August 2010

Dashboard
The Monthly Auto Update

Speedometer
Data Track: August volume update of auto majors
August 2010 relative performance
 Sector overview and outlook ......................................................... 2
 Hero Honda ................................................................................. 3 M OSL Auto Index Sensex
110
 Bajaj Auto ................................................................................... 4
 Maruti Suzuki .............................................................................. 6
106
 Mahindra & Mahindra ................................................................... 8
 Tata Motors ................................................................................ 10
TVS Motor ................................................................................. 12
102


Special Report: Maruti Suzuki: Annual report update ........... 13 98

2-Aug-10 9-Aug-10 16-Aug-10 23-Aug-10 30-Aug-10

Sector Gauge: July update 12-month relative performance

 Two-wheelers ............................................................................ 15
 Three-wheelers .......................................................................... 16 M OSL A uto Index Sensex

 Cars and UVs ............................................................................. 18 180

 Commercial vehicles .................................................................... 20

140

News and Events .................................................................... 23

 Yamaha’s three launches: the SZ, SZ-X and YBR 125 100

 Maruti launches five CNG vehicles with new technology

Hyundai to increase car prices in September
60
 Aug-09 Nov-09 Feb-10 M ay-10 Aug-10
 Ford to export Figo to new markets

v
Aggregate Volumes For August*
Segment Aug-10 Aug-09 YoY (%) Jul-10 MoM (%) YTDFY11 YTDFY10 Chg (%)
2-Wheelers 880,902 725,030 21.5 870,573 1.2 4,251,105 3,332,111 27.6
Motorcycle 780,367 648,705 20.3 768,518 1.5 3,811,025 2,981,166 27.8
Scooters & Mopeds 100,535 76,325 31.7 102,055 -1.5 440,080 350,945 25.4
3-Wheelers 45,262 33,673 34.4 46,458 -2.6 211,714 137,158 54.4
Cars 129,033 100,231 28.7 126,736 1.8 603,049 464,108 29.9
UVs 24,914 20,278 22.9 21,722 14.7 116,493 80,951 43.9
Commercial Vehicles 40,611 32,520 24.9 40,423 0.5 190,949 143,410 33.1
LCV 23,895 20,254 18.0 23,974 -0.3 112,486 90,484 24.3
M&HCV 16,716 12,266 36.3 16,449 1.6 78,463 52,926 48.3
Tractors 13,435 10,594 26.8 14,592 -7.9 78,177 48,025 62.8
Total Volumes 1,134,157 922,326 23.0 1,120,504 1.2 5,451,487 4,205,763 29.6
* Aggregate of Bajaj Auto, Hero Honda, TVS Motor, Maruti, M&M, and Tata Motors Source: Company/MOSL

Comparative Valuation
CMP * Rating EPS (Rs) P/E (x) EV/EBITDA (x) RoE (%)
(Rs) FY10 FY11E FY12E FY10 FY11E FY12E FY10 FY11E FY12E FY10 FY11E FY12E
Bajaj Auto 2,749 Buy 125.6 180.7 197.4 21.9 15.2 13.9 14.3 10.0 8.8 78.8 67.5 48.6
Hero Honda 1,759 Buy 112.2 114.1 134.6 15.7 15.4 13.1 11.0 10.3 8.0 61.7 54.0 39.2
Mahindra & Mahindra 628 Buy 42.6 57.9 68.3 14.8 10.8 9.2 10.2 8.9 7.2 26.1 23.1 22.0
Maruti Suzuki 1,273 Buy 86.7 80.4 97.6 14.7 15.8 13.0 7.7 7.8 6.3 21.1 16.4 17.2
Tata Motors 1,009 Buy 24.1 120.5 140.6 41.8 8.4 7.2 9.5 5.1 4.5 18.3 51.7 39.9
* Price as on 1 September 2010 Source: Company/MOSL

Jinesh Gandhi (Jinesh@MotilalOswal.com); Tel: +91 22 3982 5416

Sandeep Patil (Sandeep.Patil@MotilalOswal.com); Tel: +91 22 3982 5418
 Dashboard

Sector overview and outlook

Data Track
Positive outlook for the sector, though short-term headwinds exist

Strong volume growth: Volume growth is expected to continue, driven by a strong economic
recovery, increase in availability of finance and new product launches by existing and global
players entering the market. Besides, strong exports will support strong volumes. The volume
guidance provided by automakers indicates a favorable environment for FY11.

EBITDA margins to moderate, stay above historical average: Continued volume

growth will give the industry pricing power and support high operating leverage. Besides,
leading companies have undertaken cost cuts and productivity improvement programs, which
will dilute the impact of raw material cost inflation, supporting higher margins. Ramping up
operations in tax-free zones like Uttaranchal will help to counter cost pressure through a
lower tax burden.

Multiple headwinds in the short term: The auto industry will face headwinds in the
short-run due to (a) an increase in cost of ownership because of 2% higher excise duty and
partial pass-through of cost inflation in RM costs and emission-norm changes, (b) an increase
in cost of operations as fuel prices rose 15-22% in the past year, (c) hardening monetary
policy resulting in higher interest rates for automobiles, (d) the impact of forex volatility as
exposures are to multiple currencies, and (e) increasing competitive pressure.

Valuation and view: Strong momentum in volumes is expected to continue across segments.
EBITDA margins are expected to be above the historical average, despite moderating for
higher levels in FY10. Most auto stocks have outperformed benchmarks over the past 12
months, driven by strong volumes and margins. We prefer players that are less vulnerable
to competitive dynamics, enabling dilution of short-term headwinds. Our top picks are M&M
and Bajaj Auto.

Comparative Valuation
CMP * Rating EPS (Rs) P/E (x) EV/EBITDA (x) RoE (%)
(Rs) FY10 FY11E FY12E FY10 FY11E FY12E FY10 FY11E FY12E FY10 FY11E FY12E
Bajaj Auto 2,749 Buy 125.6 180.7 197.4 21.9 15.2 13.9 14.3 10.0 8.8 78.8 67.5 48.6
Hero Honda 1,759 Buy 112.2 114.1 134.6 15.7 15.4 13.1 11.0 10.3 8.0 61.7 54.0 39.2
Mahindra & Mahindra 628 Buy 42.6 57.9 68.3 14.8 10.8 9.2 10.2 8.9 7.2 26.1 23.1 22.0
Maruti Suzuki 1,273 Buy 86.7 80.4 97.6 14.7 15.8 13.0 7.7 7.8 6.3 21.1 16.4 17.2
Tata Motors 1,009 Buy 24.1 120.5 140.6 41.8 8.4 7.2 9.5 5.1 4.5 18.3 51.7 39.9
* Price as on 1 September 2010 Source: Company/MOSL

2 September 2010 2
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Hero Honda
Data Track
Below estimates; volumes up 2.3% YoY (down 0.7% MoM) at 424,617 units

Snapshot of volumes for August

YoY MoM Chg YoY Residual
Aug-10 Aug-09 Jul-10 YTDFY11 YTDFY10 FY11E
(%) (%) (%) (%) Gr. (%)

Total volume 424,617 415,137 2.3 427,686 -0.7 2,086,342 1,900,932 9.8 5,290,150 15.0 18.7
Source: Company/MOSL
Highlights
 Hero Honda posted August 2010 volumes of 424,617 units (against our estimate of
445,000 units), growth of 2.3% YoY (down 0.7% MoM). Volumes were impacted by
restricted movement of inventory from its Haridwar plant due to the ‘Kawad’ pilgrimage,
impacting volumes by 22,000-25,000 units. This growth is despite last year’s high base
(~36% growth in August 2009) and ongoing constraint in supply of components. Supply
constraints are expected to ease from August 2010.
 It’s scooter business is scaling up rapidly with volumes of over 27,000 units in Aug-10.
 Although the outlook seems buoyant, short-term headwinds continue to impact the two-
wheeler industry. Anil Dua, Sr VP (Mktg) said: “The domestic two-wheeler industry
remains buoyant and we expect growth to maintain this trajectory in coming months.
For us at Hero Honda, record four lakh (0.4m) plus sales for fourth consecutive month
has set the tone for festive season. We are looking to ride this buoyancy, having lined up
a number of new launches to meet our customers’ expectations and bring a lot of
excitement in the festive season. However, certain concerns such as high inflation and
short supply of components continue to bother two-wheeler industry in the near term.”
 We model volume growth of 15% for FY11 (to 5.3m units), implying a residual monthly
run rate of 457,687units (v/s 417,268 units in FY11 YTD), higher contribution from the
Haridwar plant (~34% of volume), and a 220bp decline in margins to 14.7%.
 The stock trades at 15.4x FY11E EPS of Rs114.2 and 13.1x FY12 EPS of Rs134.6. Buy.
Hero Honda: 2-wheelers

FY09 FY10 FY11

475,000

410,000

Restricted movement of 345,000

inventory impacted volumes
280,000

215,000

150,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Source: Company/MOSL
f
Hero Honda: Financial & Valuation Summary
Bloomberg HH IN Year Net Sales PAT EPS EPS P/E P/CE P/BV EV/ RoE RoCE
Equity Shares (m) 199.7 End (Rs m) (Rs m) (Rs) Gr. (%) (X) (X) (X) EBITDA (%) (%)
CMP (Rs) 1,759 3/09A 123,191 13,008 65.1 34.4 27.0 23.7 9.2 18.8 38.3 48.1
52-Week Range 2,075/1,396 3/10A 157,582 22,402 112.2 72.2 15.7 14.4 10.1 11.0 61.7 72.8
1,6,12 Rel. Perf. (%) -5/-8/2 3/11E 184,016 22,795 114.1 1.8 15.4 14.1 7.0 10.3 54.0 63.0
M.Cap. (US$ b) 7.5 3/12E 208,531 26,887 134.6 17.9 13.1 12.1 5.1 8.0 39.2 46.8

2 September 2010 3
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Bajaj Auto
Data Track
Above estimates, highest ever volumes at 329,634 units (+54.6% YoY); Buy

Snapshot of volumes for August

YoY MoM Chg YoY Residual
Aug-10 Aug-09 Jul-10 YTDFY11 YTDFY10 FY11E
(%) (%) (%) (%) Gr. (%)
Total volume 329,364 213,072 54.6 318,415 3.4 1,576,465 953,569 65.3 3,941,071 38.2 24.5
Motorcycles 289,176 182,441 58.5 279,781 3.4 1,396,700 833,331 67.6 3,496,828 39.5 25.5
Total Two-Wheeler 289,176 183,051 58.0 279,781 3.4 1,397,725 836,202 67.2 3,497,853 39.3 25.3
Three-Wheelers 40,188 30,021 33.9 38,634 4.0 178,740 117,367 52.3 443,218 30.0 18.3
Source: Company/MOSL

Production constraints are
likely to ease from
September 2010, taking
Bajaj Auto's monthly run-
rate to 335,000 units
Highlights
 Bajaj Auto’s total volumes grew by 54.6% YoY (~3.4% MoM) to 329,364 units (v/s est of
316,650 units).
 Motorcycle volumes grew by 58.5% YoY (~3.4% MoM) to 289,176 units (v/s est 285,000),
driven by highest ever sales for Pulsar and Discover brand.
 Supply side constraints, which impacted supplies of Pulsar and Discover 150, are expected
to ease from Sep-10 onwards translating into monthly capacity of 300,000 motorcycles.
Our FY11 estimates factor in 39.5% YoY growth in motorcycle volumes to 3.5m, implying
an average monthly residual run rate of 300,018 units (~25.3% residual growth).
 3-wheeler volumes grew by 33.9% YoY (~4% MoM) to 40,188 units (v/s est 31,500).
The company has debottlenecked capacity easing constraints. The order book is very
strong for next three months (expected at 40,000+ units). Our FY11 estimates factor in
30% YoY growth to 0.44m, implying an average monthly residual run rate of 37,783
units.
 Exports grew by 31.2% YoY (7.7% MoM decline) to 98,578 units (v/s est 100,000).
Export volumes were lower due to the decision to cater to domestic demand (e.g. de-
regulation of permits in Tamil Nadu led to fresh demand of ~35,000 vehicles).
 Bajaj’s volumes are expected to further improve driven by easing-up of supply side
constraint in two-wheelers and strong order book for three-wheelers. Given the
momentum in demand, we are upgrading our volume estimates by 5% to 3.94m (v/s
3.75m earlier), translating into residual monthly run-rate of 337,801 units (~24.5%
residual growth).
 Our EPS has been upgraded by 7.6% to Rs180.7 for FY11 and 7.3% to Rs197.4 for FY12.
The stock trades at 15.2x FY11E EPS of Rs180.7 and 13.9x FY12E EPS of Rs197.4.
Maintain Buy with target price of Rs2,960 (~15x FY12E EPS).

Bajaj Auto: Financial & Valuation Summary

Bloomberg BJAUT IN Year Net Sales PAT EPS EPS P/E P/CE P/BV EV/ RoE RoCE
Equity Shares (m) 144.7 End (Rs M) (Rs M) (Rs) Gr. (%) (X) (X) (X) EBITDA (%) (%)
CMP (Rs) 2,749 3/09A 88,104 7,963 55.0 -3.4 50.0 43.0 23.6 33.1 48.6 31.5
52-Week Range (Rs) 2,863/1,162 3/10A 119,210 18,175 125.6 128.3 21.9 20.4 13.6 14.3 78.8 49.7
1,6,12 Rel.Perf.(%) 0/40/107 3/11E 167,859 26,146 180.7 43.9 15.2 14.4 8.2 10.0 67.5 51.1
M.Cap. (US$ b) 8.5 3/12E 186,981 28,555 197.4 9.2 13.9 13.2 5.8 8.8 48.6 42.5

2 September 2010 4
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Two-wheeler volumes (units)

FY09 FY10 FY11
310,000

Volumes driven by 245,000

encouraging response to
Pulsar and Discover 180,000

115,000

50,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Three-wheeler volumes (units)

FY09 FY10 FY11

46,000

Three wheeler volumes 40,000

remain strong
34,000

28,000

22,000

16,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Export volumes (units)

FY09 FY10 FY11

120,000

100,000
Export momentum
continues in August 2010 80,000

60,000

40,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Market mix

Domestic Exports
100%

Pent-up demand of three 75%

wheelers coupled with
50%
robust two wheelers
numbers driving the
25%
domestic share
0%
Jun-08

Oct-08

Dec-08

Feb-09

Jun-09

Oct-09

Dec-09

Feb-10

Jun-10
Apr-08

Aug-08

Apr-09

Aug-09

Apr-10

Aug-10

Source: Company/MOSL

2 September 2010 5
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Maruti Suzuki
Data Track
Above estimates; volumes of 104,791 (up 23.6% YoY, up 3.9% MoM)

Snapshot of volumes for August

YoY MoM Chg YoY Residual
Aug-10 Aug-09 Jul-10 YTDFY11 YTDFY10 FY11E
(%) (%) (%) (%) Gr. (%)

Total volume 104,791 84,808 23.6 100,857 3.9 488,972 389,611 25.5 1,193,852 17.2 12.1
Domestic 92,674 69,961 32.5 90,114 2.8 425,675 334,904 27.1 1,053,656 21.0 17.2
A1 1,919 2,734 -29.8 1,680 14.2 10,505 12,649 -16.9
C 14,157 6,601 114.5 13,617 4.0 61,295 36,136 69.6
A2 65,953 52,473 25.7 64,079 2.9 300,545 247,321 21.5
A3 10,479 7,821 34.0 10,352 1.2 49,789 36,869 35.0
MUV 166 332 -50.0 386 -57.0 3,541 1,929 83.6
Export 12,117 14,847 -18.4 10,743 12.8 63,297 54,707 15.7 140,196 -5.0 -17
Source: Company/MOSL
Highlights
 Maruti’s August 2010 volumes were above estimates, growing 23.6% YoY (3.9% MoM)
to 104,791 units (against our estimate of 99,000 units). This was driven by a 32.5% YoY
growth in domestic volume, despite an 18.4% YoY decline in exports.
 Domestic volumes grew by 32.5% YoY (2.8% MoM) to 92,674 units (against our estimate
of 88,000 units). Volume growth in domestic market was driven by newly launched Eeco
& the recently launched Alto K-10 (inventory built up as it was launched on 4 Aug-10).
 While C segment volumes grew by 114.5% YoY (4% MoM), the A2 and A3 segments
grew 25.7% YoY (2.9% MoM) and 34% YoY (1.2% MoM) respectively.
 Export volumes were above estimates at 12,117 units (against our estimate of 11,000),
a de-growth of 18.4% YoY but a 12.8% MoM growth, led by the recent launch of A-Star
in non-European markets. Non-EU markets accounted for ~50% of exports in Aug-10.
 Volume growth is expected to be robust due to strong retail demand and the launch of
the Alto-K10 and re-launch of Wagon-R CNG and other CNG fitted vehicles (Alto 800,
Eeco, Estilo and SX4) in the second week of August.
 Inventory returned to normal levels of 20-21 days (from 14-15 days a couple of months
earlier). Credit sales increased and contribute 68% to volumes (v/s ~66% in 1QFY11).
 Hyundai’s volumes grew 2.2% YoY (flat MoM), Ford’s volumes grew by 207% YoY (~9%
QoQ decline).
 The management is confident of meeting demand growth from its current capacity of
1.2m, which is expected to scale-up to 1.3m by October 2010 (and it can scale up
beyond that if it uses a third shift). It is focusing on commissioning of its brownfield
expansion of 0.25m cars in Manesar by the end of CY11 instead of in April 2012.
 We model FY11 volume growth of 17.2% to 1.19m units, 130bp increase in RM costs,
160bp increase in royalty, translating into a 210bp decline in EBITDA margins to 11.2%.
 The stock trades at 15.8x FY11E EPS and 13x FY12E EPS, and cash PE of 11x and 9x
respectively. Maintain Buy.
Maruti Suzuki: Financial & Valuation Summary
Bloomberg MSIL IN Year Total Inc. PAT Adj. EPS EPS P/E P/CE P/BV EV/ RoE RoCE
Equity Shares (m) 289.0 End (Rs m) (Rs m) (Rs) Gr. (%) (x) (x) (X) EBITDA (%) (%)
CMP (Rs) 1,273 3/09A 209,074 13,334 46.1 -22.0 27.6 18.0 3.9 15.8 13.0 18.7
52-Week Range 1,740/1,171 3/10A 296,231 25,062 86.7 87.9 14.7 11.0 3.1 7.7 21.1 28.4
1,6,12 Rel.Perf.(%) 4/-24/-35 3/11E 345,937 23,228 80.4 -7.3 15.8 11.0 2.6 7.8 16.4 22.6
M.Cap. (US$ b) 7.9 3/12E 408,765 28,204 97.6 21.4 13.0 9.0 2.2 6.3 17.2 23.2

2 September 2010 6
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Monthly volumes (units)

FY09 FY10 FY11

115,000

Strong growth driven by A2, 100,000

A3 and MPV segment
85,000

70,000

55,000

40,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Export volumes (units)

FY09 FY10 FY11

20,000

16,000
Exports driven by recovery
in non-European markets, as 12,000
well as entry in newer
8,000
markets
4,000

0
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Segment mix (domestic)

A1 A2 A3 MPVs + UVs
100%

75%
A2 & A3 segments dominate
the segment mix 50%

25%

0%
Apr-08

Jun-08

Aug-08

Jun-09

Aug-09

Jun-10

Aug-10
Oct-08

Dec-08

Feb-09

Apr-09

Oct-09

Dec-09

Feb-10

Apr-10

Market mix

Domestic Sales Exports

100%

75%
Export contribution to
50%
volumes expected to fall to
12% in FY11 from 15% in 25%
FY10
0%
Jun-08

Oct-08

Dec-08

Feb-09

Jun-09

Oct-09

Dec-09

Feb-10

Jun-10
Apr-08

Aug-08

Apr-09

Aug-09

Apr-10

Aug-10

Source: Company/MOSL

2 September 2010 7
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Mahindra & Mahindra

Data Track
In-line with estimates at 42,338 units (up 29.6% YoY, down 0.7% MoM)

Snapshot of volumes for August

YoY MoM Chg YoY Residual
Aug-10 Aug-09 Jul-10 YTDFY11 YTDFY10 FY11E
(%) (%) (%) (%) Gr. (%)

Total volume 42,338 32,657 29.6 42,641 -0.7 217,222 145,697 49.1 578,157 22.1 10.1
UV's 21,755 17,284 25.9 18,016 20.8 96,844 65,504 47.8 264,308 17.5 5.0
LCV 873 658 32.7 1,007 -13.3 4,858 4,912 -1.1 13,759 40.0 81.1
PV - Logan 1,201 469 156.1 1,202 -0.1 4,369 7,465 -41.5 8,419 57.9 -289.9
Three-Wheelers 5,074 3,652 38.9 7,824 -35.1 32,974 19,791 66.6 85,816 47.5 37.6
Tractors 13,435 10,594 26.8 14,592 -7.9 78,177 48,025 62.8 205,855 17.5 0.4
Source: Company/MOSL

Supply side constraints, due
to shortage of radial tyres,
fuel injection equipment and
castings have impacted
production
Highlights
 M&M’s volumes grew by 29.6% YoY (down 0.7% MoM) to 42,338 units (against our
estimate of 41,800 units), driven by strong growth in UVs, tractors and three-wheelers.
 UV volumes rose 25.9% YoY (up 20.8% MoM) to 21,755 units (against our estimate of
20,500 units). Our FY11 estimates factor in 17.5% YoY growth in UV volumes, implying
a residual monthly run rate of 23,923 units (residual growth of 5%).
 Tractor volumes grew by 26.8% YoY (down 7.9% MoM) to 13,435 units (against our
estimate of 13,000 units). Our FY11 estimates factor in 17.5% YoY volume growth for
tractors, implying a residual monthly run rate of 18,240 units (flat residual growth).
 Three-wheeler/small truck volumes grew 38.9% YoY (down 35.1% MoM) to 5,074 units
(against our estimate of 6,700 units), driven by newly launched small truck Gio and
Maximmo. Our FY11 estimates factor in 47.5% volume growth for three-wheelers/
small trucks, implying a residual monthly run rate of 7,549 units (~37.6% residual growth).
 Supply side constraints due to a shortage of radial tyres, fuel injection equipment and
castings will shave off 8% growth in FY11. Among its peers, M&M is the worst hit as its
portfolio is based on diesel powertrain and a shortage of diesel fuel injection systems is
hurting it the most. The company plans to import components to overcome these
constraints. Supply is expected to improve from 3QFY11.
 With the Logan completely managed by M&M, its sales are being revived with growth of
156% YoY (flat MoM) to 1,201 units in August 2010.
 It manufactures Maximmo (80-100 units/day) and M&HCV (5-6 units/day) at its recently
commissioned Chakan plant (March 2010) with installed capacity of 0.3m units. It plans
to manufacture new variants of the Xylo (to be launched in FY11) and new SUV (production
from 4QFY11, launch in 1QFY12).
 Our estimates factor in 22.1% volume growth in FY11, implying a residual monthly run
rate of 51,562 units and a 100bp decline in EBITDA margins to 14.9%. On a consolidated
basis, the stock trades at 10.8x FY11E of consolidated EPS of Rs57.9 and 9.2x and
FY12E of consolidated EPS of Rs68.3. Maintain Buy.

Mahindra and Mahindra: Financial & Valuation Summary

Bloomberg MM IN Year Net Sales S/A PAT Con. PAT Adj.EPS Cons. P/E Cons. RoE RoCE EV/ EV/
Equity Shares (m) 565.9 End (Rs m) (Rs m) (Rs) (RS) EPS (Rs) (x) P/E (x) (%) (%) Sales (x) EBITDA (x)
CMP (Rs) 628 3/09A 130,937 9,297 15,047 16.2 26.2 38.8 23.9 17.7 12.9 2.4 28.3
52-Week Range 670/404 3/10A 186,021 20,451 24,402 35.7 42.6 17.6 14.8 26.1 25.8 1.7 10.2
1,6,12 Rel.Perf.(%) -7/14/31 3/11E 225,577 24,287 33,212 42.3 57.9 14.8 10.8 23.1 23.7 1.3 8.9
M.Cap. (US$ b) 7.7 3/12E 262,678 27,978 24,402 48.8 68.3 12.9 9.2 22.0 23.9 1.1 7.2

2 September 2010 8
 Dashboard

Utility vehicle volumes (units)

FY09 FY10 FY11

24,000

19,000
UV volumes continue
to remain strong
14,000

9,000

4,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Tractor volume (units)

FY09 FY10 FY11
20,000

16,000

Supply constraint continue

to impact tractor volumes 12,000

8,000

4,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Source: Company/MOSL

Product mix

UVs Tractors LCVs, 3-w heelers

100%

75%
Tractors and UVs dominate
the segment mix, but we 50%
expect the share of three
wheelers and LCVs to 25%
increase
0%
Jun-08

Oct-08

Dec-08

Feb-09

Jun-09

Oct-09

Dec-09

Feb-10

Jun-10
Apr-08

Aug-08

Apr-09

Aug-09

Apr-10

Aug-10

Source: Company/MOSL

2 September 2010 9
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Tata Motors
Data Track
Below estimates; volumes up 32.4% YoY ( down 2.7% MoM) to 65,938 units by
ramp-up of Nano, exports

Snapshot of volumes for August

YoY MoM Chg YoY Residual
Aug-10 Aug-09 Jul-10 YTDFY11 YTDFY10 FY11E
(%) (%) (%) (%) Gr. (%)

Total volume 65,938 49,810 32.4 67,799 -2.7 315,448 220,977 42.8 920,365 37.9 35.5
HCV's 16,716 12,266 36.3 16,449 1.6 78,463 52,926 48.3 225,966 34.6 28.4
LCV's 23,022 19,596 17.5 22,967 0.2 107,628 85,572 25.8 289,541 23.8 22.6
Cars 23,207 15,286 51.8 25,063 -7.4 113,249 68,961 64.2 358,824 54.9 50.9
UV's 2,993 2,662 12.4 3,320 -9.8 16,108 13,518 19.2 46,035 35.0 45.4
of which exports 5,157 2,684 92.1 4,241 21.6 21,641 10,359 108.9 41,876 0.2 -15.4
Source: Company/MOSL

Highlights
 Volumes grew 32.4% YoY (down 2.7% MoM) to 65,938 units (against our estimate of
74,350 units).
 The CV portfolio grew by 24.7% YoY (up 0.8% MoM) to 39,738units (against our estimate
of 42,000 units). M&HCV’s volumes grew by 36.3% YoY (up 1.6% MoM) to 16,716 units
(against our estimate of 18,000 units), and LCV volumes grew by 17.5% YoY (~0.2%
MoM) to 23,022 units (against our estimate of 24,000 units). Our FY11 estimates factor
in volume growth of 28.3% for CVs, implying a residual monthly run-rate of 47,059
units.
 Car volumes grew by 51.8% YoY (down 7.4% MoM), to 23,207 units (against our estimate
of 28,500 units), driven by Nano (8,103 units in August 2010) and strong demand for
the Indigo range. Indica range sales de-grew by 22% YoY to 7,531 units and Indigo
range sales grew by 151% YoY to 6,678 units due to an encouraging response to the
recently launched Manza and Indigo e-CS. Our FY11 estimates factor in volume growth
of 54.9%, for passenger cars, implying a residual monthly run rate of 35,082 units,
driven by a ramp-up at Nano’s Sanand plant.
 UV volumes improved with growth of 12.4% YoY (down 9.8% MoM) to 2,993 units
(against our estimate of 3,850 units). Our FY11 estimates factor in volume growth of
35% in UVs, implying a residual monthly run rate of 4,275 units.
 Our estimates factor in volume growth of 37.9% in FY11 implying a residual monthly
run rate of 86,417 units (residual growth of 35.5%), a 270bp increase in RM cost and
improvement in JLR performance (EBITDA margins of 14.3% in FY11 and 13.9% in
FY12). The stock trades at 8.4x FY11E consolidated EPS of Rs120.5 and 7.2x FY12E
consolidated EPS of Rs140.6, and normalized PE (adjusted for capitalization) of 16.4x
FY11E and 12.2x FY12E. Maintain Buy.

Tata Motors: Financial & Valuation Summary

Bloomberg TTMT IN Year Sales Adj. PAT Adj. EPS Norm. P/E Norm. RoE RoCE EV/ EV/
Actual Eq. Shares (m) 570.6 End * (Rs m) (Rs m) (Rs) EPS (Rs) ^ Ratio P/E (x) (%) (%) Sales (x) EBITDA (x)
CMP (Rs) 1,009 3/09A 708,810 -21,125 -33.8 -113.4 -29.8 -8.9 -36 1.2 1.1 37.1
52-Week Range 1,055/430 3/10A 925,193 15,051 24.1 -22.8 41.8 -44.3 18.3 10.7 0.9 9.5
1,6,12 Rel. Perf. (%) 17/31/78 3/11E 1,188,126 75,214 120.5 63.4 8.4 15.9 51.7 23.0 0.7 5.1
M.Cap. (US$ b) 13.4 3/12E 1,379,129 87,727 140.6 85.0 7.2 11.9 39.9 23.2 0.6 4.5
* Consolidated; ^ Normalized for capitalized expenses

2 September 2010 10
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M&HCV volumes (units)

FY09 FY10 FY11

24,000

M&HCV volumes continue 20,000

to remain strong
16,000

12,000

8,000

4,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

LCV volumes (units)

FY09 FY10 FY11

28,000

24,000

LCV volumes continue 20,000

to be robust
16,000

12,000

8,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Car volumes (units)

FY09 FY10 FY11

28,000

24,000
Newly launched Manza and
20,000
Nano drive growth in cars
16,000

12,000

8,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Product mix in the CV segment

M&HCVs LCVs
100%

75%

Segment share
50%
stabilizing after recovery of
M&HCV segment 25%

0%
Jun-08

Oct-08

Dec-08

Feb-09

Jun-09

Oct-09

Dec-09

Feb-10

Jun-10
Apr-08

Aug-08

Apr-09

Aug-09

Apr-10

Aug-10

Source: Company/MOSL

2 September 2010 11
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TVS Motor
Data Track
Volume growth of 31.7% YoY driven by growth in motorcycles & scooters

Snapshot of volumes for August

YoY MoM Chg
Aug-10 Aug-09 Jul-10 YTDFY11 YTDFY10
(%) (%) (%)
Total volume 167,109 126,842 31.7 163,106 2.5 767,038 594,977 28.9
Motorcycles 66,574 51,127 30.2 61,051 9.0 327,983 246,903 32.8
Scooters 40,913 28,582 43.1 40,357 1.4 176,486 123,505 42.9
Mopeds 59,622 47,133 26.5 61,698 -3.4 262,569 224,569 16.9
Source: Company/MOSL

Motorcyle volumes (units)

FY09 FY10 FY11

80,000

65,000

Motorcycle volumes
50,000
continue to improve

35,000

20,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Scooters and mopeds (units)

FY09 FY10 FY11

112,000

100,000

88,000

Scooters and mopeds 76,000

volumes continue 64,000

to be robust 52,000

40,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Sales mix

Motorcycles Scooters & Mopeds

100%

75%
Motorcycles have been a
key volume driver 50%

25%

0%
Jun-08

Oct-08

Dec-08

Feb-09

Jun-09

Oct-09

Dec-09

Feb-10

Jun-10
Apr-08

Aug-08

Apr-09

Aug-09

Apr-10

Aug-10

Source: Company/MOSL

2 September 2010 12
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Maruti Suzuki: Annual report update

Special Report
Key takeaways from Maruti's annual report

Maruti Suzuki: Financial & Valuation Summary

Bloomberg MSIL IN Year Total Inc. PAT Adj. EPS EPS P/E P/CE P/BV EV/ RoE RoCE
Equity Shares (m) 289.0 End (Rs m) (Rs m) (Rs) Gr. (%) (x) (x) (X) EBITDA (%) (%)
CMP (Rs) 1,273 3/09A 209,074 13,334 46.1 -22.0 27.6 18.0 3.9 15.8 13.0 18.7
52-Week Range 1,740/1,171 3/10A 296,231 25,062 86.7 87.9 14.7 11.0 3.1 7.7 21.1 28.4
1,6,12 Rel.Perf.(%) 4/-24/-35 3/11E 345,937 23,228 80.4 -7.3 15.8 11.0 2.6 7.8 16.4 22.6
M.Cap. (US$ b) 7.9 3/12E 408,765 28,204 97.6 21.4 13.0 9.0 2.2 6.3 17.2 23.2

Maruti Suzuki: FY10 Annual report Analysis

MARUTI: ANNUAL REPORT 2010
Maruti’s FY10 annual report highlights management’s cautious optimism about future driven
by focus on building upon its existing strength and developing new capabilities. We present
our key takeaways from Maruti’s FY10 annual report:

Outlook cautiously positive

The management is optimistic about demand in the medium term. Conservatively it expects
the Indian passenger car market to double in the next 5-6 years (CAGR of 13-15%). It
doesn’t rule out possibility of a China-like boom in the Indian car market. However, it is
cognizant of rising competition and, in turn, is building on its existing strengths and developing
new competence to maintain its market leadership.

Capacity augmentation to support positive outlook

In line with its positive outlook, it is investing Rs17b in fresh capacity creation of 250,000
units at its Manesar plant. At the same time, it is also scaling up its engine capacity – it has
enhanced K-series engine plant capacity to over 500,000 units, which would be further
raised to over 700,000 by 4QFY11. Further, to meet domestic demand, it is restricting
export volumes to ~15% of total. However, it believes scaling up vendors would be critical
for it to meet growth.

Continuous focus on network augmentation to sustain advantage

Maruti’s sales and service network has been one of its key strengths. The management is
concentrating on building this competitive advantage, as it understands that penetrating
rural markets is critical. During FY10, it added 121 outlets taking the total to 802, covering
555 cities (from 454 cities) and added 127 dealer service workshops covering 1,335 cities
(from 1,314 cities). It plans to have a service facility every 25 km on important stretches of
major highways.

R&D – area of strategic focus to support product refreshes and

designing
Building R&D capability has been identified as a key strategic imperative. While parent
Suzuki will continue to offer support for new models, it is cognizant of the need to supplement
it with its own R&D capability. Its R&D has already achieved capability for carrying out minor
changes and also co-design activity with Suzuki for new models. The next key milestone is
to develop full body change capability. One significant step in this direction has been the
increase in engineers for R&D from 729 in FY09 to 968 in FY10, with plans to increase the
number to over 1,100 in FY11.

2 September 2010 13
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Continuous focus on cost control

The production teams worked on several cost reduction projects and achieved substantial
savings through machining tool cost reduction and automation of material handling systems.
Special emphasis was laid on localization of parts imported by vendors, as apart from cost
reduction it also provides immunity from forex fluctuations. In FY10, inhouse die development
for body parts of models like the Ritz, Eeco and Estilo enabled cost savings over imported
dies.

‘Pre-owned’ car business scaling up rapidly, will help customer

retention
True Value Solutions, its pre-owned car business subsidiary, is scaling up rapidly with 33%
growth in FY10 to 163,240 cars. It not only enables customer retention by facilitating exchange
of old cars for new, but also enhances dealers’ profitability through sale of certified pre-
owned cars under the brand ‘Maruti True Value’.

Subsidiaries and JVs recover to contribute ~5% to consolidated EPS

FY10 witnessed significant recovery in performance of subsidiaries (insurance business),
associates (Suzuki Powertrain and others) and JVs. In FY10, revenues of this group increased
by 86.5% to Rs4.9b (~2% of consolidated revenues), whereas PAT was at Rs1.27b (v/s
Rs87m in FY09; ~5% of consolidated PAT). In FY10, the insurance business generated a
total income of Rs1.35b and PAT of Rs434m. It sold 0.81m new policies and 1.76m renewals
(~10m cumulative policies since inception in FY02). However, recent IRDA order to cancel
Maruti’s agency license could jeopardize this revenue stream.

Valuation & view

Maruti has underperformed since the beginning of CY2010 given concerns of rising competition
in small cars. While new models from competition are doing well, we believe it will take at
least 4-5 years for new players to seriously impact Maruti’s market share due to lack of
distribution network. Further, strong market growth rates would also absorb supply from
new players. The stock trades at 16x FY12E EPS and 13x FY12 standalone EPS. We maintain
Buy with target price of Rs1,417 (10x FY12E Cash EPS; which is the median Cash P/E since
listing).

Maruti Suzuki's: Key Charts

Source: Company

2 September 2010 14
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Two-wheelers
Sector Gauge
Robust volume growth continues

Two-wheelers: Volume snapshot

Jul-10 Jul-09 YoY (%) Jun-10 MoM (%) YTD FY11 Chg (%) FY10 Chg (%)
Total Domestic 2W 938,514 719,656 30.4 933,101 0.6 3,663,840 28.3 9,371,278 26.0
% of Total 2W 87 89 87 87 89
Total Motorcycle 710,621 546,233 30.1 715,985 -0.7 2,808,036 25.6 7,341,120 25.9
% of Domestic 2W 76 76 77 77 78
<125cc 518,928 384,571 34.9 529,024 -1.9 2,081,825 31.0 5,431,475 32.0
% of Motorcycle 73 70 74 74 74
>125cc 191,693 161,662 18.6 186,961 2.5 726,211 12.4 1,909,645 11.2
% of Motorcycle 27 30 26 26 26
Scooters & Mopeds 227,893 173,423 31.4 217,116 5.0 855,804 38.1 2,030,158 26.4
% of Domestic 2W 24 24 23 23 22
Exports 135,973 92,868 46.4 139,145 -2.3 528,794 61.5 1,140,047 13.5
% of Total 2W 13 11 13 13 11
Total 2W 1,074,487 812,524 32.2 1,072,246 0.2 4,192,634 31.7 10,511,325 24.5
Source: SIAM/MOSL

Two-wheelers: Domestic volume trend (units)

FY09 FY10 FY11

1,000,000

Domestic two-wheeler 850,000

volumes grew by 30.4% in
August 2010 700,000

550,000

400,000

Mar
Jul
May

Jun

Jan
Aug

Sep

Feb
Dec
Apr

Oct

Nov

Motorcycle: Domestic market share in <125cc segment (Domestic)

Bajaj Auto Hero Honda TVS Motor Yamaha

100%

Hero Honda dominates 75%

<125CC segment with
70.7% market share 50%

25%

0%
Jul-08

Jul-09

Jul-10
Apr-08

Jan-09
Oct-08

Apr-09

Jan-10
Oct-09

Apr-10

2 September 2010 15
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Motorcycles: domestic market share in the >125cc segment

Bajaj Auto Hero Honda TVS Motor Yamaha HMSI Suzuki

100%

75%
Encouraging response to
the Pulzar135cc and 50%

Discover150cc helped Bajaj

25%
Auto to improve market
share in the >125cc 0%

Jul-08

Jul-09

Jul-10
Apr-08

Jan-09

Jan-10
Oct-08

Apr-09

Oct-09

Apr-10
category to 49.2%

Motorcycles: segment mix

< 125CC > 125CC

100%

75%
<125cc forms 75% of the
motorcycles segment 50%

25%

0%
Jul-08

Jul-09

Jul-10
Apr-08

Jan-09

Jan-10
Oct-08

Apr-09

Oct-09

Apr-10
Two-wheelers: domestic market share

Hero Honda Bajaj Auto HMSI TVS Motor Yamaha Suzuki

100%

75%

Market share stabilizes

50%

25%

0%
Jul-08

Jul-09

Jul-10
Apr-08

Jan-09
Oct-08

Apr-09

Jan-10
Oct-09

Apr-10

Two-wheelers: export volumes (units)

FY11 FY09 FY10

160,000

140,000
Exports volumes to
remain strong 120,000

100,000

80,000

60,000
Mar
Jul
May

Jun

Jan
Aug

Sep

Feb
Dec
Apr

Oct

Nov

2 September 2010 16
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Three-wheelers
Sector Gauge
New permits in the passenger segment drive volume growth

Three-wheelers: Volume snapshot Mar-10

Jul-10 Jul-09 YoY (%) Jun-10 MoM (%) YTD FY11 Chg (%) FY10 Chg (%)
Total Domestic 3W 45,373 36,168 25.5 38,868 16.7 150,526 18.1 440,367 25.9
% of Total 3W 67 78 66 63 72
Passenger 38,262 29,054 31.7 32,022 19.5 122,560 20.9 349,673 30.2
% of Domestic eW 84 80 82 81 79
Total Goods 7,111 7,114 0.0 6,846 3.9 27,966 7.2 90,694 11.6
% of Domestic 3W 16 20 18 19 21
<1T 5,661 5,431 4.2 5,612 0.9 22,707 11.5 72,896 21.6
% of Goods Vehicle 80 76 82 81 80
>1T 1,450 1,683 -13.8 1,234 17.5 5,259 -8.0 17,798 -16.6
% of Goods Vehicle 20 24 18 19 20
Exports 21,989 10,020 119.5 20,426 7.7 89,637 141.5 173,282 17.0
% of Total 3W 33 22 34 37 28
Total 3W 67,362 46,188 45.8 59,294 13.6 240,163 45.9 613,649 23.3
Source: SIAM/MOSL

Three-wheelers: volume trend (including exports)

FY09 FY10 FY11

74,000

68,000

62,000
Strong growth driven
56,000
by exports
50,000

44,000

38,000

32,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Three-wheelers: domestic segment mix

Passenger Goods
100%

75%
Passenger segment
dominates 3-wheelers with 50%
84% contribution
25%

0%
Jul-08

Jul-09

Jul-10
Apr-08

Jan-09
Oct-08

Apr-09

Jan-10
Oct-09

Apr-10

2 September 2010 17
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Three wheelers: passenger segment market share

Bajaj Auto Piaggio M&M TVS Others

100%

Bajaj Auto's improved its 75%

market share to 50.2% in

August 2010 50%

25%

0%
Jul-08

Jul-09

Jul-10
Apr-08

Jan-09
Oct-08

Apr-09

Jan-10
Oct-09

Apr-10
Three wheelers: goods segment market share

Bajaj Auto Piaggio M&M Others

100%

75%
Piaggio continues to lead in
the goods segment 50%

25%

0%
Jul-08

Jul-09

Jul-10
Apr-08

Jan-09

Jan-10
Oct-08

Apr-09

Oct-09

Apr-10

2 September 2010 18
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Cars and UVs

Sector Gauge
Strong momentum in demand continues

Passenger vehicles: Volume snapshot

Jul-10 Jul-09 YoY (%) Jun-10 MoM (%) YTD FY11 Chg (%) FY10 Chg (%)
Total Domestic PVs 202,093 147,663 36.9 181,810 11.2 756,659 33.8 1,950,228 25.6
% of Total PVs 85 81 83 84 81
Total Cars 158,764 115,084 38.0 141,184 12.5 592,405 34.6 1,527,307 25.1
% of Domestic PVs 79 78 78 78 78
A1 & A2 123,915 89,066 39.1 111,351 11.3 464,728 33.5 1,191,652 27.4
% of Cars 78 77 79 78 78
A3 28,333 21,882 29.5 24,615 15.1 105,204 38.6 276,102 14.2
% of Cars 18 19 17 18 18
A4 & above 6,516 4,136 57.5 5,218 24.9 22,473 40.4 59,553 36.1
% of Cars 4 4 4 4 4
UVs 24,901 20,831 19.5 26,113 -4.6 101,333 23.9 272,665 20.8
% of Domestic PVs 12 14 14 13 14
MPVs 18,428 11,748 56.9 14,513 27.0 62,921 43.9 150,256 40.9
% of Domestic PVs 9 8 8 8 8
Exports 34,699 33,789 2.7 37,432 -7.3 143,136 9.0 446,146 32.9
% of Total PVs 15 19 17 16 19
Total PVs 236,792 181,452 30.5 219,242 8.0 899,795 29.1 2,396,374 26.9
Source: SIAM/MOSL

Cars: domestic volume (units)

FY09 FY10 FY11

180,000

Recovery continues with 160,000

strong growth on a low
140,000
base, driven by new product
launches 120,000

100,000

80,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

UVs & MPVs: domestic volume (units)

FY09 FY10 FY11

46,000

40,000
Volume growth driven by
new product launches 34,000

28,000

22,000

16,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

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Passenger vehicles: export volume (units)

FY09 FY10 FY11

50,000

42,000
Exports slowing down, due
34,000
to exhaustion of scrappage
incentives in Europe 26,000

18,000

10,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Cars: domestic market share

Maruti TataMotor Hyundai GM Honda

100%

75%
Maruti continues to
dominate domestic 50%
car market
25%

0%
Jul-08

Jul-09

Jul-10
Apr-08

Jan-09

Jan-10
Oct-08

Apr-09

Oct-09

Apr-10
UVs: domestic market share

M&M TataMotor Toyota Maruti GM

100%

M&M is the market leader in 75%

the UV segment with
50%
48.4% share
25%

0%
Jul-08

Jul-09

Jul-10
Apr-08

Jan-09

Jan-10
Oct-08

Apr-09

Oct-09

Apr-10

Passenger vehicles: segment mix

A1 A2 A3 A4 & above MPV UV

100%

A2 dominates the passenger 75%

vehicles segment with
56% market share 50%

25%

0%
Jul-08

Jul-09

Jul-10
Apr-08

Jan-09

Jan-10
Oct-08

Apr-09

Oct-09

Apr-10

2 September 2010 20
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Commercial vehicles
Sector Gauge
Recovery continues, driven by economic growth

Commercial vehicles: Volume snapshot Mar-10

Jul-10 Jul-09 YoY (%) Jun-10 MoM (%) YTD FY11 Chg (%) FY10 Chg (%)
Total Domestic CVs 51,481 37,624 36.8 52,211 -1.4 201,358 49.7 531,434 38.2
% of Total CVs 90 92 91 91 92
Total M&HCV 24,569 16,138 52.2 25,997 -5.5 95,785 74.1 244,646 33.1
% of Domestic CVs 48 43 50 48 46
Goods 20,842 13,398 55.6 21,409 -2.6 80,484 79.6 201,565 35.3
% of M&HCVs 85 83 82 84 82
Passenger 3,727 2,740 36.0 4,588 -18.8 15,301 49.7 43,081 23.5
% of M&HCVs 15 17 18 16 18
Total LCVs 26,912 21,486 25.3 26,214 2.7 105,573 32.9 286,788 42.9
% of Domestic CVs 52 57 50 0 0
Goods 23,267 18,047 28.9 22,312 4.3 90,362 36.1 252,364 45.2
% of LCVs 45 48 43 45 47
Passenger 3,645 3,439 6.0 3,902 -6.6 15,211 16.6 34,424 27.7
% of LCVs 7 9 7 8 6
Exports 5,707 3,209 77.8 5,419 5.3 19,896 95.3 45,003 5.9
% of Total CVs 10 8 9 9 8
Total CVs 57,188 40,833 40.1 57,630 -0.8 221,254 52.9 576,437 35.0
Source: SIAM/MOSL

M&HCVs: Domestic volume, goods vehicles (units)

FY09 FY10 FY11

32,000

Recovery in volumes 24,000

continues, driven by strong
economic recovery
16,000

8,000

0
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

M&HCVs: domestic volume, buses (units)

FY09 FY10 FY11

6,000

Bus volumes continue 4,500

to remain strong
3,000

1,500

0
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

2 September 2010 21
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M&HCVs: domestic market share, goods (%)

TataMotor AshokLeyland Eicher

100%

75%

Ashok Leyland recovered 50%

lost market share in the

25%
goods and the passenger
segments 0%

Jul-08

Jul-09

Jul-10
Apr-08

Jan-09
Oct-08

Apr-09

Jan-10
Oct-09

Apr-10
M&HCVs: domestic market share, buses (%)

TataMotor AshokLeyland Eicher Swaraj

100%

75%

50%

25%

0%
Jul-08

Jul-09

Jul-10
Apr-08

Jan-09

Jan-10
Oct-08

Apr-09

Oct-09

Apr-10
LCVs: domestic volumes (units)

FY09 FY10 FY11

40,000

30,000
LCVs continue with
robust growth 20,000

10,000

0
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

2 September 2010 22
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LCVs: domestic market share (%)

TataMotor Piaggio M&M Others

100%

Market share stable across

75%
all LCV players
50%

25%

0%

Jul-08

Jul-09

Jul-10
Apr-08

Jan-09

Jan-10
Oct-08

Apr-09

Oct-09

Apr-10
Goods: segment-wise break-up (%)

LCVs <12T <16T <35T

100%

Recovery in M&HCVs drives

75%
increase in contribution
to CVs 50%

25%

0%
Jul-08

Jul-09

Jul-10
Apr-08

Jan-09

Jan-10
Oct-08

Apr-09

Oct-09

Apr-10

2 September 2010 23
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Major developments in the auto sector

News and Events
August 2010

Yamaha’s three launches: the SZ, SZ-X and YBR 125

Yamaha SZ Yamaha SZ-X Yamaha YBR 125

Yamaha has launched three motorcycles, the SZ, SZ-X and YBR 125. The SZ and SZ-X will
be powered by a new four-stroke air-cooled, SOHC single-cylinder, 153cc engine. The YBR
125 has a 123cc engine and a four-speed gear box. It will be available at an ex-showroom
price (Delhi) of Rs47,000, the SZ for Rs49,000 and the SZ-X for Rs52,000.

Volkswagen Vento Volkswagen launches Vento at Rs699,000

Volkswagen India launched its entry level premium sedan the Vento. It will be available at a
starting price of Rs699,000, for the 1.6 liter petrol variant and Rs799,000 for the diesel
variant, ex-showroom (New Delhi). The model will go on sale from 6 September 2010
across India and will be made at Volkswagen’s Chakan plant, which has an annual capacity
of 110,000 cars.

Maruti launches five CNG vehicles with new technology

Maruti launched five CNG variants of its cars, the SX4, Eeco, WagonR, Estilo and Alto. They
are being launched in the NCR, Mumbai and Gujarat. The new line up is called intelligent-
Gas Port Injection or i-GPI, and introduces the company’s flagship eco technology. With this,
Maruti will have a CNG footprint across entry level cars, compact cars, sedans and MPV
segments. Adapting the CNG technology is another step to keep low the cost of ownership.
This is the first instance in which a car maker has developed and launched factory-fitted
technologically superior CNG engines in India. The i-GPI offers an intelligent ride as it ensures
more power vis-à-vis retro-fitted CNG vehicles. A release by the company said the technology
offered a peppier ride experience at par with that of a petrol-fuelled engine, along with high
fuel efficiency. The range will enjoy the full warranty benefits including extended warranty
from Maruti-certified dealers. The ex-showroom Delhi price of Maruti Suzuki CNG vehicles
is: Alto Lxi - Rs323,000, Eeco five-seater AC: Rs364,000, the SX4 Vxi: Rs747,000, the
WagonR Lxi: Rs411,000 and the Estilo Lxi: Rs405,000.

2 September 2010 24
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Hyundai to increase car prices in September

Hyundai will increase its car prices in India by 1.2% due to a rise in input costs, according
to a senior company official. While the price of its popular small cars, the Santro and the
i10, will go up by Rs3,500 for entry-level variants, the Sonata will become dearer by Rs10,000.
Car makers were grappling with rising commodity prices like steel and rubber, which were
firming up in the domestic market. Japanese carmaker Toyota Kirloskar Motors also
announced a price revision of its products across categories from October 2010.

Ford to export Figo to new markets

Ford said it would increase its presence in the fast-growing Asian and African markets,
which prefer small vehicles. The company said Asia and Africa would account for 70% of its
global growth over the coming decade with most of the sales coming from India and China.
“China and India are the two most important markets for Ford vehicles globally and we are
set to increase our commitment and stake in India,” Joe Hinrichs, Ford’s Asia Pacific and
Africa chief said. From 2011, Ford will export the Figo from India to 50 new markets including
Mexico, North Africa and the United Arab Emirates, according to Hinrichs.

Volvo Buses expects higher sales from coaches

Volvo Buses expects a 25-30% increase in revenue this calendar year mainly from the
private coach segment. “Growth is coming from the coach sector,” Volvo Buses managing
director Akash Passey said on the sidelines of the SIAM summit. Most of Volvo Buses’ last
year’s sales of 535 units were city buses, used for public transport. The company said that
this year it expected growth to come from the coaches segment. “This year, we are looking
to do 550-600 units and 80% of our business will come from coaches,” Passey said. The
company recently sold coaches in Rajasthan, Kerala and Bangalore. “We had sales in
Rajasthan and Kerala, and Mumbai also picked up considerably,” Passey said.

TVS Motor to bring back the Flame

TVS-Flame 125cc TVS Motor Company plans to bring back the Flame, a 125cc motorcycle, caught in a patent
litigation between TVS and Bajaj Auto two years ago. Following a Supreme Court verdict in
September last year, TVS Motor announced it would relaunch its twin spark-plug Flame and
production is expected to start soon. The company said it was clearing stocks of the single
spark-plug version of the motorcycle and production of the twin spark-plug Flame would
start “this month”. The Flame will occupy a key position in TVS Motor’s product portfolio.

Maruti’s launches A-Star Automatic (AT)

Maruti recently launched the A-Star Automatic, which signifies Maruti’s first significant move
from the manual transmission. The automatic variant of the A-Star will have a fuel economy
of 17kmpl, as per ARAI. The AT is priced at Rs434,535 (Rs49,908 more than the A-Star
manual VXi).

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John Deere launches two tractors

India’s leading tractor manufacturer, John Deere India, has said it would introduce two
tractor models, a 35-HP and a 41-HP model. They are powered by a fuel-efficient, three-
cylinder John Deere diesel engine and equipped with power steering, oil-immersed disc
brakes, side shift gears, mobile charging points, neutral start switch-on drive gear and
other user-friendly features. “The introduction of these two new models, marks the entry of
John Deere into the lower horsepower (HP) market segment in the Indian tractor industry,
which constitutes about 40% of the tractor market,” John Deere India director-sales and
marketing Ravi Menon said.

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N O T E S

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