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.

Hyundai to launch Santa Fe in India this year

Korean automobile major Hyundai Motor India Ltd would introduce its popular Sports Utility Vehicle 'Santa Fe' in the Indian market as a Completely Built Unit (CBU) this year, a top company official said.

Santa Fe was first introduced globally in 2001 as Hyundai's first SUV.

"We will bring the Santa Fe SUV to India this year. It will be completely built unit. But after two-three years we may consider it for manufacturing as (Completely Knocked Down) unit", company's Managing Director Hang-Woo Park told reporters at the sidelines of a function here.

HMIL Marketing and Sales Vice president Arvind Saxena said the existing SUV, Tucson, would not compete with Santa Fe as both are built on different platforms. "There are no plans to give a facelift to Tucson.It will not compete with Santa Fe". However he declined to name a price for the new variant.

On plans to introduce a 800cc small car, he said it was in the development stage and was planned to be launched in India by 2011. HMIL had invested close to Rs 800 crore on producing the car, whichwould be slotted below Hyundai Santro, he said.

Saxena said the recently launched upgraded version of Hyundai i20 had received very good response from the market.

He said all of Hyundai's models would be given aa facelift. "You know the segments we operate in. We will give a facelift to all models", he said. The Hyundai stable currently offers Santro, i10, i20, Accent, Verna and Sonata models.

He said HMIL planned to sell around 5.25 lakh cars this year, of which 50 per cent is from the domestic market.

Saxena said the number of dealerships would be increased to 320 from 289 at present by the end of 2010.

He claimed the company has a 20.8 per cent market share in South and aimed to increase it to 22 per cent by year end.

Saxena said the company has also identified newer export markets and may export to countries like Vienna, New Zealand, Russia and Australia."Already we are exporting to 110 nations. We want to add another 10 more markets this year", he said.

Park and Saxena were here to officially inaugurate HMIL fourth dealership 'V3 Hyundai' in Chennai.

Hyundai: the little carmaker that could be a world player

Hyundai Motor is merely the hottest major automaker on planet Earth. Not bad for a company that drew little but derision from car buyers after its poorly built, problem-plagued Pony subcompact made its debut in Canada in the early 1980s.

In 2009, while two of Detroit's Big Three carmakers -- General Motors and Chrysler -- were put on life support, Hyundai managed to rack up record profits, boosting its U.S. market share by more than a full percentage point, and securing its spot as the world's fifth-largest auto manufacturer, behind Ford.

Meanwhile, Hyundai's upper mid-priced Genesis model was named 2009 North American Car of the Year, the company's quality ratings continued to win acclaim -- it was the top-ranked nameplate last year among non-premium-priced vehicles, according to J.D. Power & Associates -- and it steadily expanded its global footprint.

In India, where Hyundai's wholly-owned subsidiary now produces some 600,000 vehicles a year, the South Korean company is the country's No. 2 automaker, and top vehicle exporter.

Many of the vehicles it makes are exported to Europe.

In China, where Hyundai's assembly plant in Beijing is owned on a 50/50 basis with a state-owned firm, the Seoul-based carmaker ranks as the country's largest non-domestic automaker. It sells all of its Chinese production in China itself, now the world's largest car market.

Elsewhere, Hyundai expects to complete construction of a new plant in Russia this year, and it will break ground soon on a plant in Brazil.

And in North America, Hyundai's 36-per-cent-owned affiliate, Kia Motors, will open a new plant in Georgia by the end of this month, complementing Hyundai's existing assembly plant in Alabama.

Add it all up, and the total worldwide production capacity of Hyundai and Kia is expected to soar to 6.5 million units by 2011, more than double last year's level.

That's plenty to brag about, especially in view of the troubles that Toyota and other competitors are facing these days. But apparently that's not Hyundai's style.

During an extensive interview at Hyundai's gleaming global headquarters in suburban Seoul, Chaz Lee, director of the automaker's overseas marketing group, takes pains to play down the company's recent ascent, while giving much of the credit to company chairman and CEO Chung Mong-Koo, who took over the top job in 1998.

"I think it was due to our long-term commitment about a decade ago when chairman Chung came into current management. He was very focused on improving our quality," he says.

At the time, Hyundai was still smarting from its initial foray into the North American market, where vehicles like the Pony were considered "a joke" and the company was seen as a bottom feeder.

"The first thing he did was invest in quality, all the processes and everything. So all the investment at that time I think now is paying off, it's been bearing fruit," says Lee.

"And also, the changing atmosphere in the auto industry and the world economy made people think differently and behave differently in their car purchasing. And we just happen to have the right product portfolio. They're looking for cars with good design, relatively solid sound quality, and at the same time, very affordable and very lean on fuel economy. So all these factors made us stand out a little bit. But I don't want to call it success."

A bit of false modesty, perhaps?

"No, no, no. Really, there are a lot of things to tackle and still there are a lot of tests we need to get done," Lee insists.

"Especially our brand, and our design compared to other products. Our brand reputation is not noticed as much or appreciated in the market. So we really need to have our brand image enhanced in the future."

Hyundai is working on that, too. It bought half a dozen ad spots for the recent Super Bowl game, it is spending big ad bucks on the Academy Awards broadcast in March, and it is a major sponsor for FIFA's 2014 World Cup of soccer event.

"We need to go big. Now, with Kia, together being the fifth-largest automaker in the world, we cannot be sitting in the back seat with the second-tier brands. We need to be, and we want to be, recognized as a main player," says Lee.

"And the recent opportunities for our marketing, I think it came to us because of the change of the world, really. We were able to efficiently manage our resources to grab those opportunities, by going to the Super Bowl with our first 30-second ad in 2007. And last year we really took a major part in the place of Buick. So all these things came to us because the world atmosphere has changed, and the industry."

Of course, Hyundai is hardly starting from square one.

It is already among the world's top brands, ranking 69th -- just behind names like Rolex and Avon -- in a recent BusinessWeek survey.

But at Hyundai, that's not good enough. The company exudes the same kind of restless, innovative, 'can do' spirit that seems integral to South Korea's DNA. This is a country that won't settle for second-best.

It's a nation that pulled itself out of abject poverty to become the world's 15th-largest economy, all within about 30 years. While China gets all the glory in the Western media as the global economy's rising new superpower, South Korea's story is no less dramatic.

In fact, since this tiny country of 49 million people is a thriving democracy -- unlike China -- with first-class educational institutions, a world-class high-speed rail system, and infrastructure that is the envy of many Western countries, it is now setting itself up as a model for less-developed Southeast Asian nations to follow, such as Vietnam.

"We just go for it. There is continuous challenge until we get things done. And that kind of philosophy is embedded inside us," Lee says.

Besides its primary auto-manufacturing unit, Hyundai operates dozens of subsidiary companies, from auto-parts makers to financial services, construction and information-technology firms.

It's also investing roughly $5 billion US to build its own steel mill in South Korea, so it can provide steel to its own plants. That includes Hyundai's massive complex at Ulsan, the world's largest auto-assembly operation, with annual capacity of more than 1.5 million units.

That's roughly the size of Canada's entire vehicle market, by way of comparison.

Hyundai's next big target: the upscale car market, where it intends to take aim at brands like BMW, Lexus and Mercedes-Benz this fall. That's when Hyundai plans to launch its much-anticipated premium-priced Equus sedan in the U.S. and Canada.

With its expanding market presence in the world's two fastest growing car markets -- China and India -- and its inexorable climb up the rankings in North America and Europe, plus its stranglehold on the South Korean market, Hyundai is in an almost unassailable position. Provided it doesn't lose sight of the things that got it to where it is today, that is.

Lee says Hyundai isn't about to fall down on the job anytime soon.

"We listen to customers and we try to design and build cars that people love. GM, Ford and Chrysler are big companies with a lot of know-how and a hundred years of experience. But in car design and making products, appealing products, I think we've done a little better job."

At Hyundai, that's as close to an outright boast as you're likely to hear.

Hyundai Unveils Its EV

For Hyundai Motors, it seems like filling the void. The void of entry into electric cars segment. We have of late seen or heard most of the car makers, if not all, join the electric car manufacturing band wagon. Hyundai it looks as if, a strong believer in the adage ‘Make hay while sunshine’.

Hyundai Korea has just done the much speculated thing. After a quick heart transplant in its existing and popular small car i10, the guys in Hyundai have brought out the new Electric Vehicle (EV). This creation will most certainly star in the Frankfurt Motor Show later this month. We hear that the guys in Hyundai Motors have been slogging day in and day out on this project.

Hyundai i10, a small car and a hatch back will be positioned as an example of electric urban or city vehicle. It is said that the Hyundai i10 EV comes with a 66 bhp electric motor powered by a 16 kwh lithium-ion battery. The battery cells are provided by LG Chem. Driving range is 145 kilometers and top speed is 133 kph. 0 to 60 time is a rather leisurely 15 seconds. Hyundai also has added an intrinsic liquid thermal management system in the battery which makes the car charge upto 85 per cent in 15-minutes flat at 413 V. How cool is that?

But Hyundai has borrowed a leaf from GM Volt’s story and is leasing a low volume fleet in Korea in 2010 to understand the psyche of the people and probably would go into global production in 2012. Hyundai says that the battery cost would be above the sky limit for anybody to own at the moment forcing Hyundai will offer these vehicles as lease-only for the foreseeable future. In fact, the price of the pack is greater than the cost of an entire conventional gas-powered i10.

Now for the price update you’ll have been eagerly looking in this blog for. Ladies and Gentlemen, Hyundai i10 EV’s 16 kwh battery pack itself costs, Hold our breath, 10,000 euro. Ok, allow us to translate this complicated currency with our own. It roughly could read something like Rs. 7,00,000. Alright that might sound affordable to you, but we are being polite in reminding you it is just the cost of the battery pack and the whole car could actually cost a bomb.

But since, Hyundai has had at least the courtesy of admitting the battery pack cost of their Electric Vehicle, we also think that GM Volt’s battery cost also should be hovering around in that price range since they also use the same supplier ‘s cells and also have the intrinsic temperature management system.

Ah Guys, We also would like to add something else before we forget. This car though a hybrid in itself, the energy consumption is awesome. Hyundai i10 returns with a mind-blowing mileage of 7.8 miles per kwh. The Volt achieves 5 miles per kwh. Way to go Hyundai. It seems like Koreans can teach a lesson or two in conserving that precious energy.

For us Indians, we should be glad that we have Hyundai’s i10 doing rounds here in India. So we know that it surely would be in Indian shores sometime soon after the global production of the EV kicks off. We also are staunch believers in the adage ‘Better late than never’.

Hyundai Motor India reduces prices of Sonata Transform

The country's second largest car manufacturer and the largest passenger car exporter announced that it will pass on the full benefits of the additional duty of excise reduction announced by the finance minister in the recent budget.

Hyundai Motor India Ltd offers its customers a full range of cars starting from the entry level compact Santro to the premium luxury sedan - the Sonata Transform. According to the duty reduction announced in the budget any car equipped with an engine capacity of over 2 litre will have a reduced excise duty. Earlier the additional duty of excise was Rs 20,000 but after the recent budget announcement this has been brought down by Rs 5,000.

The Sonata Transform is powered by a 2.4 litre engine and hence directly benefits from the duty reduction.

Commenting on the new price Arvind Saxena Sr VP, Marketing and Sales said,

"We have always kept our customers in mind and created value for them. We will pass on the full benefits of the excise duty reduction to our valued customers. The Sonata Transform is a premium car with all the options and it had always catered to customers who looked for the ultimate luxury without having to pay exorbitantly for it."

The new Sonata Transform was launched in January, 2009 and is sold in petrol, Diesel and with an Automatic transmission for the diesel variant. The total cost benefit to the customer will be Rs 5,852 and the new price for the Sonata petrol is now an attractive Rs1,384,448 ( ex-showroom, New Delhi).

Hyundai India to roll out diesel-powered i20 on July 7, 2009

Byoyed by the overwhelming response of the petrol-driven Hyundai i20 in the domestic market, Hyundai India is going a step ahead by launching its diesel variant on 7th July, 2009.

Likely to be fitted with a 1.4L common-rail diesel engine, the new variant is likely to be around 15-20 per cent pricier than the petrol-powered super-hatch, but will offer better fuel economy and improved drivability mainly due to the diesel engine’s higher torque output compared to the petrol.

Unconfirmed media reports also suggest that with the introduction of i20 diesel, Hyundai will also launch the 1.4L petrol version, to be available with an automatic transmission. It is to be mentioned that in the international market, Hyundai already sells i20 with 1.4 lire and 1.6 litre diesel engines.

Bringing Hyundai i20 with 1.4 litre diesel engine will qualify the company for the small car excise norms. However, the official company spokesperson refuses to comment on the engine specifications and other details. Once launched it would be pitted against Ford Fusion, the diesel versions of Maruti Swift & Ritz, Skoda Fabia, Fiat Grande Punto et al.



In India, the Hyundai i20 has managed to buck the trend and is still driving up volumes for the company. Even though the company had priced the i20 at Rs. 4.79 lakh (ex-showroom, Delhi), its bookings have exceeded the company’s expectations, thus propelling the company to ramp up its production. Though it could not be official confirmed, but sources have revealed that Hyundai India has increased its output from 1,000 units/ month to roughly 1,500-2,000 units per month.

Hyundai, which already has a market share of slightly more than 20 per cent in the passenger cars segment in India, is looking at scaling it up its market share to over 25 per cent by 2012. And for that, it is firming up plans to roll out new products in India, in order to strengthen and expand its portfolio of cars here.

Hyundai i20 Awarded Five Star NCAP Rating For Safety

The European New Car Assessment Programme (NCAP) has announced that the Hyundai i20 has gained the maximum possible score and has been awarded the five star NCAP rating for safety. This is indeed a great achievement for a car the size of the i20 as compacts are not known to be high on safety. The i20 after its launch in India and globally has certainly raised the benchmark for compact cars (B segment) not only in terms of performance, build quality, ergonomics and aesthetics but also majorly in terms of occupant and pedestrian safety. And the confirmation of this is the NCAP, 5 star rating which is the first for any car produced in India.

The i20 five-door model scored exceptionally well on all four parameters of the NCAP safety test which assess newly launched cars on four main criteria of safety – adult occupancy, child protection, pedestrian protection and safety assist. The i20 achieved the highest possible score resulting in the highest overall rating.

Notably the i20 attained 88 per cent in the adult occupant protection tests, including the new whiplash assessment. The car’s active head-restraints, front seatbelt, pre-tensioner and six airbags – front, side and curtain – played a key role in achieving success in the tests for frontal, side barrier and car-to-pole impacts.

Equipped with high levels of standard safety equipment, the i20 scored an impressive six out of a maximum seven points in the safety assist category, receiving top marks for its seatbelt reminder and Electronic Stability Control (ESC). The computerized ESC system helps to minimize the risk of skidding by applying brakes to individual wheels to direct the car where the driver wishes to go.

The Hyundai i20 has an extensive list of active and passive safety equipment, including six airbags as standard, active head-restraints, front seat belt pre-tensioners, anti-lock braking system (ABS), Electronic Stability Control, and Electronic Brakeforce Distribution (EBD).

The i20 received an average score of 80.25 percent, the highest among the six models assessed under the new NCAP rating scheme. The average is based on scores from the four categories: Adult, 88, Child, 83, Pedestrian, 64, Safety Assist, 86. Further noteworthy is the fact that the 64% score for the pedestrian protection test is the highest among all models.

Commenting on the achievement, a delighted H. S Lheem MD, HMIL said “This is a proud moment for Hyundai. The i20’s five-star rating is recognition of our commitment to providing customers with class leading safety and performance. The i20’s equipment level which includes a set of six airbags is a benchmark for cars in not only this segment but one above. This and other safety features easily allow the i20 to meet the stringent European safety norms and without a doubt the i20 is one of the safest compacts on road today. As a company we are committed to not only meeting the norms but also bettering them through constant research and development. The NCAP rating will undoubtedly increase the appeal of the i20 for our customers.”

Hyundai Motor India Ltd (HMIL) is the country’s largest passenger car exporter and second largest car manufacturer. The i20 is manufactured at HMIL’s state-of-the-art manufacturing facility in Sreeperumbedur, 35 km outside Chennai. The i20 is only manufactured in India and exported to the European Union and other countries from India and also sold in the domestic market. The i20 was first revealed at the Paris Motor Show in October, 2008 and in November 2008 the first batch was shipped to the European market from HMIL’s Sriperumbedur plant. In India it was launched on December 29, 2009.

These cars are in great demand in India!

The passenger vehicle market may be slowing, but Maruti Suzuki's Swift Dzire sedan and Swift hatchback, Mahindra & Mahindra's utility vehicle Xylo and Hyundai's i20 have long waiting lists that have their manufacturers struggling to increase production.

Xylo, the multi-utility vehicle (base model is priced Rs 6.48 lakh (Rs 6,48,000) ex-showroom, Delhi) that was launched in January this year, has a waiting period of over two months.


Mahindra & Mahindra's xylo

Despite M&M raising prices by Rs 10,000 to Rs 12,000 about a month ago, sales have not been dented, say company executives.

The company had initially set a production target of 120 units a day; unprecedented demand has forced it to raise this to 130 to 135 units per day.

"The top-end variant is seeing the maximum surge in demand," said Pawan Goenka, president (automotive sector), M&M.


Mahindra & Mahindra's Scorpio

The Xylo has even eaten into the share of M&M's sports utility vehicle Scorpio and MUV Bolero. About a quarter of buyers who had planned to buy Scorpio or Bolero booked Xylo, said the company.

Maruti Suzuki's Dzire, the sedan version of the popular Swift hatchback that was launched in March last year, has a waiting period of three to four months for both versions (the diesel variant costs Rs 5.47 lakh (Rs 547,000) and petrol Rs 4.61 lakh (Rs 461,000), ex-showroom Delhi).


Maruti Suzuki's Dzire

"Initially, there were some constraints on availability of engines. Those are over and we are raising capacity.

But demand has also increased," said RC Bhargava, chairman of Maruti Suzuki.

He added, "It is difficult to say if we will have spare capacity to increase production further."

The company initially produced 3,000 Swift DZires a month but had to quickly scale up to 7,000 as demand grew. Bookings, however, crossed 10,000 vehicles a month.

"We have continuously scaled up production for Swift DZire but the demand is still far ahead. The car, which is promoted as a vehicle that meets all aspirational needs, will continue to see healthy growth in demand even in such a downturn," said Mayank Pareek, executive officer (sales and marketing), Maruti Suzuki.

About 65 per cent demand for Swift DZire is for the diesel variant.

Maruti's Swift hatchback has a waiting period of over three months in most markets, with the diesel variant being the most in demand.

Company executives said they were producing over 9,000 units a month but were booking about 11,000.

The petrol version costs Rs 3.99 lakh (Rs 399,000) and diesel Rs 4.67 lakh (Rs 467,000 ex-showroom, Delhi).

Hyundai had priced the i20 at a steep Rs 4.79 lakh (Rs 479,000, ex-showroom, Delhi) when it launched it in December last year and did not expect to sell more than 1,000 units a month.


Hyundai i20

Bookings however, have ranged from 2,000 to 2,200 cars every month.

"Initially we had a waiting list of 60 days but this has come down to 45 days after we increased production.

However, we had not anticipated this response for a car that was considered expensive in its category," said a company spokesperson.

Hyundai says that it has been able to increase production to around 1,500 a month -- which is around 7 per cent of monthly production -- by juggling the production of different models.

Hyundai i10 Achieves New Milestone, Records Fastest 3 Lakh Sale

Hyundai Motor India Ltd. India’s second largest passenger car manufacturer and the largest exporter today achieved yet another key milestone in its decade old journey in India by clocking the fastest three lakh i10 sales since its launch on 31st October, 2007.



Of the three lakh i10 cars sold, over 1.44 lakh cars have been sold in the domestic market and around 1.56 lakh units were exported to over 100 countries across Latin America, European Union, Middle East and South East Asia. Hyundai i10 has achieved the fastest 3 lakh sales in a very short span of time which is the fastest amongst its competitors. The ‘Made in India’ car from Hyundai’s stable went global in December, 2007 when it was unveiled at the Bologna Motor Show, Italy and since then its total export orders have reached a remarkable 150,000 plus units in just over15 months.

Speaking on this momentous occasion Arvind Saxena, Sr VP, Marketing & Sales, HMIL said “Hyundai Motor India Ltd has constantly focused on providing the best for its customers be it design, technology or the best value for money proposition. And the resounding success of the i10 just proves that our customers value these parameters as well and have reinforced our belief that, if we provide the best, we will always be on the fore front be it the domestic or the overseas market. The i10 which meets the stringent safety and emission norms even in the European market has become an undoubted segment leader in both the domestic and overseas market and I sincerely thank our customers in India and in over 100 countries across the world for choosing to drive Hyundai i10.”

The customers and the automotive media were both equally impressed by the i10 when it was launched and the media which backed its belief by conferring upon the i10 all the ‘Car of the Year 2008’ awards making it the first car to win all the Car of the Year awards including the coveted ‘Indian Car of the Year’ (ICOTY) from a jury comprising of the most respected automotive journalist in India – the i10 truly has become a global car.

Santro offered at ten year old price

Scheme offers free insurance, exchange bonus, free car accessories and more

Hyundai Motor India Ltd, India’s largest exporter and fastest growing auto manufacturer, announced special schemes for its customers during the month of December. As part of the scheme, Hyundai is offering free insurance, exchange bonuses and free car accessories on the purchase of Hyundai cars. The flagship model Santro which was launched in 1998 will be available under this scheme at the ten year old, introductory price of Rs 2.99 lakhs.

Hyundai Motor India Ltd has launched the scheme on its entire product range, namely, Santro (GS/GLS/Non-AC), i10 (all variants), Getz (Petrol), Accent (GLE), Verna (Petrol and Diesel). All Santro GL (Solid) purchases will get a special price of Rs. 2, 99,000. Santro Non AC, Santro GLS and i10 buyers will be eligible to get free insurance as well as car accessories worth Rs.7, 000, Rs. 15,000 and Rs. 5,000 respectively.

There are some interesting exchange schemes as well. Hyundai customers can avail the exchange benefits up to Rs. 20,000 on all the above cars. Also, a loyalty scheme has also been announced where in existing Hyundai customers can avail the loyalty discounts up to Rs.20,000 on purchase of new Hyundai Getz (Petrol), Accent (GLE), Verna (Petrol and Diesel) .

On the announcement of December schemes, Hyundai Motor India Ltd, Senior VP, Marketing & Sales, Mr. Arvind Saxena said, "We at Hyundai Motor India are committed to provide the best of benefits to our customers who are already a part as well as new members of of the Hyundai family. The schemes announced will provide our customers with an attractive value for money proposition and with the prevailing economic conditions this should provide an impetus for our sales and offset a part of the ownership cost which has gone up considerably in the past few months.”

Automatic cars find many new women buyers The auto industry has some new positioning working out to its advantage. Automatic transmission cars are se

The auto industry has some new positioning working out to its advantage. Automatic transmission cars are seeing brisk sales, thanks to the growing number of female customers who have developed a penchant for such cars. It is widely believed that automatic transmission variants of a number of models are finding a lot of woman takers as it enhances the comfort to drive such cars.

A number of companies that have lined up new automatic transmission-enabled models like Hyundai's i20, GM's Captiva (AT version), Fiat's Linea et al. Moreover, the recently launched models like Honda City, Mitsubishi Outlander, Mahindra Scorpio etc are already equipped with the aforesaid feature. Unlike before, carmakers are offering new-age five to six speed automatic transmission systems which are offering better fuel-efficiency along with improved pick up and performance.

One of the top-selling cars of such variants is the premium hatchback car-i10, which is selling over 1,600 automatic transmission variants per month, which is more than the company's initial estimates.

It was reported earlier that Mahindra & Mahindra Ltd. (M&M), on 22nd September'08, has launched the Scorpio Automatic in Pune and Bangalore, which incorporates a fully automatic 6-speed gearbox and the powerful 2.2 litre mHawk engine. Scorpio is the first Indian brand and the first SUV in its class to offer a 6-speed fully automatic transmission.

According to a senior representative of Hyundai Motor India Limited, the sale of automatic variants of i10 have exceeded the company's expectations. He added that there has been an overwhelming response from woman drivers and the growing congestion in the urban centres is pushing up demand. He also indicated that the company will also roll out the automatic transmission variant in its Verna sedan too and would also bring a variant for the physically challenged.

Commenting on the new trend, one of the top honchos of Honda Siel Cars India (HSCI) has stated that the company sells the automatic transmission variants for most of its models like Civic, Accord, City, CRV. He added that female buyers are inclined towards high-end features and automatic transmission is one of them.

According to a senior official of GM India, the Captiva model has been selling like hot cakes. Buoyed by the burgeoning demand, the company has decided to launch the automatic variant soon (with a four-wheel drive), that will cost around Rs. 20 lakh.

Biodiesel Fuels Mandatory For All Cars In India

The new biofuel policy was announced this month which makes blending of 10 percent bio-fuel with petrol mandatory from the year 2012. It will be hiked to blending of 17 percent from the year 2017. All the major auto companies have taken a note of the same and have started to design new plans for their future launches that will run in alternative fuels.

Car companies in India are either planning to launch new variants or make changes to their existing models. Tata Motors, Hyundai and Maruti Suzuki are planning to launch variant of their existing models while General Motors and Nissan are planning to bring this technology from their existing markets. This technology is applicable only on E10 and E20 engines which has left several car manufacturers wondering about the possible solution for their models. Presently, only Honda and General Motors have E10 compliant cars and General Motors is planning to introduce models with E20 engines as well. Such a move may further increase the car model prices in India.

On the other hand, Maruti is also planning to launch E10 compatible models by the end of current calendar year. “Our present lot is E5 compatible but we are confident of offering E10 to the market soon, since this requires minor changes in the engine,” said the official.

The new Hyundai i20

The new Hyundai i20 is all set to be launched at the Paris Motor Show in October. The new hatchback model is currently under production at the Chennai plant of Hyundai Motors India Ltd. Official pictures of the new Hyundai i20 are yet to be released. The production version of the new model from Hyundai i-series will be launched at the Paris Motor Show in October this year.

The new Hyundai i20 shall replace the Getz model in the European markets and the company hopes that it shall become the next best seller. Hyundai is also debuting the latest i20 blue concept which would reflect the advanced low emission concepts from the company.

Hyundai plans to become the largest car manufacturer in India and occupy larger market share. It has already made India as its global manufacturing and exports hub for its small cars. It has its plant located in Chennai and uses Chennai port for all its exports. It also plans to launch new models in India to expand its product portfolio in the country.

Hyundai to Bring Full I-Series Small Cars to India

Hyundai Motor India Ltd. is bringing its entire i-series range of compact cars to India in a well-orchestrated plan.

Despite a gloomy market, Hyundai is riding high on the i10, launched last year. The new model in its first seven months sold more than 65,000 units in India.

The subcompact now offers a choice of a 1.1L Epsilon or 1.2L new Kappa engine. The newer mill has more power, improved fuel economy and meets Euro-5 emissions standards with 119 g/km of carbon dioxide.

“With continuous innovation in technology and design, the engine is the best in its class,” says Hyundai India Managing Director and CEO H.S. Lheem. “With continuous innovation in technology and design, the engine is the best in its class,” says Hyundai India Managing Director and CEO H.S. Lheem.

The Hyundai i20 Getz replacement, which makes its debut at the Paris auto show in October, will be available here by December, and in two years time the i30 and i40 will arrive. Additionally, the auto maker in the next three to four years will offer an 0.8L small car now under development that will launch globally from India.

The i20 will be built alongside the i10 at Hyundai’s recently opened, second Indian facility in Sriperumbudur. Parent Hyundai Motor Co. Ltd. insists it is not looking to compete with the super low-priced Tata Nano, which will sell for $2,500.

“(The) Nano is not our focus segment. We do not have the capability or expertise to match Tata (Motors Ltd.),” Lheem says.

Hyundai India’s combined domestic sales and exports jumped 33.9% in August, to 44,710 units. That compares with declines at Maruti Suzuki Ltd., down 9.2%, and Tata, off 6.2%.

To meet the industry slowdown, Hyundai India has changed its production plans. In the year’s first-half, the auto maker built 58% of its cars for local consumption and 42% for exports.Second-half builds will see 45% earmarked for the domestic market and 55% for export.

Hyundai is India’s largest exporter of cars, shipping 23,100 units in August. Hyundai also has deferred its decision to introduce a third shift at its new plant with a 300,000-unit annual capacity in the wake of the slowing market here. The plant produces about 830 vehicles per day with two day shifts. The nightshift, if introduced, would have added 1,200 workers and taken output to 1,190 vehicles per day. Hyundai’s first plant, which also has an annual capacity of 300,000 units, employs three shifts and rolls out 1,080 vehicles per day.

Hyundai India sells 10 models, with 30 variants across all the segments.

The new Kappa mill is manufactured at Hyundai’s newly opened $250 million engine and transmission plant in Chennai that has annual capacity for 250,000 units.

Developed over a period of 48 months, the Kappa is being produced in three variations for India, Europe and other world markets.

The India version has a displacement of 1.2L and generates 80 hp. For Europe and other markets, the engine has a 2.5L displacement.

The Kappa-equipped i10 here will be available with a 4-speed automatic transmission. “Looking at the current market scenario, we are happy with Hyundai’s overall sales,” says Arvind Saxena, senior vice president. “This again reinforces our belief that a strong product portfolio will see you through the tough times.”

Hyundai studying US market for i10 launch

Hyundai Motor India is studying the US market to develop strategies for launching its small car, the i10.

The US is not a “small car market” and hence introducing the i10 will involve careful study of the market.

“The ‘Elantra’ is considered a small car in the US,” said Han-Woo Park, referring to the 1.8-litre, Rs 8-lakh car, one of the premium vehicles in India.

While the Americans are not typical small car buyers, changes in the economy and rising oil prices could cause a shift in preference towards the more fuel-efficient vehicles, Park told Business Line today.

The i10 was launched in October last year and has already sold 190,000 numbers. Hyundai expects to cross the 200,000-mark in less than two weeks from now.

Nearly half the sales have been outside India — something that has given Hyundai India the confidence to take it across the Atlantic.

The car, manufactured only in India, is currently sent to over 100 countries.

Hyundai has an overseas order backlog of 15,000 cars. To mark the success of the i10, Hyundai India is taking two cars of that model to the Paris Motor Show that is to take place early October.

The cars are to be flown to Istanbul and will be driven through a circuitous route touching several countries in Europe, before reaching Paris.

The journey of the i10 began on September 10 at New Delhi, when the cars were flagged off from the India Gate.

The Indian leg concluded with the arrival of the cars to Chennai today. From here, they will be airlifted to Istanbul.

Reworked engine

To suit European tastes, Hyundai India has played around the Kappa engine, giving it a 50 per cent additional power.

Since the launch of the 1.2-litre Kappa engine last July the company has churned out about 25,000 units of i10 with the new engine.

The demand for Kappa engine has been increasing since the engine is Euro 5 ready and emits only 119g/km of CO2, which is the lowest for this class of cars.

However, for the European customers, the capacity of the Kappa has been raised to 1.25-litres. The increase of 50 cc in the cubic capacity of the combustion chamber supports the additional power and torque requirements of European customers, said the Vice-President (Operations) of the company, M. Inderjit.

Besides it also supports the additional load drawn by accessories like heater and such things that consume more power from the battery, he added. At present about 60 per cent of the i10s exported is with Kappa engine, the rest feature the 1.1-litre ‘Epsilon’ engine.

Customers consider fewer models before buying cars

In what should ring the alarm bells for car-makers already facing a sales downturn, Indian customers are considering fewer models before making purchase decisions, global marketing information services firm JD Power said in a study.

"Twenty seven per cent of new vehicle buyers in India in 2008 considered at least one other model before purchasing their vehicle, compared with 38 per cent in 2007. This marks the first significant decline in cross-shopping rates since 2005," said JD Power Asia Pacific 2008 India Escaped Shopper StudySM.

The study compared shopping behaviour of two groups of customers -- buyers of recently launched models and buyers of models that have been on the market for more than two years.

For a fourth consecutive year, Maruti Suzuki India performed well in persuading shoppers to purchase the brand, with 38 per cent of all shoppers eventually purchasing one of its models.

Among other vehicle makes included in the study, buyers of Mahindra-Renault and Hyundai tend to shop around the most before purchasing their vehicles, while Skoda and Mahindra buyers were least likely to consider another model in their shopping process, the study added.

"The introduction of several new models into the market during the past few years as well as increased advertising by manufacturers is likely to create greater dissonance in the minds of shoppers and cause them to turn to friends or relatives for reliable advice," JD Power and Associates Senior Director Mohit Arora said.

As a result, consumers were being more decisive during initial stages of the purchase process and fewer car buyers were considering multiple models, he added.

Hyundai aspires to become the No 1 car manufacturer in India

At the 10th anniversary celebration, Hyundai Motor India Ltd's (HMIL) MD & CEO, HS Lheem, said: "We hope to become the no 1 car major. While our current market share in the domestic market stands at 22 per cent, we hope to become the largest car manufacturer in the time to come." Lheem declined to comment on a time-frame towards achieving this goal.

Maruti Suzuki is the market leader by the number of cars it sells in the country annually, and holds a market share of a little less than 40 per cent. HMIL spelt its plans for the future which includes launching at least two new models every year, focussing more on the development, production, and exports of small cars like the "I 10" and soon to be launched "1 20". Parent Hyundai Motors based in Korea has designated India as the small car hub.

IN addition to increasing its production capacity in Chennai, Hyundai plans to raise its current research and development staff strength pegged at 200 to about 800 in 2009.

Carmakers offer gifts and gold to lure customers

It’s raining gold in the car market. Fighting sluggish market conditions, carmakers are offering diamonds sets, gold coins & chains, silver plates and MP3 music systems to lure customers into their showrooms before the festive season.

Traditionally, festive season has meant free insurance covers and auto accessories for buyers. However, this time around, carmakers such as Hyundai Motors and Ford India are offering precious metals to attract female customers and new buyers. Hyundai Motor India (HMI) is offering a free gold coin with its entire range (except i10 AT and Getz 1.5L CRDi) and an MP3 player with the Verna sedan range and the 1.1L & 1.3L Getz hatchback cars.

HMI managing director HS Lheem said: “We are offering these gifts as part of our successful decade-long operations in India. Besides, with these valuable offerings, we’re making Hyundai products very attractive for our customers.”

While Ford Motors India, which recently gave a facelift to Fiesta, is now offering Tanishq diamonds worth Rs 20,000 with every Fiesta. It has also started special offers including cash incentives for corporate and public sector buyers.

Car sales have nosedived in the past two months after a three year-long growth drive. While sales grew 3% in July, August saw a 1.71% dip year-on-year. To fight the slowdown, other companies are taking different routes to tap the market. Maruti Suzuki India has launched special incentives to attract over 25.4 lakh employees from the insurance, banking and retail sector with additional discounts of Rs 17,000 on SX4, Rs 5,000 on M800 & Alto, Wagon R, Estilo and Rs 4,500 on Swift (petrol version).

“It is a tough time and we are concentrating on non-core markets. Banks, financial institutions and insurance companies make up a big market, but still remain tapped. We are directly giving cash discounts to customers in place of tangibles,” a senior executive of Maruti said.

American auto major General Motor has also followed the similar path offering huge cash discounts. The highest cash rebate of Rs 58,000 comes on the Spark compact car, followed by Rs 46,000 on Tavera multi-utility vehicles. Other pre-Diwali offers include Rs 28,000 discount on Optra Magnum sedan along with a 4-5% interest waiver on all loan deals.

Honda Siel Cars India (HSCI) has plunged into the discount market for the first time and has waived 50% insurance premium on its popular City and Civic sedans, besides offering comprehensive warranty and service packages to the customers.

2008 Paris Auto Show: Hyundai Targets Ford Fiesta With New i20

Hyundai laid out its plans for the 2008 Paris Auto Show on Wednesday, including its centerpiece, the i20, which has such stalwarts as the Ford Fiesta, Volkswagen Polo and Opel Corsa in its crosshairs. The all-new i20, which will join the ranks of Europe's supermini segment, makes its world premiere on October 2 as the replacement for the Hyundai Getz.

Hyundai, while being stingy with details, noted that the five-door has a "longer wheelbase than the existing Getz and is both bigger inside and more dynamic in appearance." The new i20 was designed at Hyundai's European Design Center in Russelsheim, Germany. Exterior cues include a chrome-topped grille and teardrop-shaped headlights.

"The i20 was designed and engineered to meet European tastes and needs," said Kun Hee Ahn, Hyundai Motor Europe president, in a statement. "It was built on an entirely new platform, and much of the ride and handling development took place on European roads."

There are no plans to bring the i20 to the U.S. at the moment.

Hyundai also said it will introduce a low-emissions i20 i-blue concept, which is based on the i20 production model, at the 2008 Paris Auto Show. The concept version gets Hyundai's new 1.4-liter CRDi diesel engine which delivers 88 horsepower and generates 162 pound-feet of torque. The engine is mated to a six-speed manual transmission. Hyundai said the concept returns the equivalent of 45 miles per gallon.

Hyundai said it will also show off the Santa Fe gasoline-electric hybrid concept at the Paris auto show. The Korean automaker said this concept has a "new hybrid drive system which mates the current 2.4-liter [gasoline] engine to a six-speed automatic transmission and a 30kW electric motor powered by lithium-ion batteries." This concept returns the equivalent of 36 mpg.

Hyundai will also display its seven-passenger ix55 SUV at Paris. The ix55 is spun off the Hyundai Veracruz and is being shown in what is described as "production-ready form."

GM invests $200 million in powertrain plant in Maharashtra, seeks to increase market share

General Motors (GM) Corp, which aims to increase its market share to 10 percent by 2010 in India, has announced that it will ramp up its manufacturing facilities by investing more than $200 million in a powertrain plant in Talegaon, Maharashtra.

The facility, expected to be complete by the first quarter of 2010, will have an annual production capacity of 160,000 units that can be expanded to 300,000 units, GM said in a statement.

GM's auto plant in Talegaon is set to be operational this week and around 140,000 vehicles are expected to roll out every year, taking GM's all-India annual capacity to 225,000 vehicles.

The company has a plant in Gujarat from where it makes the Chevrolet-badged Tavera, Optra, Aveo and Spark and a technical center, including a design studio, in Bangalore. It imports the popular sport utility vehicle (SUV) Captiva.

Karl Slym, president and managing director of GM India, said the company is working on the design of its new small car, which it plans to launch in 2009.

The company has plans to roll out the small car from its new plant at Talegaon, Slym said, adding that the small car will be sold in India and exported to other emerging markets.

"The Talegaon engine facility is an important component of GM's global strategy to establish a strong presence in this market. This is just one of a number of investments, totaling more than $1 billion that GM has made over the course of the last few years in emerging markets around the world such as China, Korea, Russia and India," Slym said.

"We cannot remain a global industry leader without a strong presence in the high-growth market of India. The new facility will enable us to continue expanding our product line-up in India," Slym said, adding that the launch of the small car will enable the company "to capture more opportunities in one of the fastest-growing vehicle markets in the world."

The small car will not compete with Tata Motors' Nano, which is being touted as the world's cheapest car with a price tag of $2500.

According to market data, India sold about 1.4 million four-wheelers last year compared to 5 million in China and over 10 million in the US. Annual passenger vehicle sales are forecast to rise to 2 million units by 2010 and Indian car sales are expected to more than quadruple to $145 billion by 2016, with small cars accounting for more than two-thirds of sales.

However, GM is not alone in this emerging small car market. Other automakers have also expressed interest in developing and marketing the small car in India.

With India's middle class population growing in number, several automakers including market leader Maruti Suzuki, South Korean Hyundai Motor Co. and India's Tata Motors have begun focusing on the low-cost small car segment.

In January, Tata Motors launched Nano, which is expected to give stiff competition to Maruti Suzuki's existing line-up of small cars like Maruti 800, Alto, Wagon R and Zen Estilo. Hyundai Motor India Ltd. also came out with its compact car called i10, and plans to launch an upgrade, the i20, later this year.

In May, the Renault-Nissan alliance also announced that it has partnered with Bajaj Motors for launching a low cost car that will rival Nano by 2010-11.

Also entering the small car market is Japan's Toyota and its rival Honda, which have set up their second manufacturing plants in Karnataka and Rajasthan respectively to launch their small cars by 2010 and 2009. US-based Ford Motor Co. and Germany's Volkswagen AG also have shown interest in making small cars in India.