BMW, Audi race to take on Merc

The battle for the top spot in the country's top of the line luxury car segment is getting more intense and Mercedes Benz's near ten-year-old stranglehold in the market is under serious threat.

While BMW is the odds on favourite having already steered ahead in the first quarter of this fiscal, Audi has emerged as the dark horse in the fight. By the end of last fiscal (2008-09) in March, Mercedes Benz India held on to its leadership position selling 3,537 cars. But the signs of a change in the pecking order were there with BMW exceeding its own target and also selling more than 3,000 cars in the year.

"This market is already challenging and without doubt the competition is getting more and more intense," said Peter Kronschnabl, president BMW India. The three German companies are now racing against each other to expand their presence in the hinterland."Our involvement with tier II cities is growing at a fast pace and we are confident that these cities reflect the future growth pockets and offer good potential. We investing Rs 150 crore to expand to new cities as also to upgrade our existing network," said Dr Wilfried Aulbur, MD and CEO, Mercedes Benz India.

Airlines cut fares to beat monsoon woes

At a time when airlines are struggling to make both ends meet, reduction in fare from the carriers comes as a shocker. Airlines have introduced low fares to increase yield per passenger. The motive behind reducing fares, say industry observers, is to stimulate air travel when business and leisure travel take a backseat during the monsoons.

Air India has set the trend by introducing fares as low as Rs 2,429 on the Delhi-Mumbai route. Fares on short-distance sectors start at Rs 1,979. Air-tickets with these special fares can be purchased between June 27 and July 3 for travel before September 15. Ironically, the carrier has recently requested its higher rung executives to forgo salary for July and has also taken initiatives to curtail monthly operating costs.

Private carrier Jet Airways, which reported losses of Rs 961 crore for FY08-09, has also brought down its fares to Rs 2,000 on Mumbai-Hyderabad sector which otherwise was priced over Rs 5,000. The carrier has downsized its staff and has also downgraded salaries of its employees to improve its financials.

Low-cost carrier SpiceJet has introduced low fares at Rs 1,600 for Mumbai-Jaipur flight for the next three months. These carriers had hiked their fuel surcharge by Rs 400, only a week ago, but reversed their decision.

Samyukta Sridharan, SpiceJet's chief commercial officer, while speaking at the conference in Mumbai, said, "We have special fare schemes to stimulate non-travellers to book tickets. The reduced fares encourage travellers to fly with us. However, passenger service fee and applicable airport charges are in addition to the prices." Says an executive from a carrier, "Seats on the aircraft are perishable commodities. Once the doors of the aircraft are closed, the empty seats do not have the potential to earn revenues. Carriers introduce fares to fill up those vacant seats during lean season."

Flying low

Air India has introduced fares as low as Rs 2,429 on the Delhi-Mumbai route.

Jet Airways has brought down its fares to Rs 2,000 on theMumbai-Hyderabad sector.

SpiceJet has introduced low fares at Rs 1,600 for Mumbai-Jaipur flight.

As rains ground fliers, airlines rain schemes

With passenger load declining in the ongoing lean season, airlines have come up with special monsoon offers to lure leisure passengers. This limited period all-inclusive (except airport tax) offers are nearly 50 per cent lower than normal fares, said airline executives.

Tickets need to be booked before July 3, and travel before September 15. Air India, for instance, offers Mumbai-Delhi, Mumbai-Chennai, Mumbai- Bangalore flights at Rs 2,479, inclusive of all taxes except for airport UDF. The fare from Mumbai to Kolkota is Rs 2,729, while for all short sectors it is just Rs 1,979.

Jet Airways group - inlcuding full service Jet Airways and low cost services JetLite and Jet Konnect - has also aggressively lowered fares in its monsoon offer. "We come out with such offers to exhaust unsold inventory. Past experience had shown good results and seat load goes up by 10 to 15 per cent. Such offers give us top line growth," said Rajshiv Kumar, head, revenue management, Jet Airways.

Jet Airways is charging a mere Rs 250 over its low-cost arms to lure passengers. While the highest fare in Jet Airways for distances above 1,400 kms is Rs 2,750, the cheapest seat offered by Jet Konnect for distances below 750 kms is Rs 1,750.

SpiceJet is offering fares starting from Rs 1,500 for its 18 destinations. Passenger Service Fee and relevant airport charges are charged extra. "These unbeatable low fares will encourage more people to fly," said Samyukth Sridharan, CCO, SpiceJet.

GoAir has announced a special promotional offer for all flights operating from and to Ahmedabad, with one-way fares starting at Rs 1,500. Besides this, the airline is offering complimentary snacks to fliers at the departure hall in Ahmedabad before boarding, the airline said.

Paramount Airways has also lowered fares for the season. For select destinations, a Paramount passenger can avail all-inclusive fares as low as Rs 2,229. Airlines those increased fuel surcharge by Rs 400 early this month are worried about declining traffic.

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.