Nissan Motor Company, Japan's third-largest auto maker, has decided to cut its small car sourcing target from India's biggest car company Maruti Suzuki by 80 per cent in view of the severe downturn in Europe's automobile market.
Bookings in five-star hotels and inflow of foreign tourists into the country were already running low due to the global economic meltdown. With Wednesday's terror attack, the hotel industry is expected to see a rise in the number of cancellations and also a substantial reduction in tourist numbers since the terrorists have struck at the peak of the tourist season.
Restoration of colonial woodwork could take almost an year.
The attack comes at a time when the hotel industry is already suffering from weak demand. Thanks to the credit crunch, companies have decided to curb overseas travels and move to low-cost alternative accommodation. Even though the terror attacks occurred in south Mumbai-based Trident and Taj hotels, tourists in Delhi's Le Meridean , Shangri La and Taj Mahal were seen cancelling scheduled events.
The models will carry a price tag of Rs 1.25 crore to Rs 3 crore, the most expensive in the company's line-up, and will be custom ordered and delivered directly from Germany. Delivery time may take two or three months depending on what the customer chooses.
Companies attribute declining sales to the lack of demand from the automobile, real estate and consumer durables sectors, which are facing rising inventory levels that have choked cash flows.
Car companies are hoping to buck the slowdown by launching new models to push sales from January. Industry majors like Maruti Suzuki, Mahindra & Mahindra, Hyundai India have all lined up launches in the next few weeks and months hoping to generate reasonable volumes.
The move comes close on the heels of growth in developed auto markets such as the US and Europe dipping in the red. Analysts say that global auto companies are now focusing on developing new models for emerging markets like India, their with main focus on containing costs. The cost of development in India is considered to be the lowest in the world.
Auto component companies -- especially the mid-size and small ones -- are facing an uphill task to stay afloat as banks have become tight-fisted in giving credit and vehicle makers are cutting orders to combat the slowdown in sales.
The company is evaluating options to launch the Scorpio, Bolero, Xylo and pickup trucks in the Chinese market. However, no firm decision has yet been taken. In China, the company already has a presence in the tractor segment through Mahindra China Tractors, a joint venture company with and Jiangling Motors Company.
The company has invested about Rs 300 crore (Rs 3 billion) for resuming production at the Modinagar plant near Meerut. The earlier tie-up with Continental, which is the world's fourth-largest tyre producing company, had lapsed after the closure of the plant in 2001. Labour unrest and litigations had led to the closure of the unit then.
Second-hand car prices have dropped 15 to 25 per cent following the imposition of stringent Supreme Court norms over repossessing and selling cars of owners defaulting on their loans.
Mahindra & Mahindra has decided to curtail its capital expenditure of Rs 5,000 crore (Rs 50 billion) in view of the ongoing slump in demand for cars and sports utility vehicles in the domestic market.
India's biggest utility vehicle player Mahindra & Mahindra will spend close to Rs 300 crore ($60 million) towards brand-building and promotion as it prepares to launch its vehicles in the largest automotive market in the world - the United States.
JLR sees job cut if the situation does not improve.
Most top car makers are offering discounts, targeted specifically at government employees. About 5 million employees are expected to benefit from the government's move to raise its employees' salary by 70 per cent. The revised pay scales will be effective January 2006, which means they will get their pending salaries in bulk. Auto makers are hoping they will use the lumpsum payment to make a down payment for a car.
The company, which is now moving from being a premium brand to a mass market player through two launches in the small car segment in the next four years, hopes to cash in on Brand Honda's strong presence in the rural and semi-urban markets in India. Experts call it a gradual scaling up of the brand in the minds of the Indian consumers -- a strategy followed by the Japanese major in all parts of the globe.
The company already sells medium-to-high powered tractors in the US market. Although the exact date of launching the vehicles in the US was not revealed, company sources said that the launch will take place in January.
The Swift DZire, which is essentially a replacement model for the Esteem, was launched by Maruti Suzuki to strengthen its dwindling position at the entry-level of the sedan segment. The car was launched with an attractive price tag of Rs 4,49,000 in March, 2008.
Realisation due to a strengthening dollar exceeds the losses inflicted by export duty hike.
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