Battered by the recent economic downturn, the Indian automobile industry is looking up to the newly elected government to implement some key measures to kickstart car sales. Top on their wish-list is ensuring availability of auto loans at lower rates of interest, continuation of some of the sops announced earlier in a stimulus package and a reduction in taxes.
The deadlock between Mahindra & Mahindra and over 4,400 workers at the company's Nashik plant hardened on Friday, with the union saying it was appointing a lawyer to appeal to the Bombay High Court against an industrial court-imposed 48-hour deadline for workers to return to work. The deadline ended today.
For the first time in more than 25 years, Japans Kawasaki Heavy Industries will introduce a high-powered motorcycle in the Indian market with the help of its Indian partner and long-time collaborator, Bajaj Auto.
The company's Nashik plant, where the Xylo is made, has been paralysed for the past five working days due to an intense labour strike. Although M&M had to ramp up Xylo's production to more than what was projected, it has been falling short of the demand.
Even after people rushed to various centres to book the Nano on Saturday, the last official day for doing so, dealers undertook bookings on Sunday and Monday, breaching the time-line set by Tata Motors.
Loses less to Hero Honda than Bajaj.
Indian hoteliers and consulting organisations fear that worst is yet to come, as many international companies ranging from large corporate houses to medium-sized firms look to cut back on travel.
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.
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.
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.
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.
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