BMW skeptical Over Mini Launch

It looks like the German premium car maker BMW, is skeptical of launching its iconic luxury hatchback, the Mini in India. The launch of this hatchback was supposed to happen by the end of this year. BMW had announced its Mini launch plans during the launch of BMW X6, a sports activity coupe in India.
The Mini is a three-door luxury hatchback that was likely to be imported as a CBU in India. The BMW Mini would carry a price tag of Rs20 Lakh. The delay in the launch of this luxury hatchback owes largely because the luxury hatchback market in India is not developed. Moreover, BWM thought the investment to launch a new brand would be substantial in this condition. Any carmaker needs to look at the potential business opportunity before launching a car, especially when it’s a luxury car. BMW Mini would have faced a tough competition with the Fiat 500 if it had been launched in India at the prescribed date.
The German car giant would reconsider the launch of the Mini by the end of the third quarter of the calendar year. BMW competes with European rivals DaimlerChrysler (DCXGn.DE) and Volkswagen (VOWG.DE) in the premium Indian car market. This German carmaker makes the 3 and 5 series in India and also sells its 7 series from imported kits.
To strengthen the dealership network, BMW will set up dealerships in 10 more cities by the end of 2010. Presently, there are 13 dealerships in the country. The company has invested $30 million in India, including setting up a plant in Chennai.
BMW has lined up a slew of launches in 2009 like the new BMW 7 series, the new BMW 3 series, and a diesel variant of BMW X3.

Renault Itching for a Return to the U.S.

French car maker Renault SA is still itching for a move into the U.S. automobile market -- the world's biggest, from which it has been absent for more than 20 years -- and might be interested in Chrysler LLC if its owners were to put it up for sale, a senior Renault official said Thursday.

Jacques Verdonck, Renault's vice-president for corporate and strategic planning, told Dow Jones Newswires that one option for the company is to try to establish a presence in the U.S. by itself, although this would be both "risky and costly."

That is because it would involve developing at least three new products specifically designed for the U.S. market, while creating a dealer network, either by forming an alliance with an existing dealership network or creating Renault's own network from scratch.

The other easier and less onerous way would be to link up with one of the large U.S. automotive companies, though this would imply that the partner is in good financial health and is sufficiently robust to carry the deal through, he said.

In 2007, talks between Renault and General Motors Corp. about a possible alliance collapsed after management of the two companies failed to see eye-to-eye on the potential synergies that could be derived from an alliance.

"We had discussions in past with GM that didn't work out even though there were considerable potential synergies," Mr. Verdonck said. "If the opportunity presents itself again, we will seize it. But if it doesn't, I don't believe we can launch an aggressive takeover operation against an American company."

In 1982, Renault took over American Motors Corp. to make the Alliance, a variant of Renault's subcompact Renault 9 car, but the project never made money and Renault backed out and sold off its interest to Chrysler Corp. five years later.

While a straight takeover is only one of several scenarios, he acknowledged that Chrysler "would make a good partner" in the U.S.

Potential synergies are different when you consider Chrysler, GM or Ford Motor Co., he said. Chrysler is more focused on its U.S. operations, while GM and Ford are more global players, he noted.

"What's important in a partnership is to ensure that management really wants to be in the partnership; if you do it against the will of the partner, you'll face huge difficulties," Mr. Verdonck said.

Renault Chief Executive Officer Carlos Ghosn said earlier this year that now is not the time for Renault to make a bold move into a new market such as the U.S., arguing that the company must first ensure the success of its industrial expansion in Morocco, in Latin America, India and Russia.

Ford sets early 2010 target to launch small car in India

Armed with a $500-mn investment outlay, Ford Motors has set early 2010 as the target to launch a small car in India, start its new engine-making unit and double the assembly line capacity, a top official said here.

The US-based giant will also unveil its refurbished Ikon by next month to expand its range of offerings in the country that includes Fusion, Endeavour and Fiesta, said Michael Boneham, managing director and president of Ford India.

"Ford now has a presence in only 30 percent of India's automobile market segments. We are entering other segments too. These are exciting times," Boneham told IANS at the company's factory at Maramalai Nagar on the outskirts of the Tamil Nadu capital.

"We are also commissioning a new engine manufacturing unit. It will serve both the domestic and global markets. It will have the flexibility to produce diesel and petrol engines. The idea is to go for higher localisation in the months to come."

Speaking about the small car project, the Ford official said it was being designed and developed specifically for India by a global team. "It will meet the needs of Indian conditions - like water wading, air-conditioning and emission standards."



While declining to divulge any further information on the project, Boneham said it will have a sub-1.2-litre engine with a length of no more than four metres to avoid higher taxes. "It will be very, very competitive in that segment."

Ford's first offering here was the "Josh machine" Ikon that rolled out in 1999 from this city, often called the Detroit of India for hosting auto companies like Hyundai, BMW, Mitsubishi, Ashok Leyland, Caterpillar, TVS, Tafe and Same.

Nissan and Daimler are among some global players that have definite plans to set up their units in this city.

Boneham said the company's integrated engine plant for 250,000 units per annum will be its first outside Europe and will make low-displacement engines for cars to be rolled out of its Indian plant for both domestic market and exports.

He said the existing $26-mn diesel engine assembly plant, with a capacity for 50,000 diesel and 10,000 petrol engines for Fiesta and Fusion, would be eventually integrated with the new plant.

The company has the capacity to assemble some 100,000 cars per year at its facility here, which will be doubled to 200,000.

Queried about the future of its tie up with the Indore-based Avtec that supplies 1.6 litre petrol engines, Boneham said: "We will continue to work with them. We will look at sourcing components from Avtec."

He also sought to dispel the perception that the cost of ownership of Ford cars was high compared with those offered by Japanese and South Korean companies, as several factors like fuel efficiency and servicing were also involved.

"As per our study, in some parts we are costlier and in some others we are cheaper. Overall, we are very competitive in this area. We are working to lower component costs further. Our diesel engine is more fuel efficient than many others," he said.

"High localisation is intended to achieve that. We are extremely quality conscious. Today, we can say we are far more satisfied and comfortable with our vendors."

Daimler sees its Indian sales up 20 percent in 2008

Daimler AG sees its Indian sales rising 20 percent to around 3,000 cars in 2008 on sustained demand for its luxury Mercedes-Benz cars, the chief executive of its Indian unit said on Thursday.

"In India we have 120,000 dollar millionaires roughly. These are definitely our potential customers," said Wilfried Aulbur, chief executive of Daimler's Indian unit.

Mercedes sold 2,487 cars in the first eight months of 2008, compared with 2,491 cars for all of 2007, he said.

Mercedes has a capacity to roll out 5,000 cars in India now and could quickly double it, he said. It assembles the C, E and S class cars in India.

The luxury car market in India is dominated by Mercedes, BMW and Audi. Annual sales of less than 10,000 are miniscule given India's population of 1.1 billion, but are growing rapidly.

Last year the market grew 60 percent and this year it is on course to do double that rate due to new entrants in the luxury segment, Aulbur said.

"If you compare with other emerging countries there is significantly more potential in terms of volume here," he said.

Tata Motors may revive Daimler

TATA Group chairman Ratan Tata has told investors he is considering making a super- luxury version of the car that is a favourite of Britain’s reigning monarch, a British daily reported on Monday.

Ratan Tata, whose Tata Motors bought the marque as part of its $ 2.3- billion purchase of Jaguar and Land Rover earlier this year, was looking to revive Daimler, the Times reported. The car, which is a favourite of Queen Elizabeth II, may be remodeled into a super- luxury version to rival Bentley and Rolls- Royce — funded from a kitty of a billion pounds earmarked to develop new models at Tata- owned manufacturing units in Britain.

The paper said Tata’s plans, which include selling these cars to rich customers in Britain, Asia, Russia and the Middle East, had the support of analysts. It quoted analyst Garel Rhys of Cardiff University as saying: “Tata could make a very good job of this, especially if they target the space between where the top of Jaguar’s current range ends and where manufacturers such as Bentley kick in. Daimler has a fantastic heritage.”

Ford plans to roll out small car by 2010

WITH US automaker Ford’s Indian subsidiary announcing its intention to launch a small car in India by 2010, the Indian small car market is set to witness an explosion of small cars. Carmakers are racing to get products on the road by 2010, with global auto giants like Honda, Nissan, Daimler Chrysler, General Motors and home- grown Bajaj Auto all announcing plans to launch their small car by 2010. Tata Motors’ ultra low- cost ‘one lakh rupee car’ Nano, unveiled in January this year, has ignited competition in this sector, hitherto dominated by Maruti Suzuki.

By 2010, the demand for cars is expected to almost double to two million a year. Said Michael Boneham, managing director and president ,Ford India, “The small car segment has 75 percent share on the Indian market, and when we launch the small car, that’s when the real volumes will come in.” This shift in Ford’s strategy is touted by analysts as a global business strategy adopted by other global automakers like Nissan, Renault, Toyota and Honda. All these have acknowledged the merit and scope of producing an ultra low- cost car (ULC). Besides this, looking at factors like fuel economy and volumes, global auto companies are under pressure to target this growing segment, analysts say. Ford’s small car will most likely be sold with diesel and gasoline engine options, Boneham said, on the sidelines of a news conference, to launch an upgraded range of Fiesta sedan cars.

Ford’s new engine manufacturing facility will be set up in 2009- 10 with a capacity of 2,50,000 units per year. “The plant will fulfill the entire domestic demand and will also cater to the needs for ford in the Asia Pacific region,” said Boneham. Ford currently produces the Fiesta, Ikon and Fusion sedans, and the Endeavour SUV in India. The company had recently shut plants and cut workforce in North America amid financial losses. It has announced plans to invest $500 million in India to expand production capacity and make the new small car.

Ford is also exploring the possibility of introducing eco- friendly vehicles that run on alternative fuels or hybrid cars in the Indian market. According to the McKinsey Global Institute, consumers in the Rs 90,000 to Rs 2- lakh- a- year salary bracket will form the largest portion of India’s income pyramid in 10 years. These form the target for Tata’s Nano. Now, even global auto makers are targeting this segment. Toyota Kirloskar Motor (TKM), a joint venture between Japan’s Toyota Motor Corp. and India’s Kirloskar Group, also plans to invest Rs 1,400 crore on anew plant in Bengaluru, from where it will roll out its small car in abid to tap the largest segment of the car market in India. Said Vaishali Jajoo, auto analyst, Angel Broking, “Growth for global auto markets in developed markets is in single digits, whereas the small car market is projected to show a double digit growth in the coming five years. Besides this the (small car) market contributes over 50 per cent to the overall car sales in the country. Factors like cost efficiency are also a big push for global biggies.” The move has also set off a flurry of activity among component vendors, with most original equipment manufacturers (OEMs) gearing up their volumes for small cars to be launched by Renault- Nissan, Bajaj, Honda, General Motors and others.