Merc mulls engine, gearbox unit in India

German auto giant Mercedes-Benz is contemplating setting up a plant to manufacture engines, gearboxes and other components in India at a whopping investment of Rs 2,500 to Rs 3,000 crore. While plans are yet to be finalised, the lower cost of manufacturing in India has compelled the company to give a serious thought to the proposition, Harald Landmann, the bus business head for Mercedes-Benz said at the launch of the company’s intercity luxury bus in Pune.

Assembled at Sutlej Motors in Jalandhar, the Rs 80-lakh bus will compete with its Swiss counterpart Volvo in the fast growing Indian luxury bus segment.

“We are yet to figure out when the entire bus building operation, including the development of engine and gearboxes, will happen in India. However, we are looking at a possibility to set up a manufacturing unit over the next three to five years,” Landmann said, speaking to reporters after the launch.

While Landmann did not disclose the location to set up this unit, officials close to the development hinted at Pune or Chennai.

Mercedes Benz is setting up its new facility at Chakan to manufacture cars as well as buses, which will begin operations in January. The company is expected to move all its operations from its present plant in Chikhali to Chakan. Considering this, the company might set up the engines and gearboxes unit in the vicinity of the Chakan plant.

“As our new manufacturing unit is coming up at Chakan, the engine and gearbox manufacturing should ideally happen in the same region. Since Pune has a strong automobile component industry, the unit has to come up nearby,” an official stated.

Once the company draws a concrete plan for the Rs 2,500-crore project, it will approach the Maharashtra government for approvals. “We might explore other states to set up the engine-gearbox facility if things do not work out in Maharashtra,” he added. Apart from Pune, Chennai could be the other option for this project.

Elaborating the business plan for the newly launched bus, Landmann said, “Mercedes-Benz enjoys a 17 per cent market share in the global luxury bus market. We have built the new bus on our versatile O500 R/RF chassis, which is being developed at the Pune plant. While most of the components are being imported from a Brazil-based unit, the chassis-building acitivity will happen in Jalandhar through an agreement with Sutlej Motors.”

“The luxury bus market is growing in India. Volvo, so far the only significant player in India, sold some 350 buses last year. Our plan is to earn a significant market share within the first year,” Mercedes-Benz India Managing Director Dr Wilfried Aulbur said.

Merc mulls engine, gearbox unit in India

German auto giant Mercedes-Benz is contemplating setting up a plant to manufacture engines, gearboxes and other components in India at a whopping investment of Rs 2,500 to Rs 3,000 crore.
While plans are yet to be finalised, the lower cost of manufacturing in India has compelled the company to give a serious thought to the proposition, Harald Landmann, the bus business head for Mercedes-Benz said at the launch of the company’s intercity luxury bus in Pune.
Assembled at Sutlej Motors in Jalandhar, the Rs 80-lakh bus will compete with its Swiss counterpart Volvo in the fast growing Indian luxury bus segment. “We are yet to figure out when the entire bus building operation, including the development of engine and gearboxes, will happen in India.
However, we are looking at a possibility to set up a manufacturing unit over the next three to five years,” Landmann said, speaking to reporters after the launch. While Landmann did not disclose the location to set up this unit, officials close to the development hinted at Pune or Chennai. Mercedes Benz is setting up its new facility at Chakan to manufacture cars as well as buses, which will begin operations in January. The company is expected to move all its operations from its present plant in Chikhali to Chakan.
Considering this, the company might set up the engines and gearboxes unit in the vicinity of the Chakan plant. “As our new manufacturing unit is coming up at Chakan, the engine and gearbox manufacturing should ideally happen in the same region.
Since Pune has a strong automobile component industry, the unit has to come up nearby,” an official stated. Once the company draws a concrete plan for the Rs 2,500-crore project, it will approach the Maharashtra government for approvals. “We might explore other states to set up the engine-gearbox facility if things do not work out in Maharashtra,” he added.
Apart from Pune, Chennai could be the other option for this project. Elaborating the business plan for the newly launched bus, Landmann said, “Mercedes-Benz enjoys a 17 per cent market share in the global luxury bus market. We have built the new bus on our versatile O500 R/RF chassis, which is being developed at the Pune plant.
While most of the components are being imported from a Brazil-based unit, the chassis-building activity will happen in Jalandhar through an agreement with Sutlej Motors.”
“The luxury bus market is growing in India. Volvo, so far the only significant player in India, sold some 350 buses last year. Our plan is to earn a significant market share within the first year,” Mercedes-Benz India Managing Director Dr Wilfried Aulbur said.

Compact car ‘A Star’ is born

Maruti Suzuki is all set to launch its much-awaited next generation ‘K’ series engine that will be introduced in all its cars in India in the next three to five years. It will also be critical for the success of Japanese Suzuki Motor Corporation’s future strategic global models.

Being seen as a “generational change” in Suzuki’s engine technology, the ‘K’ series engine will be rolled out from Maruti Suzuki’s new engine plant at its Manesar (Gurgaon) complex next month. Apart from being Euro IV and Euro V-compliant, the new engine will be highly fuel-efficient that will be first introduced in soon-to-be-launched global car ‘A Star’.

Both Suzuki and its Indian subsidiary Maruti are banking heavily on its compact world car ‘A Star’ that will be equipped with new one-litre petrol engine. Japanese carmaker Suzuki hopes that the “green engine” would give it a strong foothold in the European markets. And for Maruti Suzuki, the new compact car would help further consolidate its position in the Indian car market and prove to be a timely answer to other newer products being launched by its competitor in the fast growing Indian automobile market.

The new engine holds much significance for Suzuki whose Chairman O. Suzuki, is on a three-day trip to India from Monday. He will also be visiting the new engine facility, that is part of the Rs. 9,000-crore investment being made by Suzuki Motor Corporation in India, and discuss the company’s future strategy vis-a-vis the ‘K’ series engine with Maruti’s top management. Mr. Suzuki would also preview ‘A Star’ at the Manesar (Gurgaon) assembly plant that is undergoing capacity expansion to reach three-lakh units.

‘A Star’ will make its India debut within a few weeks and then enter the European market early next year. While its one-lakh units would be exported to Europe, 50,000 units will be sold in the domestic market.

Currently, Maruti Suzuki has five types of engines used in its different models. The F-series engines in the Maruti 800, Omni, Wagon R and Zen Estillo, the G-series (two variants) in the Swift, Dzire, Esteem and Versa, the M-series in the SX4, and the K-series in the ‘A Star’.

Maruti India Sales Falls First Time in Five Months

Maruti Suzuki India Ltd., maker of half the cars in the country, said sales fell for the first time in five months in August as higher interest rates and inflation damped demand.

Sales fell 9.2 percent last month to 59,908 cars, vans and sport-utility vehicles, the New Delhi-based unit of Suzuki Motor Corp. said in a statement today. That was Maruti's biggest decline in monthly sales since Feb. 2006, according to Bloomberg Data.

Interest-rates at a seven-year high and the fastest inflation rate in 16 years are squeezing consumer spending in India. Slowing growth may undermine a government target of tripling car sales to 3 million vehicles annually by 2015.

"Condition for auto sales have been deteriorating,'' said Mahantesh Sabarad, an analyst with Centrum Broking Pvt. in Mumbai, who has an "accumulate'' rating on the stock. "there has been a substantial increase in interest rates and fuel prices also went up.''

More than half of the vehicles sold in the nation are bought on credit. Maruti said domestic sales fell 10.2 percent to 54,113 vehicles in August. Exports gained one percent to 5,795.

Maruti, 54 percent owned by Japan's Suzuki Motor, fell 2.1 percent to 635.9 rupees at 10:36 a.m. in Mumbai trading.