Mitsubishi Motor Corporation's plan to produce a volume-generating compact car from India has been indefinitely deferred for lack of funds and sliding demand.
After launching the Nano early this week, the country's leading truck and bus maker, Tata Motors, is now looking to set up a truck manufacturing plant in Myanmar with support from the Indian government in the form of financial participation.
Typically, about 70 per cent of a car dealer's revenue comes from businesses like servicing, arranging finance, sale of spare parts and accessories, insurance renewals, offering driving lessons, etc. A New Delhi-based dealer said even those ancillary services might not fetch them the margins they earn from servicing other models of Tata Motors like Indica and Indigo.
The Mumbai-based company will take on Hero Honda, Bajaj Auto and HMSI and will have models in the 100cc, 125cc and 150cc mobike segments, and also in the ungeared low and high-powered scooter segments. Hero Honda has a 60 per cent share of the motorcycle segment, while HMSI commands a 58 per cent of the scooter market. Anand Mahindra said: "Our two-wheeler project is complete; we have already begun marketing the fleet in Bangalore."
"The scene will be a bit like the Maruti 800 days. Those who are lucky enough to be allotted cars this year can resell it immediately at a premium of Rs 30,000 due to the anticipated shortage," an executive at a Motors dealer said. Supply, Tata Motors dealers say, would be between 40,000 and 50,000 cars, with 100,000 being the most optimistic estimate. This would mean customers may have to wait for up to two years to get delivery if all the bookings are accepted.
Prices of second-hand cars, mainly compact ones, have fallen 15-20% in the last few days. Dealers in the unorganised market fear a further price dip of 10 per cent when delivery starts and the Nano is seen prominently on roads. The Nano, expected to sport an on-road price of Rs 1.25-1.3 lakh for the no-frills, base version, will compete with the compact cars of Hyundai Motors, Maruti Suzuki, Tata Motors and General Motors.
Tata Motors subsidiary Telco Construction Equipment Company Ltd (Telcon) has opposed a proposal to the Foreign Investment Promotion Board (FIPB) from John Deere for a joint venture with Ashok Leyland to distribute and market its construction equipment in India.
SBI may charge 14 to 14.75% for 5-year loans.
Part of government strategy to push demand.
The Honda company is working on entering the same segment, with a sporty bike, in 2010. It hopes to sell a few lakh of these a year, to begin with
Automobile component manufacturers are rejoicing over a sudden 30-40 per cent spurt in demand in February. Analysts are, however, not entirely sure of the reason for this high growth; many are doubtful if it can be sustained, given the other gloomy signals. An analyst says, "Almost all car makers have either completely withdrawn or drastically reduced their promotional offers." Also, payment issues as far as vendors are concerned remains a problem.
At a time when the economic slowdown is eating into corporate earnings, the country's economy hotels, including Krizm Hotels and Berggruen Hotels, are going ahead with their expansion plans.
Sales of Maruti Suzuki India during January-December 2008 stood at 697,850 units while those of Suzuki Motor Corporation for the same period stood at 679,215 units. The comparable growth for MSIL in India comes on the back of an almost 2 per cent decline for the company in a year-on-year basis during the calendar year. Its sales were higher in calender year 2007 at 710,532 units, according to the data provided by the company.
Surinder Kapur, president of the company's 'vendor council,' said it has about a dozen representatives from Tata Motors and an equal number from the vendors. "We supply for about 4-5 per cent of our revenues to Tata Motors and we do not have payment issues," he said. Lumax, which derives about 15 per cent of its turnover by supplying almost half of the lighting solutions for Tata Motors worth about Rs 60 crore a year, said they had not experienced any payment issues.
The country's largest manufacturer of commercial vehicles by sales, Tata Motors, is lifting the production curbs imposed between October and December last year across all its plants that make commercial vehicles.
Tata Motors, which owns Jaguar and Land Rover, is in talks with the UK government on assistance for the luxury units as sales have plummeted.
Ford India, the Chennai-based automobile company of the US giant, said today that it has raised prices of all its models, except the Ikon, by as much as Rs 25,000 due to a strong surge in import costs recently.
The launches will be be both in the passenger vehicle segment as well as the commercial vehicle segment of truck and low tonnage vehicles. M&M, like its competitors in the overseas market, has decided to make increased use of a single platform for several models. A vehicle platform is the basic structure on which a vehicle is built, which defines its general size, strength and body construction.
With the addition of new capacities, the company aims to double its turnover to Rs 1,000 crore (Rs 10 billion) by end of FY10 from Rs 514 crore posted during the last financial year ended March 31, 2008. New hotel properties will come up in Chennai, New Delhi and Udaipur. This will increase its room inventory to almost 2,000 rooms from 1,125 rooms.
India's largest sport utility vehicle maker Mahindra & Mahindra's plan of launching its vehicles in the US has suffered a delay of almost 12 months following clearance awaited from the US homologation department.
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