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Matter1

October 01, 2010 04:24 PM |


Moneylife Digital Team

Maruti Suzuki India (MSI) reported its highest-ever monthly sales of 108,006 units in September, translating
into a 29.7% increase vis-a-vis the year-ago period.

Sales in the same month last year stood at 83,306 units, MSI said in a statement.
"This is the highest ever total monthly sales by the company. The previous highest was 104,791 units in
August 2010," it added.

This was the fourth time this fiscal that the company's monthly sales figure crossed the one lakh mark. MSI
also posted its best-ever sales of 95,148 units in the domestic market during the month, a 32.9% increase
from 71,594 units in September, 2009.

MSI's exports increased by 9.8% in September 2010, to 12,858 units from 11,712 units in the year-ago
period, the company added.

Matter2
October 15, 2010 04:41 PM |
Moneylife Digital Team

Tata Motors Ltd said its global sales increased 19% in September to 86,996 units on robust demand for both
commercial and passenger vehicles.

Sales of luxury brands from Jaguar Land Rover were at 19,528 units during September up 16% from the
same month last year, Tata Motors said in a statement.
While sales of luxury sedans of Jaguar brand jumped by 10% last month to 4,861 units, Land Rover sales
were higher by 19% at 14,667 units, it added.

It said the total passenger vehicles sales stood at 46,035 units in September 2010, a growth of 21% from the
corresponding month last year.

Commercial vehicles sales were also up by 18% to 40,961 units from the same month last year, it added.

The Tata Motors Group global sales comprise Tata, Tata Daewoo and Hispano Carrocera range of
commercial vehicles, Tata passenger vehicles along with the distributed brands in India, Jaguar and Land
Rover.
During the April-September period, total vehicle sales rose 38% at 511,934 units.
While, total passenger vehicle sales increased by 43% at 278,361 units, commercial vehicle sales jumped
32% at 233,573 units in the first five-month of this fiscal.

Matter3
October 08, 2010 12:49 PM |
Moneylife Digital Team

New Delhi: Domestic passenger car sales jumped by 30.38% to 1,69,082 units in September, compared to
1,29,684 units in the corresponding month last year, reports PTI. This was the best performance by any
category in the auto sector last month.

According to numbers from the Society of Indian Automobile Manufacturers (SIAM) released today, total
vehicle sales across all categories registered a growth of 21.63% at 13,29,086 units in September, as
against 10,92,687 units in the month a year ago.

Motorcycle sales grew by 15.50% to 7,78,352 units from 6,73,893 units in September last year. Two-wheeler
sales overall increased by 19.93% to 10,05,162 units from 8,38,152 units in the month a year ago. Sales of
commercial vehicles also registered a good growth of 29.56% to 59,455 units from 45,889 units in the period
a year ago.

Matter4
Indian Auto Industry at Top Gear in October

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Automobile sales in Indian market reached record levels this festive season. Due to easily available finance,
discounts and offers in new models, festival bonus and so on, Indian automobile industry reached a peak
level in sales.

Society of Indian Automobile Manufacturers (SIAM)’s director general, Vishnu Matur said, “October demand
was good due to the festive season. The basic fundamentals of the industry remain strong. Last month was
the best ever for new cars, motorcycles and scooters. Sales normally fall in the second half but demand is
still high so we should more than meet the sales target of over 2.4 million passenger vehicles for 2009-10.”

He also added, “The record numbers are largely due to the festival season, which advances demand from
November and December. There is also the positive market sentiment, the increasing purchasing power of
the people and the easy liquidity in the system that is helping in keeping interest rates low.”

Finally he said, “The outlook is very positive — we are hoping to exceed the 18-20 per cent growth target for
the fiscal, but the next five months are crucial. We have to watch out for the tightening of interest rates and
rising raw material prices,”

Submitted by Payal Pathak on November 13, 2010


Matter5
Japanese firm to help develop specialty steel in India

2010-11-12 17:10:00

Panchmahal Steel Limited


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New Delhi, Nov 12 (IANS) Sunflag Iron and Steel, which supplies components to leading auto
manufacturers like General Motors, Maruti Suzuki, Toyota and Nissan, has signed an
agreement with Japanese firm Daido Steel for developing specialty steel products.

'Specialty steel products like crack shaft and ball valve steel is still being imported mainly from
Japan. The deal will help us make these products in India itself,' Vipul Jain, general manager
of Sunflag Iron and Steel Co, told IANS Friday.

The Bombay Stock Exchange-listed Sunflag has entered into a partnership with Japan's
leading specialty steel producer Daido Steel for technical assistance, especially for equipment
investment and product evaluation.

Jain said domestic production of specialty steel would help cut costs for Indian car
manufacturers.

He said the company planned to set up a new plant near Nagpur in Maharashtra or production
of specialty steel that will cater to the needs of auto and engineering industry.

'This tie-up will enable us to receive technological assistance from Daido which will immensely
help us in our operations,' Ravi Bhardwaj, vice chairman and managing director of Sunflag
Iron Steel Company.

Bhardwaj said Sunflag has planned incremental investments for adding up new and up-to-date
technologies for producing special steels.

Matter6

Though I have been doing my research for a long time, choosing a hatchback option is still
driving me crazy. I wish I had bought my first car two years back, when options were fewer.
Anyway, I have shortlisted the following: 1. New Hyundai i10 Kappa2 (Sportz): Rs 5.15 lakh
on-road Pune 2. Ford Figo Diesel (1.4 ) EXI: Rs 5.40 lakh on-road Pune. I am a little inclined
towards the Figo because of the obvious reason of getting a diesel engine for Rs 25,000 more.
Though I will not be driving on a daily basis, most of my driving is on the highway (Pune-
Mumbai). My wife would be driving the car for almost 50 per cent of the time. Request you to
help me make my decision.
Kapil Budukh, Pune

If you are inclined towards the Figo, then go for it. Your driving is on the highway, and the
diesel will bring your running costs down considerably. It is also a decent and stable highway
cruiser, but we must add over here that the i10 is unbeatable as a city car. Then of course the
Figo is terrific value for money. The major negative with the car is that the diesel engine noise
intrudes into the cabin — which you will have to live with. Hope this solves your dilemma!

Mix-n-match

I’m from a small town in Kerala, called Thodupuzha. I have been driving a Skoda Octavia
for the last four years and it has done almost 80,000 km. My other cars are a Ford Ikon and a
Hyundai i20. Now I need to upgrade to something in which all six (adults) of my family can
travel in comfort. I am confused about the choices.

1. Exchange the Skoda Octavia for a Skoda Superb plus a Toyota Innova.
2. Retain the Octavia, and buy a Mitsubishi Pajero or a Toyota Fortuner.
3. Forget about travelling together, and go for a Mercedes-Benz C-Class.

My budget is a maximum of Rs 35 lakh and I intend to drive the new vehicle on my own, with
a daily usage of around 50 km plus weekend drives of around 200 km. And I prefer only diesel
cars. Hope you’ve got some idea about my problem! I’m really confused about what to
do.

Mathew G P, Kerala

The first option looks good, as the Superb is really an excellent car across all aspects while the
Innova of course is the best people mover we have. The Superb is like a spacious limousine,
but still enjoyable to drive. The Innova, of course, is a refined MPV and is comfortable for six
passengers. If you would like to, you can check out the Tata Aria as well, as it’s quite
loaded with features and has many things going for it.

First choice

We are planning to buy a car, our first one. We are a family of three and the car would be
used mostly for driving in the city. It wouldn’t be more than 300 km in a month, but we
will also take it on a 600-km round trip to our village occasionally. Fuel efficiency and space
must be the superlative features in the car. Our budget is around Rs 2.5 to 3 lakh. We have
shortlisted the following three cars: Chevrolet Spark, new Hyundai i10 and the Maruti Suzuki
Alto K-Series. Which one of the three should we go for?

Chinmay Kulkarni, via email


If the Hyundai i10 fits in your budget, then nothing like it. As a first car, it’s quite good —
it’s easy to drive, tall for easy entry and exit, well-built, has quality components going in
and has good after-sales service to match too. It is fuel efficient and is indeed comfortable for
three. If the i10 goes over your budget, then the Alto is the other option for you. It is also
pretty fuel efficient and is a good entry-level car.

Any automotive questions?


Ask us at bijoy.y@bsmail.in

Matter7

Auto sales in top gear, up 46% in Oct

BS Reporter | 2010-11-11 01:10:00

Maruti Suzuki Eeco


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On the back of strong demand during the festival season, automobile sales touched a record
high for the fourth time in a row in October, with the industry reporting sales of 14,60,655
units. The previous best was in September, when auto sales had zoomed to 13,29,086 units.

Overall vehicles sales in the domestic market during October grew by 45.9 per cent, compared
to 10,00,953 units during the corresponding period last year. Vishnu Mathur, director general,
Society of Indian Automobile Manufacturers (Siam), said, "October demand was good due to
the festival season. Basic fundamentals of the industry remain strong. Interest rates continue
to be favourable despite a marginal increase."

Launch of new models has also helped in increasing the excitement in the market and creating
demand, he added. Demand was driven by record monthly sales achieved in passenger cars,
motorcycles and the two-wheeler segments.

According to data available with Siam, domestic passenger car sales jumped by 38 per cent to
1,82,992 units during the month, against the 1,32,615 units in October 2009.

Maruti Suzuki, the country’s largest car manufacturer, posted 44.8 per cent growth in
domestic sales at 91,754 units, compared to October 2009. Hyundai Motor India had sales of
34,651 units, up 22.4 per cent from October last year.

Motorcycle sales went up by 43.3 per cent to 8,76,810 units from the earlier 6,11,828. The
previous high of 7,78,352 units was achieved in September. While Hero Honda posted growth
of 39.6 per cent at 4,64,271 units, Bajaj Auto sales went up by 34 per cent to 2,39,936 units.
The overall two-wheeler segment achieved record sales of 11,27,827 units in October, up 50.4
per cent to from 7,49,965 units in October 2009. The previous best was in September at
10,05,162 units.

Sales of commercial vehicles continued to show an uptrend with a growth of 18.2 per cent to
50,835 units, from 43,018 units in the year-ago period. Light commercial vehicle sales rose
22.7 per cent to 29,028 units from 23,653 units in October last year. Medium and heavy
commercial vehicle sales surged by 12.6 per cent to 21,807 units compared to 19,365 units
last year.

Mathur said if the sales growth persists, then Siam’s revised forecast of 18-20 per cent
growth touching 2.4 million units in the passenger vehicles segment announced last month,
could be achieved. The industry body had earlier projected about 13 per cent growth for the
segment in 2010-11.

Indian automobile associations


The Automotive Component Manufacturers Association of India (ACMA)
The Western India Automobile Association (WIAA)
Federation of Automobile Dealers Associations (FADA)
Association of International Automobile Manufacturers, Inc (AIAM)
http://auto.indiamart.com/auto-industry/associations-siam.html

matter7
We keep in mind the size of the Indian pothole,
says Audi India
head
German luxury car manufacturer Audi
AG reports 208 per cent growth in
sales for October

BY David Shaftel
Mumbai

The slowdown is as if it never was, and


even in the leaner patches, apparently
the only product that was not affected
was the luxury car segment. The sector
has been witnessing a series of new
car launches, especially since the start
of this year. Growth in the luxe auto Audi India Director Michael Perschke
segment is expected to streak past the
20 per cent mark this year, and careen
to a new high.

German luxury car manufacturer Audi AG, part of Volkswagen AG, reported a 208 per cent growth in sales
for October. It has now buckled down for the long drive ahead, keen to take the growth momentum to a new
level. October sales rose to 357 units from 116 units in October 2009. For the first nine months of 2010, Audi
India reported record sales of 2,178 automobiles compared with 1,333 in the same period last year, a growth
rate of 63 per cent.

(The figures are consistent with independent figures compiled by the Society of Indian Society of Automobile
Manufacturers or SIAM, which reports that Audi sold 292 cars in September 2010 against 188 in September
2009. The SIAM report says that Audi sold 1,545 cars in the six-month period from April to September
2010.)

In an interview, Audi India Director Michael Perschke discussed his prognosis for the luxury automobile
sector in India.

Why is Audi so bullish on the Indian automobile sector?


We see a huge growth potential here. When you have GDP (gross domestic product) per capita at a rate of
around $2,000 for a country, suddenly you come to a tipping point in mass motorisation. This is a stage
China has been in for about four years now. In India, as you see the consumer demand shift from two-
wheelers to cars, I think we are confident of the strong growth coming in from here. There are around 8
million two-wheelers in India. The important question is, when will the final shift of two-wheeler to four-
wheeler happen. Low-priced cars like the Tata Nano might obviously be the first ones to take advantage of
the initial phase of this shift.

What is your forecast for the luxury segment of the Indian auto market?
This year, India will see the total sale of vehicles going beyond the mark of 2 million. But luxury sales are
only 0.7 per cent of the total market. There is expected to be around 14,000 to 15,000 luxury cars sold this
year. If the automobile market grows to 3 million by 2014-15, the total Indian car market will exceed our
home market in Germany, but luxury will be a fraction of this. As to how much it will increase, nobody can
exactly predict, but our anticipation is that the overall market in a country like India will probably grow at a
rate of 8 to 12 per cent per annum. Our assumption has been that the luxury car segment always will grow
faster than the industry as a whole, because of the very poor share we currently have.

How are Indian tastes in luxury automobiles changing?


Ten to 15 years ago, when I was with Mercedes India, we were a single-product company. We only had the
E Class and we had a hard time convincing our headquarters that we needed a free product lineup to make
sure that we could cater to a wider Indian society. This has changed to some extent. The young achievers of
today have their own money, and social structure.

In what ways do the cars marketed in India differ from the ones in Europe?
We need to take into account all points of market specifications with respect to India. For example, looking
at what is known as the “China and India horns” – horns in China and India need to stand a much harder
test than anywhere else in the world considering the nature of the driving trend in the countries.

Another remarkable difference is with the tyres, which definitely have to survive the conditions in India and
China. The size of Indian potholes differ largely from global standards, so we always recommend our
customers to take some more rubber for the tyres. We suggest small dimensional wheels with more rubber
to tackle the Indian roads.

Our dust filters also need to be changed more often in India than they do in Europe, because there is more
pollution here. However, this is true for any brand.

What are the new trends for the future in the luxury segment?
I am convinced that over the next couple of years we will see not just a second set of cufflinks or a second
wristwatch adorning several wrists in India, but also a second set of wheels. People will soon have weekend
outing wheels and showoff wheels; flashy ones for weddings and parties and cross-country and off-road
wheels, for when you go to your farmhouse.

Also, I think we’ll see the supercar segment grow. There are more racetracks and private tracks coming up,
we’ll get more track days like in the UK. People can’t drive fast on roads here because of the speed limits,
so they will go and drive on these tracks on weekends. As more tracks are developed, more taste for these
supercars or weekend toys will develop.

Going ahead, what type of luxury automobiles do you see selling particularly well?
I think the Indian market would look out for the classical limousine and saloon. Limousines are very strong in
India and these should do well.

Are there any types of auto that haven’t caught on here?


The market for hatchbacks in the upper price range has not developed in India as yet. And there is no
market for three-door cars here, because people get shuttled around by a chauffeur, even in smaller cars
like the Tata indigo or Maruti Swift. It would be unthinkable in Europe to have a chauffeur-driven Maruti
Swift. It just wouldn’t make sense in the European mind. But it works very well here.
Posted on November 09, 2010

New Matter
Auto sales grow highest in a decade
BS Reporter / New Delhi May 11, 2010, 0:47 IST

Several new launches in the compact car category, easier availability of finance and the low base effect of
last year helped the Indian automobile industry to continue its growth momentum of 2009 into April 2010 as
well, with passenger car sales registering their highest growth in a decade.

According to the Society of Indian Automobile Manufacturers (Siam), total passenger car sales in the
country surged 39.5 per cent last month at 1,43,976 units, as against 1,03,227 units during the same month
last year. This is the highest growth in car sales in April in the last 11 years. Car sales had grown 50.3 per
cent in 1999.

“Low base of last year has resulted in surge in passenger car sales in April and, while this will continue to
play a prominent role even in the next two months, there could be a little bit of tempering in the second
quarter, when higher sales of last year impact growth rates,” said Vaishali Jajoo, senior auto analyst, Angel
Broking.

However, on a month-on-month basis, there has been a decline of 7.4 per cent in domestic passenger car
sales in April, signalling the upcoming impact of increasing commodity prices. Siam data showed 1,55,600
units of passenger cars were sold in March; 1,53,845 units in February; and 1,45,905 units in January.

According to Jajoo, while new launches in the compact car category and easier availability of finance were
some factors that supported growth so far, demand would get impacted second quarter onwards, as raw
material prices continue to shoot up and higher base effect comes into play.

Sales of Maruti Suzuki India went up 22.1 per cent at 68,668 units in April 2010 as compared to 56,228 units
the same month last year, while its closest rival Hyundai Motor India posted a jump of 28.1 per cent at
28,501 units last month vis-à-vis 22,241 units, and sales of Tata Motors went up 76.4 per cent at 19,762
units, as compared to 11,202 units during the same month last year.

“On the back of overall improvement in the economy over the last few quarters, there is an improvement in
customer sentiment and, therefore, high sales in April, which is traditionally a lean month, as people
advance their purchases. However, we have already started seeing moderation in demand and, going
forward, it could stabilise at these levels,” said Vishnu Mathur, the newly-appointed director-general of Siam.
With high growth in the commercial vehicle segment and two-wheelers, the overall domestic sales also went
up 25.24 per cent at 1,120,081 as compared to 8,94,380 units in April last year.

While the total two-wheeler sales in April grew 22.06 per cent at 8,55,670 units as against 7,00,987 units in
April 2009, sales of commercial vehicles went up 64.5 per cent at 49,086 units vis-à-vis 29,842 units in the
year-ago period.

“In the commercial vehicle segment, freight rates have increased and this has encouraged owners to invest
on new vehicles. Thus, the higher sales,” said Mathur, adding that sales of LCVs went up 42.2 per cent in
April at 26,759 units as compared to 18,819 units, M&HCVs registered two-fold jump in sales at 22,327 units
as compared to 11,023 units in the same month last year.

New matter
Global majors rush for India
car
Swaraj Baggonkar / Mumbai November 10, 2007

Honda, Toyota, Volkswagen stitch plans for country-specific mall car models.

With India increasingly becoming the production and sales hub for all major car manufacturers, international
giants like Honda, Toyota and Volkswagen (VW) are pulling out their drawing boards for an all-new India-
specific car model.

Cutting costs
The primary reason that manufacturers have opted for a new car model for India is to make use of low cost
manufacturing expertise and also to qualify for small car norms.

One of the first to announce plans was Honda Siel Car India (HSCI), also the leading Japanese player in
India. The company is working on a model which would derive the benefits of a small car. “Definitely, our
aim with the small car is to qualify for the excise duty benefits,” said

Masahiro Takedagawa, president and CEO, HSCI.

Homemade
Jnaneswar Sen, senior marketing manager, HSCI, said, “The company has the option of launching the next
generation Jazz with a 1.2 litre engine or we can go in for a completely new model.”

The idea of benefiting from the small car norms has attracted Toyota and Volkswagen, too. Toyota, which
had restricted itself to the mid-sized sedan market, has decided to foray into small cars 2009. Sources say
that the company is developing a completely new car code named 800L at an undisclosed facility outside
India and Japan. The company proposes to launch a car having 1000cc petrol-powered engine for Rs 3
lakh.

The development of a completely new car model usually entails a cost in excess of Rs 1,000 crore if the
design, styling and engineering involved are not sourced from another model.

Volkswagen, owners of luxury brands like Bentley, Lamborghini and Bugatti, too, has agreed that it is
working on a small car for India. The company is already in the process of appointing autoparts suppliers to
ensure uninterrupted supply of parts for its small car.

Wallet easy
Kevin Rose, executive director, sales international, Volkswagen, said, “There are products on the drawing
board and we expect to have a car soon just for India. This car will be a completely new model.” VW will
launch its locally produced small car in India by 2009 when its green field plant will be fully operational in
Pune, Maharashtra.
Honda’s small car, to be developed in its new plant in Rajasthan having a capacity of 200,000 units per
annum, will be strapped with a 1.2 litre petrol engine and will be upto 4000mm in length, thereby qualifying
for the small car excise duty benefit. The company is independently working at its Japan R&D centre for the
model.

Most of these companies do have a small car in the international market which carry a price tag of more
than $14,000 (about Rs 6 lakh).

The lure of the huge emerging markets like India have forced global players to look for new models that
complement the market sentiment and at the same time fall within the affordable price bracket of $8,500
(about Rs 3.5 lakh).

Ford India is also said to be working on the small car for the country but the company’s plans remain
unclear. With a small car in its portfolio, it will be able to target buyers on a much larger scale.

Korean car maker Hyundai launched the i10 in India last week. The company intends to make India the
production hub for the i10.

Triggered by the buoyant small car market, the companies want to increase their market share to about 10
per cent by 2010 from the current 3-4 per cent. Toyota, Honda and Volkswagen have forecasted optimistic
growth post their small car launches in 2009.

New matter
Tata's crossover experiment
Preeti Khicha / Mumbai November 8, 2010, 0:40 IST

Tata Motors hopes to attract buyers of sedans, MUVs and SUVs with the Aria, its first crossover

Recently, there was a new occupant in the Tata Motors showroom — the Aria crossover. Staff trained
specially for the vehicle could be seen extolling its virtues to prospective buyers. The Aria, which means an
expressive melody in Italian, is the company’s most expensive offering till date — the seven-seat crossover
is priced between Rs13 lakh and Rs16 lakh (ex-showroom, Mumbai). Tata Motors is known best for the low-
cost Nano and its competitively-priced hatchback (the Indica), sedan (the Indigo), multi-utility vehicle (the
Sumo) and sports utility vehicle (the Safari). All sell at prices way below rivals. The Aria is meant to move it
up the value chain. Prosperity in the country is on the rise and people are ready to look beyond the price tag.
Tata Motors cannot afford to miss the bus.

As a crossover, the Aria will try to snatch customers from sedans, but its main target will be the buyers of
MUVs as well as SUVs. The possibilities for the Aria, if buyers take a shine for it, are huge. Abdul Majeed,
the leader of automotive practice at PricewaterhouseCoopers, attributes the growth in this segment to
increasing disposable income, which is driving ownership of two cars in the household. “People have a small
car for daily use and a larger family car for the weekend.” Kumar Kandaswami, leader (manufacturing),
Deloitte Touche Tohmatsu, concurs. “With better infrastructure around cities, families are likely to travel
during the weekend to nearby areas. Since Indian families, unlike their western counterparts, love to travel
all together, the demand for a large family car is always there.”

This has begun to show in the sale numbers. MUV and SUV sales have jumped 21 per cent to 154,372 in
the first six months of 2010-11. Market observers say the Aria is Tata Motors’ attempt to regain market share
in the MUV and SUV market. According to data provided by the Society of Indian Automobile Manufacturers,
the share of Mahindra & Mahindra (the Scorpio, Bolero and Xylo) has gone up from 43 per cent in 2007 to
55 per cent in 2009; during the same period, Tata Motors has fallen from 22 per cent to 13 per cent. Others
in the fray are Toyota (the Innova and Fortuner), General Motors (the Tavera and Captiva), Honda (the
CRV), Maruti Suzuki (the Grand Vitara), Hyundai (the Terracan and Santa Fe) and Ford (the Endeavour) —
rivals that cannot be taken lightly.
Clearly, the market is cluttered. How will the Aria stand out? “As a luxury crossover, the Aria will address
many of the disadvantages of the traditional SUV,” says Sunil Saxena, the head of utility vehicles product
group, Tata Motors. The market has also been rife with speculation that Tata Motors has leveraged the skill
sets of Jaguar Land Rover, which it acquired in 2008 from Ford for $2.3 billion, for the Aria.

Saxena claims the planning for the Aria began five years ago — it is not a quick-fix to address the surge in
SUV and MUV sales. “Our decision to launch a crossover goes way back to 2005. So naturally, it was not an
outcome of the acquisition of Jaguar Land Rover two years ago.” Tata Motors first tested the market through
static clinics where the prototype of the product was showcased at two different auto shows. The first was
Geneva Motor Show in 2005 and the second was Delhi Auto Expo in 2006. “At the Geneva show, we
received feedback on features ranging from shape of the vehicle, seating, wheels and spaciousness.
Overall, the product received positive feedback, after which we presented it in the Delhi expo,” Saxena adds.

The respondent pool included owners of sedans, MUVs as well as SUVs. At the end, Tata Motors concluded
that sedan owners wanted a higher sitting position and ground clearance, and the ability to drive comfortably
on unpaved or potholed roads. MUV owners, on their part, wanted better styling, whereas SUV owners were
looking for better ride quality and handling. Ingress and egress were also a concern for SUV owners. The
learning was vital. The company learnt, for instance, that higher step-in height, though it gives a macho
image, doesn’t work well with the older women in the family who might be battling arthritis. “The ground
clearance in our crossover is much lower than in an SUV; it makes it convenient for Indian women (in saris)
to get in and out of the vehicle with ease,” says Saxena. “The Aria’s design will win over the woman in the
family who is not sold on the macho image of an SUV.”

The company also held dynamic clinics where people were asked to drive the vehicle. These clinics were
held in five metros — Mumbai, Delhi, Bangalore, Pune and Ludhiana — and allowed the company to
integrate customer feedback prior to the final rollout of the Aria. “In all, drawing board to market took us
three years,” says Saxena.

Game changer?
In the last few years, Tata Group has tried to unlock value at the bottom of the pyramid, whether through
Ginger budget hotels, the Nano or the Swach water purifier. Does it have what it takes to sell in the premium
space? To be fair, the Tata Group is not a total stranger to luxury; it does, after all, operate the Taj chain of
luxury hotels and sells Jaguar and Land Rover cars across the world. But rivals say Tata Motors will have to
acquire the DNA to sell a premium crossover like the Aria.

Saxena doesn’t appear perturbed. “When we decided to enter the passenger car segment, critics were
unsure whether we would be able to deliver. Today, the Tata Indigo is the highest-selling car in its segment,”
says he. “There was a poor perception of Japanese cars in the United States until Toyota launched the
Lexus in the premium category.” That may be true. Closer home, Mahindra & Mahindra was just a tractor
maker till not so long ago; it is now better known as an SUV and MUV company — a perception that will
strengthen with its acquisition of Ssangyong Motors in South Korea. On the other hand is the example of
Maruti Suzuki — in spite of its dominance of the Indian market, it has not been able to make a dent in the
higher end of the market. So, if recent history is anything to go by, the Aria experiment could go either way.

According to Majeed of PwC, the launch of a premium product should not be seen as abandoning the price-
sensitive segment, but rather as an extension of the brand to keep customers in the fold through their car-
purchase cycle. “It is important for car makers to have a product portfolio across different segments. The
Aria’s launch will bridge the gap in the high end of Tata Motors’ portfolio,” adds Kumar of Deloitte Touche
Tomahatsu.

Still, Tata Motors is aware of the pitfalls. Cars like the Toyota Innova, Force Motor’s Trax, Tata Motors’
Sumo and Mahindra & Mahindra’s Bolero are used as family cars but also show up in taxi fleets. This
fetches sale numbers all right, but does great harm to the brand equity. Tata Motors learnt it the hard way
with the Indica — its perception took a beating when it became the preferred choice of taxi operators. “With
the Aria, we are not looking at this space,” says Saxena. The company is not pinning its hopes on fleet
operators, but is targeting the wealthy family buyer who will find in the Aria a status symbol. Competitors feel
the market is growing fast and Aria’s launch will only grow the market further. “Every car company has its
own positioning, so we don’t view the launch as a threat,” says a rival manufacturer who does not want to be
named.
Price matters
The price tag on the Aria may deter fleet operators — it works out to over Rs2 lakh per passenger. But there
is a flip side to it: Will the customer be ready to pay a premium for the crossover? The Toyota Innova, for
instance, comes between Rs9 lakh and 13 lakh (ex-showroom, Mumbai) and the Mahindra & Mahindra Xylo
is priced between Rs7 lakh and Rs9 lakh (ex-showroom, Mumbai). “Our product has an array of
technological firsts which are usually available in the higher-priced sedans. Safety features like an electronic
stability programme in the Aria are not a feature in even any Rs30-lakh car. It is a computerised technology
that improves the safety of a vehicle by detecting and reducing skids,” says Saxena. Other new-fangled
perks include automatic darkness-sensing lights, rain-sensing wipers and six airbags in the top-end variants.
The Aria, claims Saxena, comes loaded with features that ensure a comfortable ride. These include a dual
air-conditioning system with automatic climate control, and an in-dash GPS-based navigation system (a
feature that cannot be found in most cars).

Some automobile experts agree that Tata Motors has learnt from its mistakes and has vastly improved the
quality of the Aria. Recently, the company gave the Indica a new lease of life with the Indica Vista. Similarly,
the Tata Manza with its refreshed diesel engine, spacious interiors and refreshed design raised the bar in
the saloon segment. With the Aria too, from reliability of its components to the interior finish, the company
has not only aimed to offer a premium product but also rectify issues which plagued its previous offerings.
One of the USPs of the Aria is the 4x4 wheel drive which offers greater traction compared to rivals like the
Innova and Xylo. This improves safety of the passengers, particular in difficult road conditions.

The Aria’s interiors too have seen a step up when compared to the other cars from the Tata Motors stables.
For example, the quality of the plastic used is of a superior quality, claims a member of Business Standard
Motoring who has reviewed the crossover. Features like the centre console display and stereo controls look
of a higher grade. In terms of space, the front and middle row can comfortably seat adults. The problem area
is the third row which hardly has legroom, a definite flaw given that the car is built to be a family car.

In terms of power and performance, critics were initially worried how the 2.2-litre Dicor engine (the same as
in the Safari) would fare, given its history of weak traction lower down the rev range. However, in the Aria,
the company seems to have addressed these issues and the engine is a lot more refined. It creates lesser
noise compared to the Safari. The Aria also has a more powerful engine compared to rivals — 140
horsepower. The Innova’s 2.5-litre diesel engine delivers 101 hp, while the Xylo’s 2.5-litre diesel engine
gives 112 hp. The reviewer says the Aria delivers a mileage of 11.2 km per litre — more or less the same as
others.

The product is perhaps just one half of the story; the other is retail. Rivals say the real ace that Tata Motors
has up its sleeve is its distribution network. Indeed, the company has 240 dealers across the country, which
is next in size only to market leader Maruti Suzuki. To begin with, the Aria will be made available in 65
dealerships in 25 cities; later, all the dealerships will be given the crossover to sell.

But more needs to be done. The retail experience can make or break a sale. Car makers do extensive
training at dealerships — right from the doorman to the test drives. And premium customers are finicky; they
want a premium experience at the dealership. Selling to such customers is a different ballgame than to a taxi
operator or a value-conscious buyer. “Educating the Indian consumer about the distinctive features, for
which a little premium is to be paid, will be a challenge. We hope to tackle it through an ongoing marketing
campaign which will inform consumers of the distinctive features of the Aria,” says Saxena. “Currently, we
have trained staff across our dealerships to educate potential buyers about the uniqueness of the car.” Thus,
the salesman who interacts with potential customers of the Aria is dressed differently from the other
salesmen in the dealership. He is also trained to speak the language of the premium buyer.

Tata Motors’ tryst with the premium customer has begun. May the best salesman win!

New matter
M&M's Bolero 'refresh'
Swaraj S Baggonkar / Mumbai October 4, 2010, 0:42 IST
Here’s what keeps the entry-level SUV miles ahead of competition.

In its 10th year, the Mahindra Bolero remains the dominant market leader in the sports utility vehicle
segment with a market share of 29 per cent. Since 2006-07, the brand has out-performed the passenger
hard tops category with a CAGR of 23 per cent (category CAGR 7 per cent).

That’s not all. It is also the first SUV in India to surpass the 50,000 sales mark three years in a row and has
become the volume leader for Mahindra and Mahindra (M&M), surpassing competitors’ brands such as the
Tata Sumo and Tavera.

What is interesting is that about three-fourth of Bolero sales comes from smaller towns.

So what exactly is the key to Bolero’s (current price tag Rs 5.27-6.67 lakh)
success? The answer lies in the brand positioning strategy of M&M, which has
classified Bolero as a entry level and rugged sports utility vehicle and not as a
tourist vehicle.

Rajesh Jejurikar, chief executive (automotive division), M&M, says “We were
very careful while positioning the Bolero. We never wanted it to be classified as
a tourist vehicle. The idea was to promote it as a personal vehicle complete with style and status.”

That, Jejurikar says, is a key change as SUVs have always been associated with commercial vehicles. One
reason why Sumo lost out, Jejurikar argues, is that the vehicle made deep inroads into the tourist vehicle
space. This, he says, didn’t help Sumo as sales refused to rev up even after Tata Motors launched a
completely new version of the vehicle in early 2008.

Tata Motors, however, tried to promote Sumo Grande (presently the Sumo Grande Mark II) as a personal
vehicle, one which combines the looks of a big SUV with the comforts of a family car. But the vehicle is over
Rs 1.5 lakh more expensive than the Bolero.

The numerous promotion campaigns done by M&M for its products like Scorpio, Gateway and Xylo show
that they are all positioned as personal vehicles. While the Scorpio is promoted as a mature and rugged
SUV, the Xylo, despite its ample seating capacity and space, is promoted as a vehicle which can replace
sedans.

Vivek Nayar, senior VP (marketing - auto division), M&M says the moment a company allows its product to
be sold under the ‘tourist vehicle’ tag, it will lose its ‘X’ factor.

The dominance of the rural and semi-rural areas in the overall sales of the Bolero is also due to M&M’s long
association in the tractor and agricultural equipment segment.

“Most of the Boleros are owned by senior villagers like a Sarpanch or farmers who hold large tracts of
farming land. This vehicle proves to be their status symbol and this further helps drive the aspirational
value”, adds Nayar.

At the heart of Bolero’s success, however, is a project called ‘Bolero Refresh’ after M&M launched Mahindra
Scorpio in the higher SUV segment and there was a need for a brand revitalisation to extend the Bolero’s
lifecycle.

Under this, the company took a conscious decision to re-position and re-launch Bolero as an entry level
SUV as against a plain utility vehicle. A detailed consumer research was undertaken on different usage
segments of the category.

Research studies suggested that competing brands such as Tata Sumo had a powerful equity in commercial
segment but negligible presence as a personal vehicle.
There was an opportunity to capitalise on emotive drivers such as ‘Pride of Ownership’ through attributes
such as product styling and an aspirational imagery.

This led to the launch of new Bolero variants. It was also important to evolve distinct spaces for both Bolero
and Scorpio to prevent cannibalisation.

Towards this end, the Bolero was repositioned as an entry level SUV with an attitude of ‘Taking on
Anything’, offering an affordable option for young, upwardly mobile consumers while the Scorpio was
targeted at those who had arrived in life and for whom the brand was an extension of their lifestyle.

A clutter-breaking new “Water Scooter” TV ad was developed to project excitement and energy. This was
supported by a 360 degree marketing campaign involving print, interactive & on ground activities.

M&M also provides customers the option to customise the Bolero after paying a price of around Rs 2-3 lakh
over and above the purchase cost of the vehicle.

Added features on the vehicle, christened as Stinger, is a custom-built front guard, stylised body cladding,
reverse camera with sensors, leather upholstery among several other features.

New matter

The Etios brief


Bhupesh Bhandari / New Delhi September 27, 2010, 0:57 IST

Toyota will step into the mass market with the Etios by the end of the year. Has it done its homework?

In 1989, Toyota launched the Lexus at the top end of the market. In 2005, it came out
with the IMV platform on which were launched the Innova multi-purpose vehicle, the
Fortuner sports utility vehicle and the Hilux pickup truck. Both proved to be game
changers for the world’s largest car maker. The Lexus gave it an entry into the luxury
market, while the IMV vehicles helped it grow in the emerging markets of Asia, Africa
and South America. No less important will be the launch of the Etios in India some time
towards the end of the year, says Toyota Kirloskar Motor Pvt Ltd (Toyota’s 89:11 joint
venture with the Kirolskars) Deputy Managing Director Sandeep Singh. The reasons are
elementary: It will help Toyota gain critical mass in a large market (estimated size: 3
million in 2010-11), and the platform could yield more cars for other emerging markets in the days to come.

Numbers do matter. Volkswagen wants to dislodge Toyota as the world’s largest car maker by 2018. The
gap between the two is not huge. In 2009, Volkswagen sold 6.29 million cars against Toyota’s 7.81 million
cars. India could well decide who wins finally. Volkswagen has launched the Polo hatchback and sedan
(Vento), and invested Rs 3,200 crore in a new factory at Chakan near Pune that can roll out 110,000 cars in
a year. The Etios could be Toyota’s answer. So far, Toyota has been present in just 15 per cent of the Indian
market with the Altis, Camry, Innova, Fortuner, Prius, Prado and Land Cruiser. The Etios will expand it to
around 50 per cent. It will compete against the likes of Maruti Suzuki Swift, Hyundai i20, Nissan Micra,
Volkswagen Polo and Ford Figo. Toyota has spent over Rs 3,000 crore in a production facility for the car
near Bangalore. Its capacity will be 100,000 cars per annum, which can be doubled in the future. It wants to
sell 70,000 Etios, hatchback as well as sedan, in 2011, which could double its sales in the country. By 2015,
Toyota wants to sell 300,000 in India. Rivals say Toyota is a little late to hit the market. Still, much is at
stake. Nothing can be left to chance.

Toyota spent the whole of 2007 researching the Indian market. Teams met different customers groups:
Young people, old, single, married etc. Dealers were taken on board to get their feedback. In early 2008,
Toyota finally said it would go ahead with the car. Since then, Narita Ke, the chief engineer of the Etios, has
made innumerable trips to India, and lived with families here to understand their habits and needs. He
observed, for instance, that all Indians are in a hurry to take off as soon as the traffic signal turns green; they
therefore need that additional pick up. Similarly, a car has to be easy to park. Indians often accommodate
three passengers on the back seat; so it is essential to give good comfort towards the rear of the car. The
Etios, which has been developed in Japan, will “give a very good driving experience, very good space, high
ground clearance and best-in-class fuel efficiency,” says Singh.

Fuel efficiency and the cost of ownership, experts will tell you, make or break a car in India. This is why
Maruti Suzuki has done so well in the country. Singh says that the life of all Toyota parts is long, which
reduces the need for replacements. “We have proved that Toyota cars require very low maintenance. That’s
why their resale value is the highest. For a five-year old Innova, the erosion in value is just 30 to 40 per cent.
A 10-year old Qualis fetches 50 per cent of the original value; a five-year old Qualis can get 70 to 80 per
cent.”

The right price


Much will also depend on the price tag Toyota puts on the Etios. The car maker has so far kept the price
under wraps. Singh says the hatchback will be targeted at young executives with a take home salary of Rs
30,000 to Rs 50,000 per month, and the sedan at those with a salary of Rs 75,000 per month and above.
Experts say that Toyota, because of its brand equity, can command a premium, though it can’t be very high.
“Toyota does command a premium of 5 to 7 per cent over others,” says Synovate India Associate Director &
Head of Motoresearch Sumit Arora. “But the example of the Honda Jazz shows that consumers are not
willing to pay a hefty premium for a hatchback.”

But this is where Toyota could spring a surprise. Singh says that Toyota has done strategic pricing of its cars
in the past and will do that with the Etios as well. “You don’t look at profits in the short run. I don’t think we
have done that with any product, even when we launched the Qualis. You look at profit from a product over
a period of time. It includes not just your vehicle but also spare parts, merchandise and accessories. Frankly
speaking, most companies take much longer than three or four years to recover the investments.” Singh
discloses that Toyota Kirloskar broke even a couple of years ago, though it went into business way back in
1997.

To keep the costs low, the company will source 70 per cent of the components of the Etios locally. Six key
vendors have set up shop within its plant at Bangalore. The transmission and engine will come from Japan
to begin with. By 2012, the transmission will be made locally, and by 2013, so will the engine. That is when
localisation will shoot up to 95 per cent.

But even Toyota knows that there are limits to strategic pricing. That’s what deters it from launching a small
car in India, though it does have in its portfolio the Yaris and the Daihatsu range. “Toyota is not looking to
develop a low-cost car for India at this moment because it believes that, given the standards it wants to
maintain, it is very difficult to develop a car at those prices,” says Singh. Toyota knows this means that it will
have to play second fiddle to rivals like Maruti Suzuki for several years. But it is willing to wait.

Sometime last year, Singh and his team carried out a brand recall survey. It showed that in the top ten cities,
Toyota came third after Maruti Suzuki and Honda in cars. In multi-purpose vehicles, it was on top. But in
semi-urban markets, it fell to the fifth or sixth slot. Many people, in those markets, weren’t even aware that
Toyota made cars; they thought it only made multi-purpose vehicles. So, the company decided to take the
Etios, along with the entire Toyota range, to ten cities that account for 70 per cent of the car sales in the
country under the Q (quality) World programme. The list was then expanded to 20 and finally 24. The gains?
Singh says that a recent survey has shown that Toyota’s brand recall in the top ten cities has jumped to
number two, at par with Honda; two, feedback was obtained from 1,200 customers on the car, which has led
to some last-minute tweaks; and three, 54,000 of the 150,000 people who saw the car have registered their
interest in it. Some of them could end up buying the car.

Harping on quality
At the same time, Toyota has launched a campaign called Q Promise along with its agency, Dentsu. “We
are working on an emotional connection with the customer. We are not talking about products; we are
talking about what goes into the high-quality product we give you. We have talked about manufacturing and
safety, and will talk about dealers, vendors etc,” says Singh. In another departure from the convention,
Toyota may rope in a brand ambassador for the Etios. Singh rules out the possibility of a cricketer or a film
star because “they have been used by all”. The market is rife with the talk that it could be music maestro AR
Rahman. Singh admits that Rahman does not fall in the category of overexposed film stars. Cleverly, Toyota
has launched two high-end vehicles, the Prius hybrid and Fortuner, in the last one year. They might not have
given huge volumes, but have boosted the car maker’s brand equity in India.

The most vital link in the Etios gameplan is the Toyota dealer. The company has raised the number of
dealers from 40 to 60 and the number of sale and service points from 82 to 150 in the last two years. The
numbers might look small but, Singh claims, cover almost 85 per cent of the market. Apart from land, a
Toyota dealership can cost as much as Rs 30 crore. To keep the dealers happy, Toyota gives them higher
profit margins of 4 per cent on cars (industry norm is 3 to 3.5 per cent) and 18 to 20 per cent on spares
(industry: 15 per cent). Eighty per cent of the owners bring their cars to a Toyota authorised station for
service in the warranty period (industry: 50 to 60 per cent), which falls to 70 per cent after the warranty
(industry: 30 to 40 per cent). This keeps the cash registers ringing.

Also, conversion of footfalls in Toyota dealerships is 32 per cent, way above the industry average of 20 per
cent. All prospective customers are required to take a test drive, though 70 to 80 per cent actually do that —
this way customers can feel the difference in the drive quality. Still, claims Singh, this is better than the
industry practice of 30-40 per cent. All cars meant for test drives are replaced within two years. “We train
everybody in the dealership, even the doorman and the attendant who serves tea,” says Singh.

Still, Singh says that breakeven for a Toyota dealer can take up to seven years, higher than the industry
norm of four to five years. The missing link here, according to Singh, is the appreciation in the value of the
asset. Most of the initial Toyota dealers were encouraged to set up large dealerships in the fringes of the
city, away from downtown, to keep the real estate cost down. Many of them, Singh says, have now come
inside the fast-expanding city. “So far, only one dealer has left us, and 99 per cent of our dealers have
expanded,” says Singh. The dealers are important for another reason: Till date, Toyota has sold 460,000
vehicles in India to around 320,000 customers. This base will be tapped for the Etios. “We hope to get 50
per cent of the Etios volumes from our existing customers,” says Singh.

The customer, says Singh, is central in Toyota’s worldview. The company therefore no longer talks about
market share targets. It clearly is a long-term player.

http://www.slideshare.net/hemanthcrpatna/dissertation-on-car-market-and-buying-
behavior-a-study-of-consumer-perception

“car buying behavior ppt India” in google

GROSS TUNROVER OF THE AUTOMOBILE INDUSTRY IN INDIA


Year (IN USD MILLION)
2004-05 20,896
2005-06 27,011
2006-07 34,285
2007-08 36,612
2008-09 38,238