Hero Group in Talks with Proton

The Indian two wheeler company Hero Group is to have a pact with Malaysia’s Proton  for an assembling venture. This will be the Asia’s third biggest venture after China and Japan. The outcome of the pact is to be known. The Hero Group has the major share in the Indian two wheeler market as Hero Group, along with Hero Honda Motor Ltd, has 26% share each. Proton is simultaneously talks with the Indian car and truck maker M&M, which is not reliable as of now.

Yet the initial news in the air is Proton likes to have a business deal in the form of manufacturing and distribution, from either of the companies. The move, from the Malaysian firm, is right from a decade ago and the company is on the verge of converting this into a regional factor. Proton has a good track record – as on June 30, it has sold 69,977 autos in Malaysia ( a dip by 2% than the earlier year. This has been an another such move by Proton, which preceded its move with the Indian firm Argentum Auto, which is basically a contract manufacturer. Proton offered to make use of Argentum’s plants for assembling cars in India, but in vain.

The global recession had no serious impact on the auto market in India, as several global car and other auto makers have invaded the market largely. Renault S.A, Nissan, Daimler A.G (truck) are the few to quote who make frequent investments in the Indian market. The sale figure of cars and SUV in India show upward rise- 12% for the period of  April-Aug with 716 594 units. As on March 31, the car sale received a growth of 1.3 % (it was 1.21 million cars compared to 1.20 million in the preceding year)

Tata Motors to lighten the festival with Manza sedan

The Indian car maker of high repute, Tata Motors, is scheduling its launch of new sedan Manza sometime next week, according to sources available. The car, @Rs 5-7 lakhs, will come on the lines of its earlier indigenous hatchback Indica Vista, with refined performance. However, the launch is not yet finalized and the date of this launch may be either Oct 14 , but the given the timing, with festival spirit, the company may try capitalize on it.

The car will bear engine sources from Fiat Auto and Ranjangaon plant near Pune will look after the building of the body. Manza will come in two variants – 1.4 lit petrol (Fire) and a 1.3 lit multi-jet diesel (Quadrajet Common Rail Diesel) with the power generation capacity of more than 90bhp. The 1.3 lit diesel is used in Indica Vista, Fiat Palio & Punto, Maruti Swift and Ritz but with various dimensions. In the base variant there will be a 5-speed manual gearbox, power-assist steering, integrated music system, AC, power windows and central locking.

In the top-end variant there will be additional features like Bluetooth controls, anti lock breaking system, air bags. The car can be chosen from 7 colours and in terms of pricing, this car will vie with Chevrolet Aveo, Ford Fiesta, Maruti Swift Dzire, Hyundai Accent, Ford Ikon, Mahindra Renault Logan in top-end variant and Fiat Linea and Hyundai Verna in base  variant. Tata Motors is gaining popularity with its Indigo range and has undergone many variations over these seven years. Manza is the third, after Nano and Xenon pick up with Jaguar and Land Rover not coming under account, and the company has regrets over the delay in introducing this model as per the schedule.

Honda Motorcycle has a skidding show

The Indian two wheeler company Hero Motorcycle and Scooter India, is in much waters with the labor problem persisting largely and the sale will fall down to 50% this month. This will make the company to secure just 50000 bikes and scooters as against 1 lakh. Despite the festive season, the company is facing this crisis, which may extend upto December at least. The company is a pioneer in the gearless scooter segment – Activa- and is popular with its branded bikes Unicorn, the Shine and the Stunner. This hassle makes the direct impact on the customers who are left with long time wait for the delivery.

The labor crisis in the Gurgaon plant spread to other crisis with the suppliers like Rico Auto, Sunbeam auto and Hema Engineering. But it is not as much as in other companies quoted. The labor are demanding higher wages. As this has been the case, there is no official work at other production unit. But the company has offered for talks with the long term vision to resume the production and does not leave any risk to affect the course. The workforce in HMSI includes 1500 whose average age is 28 who get Rs25000/ as salary per month. Other auto industries who offer the same package are Maruti Suzuki and Hero Honda who does not have any such problem. The Hero Motors insists that their company is not such an old company. the company hopes to get an amicable solution through talks, avoiding complications.

The company is more on the point of reviving the production than to confront against the labours. The serious turn took with the outbreak of Haryana polls and the results will decide the company’s feat, sources claim. The Gurgaon belt has become the hugely influential and wealthy”, which is altogether a new phenomenon. The increase of the land sale in the Special Economic Zone and the thronging of the entrepreneurs in the Manesar region prompted this crisis. This has led to severe law and order question too. Amidst these hiccups, some of the major companies are exploring alternative venues for their show. In particular HMSI, foresees a dip of 1.4 million units, given the fact that the crisis continues for another one or two years. But the company is yet to make a decision on alternative venue.

Renault faces lot of speed breakers

In its vain to build a repute brand image in the Indian market, Renault had made a tie-up proposal with the local giants like Bajaj and M&M. But the momentum failed to gain as M&M is not in good spirit to go ahead. However, the fate played in a different way with Bajaj offering its bid to the French car maker. M&M is a joint seller for Renault’s Logan model in India. But nothing materialised so far putting the eggs in the froth. In the 51:49, both M&M and Renault were to go along in the car market, but problems persisted that Renault is in a position to approach Bajaj. The picture is still clumsy as all the companies – Renault, M&M and Bajaj- being tight-lipped about this tussle.

The marketing problem with Logan is its size, which led to 20%excise duty (cars beyond 4 meters length are liable for this excise duty and Renault refused to cut down the size). The past few months have been bad phase for Logan –just 500 vehicles in September (a dip of 71%) and its sale for the period from April-September hallowed to 2901 units, a figure telling hard story (last year’s sale was 9217 units in same period). Meanwhile, M&M is continuing its venture role amidst these speculations.

The JV between Mahindra and Renault took place some four years ago with an investment of Rs700crore. The initial plan was to deliver some 50000units of Logan from M&M’s Nashik plant. The tie-up immediately found similar one this time from Nissan entering into the picture with an investment of Rs4500 crore for a plant near Chennai. Then came the news about small car project in association with Bajaj. All put together Renault is not in a position to secure any prospects- its investment with Nissan lies idle, the project with Bajaj is in deadlock over branding, and the tripartite deal of Renault-Nissan-Bajaj is a never ending dispute.

Premier Auto to launch Zotye Rio

It was exactly nine years ago that the Doshi’s Premier Auto went to recluse after in the fray with its long term product Padmini. This time with its come back the company intends to launch an SUV, Rio, marking the entry of Chinese four-wheeler company(Zotye Auto) into India. Under the scheme, the Chinese company will provide Premier with CKD vehicle kits which will be assembled at Pune which has a capacity of 20000 units. Both the companies are chalking out the strategy to offer the vehicle at a reduced cost(Rs5 lakh for the basic model) with 30% reduction from other cars particularly Mahindra’s Scorpio. The top-end variant would cost Rs7lakh and will offer air bags, anti-lock braking system in addition. The launch is expected to take place after Deepavali.

Rio is actually the first-generation model from Daihatsu which is a Toyota brand – Terios- in the air from 1997 to 2005. The second generation variant is already in the global market with same badge. The Chinese company could secure the tools and parts of Terios from Daihatsu similar to Tata’s deal with Renault for its Traffic, which is converted as Winger in India. Premier, for its part, will give this Rio, a four-cylinder 1.5 diesel engine (to produce 65bhp) along with a 5-speed manual gearshift and will measure lesser than Mahindra’s Scorpio. Premier likes to have a separate dealership network for this Rio, keeping its LCV sales away from them.

Hence there is a call for 30 new dealers in addition to the recent launch of 20 dealers. The Chinese invasion in the two wheeler market could not succeed due to less demand. Premier was at its peak from 1968-2000 with its Padmini, until Maruti took over the car market. The company had the business deals with Peugeot and Fiat. But the bad luck would have its say, the labor crisis and the devaluation of rupee pushed the company to withdraw its import of Peugeot from France. Fiat, with its Uno, supplied the CKD kits to Premier Automobiles Ltd and set up a unit plant for the automotive division.

Toyota to launch Prado diesel

Toyota Kirloskar Motors is on the driver’s seat with its suv Fortuner brining some good fortunes. This encouraged the company to go in for a diesel variant in the form of Prado, by next year. With the initial launch in this December in Japan, the car will be on the Indian roads in a gap of six months after getting the consent from the apex company. the petrol variant is not prospective, as per the statement from its DMD as the sale was only 50-60 units and the sale will shoot up with the arrival of diesel version.

The cost will be more than the petrol’s Rs45 lakhs and the company is on the steps of boosting the suvs and Innova with equal focus on small cars. The editor of Auto Car India Hormazd Sorabjee is all praise for this Prado and Toyota in particular, in spite of the cost factor. The SUVs too bring laurels to Toyota. The dealers too are hopeful of pushing more Prado in diesel version, after experiencing the debacle with its petrol version.

Prado diesel will certainly outnumber the petrol version, as the people are anticipating good returns from Toyota. The markets of Delhi and Chandigarh exerted a tremendous support to Prado while the response in southern and the western areas was poor. The condition for Fortuner was excellent with 7000 bookings poured in the first month itself and there are 1000 cars on road already.

Nano

Tata Motor’s sensational small car Nano has already swept the Indian roads ever since its launch. As the stint continues, the company projects the number of Nano during the period of 2010-11 to increase by 40000 taking the toll to 1.7 lakhs. The plant in Patnagar, Uttarkhand is giving the temporal relief to the company in manufacturing the required units (the Ace pick up too is manufactured in this plant). Starting December 2009, the unit will be upgraded to manufacture a monthly figure of 5000 (from the current 4000 units) which will be continued till 2010-11.

The helping hand from the Gujarat Chief Minister Narendra Modi made the company to concentrate at Sanand where the Nanos would start rolling up from February 2010, by designing 1200 units a month till May after that the number will be 5000 units. With Patnagar unit to feed more units, the net production from both the units will go to 40000 this year. The company believes that the production in Sadand plant will increase to 10000 units from September 2010 and the next three months will feed 12000 units and the last two months (Feb/Mar 2011) will feed 15000 units each. In all the company has targeted the production in Patnagar plant by 2010-11 to exceed 60000 units with the Sadand unit to feed some 1.1. lakhs thereby taking the net production to 1.7 lakhs. As such, the bookings for this Nano are at 2 lakh mark and the company is in a state of obligatory to fill in the slot with more production. But there has been no word yet about the car which are already on roads. Hence 2010-11 will be a crucial and critical year for Tata with regard to Nano, which needs special focus on branding and marketing factors. Only by this targeted period 2010-11, that the future prospects of this car will get real shape, say sources in the industry. Tata has already lost precious time by dwelling in the dispute land row in Singur, WBengal. Instead, the company should have concentrated on the existing unit to increase the production.

As a part of executing specialised versions of Nano, the initial step would be to explore the diesel version -684cc, during the same period. The company hopes that this version will enhance the sale volume, as evident from Maruti Swift. The price factor doesn’t matter much – the ex-showroom Mumbai price is Rs1.85 lakh for petrol while the diesel engine cost of Rs70000 is not on the higher side. If the version comes into effect, then Nano diesel will be the most sought-after car in India. Even the production may increase to 3.5 lakh units by 2011.

Jaguar Land Rover secures $277.7 million loan from SBI

The British car maker, undergoing the turmoil of financial crisis, is getting a lifting hand from the bankers to run the show. It gets $277.7 million from the State Bank of India along with the fund aid from ABC International Bank. The company’s Indian owner, Tata Motors, is shaping the revival with a separate export financing facility of $90 million under an agreement.

Together, the company has enlisted 500 million pounds under the retrieval plans and expansion schemes. According to Tata sources, by this August, JLR faced the pre tax loss upto 62million pounds accounted for the first quarter with the unit sale too dipping by 52% compared to the previous year. In a bid to save from this crisis, JLR has proposed to amalgamate all the three units located in England before 2014.

Renault and M&M out of funds to grease their hands

The proposed alliance between Renault and Mahindra & Mahindra took the neutral position and yet to kick off, due to lack of funds. The companies are partnering under the banner Renault India and Mahindra & Mahindra (MRPL) to make and sell Logan sedan. For months together there has been no green signal recover the brand image, except negotiations between them. Main factors that contributed for the hassle are recession and fund lock. The car is the lone brand under the JV, the pressure is mounting on the early recovery.

The company has analysed the cost factor as the main one for the downfall of the sales. It costs more(Rs4.2 lakh-Rs7 lakhs) than Swift Dzire, Tata Indigo and Ford Ikon sedans. Further, the technical flaws like the wiper on the left for the right hand drive too brought the rejection. M&M has been offering the marketing back up through its 100 dealers. While there is no final word about the depart of the partners, both companies are conscious of the investment made so far. Renault is in tie –up with Nissan on 50:50 basis to make cars at the Chennai plant;  with Rs200 crore being diverted to the Nashik plant. Thus the investment may accrue to Rs1000crore for Renault alone.

Even if the companies break apart, Renault would have a large say and same is the case with M&M too. Amidst these speculations, the companies are burning the midnight candle on promoting more sedan variants- Sandero, a hatchback on Logan platform. In addition, M&M would make its own products in Nashik plant. Everything is on paper and air, but for the outcome we have to wait further.