Piaggio to launch 2 verions of NT3: a three-seater car in India

Piaggio Vehicles has been the pioneer of 3-wheeler goods transportation in India since 1999 and today is among the top in its category. With global standards in vehicle performance and customer service, it has revolutionized the 3 wheeler cargo segment in India. This well established company is all set to bring its new car named NT3 a three-seater car. The 2.4 meter long car is expected to have a 200 cc and a 300 cc engine option, in addition to a hybrid and electric variant as well.

The NT3 car is expected to have a maximum speed of 80 km p/h with the 300 cc engine and 60 km p/h with the 200 cc engine. The car is expected by 2012.

These cars are developed for markets like India, Vietnam and some areas of South-East Asia because as informed by Ravi Chopra, chairman and managing director, Piaggio Vehicles, said, “The demand for small cars will be large in the densely populated countries and cities”.

Company is planning to put in good money as investment in Vietnam & India to expand manufacturing and sales activities in these regions. In India, the company will be putting in Euro 90 million to finance growth in both the commercial vehicles and the two-wheeler businesses. The company will be launching Vespa brand of scooter in the first quarter of 2012.

With an aggregate market share of 41% in the three wheeler industry and 64% in the three wheeler cargo segment in 2010, Piaggio has firmly established its position as an undisputed leader in the three wheeler domestic market. Today the company offers a range of passenger and cargo vehicles already and with NT3 company is hoping to increase its market share and sales in coming future.

Volkswagen India to bring 7th generation Passat by March

Volkswagen has recently stated to bring its much awaited 7th generation 1.8 TSI (Petrol) Passat, which was wrapped off in 2010 Paris Motor Show, to India. This long awaited new model has got sharper treatment in its lines alike its other Scirocco inspired models like Jetta, Vento and Polo.

The new grille has been beautified with loads of chrome, whereas the daytime LED lights on outer corners make it quite catchy. The rear of the vehicle too has been worked out well - the taillight too is LED and adorned angularly to give sharper lines to the new age Passat as compared to existing one.

The vehicle has been priced at Rs 19.20 Lakh (Ex-showroom, New Delhi). Mr. Neeraj Garag, Member of Board and Director, Volkswagen Passenger Cars (Group Sales), Volkswagen India Pvt. Ltd said “The Passat TSI is well refined and not only will provide superior driving experience but also decrease fuel consumption and lower emissions.”

On the other end, Volkswagen is setting itself to launch new version Jetta 2.0L TDI too in India, around the same time at a cost of 15.92 Lakh (ex-showroom, Delhi).

Mr. Lutz Kothe, Market Head, Volkswagen said about their production plans of both the vehicles, “We have no plan to localize the Jetta or Passat but we will continue to assemble them in India, India is the fastest-growing market in the luxury car segment and we will continue to grow here”

He also added, “We are gradually ramping up production at our Chakan Facility in Maharashtra to cater to the increasing demand. The Polo (White Color) has been more in demand in the market.”

Riding on economic prosperity, car sales zoom

One of the most revealing indicators for economic prosperity of a country is the growth of the automobile sector, specially the sales of cars. Booming car sales thus conclusively indicate that the Indian economy is doing well.

Fourteen players in the car industry together sold 19.83 lakh cars in the financial year 2010-11, a whopping 30 per cent more than 15.28 lakh cars sold in the previous financial year. Surely the Rs 100,000 crore Indian car has found a place in the world map by becoming the fastest growing in the whole world.

“The impressive growth witnessed by the auto sector appears primarily to be driven by the strong revival of demand spurred by ongoing growth momentum of the economy,” said Society of Indian Automobile Manufactures (SIAM) Senior Director Sugato Sen. “The growth rate would have been still better had there been no global slowdown.”

Agreed Toyota Kirloskar Motors Deputy MD Shekhar Viswanathan “Rapidly rising disposable income of Indian middle class is fuelling the growth of the car industry.”
Though the industry did extremely well, same was not true for every one. While aggressive new players ate away market share from the incumbent players, some old ones actually slowed down.

The market leader, Maruti Suzuki India with 49 per cent market share pushed up its car sales by 26 per cent to 9,66,447 in 2010-11, the second largest Hyundai Motor India grew 14 per cent. Tata Motors which sharply revived sales of country’s smallest car Nano, sold 2,56,202 cars, 27 per cent more than the previous year. Ford India and General Motors too did well. (See table)

But there were a few laggards. Honda Siel Cars sold 58,951 cars, 3.87 per cent lower than previous year, Fiat India’s sales was down 15 per cent and Hindustan Motors dropped 20 per cent.



Action speaks

Mixed fortunes among the car manufacturers in 2010-11 also demonstrated the fact that those who were more active in terms of new launches and refreshments did better than those who were not. Maruti Suzuki, for example, re-launched all its old models with much superior K-series engine. Maruti now has this new petrol engine in Alto, Ritz, A-Star, Zen Estilo, Wagon R and in Swift. The new K-series engine not only provides much better mileage than the earlier engine but also generates more power to the car.

“The primary factors that helped us to boost our sales is introduction of new fuel efficient K-Series engines in virtually all the models. Result of intensive in-house research and development efforts, this engine boosted the image of our cars,” Maruti Suzuki India Chief General Manager (Marketing) Shashank Srivastava said. “It helped us keeping ahead of our competitors and has considerably improved our portfolio in the auto market.” Maruti also introduced a diesel version of its sedan SX4 and also launched a luxury sedan Kizashi. Hyundai too introduced a more fuel efficient Kapa engine for its small cars.

New launches and refreshment also helped others. Hyundai launched new i10 and new Verna, Ford India’s Figo, Nissan Motor India’s Micra, Vokswagen’s Polo, Toyota’s Etios and Skoda Auto India’s Fabia are a few good examples of how excitement created with new models helped them sell more.

During the fiscal, Tata Motors launched the all-new Tata Indica eV2, Tata Indica Vista Drivetech4, Tata Indigo e-CS, new Tata Manza, Tata Venture and the Tata Aria. Said Viswanathan of Toyota, “There is a huge excitement for our new car Etios and we have 5 months waiting period for it.

Now that we have started the second shift in the new plant our monthly production has gone up to 6,900. Hopefully we will be able to clear the backlog soon.” According to SIAM President Pawan Goenka the passenger vehicle segment saw 24 new launches and 40 refreshed versions in 2010-11.

Small is big

The other interesting feature of the Indian car market is that although there were several hyped up launches of big and expensive sedans, the small car segment continued to rule Indian roads in 2010-11. Small and compact cars accounted for 78 per cent of industry’s total sales. In the A1 segment, Tatas revamped their entire strategy on Nano which led to its sales zooming to 70,432 in 2010-11, more than double of 30,350 it sold in the previous year.

To arrest the sagging sales of Nano, Tata Motors changed the earlier plant to sell Nano only through pre-booking to open sales about six months ago. As open sales began the company created the necessary sales, marketing and finance infrastructure. In addition to 617 odd regular sales outlets the company set up Special Nano Access Points (as of now about 210 across the country) where customers can experience, test-drive of the car.

To build consumers’ confidence the company unleashed huge advertising campaigns through print and television media and also offered a 4-year or 60,000-km (whichever is earlier) manufacturer’s warranty. The company also tied up with 28 banks and non-banking finance companies to offer loans up to 90 per cent of the value at easy rates.

“The impact of these initiatives can be seen in the progressively growing monthly sales of Nano-- from 5,784 in December 2010 to 8,707 in March,” said Tata Motors Vice President R Ramakrishnan. As the company’s plant at Sanand, Gujarat, reaching almost the full capacity, Tatas may soon have to build another plant for Nano, said Ramakrishnan.
Speedy sales growth of Ford Figo, Nissan Micra, Chevrolet Spark and Beat, Hyundai i10, Maruti Alto and Swift also point to the fact that small and compact cars are in great demand. No wonder Toyota is planning to launch a hatchback small car Liva and Honda a small car Brio around June this year. To complement its offerings GM will soon launch Beat with a one litre diesel engine. Said GM India Director Marketing P Balendran, “We have done very well in 2010-11 as our two small cars Spark and Beat together sold around 72,000 and Cruze has seen good pick up in demand.”

Exports stagnate

Another interesting trend is that India is slowly but steadily emerging as a export hub for cars. The country exported 447,403 cars in 2010-11, almost same as previous year. Hyundai Motors which exports i10 and i20 from its plant in Chennai exported 2.33 lakh cars, Maruti exported 1.36 lakh cars and the new player Nissan India exported 55,000 cars. With the demand pick up in the European market, exports of cars from India in the current year are expected to be much higher.

Growth to slow down

The boom story in 2010-11, however, may not be repeated in the current financial, fears car makers. Both Balendran and Viswanathan feel that car sales growth in the current year may slow down to around 15 to 17 per cent as against 30 per cent growth last year.

Reasons are several: hike in interest rates, increase in commodity prices (steel, copper, plastics), overall inflation in the economy lowering the disposable income, rising wage cost and above all very high prices of petrol and diesel. “Current year scenario is not as rosy as it was last year. Costs have gone up for almost everything, but there is a limit to which we can pass on the cost.”

Balendran of GM thinks that apart from all round increase in cost, steep and frequent rise in interest rates will severely affect customers’ ability to take loans. “This is big problem as 85 per cent of cars in India are bought with loans” he said.

India car sales soar 30 percent in 2010-11

Indian passenger car sales soared by 30 percent in the past year, the most in over a decade, but surging raw material costs will put the brakes on further growth, an industry body said Friday.

Car sales grew to 1.98 million units in the just-ended fiscal year to March 2011 from 1.53 million the previous year, spurred by cheap loans and new model launches, the Society of Indian Automobile Manufacturers (SIAM) said.

"We have ended the year on a reasonably high note. We have reached a very strong base," SIAM president Pawan Goenka told reporters.

India is the second-fastest growing auto market in the world after China.

But Goenka said growth would slow to 16 or 18 percent this year due to rising commodity prices and costlier loans resulting from a tighter monetary policy aimed at curbing inflation.

The percentage gain in car sales in the year to March 2011 was the highest since 2000 when car sales soared 60 percent, SIAM said.

The sustained expansion of the Indian market in the face of saturated markets in the West has turned the country into a battleground for global vehicle manufacturers.

Ford, Renault-Nissan, General Motors and Volkswagen have all launched new models in India recently.

Sales of Japanese-controlled Maruti Suzuki, India's car market leader, jumped by 26.24 percent to 966,447 units last year from a year earlier, while sales of rival South Korea's Hyundai Motor increased by 13.95 percent to 358,904 units.

In March, passenger car sales in Asia's third-largest economy climbed by 24.37 percent to 194,199 units from the same month a year earlier, SIAM said.

Sales of commercial vehicles - seen as an important barometer of economic health - climbed by 15.35 percent to 77,688 units from a year ago, the auto group said.

Total sales of vehicles across categories grew by 19.42 percent in March to 1,465,909 units from the same month a year earlier.

Domestic car sales hit record high in February

Car sales in India hit a record monthly high of 1.89 lakh units in February as customers advanced purchases in anticipation the government may hike excise duty in the Budget. Sales were also driven by rising disposable income with the middle-class , easy availability of loans, and a pick up in new product launches.

Car sales rose by 23% in February compared with a year earlier, data released by industry body Society of Indian Automobile Manufacturers (SIAM) showed Wednesday. The February sales number is higher than the record 1.84 lakh cars sold in January.

The Budget for 2011-12 , however, left excise duty unchanged at 10-22 % for different segments of cars, contrary to an expectation of a 2% hike. "Car prices have not increased much despite rise in global commodities prices like steel and rubber . Also, customers are enjoying flexible financing options. In future , however, we expect higher base of 2010 to moderate growth rate," SIAM Director General Vishnu Mathur said. Maruti Suzuki, the country's largest carmaker, reported 19.8% year-on-year growth in sales in February to 101,543 units.

"There was more demand in the market than what we could supply as we faced severe scarcity for our highrunning models like Alto and WagonR," a senior official from Maruti said. Hyundai sales grew 5.3%, while Tata Motors car sales grew 14% during the month. Two-wheeler sales in February grew 22% to a record 10.22 lakh units. The growth in the segment was primarily driven by market leader Hero Honda that posted 24% increase in sales to 4.62 lakh units last month. Sales of trucks and buses grew 11% in February to 64,057 units led by Tata Motors, Ashok Leyland , and Eicher Motors.

India's total domestic vehicle sales in the current fiscal year is expected to grow 26-27 % year-onyear , higher than SIAM's earlier estimate of 18%, said Mathur. However, rising interest rates on auto loans and spiraling global commodities prices, including crude oil, are concerns for the sector going forward.