multi-axle vehicles in the country. And secondly,
according Mr Banerjee, a drought-like situation this year can cause massive food grain movement across the country.
This has perhaps prompted tyre makers to speed up new initiatives in the CV space. It‘s a crucial segment for them
because sales of CV tyres account for nearly 70-75% of revenues in the replacement segment. For instance, Gurgaon-
based tyre maker, Apollo Tyres, has already invested Rs 1,500 cr for its Greenfield project in Chennai to manufacture
truck radials. ―The first truck tyre will roll out by November this year,‖ says Neeraj Kanwar, MD, Apollo Tyres.
But then the replacement CV tyre category is just a part of the optimism. The aftermarket passenger car and the OEM
segment in the tyre industry are also estimated to grow fast. Dragged down by disappointing automobile sales during the
slowdown, the OEM segment, which forms around 25% of the total industry revenues, is back on track with resurgent
automobile sales. The negative growth in the OEM CV segment has stabilised.
―Also the passenger car segment in the replacement sector is growing faster than the CV segment at around 10-12%,‖
says AS Mehta, head of marketing at JK Tyres. ―I expect it to grow more in the coming months.‖ The only segments that
will perhaps be affected in the near future are sales in the two-wheeler and farm tyre market. Drought is the most likely
reason, say tyre makers.
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New Product
Ford plans to bring Rs 3 lakh-plus small car

1 September 2009
TNN
Ford has started work on a new low-cost small car to sell in fast-growing markets like India, China, Eastern Europe and
South America.
A senior company official said the new small car would not be confined to one market but will be positioned across
markets, sporting a "Rs 3 lakh-plus price range," making it one of the low-cost cars for the company globally. "We plan to
grow business in B (small) cars globally, and especially in the Asia-Pacific region where we plan to raise the share of B
cars to our line-up from 15% to 45%," John G Parker, Ford‘s group executive V-P for Asia-Pacific and Africa, told TOI
here.
Asked whether India would be one of the global development and manufacturing base for such a low-cost car,
considering that other companies like Hyundai.
Suzuki and GM too were shifting production of such products here; he said it was too early to comment on that.
"Potentially yes is all that I can say on this at the moment," he said. Parker also clarified that this new car would be
different to the small car that Ford would be launching in India in 2010. "But linkages would certainly be there. We are
looking at integrated product development system at Ford now," he said.
This is perhaps the first time that Ford has spoken of work on a low-cost product to push up volumes globally. With the
interest in low-cost segment, the company now joins companies like GM and Hyundai who too have announced
exploratory plans in the segment that holds the potential of big volumes in fast-developing markets like India. On specific
India plans, Parker said the company's new small car was on course and would be out by 2010, with localisation of over
80%. "It will the first offering from Ford in the mass-market segment and we are making efforts to keep it cost-competitive
and a great value proposition," he said.
Asked whether the company would have a multi-product strategy in the small car segment, he said Ford planned to have
more than one car there. "We cannot be satisfied with just one product in this crucial segment. India is a big car market
and we can't just meet the demand with just one product in small cars," he said.
The company is investing around $500 million fresh money in India for building small car and engine manufacturing
capacity.
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Mercedes-Benz to launch new variants in India

8 September 2009
PTI
Mercedes-Benz (MB) India plans to launch new variants of its models in the coming months and the company was
currently seeing an upswing in its sales, a key official said on Tuesday.
Director, Sales and Marketing of MB India, Debashish Mitra, however, declined to go into the details on the proposed new
variants and merely commented: "You (media) will hear from us a number of times this year (on new variants)".
He said the company's sales were witnessing "upward swing" in the second half (July-December 2009) after a drop in the
first six months like any other automaker in the country.
E-class of passenger cars is in the process of being phased out. "We are ready to welcome new E-class", Mitra said,
adding, the launch this new car is "not far away".
In 2008, MB sold 3625 cars, 240 units of trucks and 15 units of MB buses in India.
Company officials said MB plans to increase headcount by 500 to 1,000 engineers at its R & D centre here in the next few
years from the existing 200-250 people.
MB today launched the "Special Edition C-Class" in Bangalore.
The company plans to produce only 60 units of this vehicle in order to maintain exclusivity, Mitra said.
This car carries a price tag of Rs 30.10 lakh onwards Ex-showroom Bangalore, officials said.
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Ford Endeavour gets a facelift

9 September 2009
ECONOMICTIMES.COM
Ford India on Wednesday launched the new design look Endeavour 3.0L with 5-speed automatic transmission and an
array of contemporary features that give the new Ford Endeavour fresh appeal.
The new Ford Endeavour pioneers a suite of new design elements, led by a new-look front design with a multi-bar
chrome grille and chrome-accented lower grille combining with wraparound headlamps, in an effort to create a distinctive
style. Under its new shape are the toughness and proven capability that have made Ford Endeavour one of the popular
choices among premium SUV buyers in India.
At the unveiling of the new Ford Endeavour, Michael Boneham, president & managing director, Ford India said, "The
Endeavour has established itself as an undisputable leader in the premium SUV segment. With its contemporary new
design look, the dominant toughness of Ford Endeavour has never been more appealing and we believe that it will set
new benchmarks in its segment."
The New Ford Endeavour is being launched across the country in a phased manner. The vehicle was unveiled in New
Delhi by Bollywood actor Suniel Shetty. The vehicle is launched and bookings are open from today in North and West
region and will be launched in the following weeks in Southern and Eastern markets.
Priced aggressively, the new Endeavour is available in Delhi from today at Rs. 17, 99, 000 for the 3.0L 4X4 automatic
transmission and Rs. 15, 99, 000 for the 2.5L 4X2 manual transmission variant (Ex-Showroom, New Delhi).
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Maruti Suzuki to relaunch power-packed SX4

25 September 2009
The Economic Times
Passenger car leader Maruti Suzuki India has stopped manufacturing its most expensive car SX4, the mid-sized sedan,
reinforcing the widely-held belief that the small car leader does not have the expertise to make and market big cars.
Maruti will relaunch SX4 within a fortnight with a new 1.6-litre engine which will have a much higher pick-up. It will be
more expensive than the current top-end Zxi variant, which comes at Rs 7.5 lakh (ex-showroom Delhi).
Maruti will also rope in Bollywood star John Abraham as the new brand ambassador for the sporty model to arrest falling
sales.
SX4 was launched in May 2007 in three manual variants to counter Honda City but could not compete with Honda‘s
superior technology and brand image. SX4 steered ahead of the City and clocked top sales of over 3,000 cars per month
in the first three months of its launch but soon lost speed when Honda launched the third-generation City in November
2008. SX4 sales are now confined to a few hundred units per month.
Honda has sold 37,600 of the new City till August 2009 since its launch (November 2008) while Maruti has sold only
9,763 SX4s in the same period. Despite being cheaper than the City by over a lakh, SX4 trailed by a huge margin last
fiscal too, selling only 13,976 cars against City‘s 38,200 cars. The new SX4 will have an additional automatic variant,
another first for any sedan from Maruti.
It will deliver 165-175 Newton metres of power, much higher than the outgoing model and will meet the latest emission
norms. When contacted the company spokesman refused to confirm the development. ―We do not talk about future
launches and product refreshments. However, any product refreshment is an integral part of our marketing strategy to
maintain excitement and meet customer‘s aspirations.‖
Analyst tracking the sector said that by fully loading the new car, Maruti is making another attempt to prove that it can
make all kinds of cars. ―Maruti Suzuki is a good brand but its Japanese peers Honda and Toyota appeal more to
customers when it comes to buying big cars. SX4 performed better than Maruti‘s other big car Baleno and initially even
overtook City in sales.
However, it failed to maintain the momentum after Honda responded with a new and more powerful Honda City.
Probably, Maruti is now looking for answers to challenge the mid-size car segment,‖ Kapil Arora, partner at Ernst & Young
said.
Another top executive of the auto industry said just as Maruti has not been able to establish itself as a big car maker,
similarly global car maker Honda has not being able to sell its small car Jazz, which sells less than 1,000 units per month
compared with its closest competitor Maruti Swift that sells over 5,000 cars per month.
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Nissan to launch sports car Z370 in India in 2010

27 September 2009
PTI
Nissan Motor will roll out its new sports car 'Z370' in India in 2010 as part of its strategy to offer more variants to the
Indian customers.
"Nissan will launch its sports car Z370 in the Indian market and is expected to be rolled out in January 2010," Hover
Automotive India (marketing partner of Nissan, India), vice-chairman, G M Singh told reporters today during the launch of
new dealership here.
"Though the market for sports car in India is limited now, but we think over a period of time, the market for such cars will
increase," he said.
The company will also unveil its small car Micra hatchback on new platform in 2010 in the Indian market. "Micra will come
out with three variants of petrol and diesel...moreover, it will be developed entirely on a new platform," he said.
The price range of Micra could be close to Rs 5 lakh, he informed. Nissan has planned to introduce nine new variants in
India by 2012. "Out of the nine models, five of them will be manufactured in its facility that is coming up in Chennai, while,
rest of them will be Completely Built Units (CBU)," he said.
At present, Nissan has two models 'Teana' and 'X-Trail' for the Indian market, priced between Rs 21 and 25 lakh.
Nissan is hoping to start its new state of the art manufacturing facility entailing capital outlay of $1.4 billion in the first half
of next year. Initially, it will have a capacity of 2 lakh units which will subsequently be raised to 4 lakh units per annum.
"The new facility will also be used for exporting cars to Europe and other 100 countries," he said.
Nissan is expecting to achieve sale of 15,000-20,000 units in India after the commencement of facility in Chennai.
"We hope to achieve sale of 15,000-20,000 units once the manufacturing facility starts," he said. By the end of this fiscal,
the company intends to sell 400 units.
To expand its presence in the country, the company intends to have 26 dealers across the country in the next year. "By
the end of the current fiscal, we will have total 19 dealerships and its strength will be scaled to 26 next year," he said.
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Audi rolls out its latest sports utility vehicle Q7 in India

3 September 2009
IANS
German premier car maker Audi on Thursday announced the launch of its latest sports utility vehicle (SUV) Audi Q7,
which will be available with three engine variants.
The three variants of the car, which will be available in 11 colours, will cost Rs 55.2 lakh, Rs 53.4 lakh and Rs 29.9 lakh in
showrooms in Maharashtra.
"Audi India achieved remarkable growth in the first eight months of 2009 by selling 1,128 cars (62 percent growth). With
the launch of new Audi Q7, we expect to sell upwards of 1,500 cars," said Audi India managing director Benoit Tiers.
"If I can get good production (of cars) from Germany, then we should be able to sell about 1,700-1,800 cars this year," he
added.
The company also plans to expand its dealership from 12 to 18 by 2010-2011.
Audi currently has dealerships in Delhi, Gurgaon, Chandigarh, Ludhiana, Mumbai, Pune, Ahmedabad, Bangalore,
Hyderabad, Chennai, Kolkata and Kochi.
"We plan to expand to Jaipur, Lucknow, Nagpur and Coimbatore soon," Tiers said.
The Audi Q7 has a number of new features like voice control, which enables the driver to operate a cell phone or music
system by just calling out the name of a song or a phone number.
It also has adaptable headlights that switch on or off according to the moves of the car, showing the path ahead.
With up to seven seats, the Audi Q7 boasts of luggage space of about 2,035 litres.
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Honda Siel launches new Civic

9 September 2009
ECONOMICTIMES.COM
Honda Siel Cars India (HSCI) Ltd on Tuesday launched the new Honda Civic. The new Civic has a curved 5 Point
Metallic Front Grille and restyled front bumper which the company believes gives the car a sportier look. Also new are the
stylized ‗Dark Smokey Headlights & Crystalline Octagonal Tail Lights‘. The audio system of the new Civic comes
equipped with a USB port together with the CD player. An intelligent fuel economy indicator has been introduced in the
new Honda Civic to enable the customer to achieve the good fuel efficiency.
New Civic will be available in 3 variants - SMT, VMT & VAT. Honda civic will have an additional color option Polished
Metal along with the existing colors available in the range.
The new Civic SMT comes with two tone fabric seats with matching fabric on door panels & armrest. Honda Civic VMT &
VAT comes with a steering mounted cruise control system that helps to cruise at the desired speed with one touch
operation. It also comes with a new fog light with garnish and newly designed alloy wheel.
Additionally, all the variants will be available in 2 attractive types - Elegance and Inspire.
The company believes that the 1.8 L i-VTEC engine in the new Honda Civic is the most advanced engine technology
available in the segment. It combines Honda‘s i-VTEC (Intelligent Variable Valve Timing and Lift Electronic Control)
technology with VTC (Variable Time Control) to deliver powerful performance and superior fuel economy. The i-VTEC
regulates the opening of air-fuel intake valves and exhaust valves in accordance with engine speeds. The ARAI fuel
efficiency results for Civic MT are 15.5 km/. The car is E10 compatible and has Euro IV emission levels.
Safety equipment is standard across all variants. It has active and passive safety features including ABS (Anti - Lock
braking system) with EBD (Electronic Brake - Force Distribution System) & Brake Assist, Dual SRS airbags and pre-
tensioner seat belts.
The Civic was first launched in 2006 in the lower D segment of passenger car market in India. HSCI has sold over 42,000
units in just over 3 years. Honda Civic has won 10 automobile awards including the Indian Car of the Year (ICOTY) 2007.
It was also winner of the JD Power Initial Quality Study in its very 1st year with the best ever score in the Industry.
Speaking on the occasion, Mr. Masahiro Takedagawa, President and CEO, Honda Siel Cars India Ltd. said, ―The Honda
Civic is a segment defining product both in terms of looks and performance. The new Honda Civic carries forward the
legacy of the Civic which is already the most refined and advanced car in the segment.‖
Bookings for the new Honda Civic will start immediately at the company‘s distribution network of 106 authorised
dealership facilities, across the country. This network is likely to go up to 112 facilities by the end of the current financial
year.
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Nissan launches 2 new cars in India

16 September 2009
AGENCIES
Nissan Motor Co launched two new car models in Mumbai Wednesday, part of an aggressive India expansion plan by
Japan's third-largest automaker.
`Ìndia is the single biggest country in Nissan's investment plan in 2009,'' said Kiminobu Tokuyama, chief executive and
managing director of Nissan Motor India Pvt. Ltd.
He declined to specify exactly how much of Nissan's fiscal year 2009 capital expenditure budget of 350 billion Japanese
yen ($3.6 billion) will be directed to India as the company works to diversify its product line, raise its market share and
transform India into a global production hub.
The new versions of Nissan's X-Trail sport utility vehicle and luxury Teana sedan unveiled Wednesday during a smoke
and light show with live African drumming will not immediately solve the problems _ chiefly high prices, big cars that lack
mass appeal and desperately low sales volumes _ that analysts say have thwarted Nissan's India efforts.
But Tokuyama said that is about to change. Like other global auto majors, Nissan has been pushing into emerging
markets like India and China to cut production costs and sustain sales growth as demand in mature markets stagnates.
Currently, Nissan ships cars to India ready-made from Japan, incurring a 109 per cent import duty. That high cost _ the
retail price of the new X-Trail starts at Rs 2 million ($42,670) and the new Teana at Rs 2.1 million ($43,121) _ has
thwarted sales, executives said.
Since Nissan began selling cars in India in 2004, it has only sold about 1,000 X-Trail vehicles, and just 300 Teana
sedans, executives said.
Tokuyama said that by 2012, Nissan plans to expand its India product line from two to nine models, five of which would
be manufactured in India, and ramp up its dealer network from five to 55 outlets.
Tokuyama said Nissan's first India-made car _ a new version of the hatchback that now sells under the Micra brand in
Europe and the March brand in Japan _ would roll out of its Chennai factory, in southern India, in May 2010.
That factory is the centerpiece of a seven-year, 45 billion rupee ($920 million) investment plan undertaken with France's
Renault, which owns 44 percent of Nissan.
Nissan also plans to use the Chennai factory as a global export hub and shift production of Micra cars for Europe from the
U.K. to Chennai. Tokuyama said Nissan would start exporting 110,000 cars a year from Chennai to Europe, the Middle
East and Africa starting in the second half of 2010.
``Production cost is an important factor in the production of the Micra,'' he said. `Òther global manufacturers have found
that India is very good quality and cost competitive.''
Tokuyama said the U.K. factory would be used to produce another vehicle and said he did not anticipate any layoffs. He
said Nissan also plans to shift production of the March hatchback from Japan to a factory in Thailand.
Nissan, along with Renault and India's Bajaj Auto, is also developing an ultra-low cost car to compete with the Tata
Motors Nano. Tokuyama declined to say when the model might be ready.
Mohit Arora, who covers the Indian auto market for J.D. Power from Singapore, said Nissan was late to come to India and
its current offerings are too expensive for most Indians.
`Ùnlike, let's say, Toyota and Honda, which have been there for some time, Nissan was a late arrival on the Indian
scene,'' he said. ``They were focused on markets which had given them faster growth, like China.''
But, he added, ``That's not to say they've missed the boat.''
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Mercedes unravels its new E-Class

23 September 2009
PTI
German luxury car maker Mercedes Benz on Wednesday launched a brand new version of its sedan E-Class in India
priced at Rs 46.98 lakh (ex-showroom, Delhi).
The new E-Class comes with a 3.5 litre V-6 petrol engine, which would be locally assembled here.
The company has so far sold a total of 11,000 units of the existing E-Class in the country.
Mercedes Benz India had last month launched a special edition of its sedan C-Class also in an attempt to boost sales.
Earlier the company had projected a dip in sales this year compared with 2008. However, it expects to register impressive
growth next year onwards.
Mercedes Benz India Managing Director and CEO Wilfried Aulbur had said this year the company would be lagging a little
behind than its sales in 2008.
Last year Mercedes Benz India had sold 3,625 units in the Indian market.
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Honda launches the new City priced at Rs 8.37L-10.24L

15 September 2009
ECONOMICTIMES.COM
Honda Siel Cars India on Tuesday launched a new feature packed Honda City 1.5V and the new Honda City 1.5S with
brand new beige interiors.
The new variant of the Honda City has been launched as part of the Great Honda Fest promotion.
The new City 1.5V (MT & AT) comes with the introduction of 5 spoke Alloy Wheels and Front Fog Lamps for style and
better visibility. The exterior looks of the new City 1.5V gets an addition of Chrome door handles, new Sporty Exhaust
Finisher and Front & Rear mud guards.
The new variant has a complete new interior look with Beige fabric seats, Silver Colored Fan Knob, painted inner door
handles, door lining garnish and power windows panel. The car also gets the Dual front tweeters and a driver seat back
pocket for added convenience.
The new Honda City will now be available as SMT, VMT and VAT. Additionally, all the variants will be available in 2 types
– Elegance and Inspire.
Honda City will have an additional colour option Deep Sapphire Blue for a limited period during festive season along with
existing colors available in the range.
The Honda City comes equipped with a 1.5L, 4 cylinder new generation i-VTEC engine that delivers power of 118PS. The
engine is E10 compliant and has Euro IV emission levels.
The new City is fully loaded with various active and passive safety features as standard including ABS (Anti-Lock Braking
System) with Brake Assist (BA), Dual SRS airbags, pre-tensioner seat belts and G-CON (G-Force Control Technology)
body with a high integrity survival zone. The front body structure of the Honda City ensures advanced pedestrian safety
features.
The new Honda City has sold nearly 38,000 units since its launch in September last year.
Masahiro Takedagawa, President and CEO, Honda Siel Cars India Ltd said, ―We are happy to introduce this new V-
Grade in response to our discerning customers‘ feedback. With the recently launched Honda Jazz, the refreshed new
Honda Civic and now this V-Grade Honda City, we have a whole new line-up for all our customers to choose from.‖
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Volkswagen's Polo to hit Indian market

25 September 2009
PTI
European luxury car manufacturer Volkswagen on Friday said its proposed small car was "well on track" and would hit the
Indian market by next year.
The small car, Polo, a hatchback model would compete with B+2 segment, Volkswagen India (Passenger car) director
Neeraj Garg told reporters here.
At present, the B+2 segment comprises Maruti Suzuki Swift, Hyundai i20, Honda Jazz, Chevrolet UVA and the latest
Punto from Fiat's stable. This segment has growth potential, with leading car makers such as Toyota, Nissan-Renault and
Ford India also planning to enter into this category, Garg said.
The Pune plant would be exclusively manufacturing Polo range of cars. "We have heavily invested in the plant at Pune
and right now, the pre-production stage is going on and we should launch Polo by next year," Garg said.
On sourcing of the parts of the proposed small car from the domestic market he said, "It is too early to comment now. We
are yet to decide on that." Garg declined to give out the specifications and the pricing of the proposed small car.
The plant has a capacity of 1.10 lakh units and would reach full capacity in four years from now, he added.
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Industry Competition
M&M may buy Kirloskar Oil's stake in Swaraj Engines

25 September 2009
Reuters India
Mahindra & Mahindra Ltd is planning to up its stake in Swaraj Engines by buying out Kirloskar Oil Engines' stake in the
latter, the Business Standard reported on Friday.
Swaraj Engines was formed in technical collaboration with Kirloskar Oil, which currently holds 17.39 percent stake in the
firm.
Mahindra & Mahindra, India's top tractor maker has a 33.2 percent stake in Swaraj Engines and is planning to consolidate
its stake in the firm to expand the diesel engines business; the paper said quoting bankers familiar with the development.
"M&M has a bigger plan for the engine business and this acquisition would help the group leverage Swaraj Engines for
that," the paper quoted an investment banker familiar with the development.
"M&M has already had talks with Kirloskar Oil and the deal is most likely to happen," the banker told the paper.
A spokesperson for Mahindra & Mahindra declined to comment when contacted by Reuters.
Kirloskar Oil Engines could not be reached for comment.
Another banker familiar with the matter told the paper the sale of stake by Kirloskar Oil would help it focus on its own
business.
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Volvo Car sees good demand for luxury cars in India

2 September 2009
REUTERS
The Indian unit of Volvo Car Corp, a subsidiary of Ford Motor Co, expects industry sales of luxury cars to rise to about
10,000 this year from about 7,000 last year and to keep growing in double-digits for some years.
Volvo Cars only entered the Indian market last year and is a small player. It sold about 90 cars in 2008, and expects sales
of its 6 models to rise more than 10 percent in 2009 as it seeks to tap a growing market, the Indian unit's Managing
Director Paul de Voijs said.
"First, there is a huge unsatisfied appetite for luxury cars in the market. Second, most luxury brands are still expanding
their dealer network and expanding their portfolio of car lines," de Voijs told Reuters.
Luxury cars account for 0.5 percent of total car sales in India, but the market's potential is attracting new entrants. Tata
Motors recently launched its high-end Jaguar and Land Rover brands, which it bought from Ford in 2008.
Prices for Jaguar cars range from 6.3 million rupees to 9 million rupees ($128,000 to $183,000) while Volvo cars range
from 3.8 million rupees to about 5 million rupees.
Russia, where luxury cars are about 5 percent of total sales, is Volvo's largest market among emerging markets, with
sales of about 20,000 cars annually, de Voijs said.
"India has a bigger population and has more dollar millionaires than Russia... I see no reason why (luxury cars) should
not go to 2-3 percent of the market," he said.
Ford put its loss-making Volvo car unit up for sale in December as it looked to cut costs and raise cash, and has been
talking to potential buyers, including China's Beijing Automotive Industry Holding Corp and rival Geely.
From October, Volvo Cars' Indian unit will become a separate unit independent of Ford India, de Voijs said.
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Mercedes targets Rs 145 cr revenue from truck sales

8 September 2009
The Economic Times
Mercedes-Benz India Ltd hopes to sell about 240 trucks in India during 2009 which is estimated to translate into Rs 145
crore revenue for the segment. During 2008, it sold about the same number of vehicles. It now feels that the market will
improve only in 2010 when growth is likely.
This calendar, Merc has already sold about 127 trucks and has orders for another 50 from Saumya Mining – a Kolkata
based company into contract mining. ―Saumya Mining has ordered 100 trucks for its mining business, 50 of which will be
delivered this year and the rest 50 next year. The order size is about Rs 60 crore,‖ said Mercedes-Benz India MD and
CEO Wilfried Aulbur.
Interestingly, Merc is also looking at a sizeable opportunity in fire departments of various states as well as the defence
sector.
―We have already sold about six trucks to a fire department in Mumbai and are looking at opportunities in the defence
sector. Merc‘s stable offers vehicles that are suited for the defence sector and are in use by some governments. These
could be a possibility in India,‖ said Mr Aulbur.
In India, the commercial vehicle segment offers about 15% of the total revenue to Mercedes-Benz India, while it is 40%
globally. ―The contribution of the commercial vehicle segment is slated to rise with time,‖ he added.
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M&M may decide on US plant by mid-2010

23 September 2009
REUTERS
Mahindra & Mahindra Ltd wants to decide within months of its US market launch whether to set up an assembly plant
there, the head of its automotive division told media.
"By mid-2010 we want to make a decision about whether to produce in the US or not," Pawan Goenka said on Tuesday
on the sidelines of the Frankfurt Motor Show.
Mahindra, which already sells tractors to U.S. farmers, plans to bring its pickup trucks to U.S. markets in the first quarter
of 2010.
"If sales are right, we will start manufacturing in the US", Goenka said, adding that he saw the required sales level at
below 100,000 vehicles per year.
He declined to give an estimate for US sales.
Mahindra is looking at various options for assembling its pickup trucks in the U.S. including buying or building a plant or
relying on contract manufacturing, Goenka said.
The biggest Indian utility vehicle manufacturer was not looking into opening a production plant in Europe at present,
Goenka said.
"Volumes in Europe are very small, they were around 2,000 vehicles in our best year," he explained.
Unlike most car makers round the world, Mahindra still experiences high growth rates in sales. The company was able to
sell 30 to 35 percent more of its utility vehicles in the first two months of the quarter ending September than in the year-
earlier period.
"Volume growth has been similar to what we have had in the first six months (of the year)," he said, adding that Mahindra
had again increased its market share.
Mahindra & Mahindra accounts for about 65 percent of the 250,000 utility vehicles sold in India per year, Goenka said.
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24 September 2009
The Economic Times
American carmaker, Ford Motor, plans to make India its manufacturing hub for its small car Figo it showcased on
Wednesday for the Asia Pacific market. Ford has targeted 2 lakh cars for India by 2010. After unveiling the Figo in Delhi,
Ford‘s president and CEO Alan Mulally said: ―The global market is shifting towards smaller cars and India has a
predominant advantage with a 70% market for compact cars. With Figo, we plan to get a larger chunk of the premium
hatchback market, both in India and overseas.‖
―Our plan for India involves accelerating development of fuel-efficient small cars. The small car market in India will double
in the next one decade,‖ said Mr Mulally. He, however, ruled out plans to compete with Tata Motors‘ Rs 1-lakh car the
Nano and Maruti Suzuki‘s M800 in the near future.
Figo, Italian for ―cool‖ will be launched in the first quarter of 2010 and come in both petrol and diesel variants. Ford India
has not announced any price but the car is expected to cost Rs 4 lakh and upwards for the base variant and will be pitted
against Maruti Swift and Ritz, Fiat Punto, Chevrolet U-VA and Hyundai I20.
The company plans to export a significant number of the Figo to Asia Pacific and African countries in 2010.
Ford, the only American auto company that survived the downturn without a government bailout, is planning to integrate
car designs globally and develop compact and mid-sized cars to improve profitability and productivity.
―We are looking at synergies at the global level under the ‗One Ford‘ concept for all major markets. We will develop global
platforms for cars that will be tweaked for local markets.‖ Mr Mulally said. Ford India currently enjoys 2.07% share in the
over-12 lakh Indian passenger car market. The company is investing $500 million in expanding its production capacities
at the Chennai facility to two lakh units per annum from the existing one lakh units a year, besides producing 2.5 lakh
engines every year.
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Nissan plans compact car hub in Chennai

25 September 2009
The Economic Times
Japan‘s Nissan Motor plans to make India one of its key manufacturing locations for its compact cars, which include
products such as Micra, a senior official said.
―Low operational costs and the growing importance of India in compact car manufacturing make it an attractive
proposition to make India a hub,‖ said K Tokuyama, MD & CEO, Nissan Motor India.
When Nissan, which has a partnership with France‘s Renault, does it, it would be following the footsteps of Suzuki Motor,
its rival in home country, and South Korea‘s Hyundai Motor, which have benefitted from the massive plants they have set
up here. The low-cost, but trained manpower, thousands of component makers and easy access to growing markets
make India an attractive destination for small cars. Tata Motors is producing the world‘s cheapest car here.
Nissan has said it will invest close to 350 billion yen this year across the globe and India may get a ―major chunk‖ of the
investments, Mr Tokuyama said. India will be an export hub for compact cars for many countries, especially for Europe
from the second half of 2010. Nissan which is scheduled to showcase its enhanced Micra in March of 2010 at the Geneva
Motor show, plans to launch the same in India in May 2010. It will be followed up with five more models in three years,
including an entry-level car, commercial vehicles to high-end sports cars and sedans, an official said.
Nissan may also set up massive plants in Russia and Brazil to cash in on the prosperity in those resource-rich nations as
part of its five low-cost plants across the globe, a person familiar with the plans said. ―We still have not taken a decision
on the other two countries,‖ said Mr Tokuyama.
Nissan has also been juggling with its production sites across the world. Recently, it announced plans to shift the
production of Micra compact car from UK to India and from Japan to Thailand. India and Thailand will be the markets from
where it will source Micra from 2010.
The company is building a plant in Chennai, Tamil Nadu, with an investment of Rs 4,500 crore that will have a capacity to
produce four lakh cars. That plant is an equal joint venture between Nissan and Renault. Mahindra & Mahindra, which are
partners in producing Renault‘s Logan in India, pulled out of the tripartite agreement for that venture in 2007.
Nissan India which already imports the X-Trail SUV and the Teana sedan as CBUs (completely built unit), plans to sell
the 370Z early next year. The company is also contemplating the launch of GTR, a sportscar or the Murano, a crossover,
in India.
―We have yet to decide whether we need a volume puller or an image leader. Depending on the decision, the fourth
model will be imported for the Indian market, Mr Tokuyama said. The Japanese company is also trying to sell its electric
vehicles in India.
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Ford India doubles Chennai plant capacity

3 September 2009
The Economic Times
Ford India, whose automobile manufacturing facility in Chennai functioned with zero automation so far, is investing US $
500 million in ramping up and modernising the facility, including introducing a 30% automation in its operation.
The company has also recruited 400 workers at its plant, in preparation for the launch and production of its new 'small
car' model by early 2010. By then, the plant capacity would be doubled from its present 1 lakh per annum to 2 lakh per
annum.
The plant presently produces only 30,000 units per annum, as it works only single shifts, while the installed capacity is for
three shifts. "The number of employees will depend on the market demand in the coming years. But we will be recruiting
another 400 probably by the end of the year," said Ford India MD and president Michael Boneham.
The company presently employs 1600 workers in its Chennai plant. It had 13% of them women till recently but it has
dropped to 3%. These women are employed on the shop floor in the same jobs as their male counterparts, as per
company policy. "We will also be conducting recruitments specifically for women apart from the planned head count
increase," Mr Boneham said.
Part of Ford‘s investment has gone into deploying 66 robots in its factory to increase the level of automation in its
operations. It has introduced a new premium painting process in its paint shop called three wet high solid process, which
is expected to increase the gloss and quality of its colours as well as save overhead costs on painting, which is normally
35-40% of a car‘s production cost.
"Painting is only the second single most expensive component in the assembly line. We have invested in this process
now, and will be seeing the qualitative benefits soon. I am not sure whether there will be a significant cost benefit to offset
the increased expenditure in the process itself," said Ford India manufacturing vice president Tom S Chackalackal. 70%
of the planned $ 500 million has been deployed so far, with the rest saved for sundry expenses till the launch of the small
car and the completion of its overhaul process by end of Q1 2010-11.
Talking about the soon to be launched small car model, Mr. Boneham said, "We are not ready to discuss the production
platform yet, but it will be rolled out on the same assembly line as our existing sedan models." He ruled out the possibility
of a hybrid engine saying, "Hybrid or electric cars are too expensive for the price sensitive Indian consumer. At the
moment, we are concentrating on improving the fuel efficiency of our 1.2L petrol engines and 1.5L diesel engines."
The car will be made with 85% local components, supplied by the company‘s suppliers located within the 352-acre plant.
A new supplier park is included in its ramp up plans as it will be increasing the base from 150 to 190 suppliers to cater to
its increased capacity. "Our long term partner Visteon, which also houses its facility in our campus, will supply new parts
for the small car, but most of our suppliers are locals," Mr. Boneham said.
Ford India will launch an automatic variant of its Endeavour model by next week, a first for the company in India.
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Suzuki to spend $215 million on new Haryana factory

6 September 2009
REUTERS
Japan's Suzuki Motor said it plans to invest about 20 billion yen ($215 million) to build a new car factory in India, aiming to
upgrade its production facilities in the face of growing competition.
Suzuki, which controls about half the Indian car market through unit Maruti Suzuki India Ltd, said late on Saturday that the
new facility would come on-line as early as 2011 and have an annual output capacity of about 250,000 cars.
The plant will expand its existing Manesar facility in the state of Haryana, about 50 kilometers (30 miles) from New Delhi.
The investment will not alter Suzuki's annual production capacity of about 1 million cars in the country because it plans to
shift about 250,000 units of capacity from its ageing Gurgaon facility to Manesar.
Suzuki Chairman Osamu Suzuki told a briefing on Saturday that the investment would likely come to about 20 billion yen,
according to a public relations official.
Suzuki is bracing for tougher competition in the Indian market.
Tata Motors' Nano, the world's cheapest car, hit the roads in July. Toyota Motor Corp, Ford Motor Co, General Motors
and Volkswagen are all set to launch small cars in India next year.
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Volkswagen India plans to double distribution network

25 September 2009
IANS
German auto giant Volkswagen is planning to double its distribution network in India and increase brand spend before its
much awaited entry into the country's small car segment early next year, a top official said here Friday.
"Gearing up to the launch of our high volume model Polo, we are expanding our distribution network. By the end of this
year the company will have 40 dealers," Neeraj Garg, director (passenger cars) of Volkswagen Group India, told reporters
here after inaugurating a new dealership.
The company now has 22 dealership outlets in the country, of which two are in Chennai.
Depending on the market, company would further increase the number of dealers, Garg said.
Volkswagen will roll out hatchback and sedan versions of Polo next year from its Rs.3,800-crore plant in Pune.
"This year the B-plus segment will be around 300,000 units in size. The entry of new players will further expand the
market," Garg said.
He added that the company would step up spending on brand promotion activities in the country to meet the mounting
competition challenges.
"It is true the Volkswagen brand is not well known in the country. This will be corrected with appropriate branding
strategy."
Volkswagen will bring its popular model "Beetle" to India as completely built unit.
For the current year, Volkswagen hopes to sell 3,000 units of "Jetta" and "Passat", up from 1,566 units sold in 2008.
"We sold 1,900 units during Jan-Aug this year," Garg said.
While Volkswagen has no major plans to localise the components for these two premium cars, the company will go in for
80 per cent local content for its Polo model, Norbert Hoppel, deputy general manager (parts organisation), said.
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International Updates
Tata arm gets 10 mn pound loan from UK Govt

19 September 2009
The Economic Times
Auto major Tata Motors on Friday said its wholly-owned European subsidiary, Tata Motors European Technical Centre
(TMETC), has received a loan of £10 million (approximately Rs 80 crore) from the British government to develop an
electric vehicle in the UK for a total investment of £25 million (Rs 195 crore).
The loan is under the foreign government‘s automotive assistance programme (AAP) that is meant for developing cars on
fuel-efficient technologies. The company will develop and manufacture the Tata Indica Vista Electric Vehicle in the UK.
―The Tata Indica Vista EV will be the first four-seater electric car with a range of up to 200 km to become available this
year in Europe,‖ the company said in a statement. The pricing of the car will be announced closed to the launch. The
vehicle will be launched in India later.
Tata Motors will send the Indica Vista from India to TMETC which will power the car with batteries from Miljobil, the
Norwegian subsidiary of Tata Motors. Tata Motors is also working on development of hybrid cars.
The loan comes a month after Tata Motors said it would not need the UK government support for the revival of Jaguar
Land Rovers (JLR). Instead, it is organising a loan of £340-million (Rs 2,700 crore) from the European Investment Bank.
Set up in 2005, TMETC is engaged in design, engineering and development of automobiles and works synergistically with
Tata Motors R&D centres in Pune, Lucknow, Jamshedpur and Korea. It has 180 employees.
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India in spotlight at Frankfurt auto show

28 September 2009
IANS
India, whose mode of transportation in antiquated cars was once referred to in German industrial circles as the "world's
bullock cart", is now being aggressively courted by German automakers, seen by the enormous attention it received at
the International Motor Exhibition here.
Forced by their own financial problems and shrinking demand in the traditional markets in Europe, Japan and the US,
German carmakers are desperate to tap the new markets of the so-called BRIC (Brazil, Russia, India and China)
countries.
Among them, India clearly stands out with a large cash-rich middle-class whose appetite for luxury products, including
foreign brand-name cars, exudes considerable pull for German car manufacturers.
So it was no wonder that India hogged the limelight this year at Frankfurt's International Motor Exhibition, popularly known
by its German acronym IAA, where a special India Day was organised to highlight the opportunities and challenges of the
Indian market. The ten-day IAA which ended Sunday was held under gloomy economic skies, as a major crisis continues
to ravage the West's automobile industry.
As Germany's car industry continues to bleed with declining sales and revenue, more and more German carmakers feel
that one "simply cannot bypass the future market India", as the president of the German Automobile Association, Matthias
Wissmann, a minister in former Chancellor Helmut Kohl's government, put it.
To highlight the market potential, Wissmann told the audience at India Day that whereas one out of two Germans drives a
car, in India the ratio is 11 cars to 1,000 people.
Sudhir Vyas, India's ambassador to Germany, highlighted India's "ambitious plans" for its industry. India, according to
Vyas, has plans to move up the ladder from its present position as the world's eleventh largest automobile producer to the
seventh position by 2016.
Management consultancy Deloitte predicts that by 2020, consumers will prefer small and energy-efficient cars and
production will take place mainly in Asia, another reason to woo India.
Meanwhile, Germany's - and Europe's - largest carmaker Volkswagen will join forces with Japanese carmaker Suzuki
which has a tie-up with India's Maruti, a Suzuki executive revealed at the IAA.
Indian carmakers at the Frankfurt event appeared confident and bullish, buoyed by the unprecedented attention they
received at the exhibition. "By 2016, we want to become the leading automobile nation in Asia," said Pawan Goenka,
president of the Society of Indian Automobile Manufacturers and the top executive at India's fourth largest automobile
group Mahindra.
Goenka predicted that turnover volume in the Indian market in the coming seven years would rise from $36 billion to $115
billion. That would account for a 10 percent share of India's GDP by 2016. The number of workers directly or indirectly
employed by the automobile industry would double to 25 million, he predicted.
Wilfried Aulbur, the managing director of Mercedes-Benz India, said that India had already "surmounted the worst" in the
current global financial and economic crisis. The typical Indian car buyer was well-educated, brand-conscious "but not
always loyal to the brand", he felt.
German involvement in Tata‘s' Nano was quite significant, according to Bernhard Steinruecke, the executive director of
the Indo-German Chamber of Commerce. "Twelve German subcontractors are involved in the small car (Nano)," he said,
adding that the car was essentially German technology. Without German involvement, it would not run, he claimed.
Consultancy firm Management Engineers has estimated that India's small-car market is the world's second fastest
growing after China. The annual growth rate, it says, is 7-8 cars per 1,000 residents in India. Small cars presently account
for some 61 percent of India's automobile market while vans and SUVs make up some 13 percent.
But German automobile experts are aware that India is not a "cake walk", as Karl Rodenstock, an analyst based near
Frankfurt, put it. Representatives of established German automakers such as Audi, BMW and Daimler have experienced
that Indians wanted "the best product at the lowest possible price".
While many Germans are discussing the low price of Nano which is being sold for 1400 euros, the German industry is
also monitoring moves by Indian car manufacturers.
Bangalore-based Reva, which showcased its electric car at Frankfurt, announced plans to introduce the car in 12
European countries in 2010. The four-seater car can run at a speed of 160 kmph and is equipped with solar panels in the
roof. The car, which can be fully recharged from an electric grid in eight hours, is expected to cost between 12,200 and
14,000 euros, according to company sources.
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Reva launches new car models at Frankfurt Motor Show

17 September 2009
AGENCIES
Reva Electric Car Company announced the launch of its model Reva NXR while unveiling another variant Reva NXG, at
the Frankfurt International Motor Show.
Reva NXR, a lithium-ion battery powered car is scheduled to go for production early next year and Reva NXG's
manufacturing is scheduled for 2011, a company statement said.
Reva NXR is a four-seater hatchback model and can attain top speed of 104 kmph and cover a distance of up to 160
kilometers in a single charge, it added.
The car is loaded with several other features such as keyless operation, dual charge port, digital display and SMS alerts.
It can travel up to 320 km per day using 90 minutes fast charges and a fast charge of 15 minutes will provide a 40 km
range, the company said.
The company has priced Reva NXR at 14,995 euros and Reva NXG at 23,000 euros excluding the cost of battery in
European market. However, prices of both models in Indian would be announced the next year.
"NXR is a stylish car packed full of user-friendly technology. You can order one from today and production will start early
next year.‖ Reva Chief Technology Officer Chetan Mani said.
"The world cannot afford conventional cars anymore."
A surge in global oil prices last year had helped raise people's consciousness, he added.
"Five years ago I don't think people were thinking about electric cars," said Maini, Reva's deputy chairman and chief
technical officer.
When consumers mull a purchase now however, "they would at least consider an electric car," the Indian entrepreneur
added.
Reva will launch its Bangalore output with capacity of 300,000 vehicles per year.
"We believe it may take us two to three years to get to full capacity but we think the market potential is very high, and
that's why we are setting up that kind of capacity," he said.
He cited a study which forecast a market of 500,000 electric vehicles in Europe in 2015, while also stressing a key role for
governments in developing electric cars.
"There is a societal cost to pollution" that justified funding to help companies invest in infrastructure, technologies and
product launches, Maini maintained.
"Once people use it and feel the benefits, the volumes grow and prices come down and then you don't need support" any
longer, he said.
Reva, which has produced electric vehicles since 2001, claims now to have solid experience in the field.
Maini said 300,000 of its cars were already being used in 24 countries.
Powered by a lithium-ion battery, the NXR is a three-door model designed to carry up to four passengers.
It is expected to cost 15,000 euros (22,000 dollars), minus the battery which specialists note are one of the most
expensive components, for an "inter-city" version.
A pure city car with less range and traditional batteries is to be offered for less than 10,000 euros.
Customers would be charged "a mobility fee" for battery rental, but they will be available for purchase as well.
The prices were noticeably higher than the 2,055 dollar tag for the Indian produced Nano, which was launched in July and
is currently the cheapest car in the world.
Reva Electric Car, a Bangalore-based company, is a joint venture between India's Maini Group and AEV LLC of
California.
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M&M to enter US market in 1st quarter of 2010

3 September 2009
PTI
Auto maker Mahindra & Mahindra on Thursday said it will begin US operations in the first quarter of 2010 with two new
variants of SUV Scorpio besides two vehicles in the Indian market over the next six months.
The company also said reports about recall of some of its Scorpio and Xylo vehicles are false.
"In the US market, we are going to start off with the Scorpio single cabin and double cabin in the first quarter of next year.
In future, we will have newer models coming in," Mahindra & Mahindra (M&M) President (Automotive Sector) Pawan
Goenka told PTI on the sidelines of ACMA annual conference here in the capital.
He said the company will initially sell its models in the US market as completely built units shipped out from India.
"If we get good volumes, then we will look at local assembly (in US). It depends on the market and how our products are
accepted there," Goenka said.
The company had earlier announced that it had made investments worth Rs 300 crore on product development for its US
operation.
M&M is also planning to launch two new vehicles in the Indian market within the next six months.
"The first one will be a sub-one tonne four wheeler in the last quarter of this calendar year and second one will be medium
and heavy truck developed in joint venture with 'Navistar' which will be launched in the first quarter of 2010," he said.
Asked about reports on the recall of Xylo and Scorpio he said," It is absolutely wrong. There is no recall of Xylo or Scorpio
from any of the market."
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Tata Motors lines up Rs 160 cr electric Indica Vista project
5 September 2009
ET Now
Indica Vista will, this year, become the second electric car to be exported from India since the Maini Group started selling
its Reva as G-Wiz in Europe about five years ago.
Tata Motors will soon roll out its £20-million (Rs 160 crore) electric car project in Norway and later scale it up for other
Scandinavian markets. The Indica Vista EV has been designed and developed by Tata Motors' UK subsidiary, Tata
Motors European Technical Centre.
The project involves assembling the car in Norway from semi-knocked down kits imported from India, an application by
Tata Motors to the commerce ministry said. It is confident that the project will turn profitable within four years of start of
production. However, there is no plan to introduce the electric variant in India, a Tata Motors official told ET NOW. "In
future, Indica Vista EV could be manufactured in India if sales volumes justify," the company said in its application to the
government.
While it is believed that Tata Motors had told the UK government that the company won't go ahead with its electric vehicle
project without its support, the project seems to be on track. "Tata Motors is progressing with the Indica Vista EV project
as per plan. The company has said it will introduce the car in Norway this year," a Tata Motors spokesperson said on
condition of anonymity.
The company is still negotiating with the British government on the electric car project, which has no link with the Jaguar-
Land Rover (JLR), said people with direct knowledge of the development.
Running on lithium-ion batteries, the Indica Vista EV will be faster and peppier than its petrol and diesel variants available
in India. The car will have a top speed of 151 km an hour, maximum power of 55 kw at 4,000 rpm and 190 Nm of torque,
the Tata Motors' application to the commerce ministry said.
Back to Top
JLR plans to shut down UK plant, pump in 800 mn pounds

25 Sep 2009
The Economic Times
Jaguar Land Rover (JLR), the British luxury carmaker owned by Tata Motors, on Thursday said it will close one of its two
West Midlands plants, introduce new products and infuse funds in a bid to drive growth and return to profit.
The new strategy will focus on the medium and long-term requirement, but has an ―acute focus‖ on next year. It is aimed
at global competitiveness, driving growth, sustaining profitability and responding to the challenges of climate change, the
JLR statement said.
A person close to the company said the plan would help it to return to profit in two years. JLR suffered net loss of £41.2
million (Rs 319 crore) in the June quarter mainly because of a 52% drop in sales volumes. The car industry has been
through an unprecedented recession. New car sales, including those of Jaguar and Land Rover, are down globally by
25-30 %. ―This has resulted in manufacturing capacity utilisation of less than 60% at JLR, which combined with the credit
crunch, has exposed fundamental weaknesses in the structure of the business,‖ the statement said.
JLR has responded to the adverse situation over the past year through production and cost cuts. Production was reduced
by more than 100,000 units, spending and costs were cut, employment reduced by 2,500 and pays frozen and bonuses
cancelled. But this was not enough to offset the full magnitude of the downturn and the company swung from profit in
2007 to significant losses over the past 12 months, CEO David Smith was quoted in the statement. Actions taken have
started to reverse the trend quarter over quarter and we now have to take the company to the next level of
competitiveness, he added.
―This is a plan that recognises the impact the economic collapse has had on our business, and at the same times the
opportunities that lie ahead for these two great brands. We are confident that a new more efficient and competitive
structure combined with future investment will unlock the true potential of this business,‖ Mr Smith said. JLR intends to
invest close to £800 million (Rs 6,300 crore) for environmental innovation and new technology.
The company is likely to borrow £340 million (Rs 2,680 crore) from European Investment Bank to finance the investment.
A new generation of lightweight sedans, sports cars and premium SUVs, with hybrids and electrification technology will
be introduced which will significantly reduce fuel consumption and carbon dioxide emission.
There will be additional derivatives and powertrain variants from core model lines too. Cost reductions include pension
restructuring, lower employment costs for new hires and a focus on IT and business simplification. Volume growth,
especially in emerging markets, combined with low-cost country sourcing will also reduce variable cost, the company
said.
JLR may close down either its Castle Bromwich plant in Birmingham which makes Jaguar cars or its Solihull unit, which
produces Range Rovers. About 800 new jobs will be created at its Halewood plant in Liverpool which will build a smaller
and fuel-efficient Range Rover model, the LRX.
JLR has about 5,000 workers in Solihull, 2,000 in Castle Bromwich and 1,800 at Halewood. JLR said there will be no
―compulsory redundancies‖. The workers from the closed unit will be transferred to the chosen site, once it is decided
which plant will be closed, said a person close to the company.
Back to Top
China – Automobile Production to Reach 16 Million by 2012

17 September 2009
E-Business
Our recently published report "China Automobile Sector Forecast to 2012" has found that the auto sales in China surged
to 7.2 Million in the first seven months of 2009, up 23% from the same period last year, despite adverse business
conditions emanated from the global economic slowdown. With the government‘s supportive policies, the automobile
production is expected to reach 16 Million by 2012.
The Chinese government's stimulus measures have boosted the auto industry and it is set to stay robust in coming years.
At the beginning of 2009, China's State Council unveiled a long-awaited support package for the automobile sector.
Under the plan, the government has lowered the purchase tax on cars less than 1.6 Liters from 10% to 5% in a bid to
stimulate sales which were facing tough time due to recession. It has also allocated US$ 730 Million to provide one-off
allowances to farmers to upgrade their three-wheeled vehicles and low-speed trucks to mini-trucks, or purchase new
mini-vans under 1.3 Liters.
In addition to the government‘s stimulus packages and sales inducing policies, China‘s real GDP growth, which was
pegged at 9% in 2008 in spite of gloomy world economy, gave fillip to the automobile industry. Strong economic
performance of China in the past few years (2004-2008) has given strong impetus to the economic condition of industries
as well as individuals. During the period, the Chinese government concentrated on increasing the domestic demand by
strengthening the consumption levels. This was one of the main reasons that attracted many automobile players towards
the Chinese automobile market.
"China Automobile Sector Forecast to 2012" contains an extensive research and in-depth analysis of the automobile
industry in China. It gives detailed information of the past progress of automobile market and its various segments,
including passenger vehicle, commercial vehicle, utility vehicles, two-wheelers and auto component.
We have also done a comprehensive analysis of alternative fuel vehicle industry in China as well as its future outlook.
The study evaluates the growth avenues available for the country's automobile market, which include motor insurance
industry, steel industry, used vehicle market, automotive electronic market, biofuel industry, etc.
The report provides past and current information of the Chinese automobile industry with forecast for various important
industry aspects, including China's share in global automobile production, automobile production, passenger car stock,
commercial vehicles production, motorcycle production, motor insurance premium income, automotive electronics market
and ethanol consumption
Back to Top
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India

Automobile Industry Updates

Global slump oiled Indian auto Regulatory Update

Mahindra Renault targets to sell

Industry Competition Press Release

M&M may buy Kirloskar Oil's

Ford India doubles Chennai

Tata Motors sales soar 14 pc in August

M&M to enter US market in 1st

JLR plans to shut down UK

China – Automobile Production

Car sales rise 26% in India

India speeds past China in auto exports

M&M may soon be world’s No. 1 tractor co

Volkswagen may assemble Audi Q5 in India

7 auto testing centres to make India an auto hub on cards

Indian co to be in top 6 carmakers of the world by 2020: Study

Commercial vehicle makers gear up for price hikes

Maruti plans KB Series engines for entry level, A segment cars

Sales of luxury cars robust in Gujarat on Dussera

At Rs 3,400 cr, record auto loan disbursal in Sept

Replacement market props up Indian tyre sales

Ford plans to bring Rs 3 lakh-plus small car

Ford Endeavour gets a facelift

Maruti Suzuki to relaunch power-packed SX4

Nissan to launch sports car Z370 in India in 2010

Audi rolls out its latest sports utility vehicle Q7 in India

Honda Siel launches new Civic

Nissan launches 2 new cars in India

Mercedes unravels its new E-Class

Honda launches the new City priced at Rs 8.37L-10.24L

Volkswagen's Polo to hit Indian market

M&M may buy Kirloskar Oil's stake in Swaraj Engines

Volvo Car sees good demand for luxury cars in India

Mercedes targets Rs 145 cr revenue from truck sales

M&M may decide on US plant by mid-2010

India will build Ford's Figo

Nissan plans compact car hub in Chennai

Ford India doubles Chennai plant capacity

Suzuki to spend $215 million on new Haryana factory

Volkswagen India plans to double distribution network

Tata arm gets 10 mn pound loan from UK Govt

India in spotlight at Frankfurt auto show

Reva launches new car models at Frankfurt Motor Show

M&M to enter US market in 1st quarter of 2010

Tata Motors lines up Rs 160 cr electric Indica Vista project

JLR plans to shut down UK plant, pump in 800 mn pounds

China – Automobile Production to Reach 16 Million by 2012

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Do you have a blueprint for that course?

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What about automobiles propelled by alternative fuels?

Are you looking at any corpus to develop the technology together?

Global slump oiled Indian auto wheels

Tata Motors takes Rs 329 cr hit

Hero Honda rescues Honda from skidding in recession

Mercedes' India sales may be less this year

Tata Motors may sell 15% in fin arm

Recovery still far away for commercial vehicle manufacturers

Mahindra Renault targets to sell 1200 units of Logan in north

Maruti sells nearly 85,000 vehicles in Aug 2009

Tata Motors sales soar 14 pc in August

Audi sales up 69 per cent in August