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Tata’s one lakh car – Part 2

Will the much hyped Tata’s 1 lakh car fizzle?

* Already two wheeler manufacturers has burnt their hands by lower pricing to increase their market share. Since the steel prices are soaring and other raw material prices are continuously increasing it is necessary to produce a vehicle which will not burn out your topline growth. in fact tata motors itself acknowledge that margin pressures are high for the financial year 2006-2007. The car is expected by the 2^nd half of 2008. The input cost is sure to head northwards and can tata make anything out of the one lakh car evenif sells 80% of expected sales.

* Nowadays even rural customers, one of the main targets of the car are becoming demanding and less forgiving. Existing people’s car Maruti 800’s sales volume has been sliding steadily during the past two years.

* When worlds safest car manufacturer’s like toyota are just launching their products in the 10lakh segment depriving safety system we cannot expect any safety systems in the 1 lakh car. but the question is can the Tata’s one-lakh car($2500) meet the upcoming safety and emissions regulations? India is going to have much stricter emission norms in the near future and india will be forced to enact same in safety side too. Road deaths and poor air quality are both growing problems in India. I believe that tatas can meet the first challenge(emission norms) since the one lakh car will be destined to india and other low cost market not for europe or US( since adding equipment required for safety and emissions control in Western markets would automatically bring the price of the car easily up to $6,000 to $7,000). But if the indian government makes any safety regulation what will be future of the one lakh car. But Tata claims the one lakh car($2500) will even pass a crash test.

* Here is the case of Tata’s ace, which is exported to nepal and srilanka and planned for south africa but certainly not for the developed countries. Although it emits very little carbon dioxide thanks to its tiny engine, meeting other emissions standards and crash regulations would be much harder.

What if Tata 1 lakh car succeeds?

* If Tata’s one lakh car succeeds as Ratan Tata expects no longer a family will be hanging in a bike it will ensure safety of those people. On the other hand as already India is struggling with the infrastructure needs Tata’s one lakh car (and others following) will add insult to India’s injuries and it will also have heavy impact on our environment.

A problem of plenty:

* Can indian which now has 1.3 crore vehicles can bear additional 10lakh cars per year from Tata’s alone(in addition to the tata’s other cars). Based on manufacturers expansion plan it is estimated india will build more than 3.3 million cars in 2010, If Hero group and Bajaj choose Tata’s way this figure will shoot up to incredible levels. According to SIAM (Society of Indian Auto Manufacturers) India is adding 1.4million cars a year as indian car industry and is growing at 20% every year. My very obvious question is Will there be enough buyers? certainly not! India is expected to add only just over 2.3million cars in 2010. Manufacturers may bet on exports but that too is not so promising, india exported only around 2 lakh last year, This means that exports have to grow by over 70 per cent year-on-year for the next three years in order to reach the million mark by 2010. However, the industry has managed an average growth rate of 15% in last three years.

* The end result of this surplus capacity will be intense price war between manufacturers and ultimately their margins will get down. Tata itself will face some serious problems if their 1 lakh car ($2500)succeeds, manufactures who cannot such produce low cost car will put up more products in other segments where Tata now has significant share, ultimately this kind of volume game may swallow the profits of all manufactures. The race will affect every bit of business as much as Henry Ford’s model T did a century ago.

* More the cars, more is the pollution not only due to burning of fuel but also due to the dumping of low quality parts used in the low cost car. Dont be surprised if Sunita Narain of CSE – Centre of Science and Environment who raised concerns on pepsi and coke raise concerns on Tata’s one lakh car.

* More terrible the traffic will be, The country’s poor-quality road network is slowly improving, but it is heavily over-used. With India’s transport arteries already so badly clogged, a boom in sales of low-cost cars could bring about a complete seizure.

* Real estate prices may shoot up as the need for the space(parking) raises and parking charges will become more costlier. The result will be owning a car will become more expensive.

Tata’s first Global launch:

Tata Motors plans to sell one million of its one-lakh cars. Tata’s West Bengal plant for the one-lakh car will have a built-up capacity of 500,000 units on an annual basis; for the remaining 500,000 units, there are plans to set up satellite plants across the country at strategic locations that would make it cost effective to manufacture and sell the car in the shortest time possible. Tata Motors is reported to have talks with Magna a contract manufacturer for making the Rs 1-lakh car($2500) at many satellite manufacturing plants that will be set up for the purpose across the globe. This will reduce the cost significantly but the fit and finish of the car will be a question. We dont have to worry much on this since Magna has been doing already the same for international majors such as GM (Saab convertible), BMW (X3), DaimlerChrysler (G-Wagon, E-class-4WD, Chrysler 300C, Chrysler Voyager, Jeep Grand Cherokee, Jeep Commander). Tata’s one lakh car will be launched in places like Africa, Russia,China, Southeast Asia and in eastern Europe and Latin America. Tata may use its global partner Fiat for selling the car outside india where Tata’s don’t have their subsidiary. In short Tata will wish to sell the car wherever the income levels mirror India’s.

Component suppliers for the one lakh car:

Building a one lakh car isn’t a challenge just for Ratan Tata and his team, but also a formidable task for several small component makers who need to meet stringent cost and quality targets so that the car can be produced for Rs 1 lakh. Tata Motors demanded and got a whopping 20% discount on its rates for the Rs 1-lakh car($2500) from some of its biggest suppliers by betting on volume of the orders. Because of this, component suppliers have been forced to adapt a different strategy for the Tata’s one lakh car. They are innovating new products, setting up dedicated facilities and outsourcing their jobs to keep the production cost as low as possible. For auto components maker like Bosch, it’s an opportunity to work on products they developed over the years but could never sell because of the absence of a market globally. Bosch has tried a new technology for the exhausts by combining metal and plastic. It is expecting costs to come down significantly by using a blend. Bosch is also providing ignition technology for the one lakh car. Lumax Automotive which supplies headlamps is sourcing designs from Taiwan. Shriram Pistons & Rings, which is making engine parts for the car, is setting up a dedicated production line. It is learnt that Shriram is also working on in-house designs to cut costs. Many suppliers are setting up factories near the plant to reduce transport and packaging costs, which usually constitutes about 8-10 per cent of total manufacturing costs.

The NK Minda Group supplies parts such as switches and horns for the Rs 1 lakh small car. Sona steering is supplying steering columns for the tata’s one lakh car. Rico Auto supplies clutch for the car. Other prominent suppliers includes Gabriel Ltd, Kinetic Engineering and Teenco. Also among the suppliers for the tata’s one lakh car are a large number of Tata group companies, including Tata Bearings, Tata Toyo Radiator, Tata Johnson Controls, Tata Yazaki and Tata Ryerson, which ensures Tata a better control on time and time.

The good thing is this car help these suppliers evolve in terms of R&D which they often not used to, they are developing new products specifically for the one lakh car also they are getting a platform to showcase their skills, If the car sells in huge numbers, just like motorcycles did through the 1990s, it would be a windfall for India’s auto parts industry. The success of Tata Motors and all its component suppliers hinges on the number of cars that will hit the road.

Manufacturers who will challenge Tata’s one lakh car…In Tata’s one lakh car – part 3

Tata’s one lakh car – part 1

Tata’s people’s car:

Tata’s one lakh car is the most expected car in recent times not only in india, the whole world is anticipating for the car. “The one-lakh car is a case study which the whole world is watching. If successful, the car can spark demand in a new segment all over the world” reports JD power an Automotive rating and research firm. That’s why every news and rumours about the low cost car is getting covered in almost every magazines, every newspapers and every webportals even the mighty Businessweek and BBC is reporting about the developments of the car. The most expected car has also become the most controversial car in indian history. Whether its the singur controversy or the competitors criticism in one or many ways the one lakh car is making news.

Whie the Chevrolet Aveo, currently the cheapest car in the US, costs around $ 10,350 while Europe’s low cost contender the Dacia Logan costs around 6000 euros. Coming to india while most manufacturers are finding difficult even to make a 100cc bike for Rs40000 Tata is building a car for 1 lakh ($2500) and Tata has to break its own achievements and has to set new levels of benchmarks in design, production, assembly, logistics and whereever they can to produce a car at such a price.

Can the Tata’s meet the expectations? Will the one lakh car convey the india’s potential to the world? Will Tata stick to its price tag? Will it make sense for Tata to have a car when other players are moving to premium segments? Will the more demanding customers will like the low cost machine? In this preview we will find answer for all these questions also we will know how tata is cutting the cost in all domains to adhere to its price tag.

Name for the Commuters car:

The most watched car in the Indian car space — the Rs 1-lakh ($2500) offering from the Tata Motors stables — is still unnamed, but company sources here believe that `Jeh’ is emerging as the `most favoured name’. “It has always been our Chairman Mr Ratan Tata’s dream to name one of the cars after J.R.D. Tata,”said a Tata official.

What’s the 1 lakh car all about?

Tata says the proposed Rs 1-lakh car would be a vehicle that “will seat four to five people and have a rear engine. It will not be a scooter, three-wheeler or an auto-rickshaw made into a car.” “It will also not be a stripped down car. It will be an inexpensive car,” he said, but added that it would obviously not have the finish or the high speed or the power of a larger car. It would be a rear engine, 4-5 seat, four-door car with about 30 hp (horsepower) engine.Though it is tough to preview a car which is guarded highly by its manufacturer, we will unveil as much we can in this post.

Engine and Transmission:

It is almost sure that Tata’s no frills car will be an rear engined car –to save the transmission cost. Tata Motors have tested an 550-650cc engine but felt it is not sufficient to propel a four seater and they decided to step up the engine. Robert Bosch the international Auto Electronics major has acknowledged that’ its latest success is an order to supply alternators, brakes, and gasoline and diesel management systems for the one lakh car from Tata’. So a diesel and petrol unit is sure for the one lakh car. It is believed that finally tata settled for a 660cc petrol unit and 700cc diesel unit to power the one lakh car.

For the 660cc petrol unit Bosch has designed a special fuel injection system called “value motronic” – the cost of the system is roughly half of a full scale system and it is said to be more efficient. For the 700cc diesel will be a CRDi unit( it’s DICOR for Tata) too Bosch has developed a special injection system for this world’s first twin cylinder CRDi engine. Earlier in 1998 when Ratan Tata unveiled a concept car named ‘zing’ he initiated the idea of producing the 1 lakh car using scooter parts. Yes, Tata opted a basic, automatic or variomatic transmission, instead of a manual transmission set up. Not only it will help the tata in cutting the cost as Tata targets millions of two-wheeler users for its 1 lakh car it will be easy for the tata to lure them. In the combination of a smart petrol unit or a DICOR unit with automatic transmission the one lakh car will be dearer not only while your buying it but also it will be softer on your monthly fuel bill. Overdrive reported petrol version of the one lakh car registered mileage/ fuel efficiency in the region of 26kpl(65mpg) in the internal Tata tests and but Tata is gunning for 30kpl!(70mpg) enough isn’t it? if not, Tata – Bosch DICOR unit may satisfy our thirst. On the performance side the petrol unit is believed to produce 33bhp with a top speed of 120kph(80mph)

Few disadvantages in a rear engine car:

* uneven weight distribution and hence poor traction control

* poor cornering and poor handling

* poor engine cooling and hence more chance for engine overheating

* almost no boot space and cramped space for rear passengers

Design and features:

Tata’s zing and indiva concept cars exhibited at 1998 and 2002 auto expo would be base for the proposed one lakh car. Apart from the concept cars, the one lakh car is sure to have few signs popular rear engined cars such as volkswagen beetle, Fiat model 500 and porsche cars. Tata has outsourced the design to Italy’s Institute of Development in Automotive Engineering (IDEA) which designed most Tata;s cars including indica. The one lakh car probably will not be designed to win any beauty contests but at the same time it will not be a ugly duckling either. As evident from the indiva, tata’s small car will embrace not so contemporary tall boy look similar to Maruti Suzuki’s WagonR. Under the front hood the one lakh car will have a small storage space, “like an overhead bin” on an airplane.

As bonnet is used for the storage space, headlamps will not be a wraparound, it may be quadrilateral in shape and the headlamps will sit on the smaller bonnet. As the one lakh car is a rear engined one, i believe drivers will have more fun with this car, starting from steep rake to the larger front windshield is truly what every driver loves to have. For the one lakh car there will not be a distinctive grille but because of the round bumper, Tata’s will carry its familiar ‘smiley’ front look to the one lakh car as well. Tata’s small car will make use of a single wiper instead of two, not only for giving the car a cleaner look also for cutting the cost of windshield wipers for the people’s Car in half. In the sides as Tata will source smaller tyres from its cargo carrier ace for the one lakh car and beacuse of this Tata will not spruce up the fenders. Not so full wheels and black door handles will feature in people’s car. Identical rear view mirrors will be used on either side to save cost. In the rear one lakh car will be more upmarket since the car will have pillar mounted taillamps similar to its sibling indica.

Inside, the one lakh car will feature all the basic amenities, instrument console would have a speedometer, an odometer and fuel gauge. You have to cut costs on everything—seats, materials, components—the whole package,” says Tata Group Chairman Ratan N. Tata. These are the words which are going to be reflected in upholsteries and door trims.

Some myths about the one lakh car:

Though too early to call some news about the 1 lakh car as myth, from Tata words we can atleast flush some rumours about it. Some scoops on car’s features includes – Curtains replacing glass windows, removable bolt-on seats instead of the regular ones, roof will be an optional add-on, and plastic body panels instead of the regular metal panels. Yes, Tata had talks with General Electric for using its re-engineered plastics for its low cost car and Tata may make use of modern adhesives instead of welding to cut down cost, but still there is no definite direction in this issue but certainly there will be no curtains. The one lakh car will be a complete car with definite roof and glass windows.

Will the much hyped 1 lakh car end in a flop??.. In Tata’s one lakh car – part2

Tata’s Jaguar acquisition and Ferrari ride

in depth analysis on TATA acquistion of Ford’s Jaguar and Land Rover

Tata group which is responsible for India’s biggest foreign takeover, by acquiring the British steel company Corus through his Tata Steel business for £6.7bn earlier this year, is now reckoning for another big acquisition, this time for its automotive division. Tata Motors is in the early stages of evaluating a bid for the Jaguar and Land Rover reported British daily The Telegraph.. Ratan Tata is understood to have instructed advisers in the past fortnight to begin evaluating the merits of a joint offer for Jaguar and Land Rover, which have been earmarked for disposal by struggling American car giant Ford. People close to the situation last night said that Tata Motors’ evaluation of a bid was at an “exploratory” stage and may not lead to a formal bid for the two brands. One person familiar with the position said that Tata Motors had signed a confidentiality agreement with Ford in recent days. .Besides Tata, other car makers from middle east and eastern car manufacturers may be interested in bidding, while a formal auction would also be likely to attract private equity firms such as Apollo, Blackstone and Cerberus ( theUS buyout firm which acquired Chrysler earlier this year for $7.5bn).

Price of the luxury brands:

Analyst believe anything between $2.5bn to $3bn for jaguar and Land Rover. Here is their words

A Meryll Lynch analysts suggest that Jaguar and Land Rover may fetch about $1.5bn (£735m). Earlier a private equity firm called Alchemy Partners was said to be lining up a £3bn offer for the two luxury brands. “If you look at the financial position, [Jaguar and Land Rover] are worth some $1bn to $1.5bn,” Mr Dorris an analyst said. “Add a control premium, and the final sales price could come in at about $2.5bn.”

Ford bought Jaguar for £1.6bn in 1989 and it is believed that Ford have invested about $10bn in Jaguar since it bought, Ford bought the Land Rover from BMW for £1.7bn in 2000.

What may hamper Tata’s?

Union leaders of both Jaguar and Land Rover have already raised concerns about their job security because of the sale.

Jaguar’s sales were down nearly 32 percent for 2006 in the United States, the company’s largest market.
Jaguar lost more than $715 million last year and is expected to lose $550 million in 2007. According to the analysis, Jaguar is projected to lose more than $300 million in 2008 and is not expecting a profit for several years. These losses are mainly because of extremely high manufacturing costs in Britain and Ford has not earn a profit from jaguar since it bought.

Land Rover sold a record 192,500 vehicles in 2006 and is said to be profitable. Unlike the jaguar, Land Rover is a much stronger and more profitable business but Tata’s has to buy both the units since the products and manufacturing of vehicles for Land Rover and Jaguar is so intertwined..
The worried jaguar ‘s workers, they told “if the two companies are sold together, then there was no guarantee “that a new owner would not shut down most of Jag’s manufacturing capacity”.

Official Words from Tata and Ford…

A spokesman for Tata Motors said the group did “not comment on speculation about mergers and acquisitions”. Though Ford denied it, Ford had told that it was still some way from doing a deal, it also added hat it had been looking at its options for a year, and that it was neither setting a timeframe for any decision, nor ruling out any options.

is Mahindra in the race?

Mahindra & Mahindra (M&M) might also show interest in these brand.

M&M which wants to be global SUV maker should have an interest, at least, in Land Rover, says the brand is attractive. Even so, it will not help Mahindra become an independent global sports utility vehicle, or SUV, brand. Moreover, Land Rover, which is about six times as big as M&M, might simply be unaffordable.

“I do not know what is on offer, whether it is the whole brand, or some products or what plants are being offered. I cannot say if it is a strategic fit or not. Mahindra is a SUV brand and Land Rover is an SUV brand. So, the two brands have something where synergy is possible. But having said that, its a big company,” said Pawan Goenka, President-Automotive Sector, Mahindra & Mahindra.

European car manufacturers Renault and Fiat have recently ruled out of the possibility of bidding for Jaguar and Land Rover.Ford – the struggling auto giant:

Ford which has become struggling automaker in recent years posted a full-year 2006 net loss of $12.7 billion, the largest single-year loss in the company’s history. Also Ford lost its No. 2 ranking worldwide to Japan’s Toyota. Ford Chief Executive Officer Alan Mulally, who took over the top post in September 2006 from Bill Ford has been restructuring Ford to counter losses. As a part of restructuring Ford has been selling assets in a bid to offset falling sales and profits. Premier Group, which includes Aston Martin, Volvo,Land Rover and Jaguar is the main cause for Ford continuing losses. Earlier this year Ford sold its UK based sports car division Aston Martin(popularly known as james bond car) for $848 million to investors led by U.K. auto-racing champion David Richards. Many believed that Ford was in talks with Germany’s BMW to divest the Volvo brand but Ford denied any such sale of Volvo. Ford reported a loss of $282m for the first three months of 2007.

Tata’s Ferrari ride:

Soon we can see the Ferraris cruising in India roads, as an extension of the existing Tata-Fiat(parent company of Ferrari) partnership, Fiat is planning to drive Ferrari into India and its navigator will be the Tata Motors. The world’s favourite sports car – Ferrari will zoom into India’s exclusive sports car market currently dominated by porsche. The two new Ferraris to be launched in India would be a 612 Grand Tourer, a big four seater and F430, an absolute sports car which is performance oriented. Tata Motors will market and set up engineering centers as a post sale services for these cars.

After some bad experiences in China and Russia, Ferrari did not want to take chances by going it alone. With Tatas in fold, the Italian major is expecting a solid infrastructure back up in India. Ferrari and Tata are natural partners because Ferrari already gets lot of its software done from TCS.

source: NDTV profit

Tata’s to setup production base in Thailand:

Tata Motors, India’s top commercial vehicle maker, will invest 1.3 billion baht (38 million dollars) to launch its first production base in Thailand, the Thai Board of Investment said on July 18th. Tata Motors plans to roll out one-tonne pick-up trucks by the end of this year with initial output capacity of 7,000 units per year, the state-run investment promotion agency said. Tata Motors aims to boost annual production capacity to 30,000-35,000 units over the next five years, with 80 percent of light pick-up trucks to be sold in Thailand and the rest for export, the agency said.

Ford’s small car for India

Ford officials have given some hint about their small car entry in india

When asked about Ford India’s small car plan

`It’s(small car) a segment we can’t ignore,” said McCormack – Ford india’s vice president for marketing and sales. “At some point we’ve got to be in that segment.”he added

When asked about Tata’s 1 lakh car plan

“We are always focused on what our consumers want… if our consumer comes back and says here are the trade-offs, I am willing to make ($3,000 car) and this is what I will accept and live with,” Ford India managing director and president Arvind Mathew said.

It’s Ford KA or Mazda2 for India

Unusually very tight lipped ford officials have given few indications on Ford small car entry in india. With this hint, Ford is joining with Honda,Toyota,Volkswagen in planning to sell small cars in India. It is believed that Ford will either use the existing Ikon or Fiesta platforms for a hatchback or it will tweak the new KA that Ford is developing jointly with Fiat in Europe. The new KA is expected to roll out in Europe next year. Fiat has already formally launched its euro small car Fiat 500 which is on the same platform as the new KA. But now many believe Ford may opt for Mazda2 which was formally previewed at the Geneva motor show earlier this year. The Mazda 2, when it debuted, got more wows than the fit/Jazz(Honda’s proposed small car for india). Also The Mazda2 can be a fairly decent India option and may even be cheaper to develop in India compared to the new KA. Ford already has both petrol and diesel engines that can be tweaked to enable the hatch to qualify for excise benefits. There’s a 1.4 litre duratorq (CRDi) diesel engine in the Fiesta and a1.3 litre petrol in the Ikon. Both may be likely probable if Ford decides to build an India-specific car on an existing platform. KA or Mazda2 whatever Ford opts for india surely it will have more impact on other manufacturers proposed small car.
source: bloomberg,livemint,overdrive and economictimes

Ford’s Fusion Diesel

Take the no-nonsense Ford Fusion, add a Fiesta’s 1.4L Duratorq Diesel engine, Fusion diesel is ready. Ford India on july 17th introduced its multi-utility vehicle Fusion with a diesel engine in a single variant that has been priced at Rs 6.59 lakh ex showroom Delhi. Ford launched its petrol fusion in 2005 and diesel for the Fusion is anticipated for a long time, as fiesta diesel is a grand success for Ford. The petrol fusion is little bit underpowered also the no-nonsense fusion has been criticized for its poor fuel efficiency. Ford tries to check both the shortcomings through the diesel fusion. Fiesta – ford india’s flagship product lure customers through its performance and its fuel efficiency(70% of Ford Fiesta’s sales is in the diesel category).

New Engine and reduced length:

Fusion is now powered by the 1.4 L Duratorq(Ford’s CRDi) diesel engine with Ford’s proprietary TDCi technology for great refinement and fuel efficiency. Fusion duratorq engine develops 160 Nm torque at 2000 rpm and generates a maximum power of 68PS at 4000rpm. Fiesta diesel which is powered by this engine delivers an excellent fuel efficiency/mileage figure of 16kpl in city and highway combined drive. Ford says “the fuel economy in the new diesel Fusion will be as same as in Fiesta”. But before accepting Ford’s word we have to note that fusion weighs 30kg more than fiesta sedan. Ford has also trimmed the fusion to 3989mm to avail the small car tax benefit but thankfully ford has retained all other dimensions including fusion’s 198mm ground clearance.

Nothing else about the car has been changed.

Bajaj’s new car and ducati acquisition

Bajaj’s Ducati or Bajaj Triumph:

Bajaj Auto ltd is looking for a big-ticket acquisition in the European motorcycle market to increase its product line-up of high-end bikes. Bajaj is targeting two cult bike companies, Italy-based Ducati Motor Holding SpA and Triumph Motorcycles Ltd of the UK. Bajaj Auto has been looking for an appropriate acquisition or an alliance to boost its engineering and product development to expand a product range currently limited to 220cc. A big-ticket European brand like Ducati or Triumph will not only give Bajaj products in the premium lifestyle range in India but also a vehicle to drive export growth in the developed markets. Bajaj Auto has been getting increasingly aggressive with its bike retail channel Probiking and Bajaj has been saying that it will crank out more products to stock its Probiking shelves. Bajaj’s reported talks earlier with Japanese major Yamaha were also focused on technology-sharing and expertise for bigger bikes while offering engineering and manufacturing expertise for smaller motorcycles. Japanese bike maker Yamaha had first initiated talks with Bajaj in November last year. Yamaha’s global team led by Yamaha Japan president Takashi Kajikawa had visited Bajaj’s facilities and had talks with the companies. The two bike majors might join hands for making co-badged bikes for the higher segments both for the domestic and export markets. Bajaj is also considering entering the segment under its existing collaboration with Kawasaki.

Ducati is a 95.4 mln euro company and all its products are in the 700cc-plus range with the brand having a formidable reputation in the MotoGP series. Triumph is a 165.0 mln stg ($336 million) company and has cruisers, urban sports bikes and other lifestyle products in its range including apparel and accessories.

Bajaj – Renault $3000 car:

The Tata Rs 1 lakh car project has triggered off a lot of excitement both among local auto majors as well as global biggies. Carlos Ghoshn is very keen on building a rival to proposed Tata’s 1 lakh car. Last month, he announced that the Nissan-Renault combine would develop a $3000 car using India’s “frugal engineering expertise”. If produced the car will be the Renault’s big pitch for global volumes after the Logan. But contrary to Renault – Nissan its Indian partner M&M is not interested in the $3000 car project as its long-term strategy is to be a global player in the SUV market. Hence Renault – Nissan has to find an Indian partner for its planned small car. Bajaj Auto is planning superior technology and multiple options to foray into the passenger car segment. So, is that what Renault-Nissan is looking for in its partner for its budget car.

Already India’s robust two and three wheeler manufacturer Bajaj is experimenting with the concept of a small car. Bajaj is also developing a six or eight seater vehicle that could compete with Maruti’s Omni van or even the more recently launched Tata’s Ace Magic. Unlike the Ace Magic or Maruti Omni, Bajaj is planning to offer both petrol and diesel engine options for its new vehicle. Interestingly, this month Bajaj created five strategic units including engineering and R&D. All these may make these two giants to produce the low cost car which will rival Tata’s 1 lakh car.

Bajaj auto Q1 results

Bajaj auto tumbles:

Bajaj Auto sales for the first quarter ended June 2007 were down 4.2 per cent at Rs 2,109 crore as against Rs 2,203 crore and its net profit was down 15 per cent at Rs 226 crore versus Rs 266 crore (YoY). Bajaj’s auto total income dropped from Rs 2,297.22 crore for the quarter ended June 30, 2006 to Rs 2,211.80 crore for the quarter ended June 30, 2007.On consolidated basis, the group posted profit of Rs 201.15 crore for the quarter ended June 30, 2007 compared with Rs 255.77 crore for the same quarter last year. Net sales decreased to Rs 2,206.43 crore from Rs2294.28 crore year ago. During the quarter, motorycle sales declined by 13 per cent at 4,94,042 units as against 5,68,187 units a year ago. Bajaj Auto had initiated major structural changes in its distribution and logistics channel during this quarter. The channel change resulted in reduction of inventory at dealerships by around 45,000 motorcycles. Surprisingly, Bajaj auto’s share rose by closes Rs2194 up by 3%(Rs66). The reason for the rise of the Bajaj’s auto share despite the poor earnings are since the stock has already bottomed out very little room for further correction (the stock has fallen 18 per cent this year compared with a 9 per cent gain for the benchmark Sensex index) and its guidance is good. ” The company anticipates improvement in its market share and profitability in the second half,” Bajaj said in a statement.

Bajaj Auto exports:

Exports of motorcycles during the first quarter zoomed 62% to 1,14,551 units from 70,771 units. Bajaj is the largest exporter of motorcycles in the country with a market share of 63.55%. Domestic sales of motorcycles for the three months stood at 3,79,491 units – down 23.70% from 4,97,416 units sold in Q1FY07. The company is increasing its exports to Indonesia, Latin America to cut its dependence on India.

Bajaj Auto Finance:

Bajaj Auto Finance on Wednesday reported a “modest” rise of 19.47 per cent in profit after tax at Rs 4.11 crore during the first quarter of the current fiscal against Rs 3.44 crore during the same period previous year. The auto finance company’s total income grew by 55 per cent to Rs 105.90 crore against Rs 67.83 crore during the period.

Maharashtra Scooters:

Maharashtra Scooters Ltd (MSL) the scooter maker jointly promoted by Western Maharashtra Development Corporation (WMDC) and Bajaj Auto Ltd (BAL) is exploring alternatives to revive manufacturing activity. The company has ceased production of geared scooters from April 2006 and now produces pressure die castings for vendors of Bajaj Auto. Maharashtra Scooter has been making news today after Rahul Bajaj said that Bajaj Auto will not liquidate its investment Bajaj Auto (holds 24% stake) wants to buy out Western Mah Dev Corp’s (WSDC) 27% stake. The two promoters – BAL and WMDC have differences over the valuation and the price to be offered. WMDC has earlier rejected offer made at Rs 151.56/share in Jan 2006. Its current market price is Rs 277.

Maharashtra Scooters has not being doing well for itself and had reported net loss of Rs 3.89 crore in the quarter ended March 2007 as against net profit of Rs 4.11 crore during the previous quarter ended March 2006. Sales declined 86.18% to Rs 0.89 crore in the quarter ended March 2007 as against Rs 6.44 crore during the previous quarter ended

March 2006. Looking at the balance sheet of Maharashtra Scooter, the company has an investment of Rs 802.93 crore, as on 11^th July, 2007. Maharashtra Scooters market capitalization is around Rs 317 crore. Maharashtra Scooters has outstanding equity shares of 1,14,28,568. Maharashtra Scooters investment in Bajaj Auto Finance stands at Rs 61.39 crore, Rs 721 crore in Bajaj Auto and Rs 20.54 crore in Bajaj Hindustan. Maharashtra Scooter is a zero debt company with unquoted debentures/bonds of Rs 69.34 crore. Maharashtra Scooters has a net block of Rs 11.82 crore of which buildings is worth Rs 2.67 crore and plant & machinery worth Rs 8.79 crore. However, for the first quarter of the current fiscal, MSL’s net profit was Rs 4 lakh on gross sales of Rs 75 lakh. It’s peers such as LML has already closed production and Kinetic has been reporting a negative bottomline.

Hot Photos – July 2007

1) Ford’s New endeavour

2) Audi’s ~~TT coupe~~ A5 to be launched in india soon. Audi also plans to launch R8 soon

3) a)Mitsubishi’s old pajero

b) Mitsubishi’s new pajero

4) a) Maruti suzuki’s old grand vitara

b)Maruti Suzuki’s new grand vitara

5) Fiat’s new 500

6) Audi’ s TT coupe:. The Volkswagen group company, Audi has so far sold 60o cars in India since it debuted three years ago. But now, the company is hoping to cash in on the India economic boom. Audi hopes to see a five-fold jump in sales to 3000 cars by 2010. The company has set up an independent marketing and sales office in India. Audi currently offers A6, A4, A8, Q7 and TT in India. Audi is ready to bring in its popular models R8 and A5 to India. Audi will employ 40 people in its Indian office by 2010 and triple its dealer network to at least nine by the end of the year. And, the Rs 600 crore luxury car market in India is expected to become a Rs 5000 crore one, with 5000 units by the year end. Audi’s TT coupe is priced Rs49 lakh.

7) Ford’s new fusion diesel

TVS apache rtr 160cc Pictorial Review

1) Racing styled TVS apache rtr 160cc in black

2) TVS apache rtr 160cc in apache’s much loved red colour. Apache rtr 160 also available in blue and yellow colour

3) TVS apache rtr 160cc front – almost the same as its sibling except for the racing stripes and leaf shaped rear view mirror

4) TVS apache rtr 160cc rear completely new with LED tail lamps, re-styled silencer and CBZ X-treme type split grab rail

5) TVS apache rtr 160cc engine which produces 15.2bhp at 8500 rpm and 13.1Nm at 6000 rpm( higher power to weight ratio 111.7bhp/ton than its sibling)

6) TVS apache rtr 160cc digital dash – LCD speedo,two trip meters, clock,odometer, fuel gauge and an analog tachometer. Also has useful features service and battery indicators. Another useful feature is the clip on handlebar for various position

7) TVS apache rtr 160cc sporty riding posture

8) TVS apache rtr 160cc LED brake lights, headlamp and petal type 270mm disc brake

9) TVS apache rtr 160cc leaf shaped rear view mirror, aluminium levers, attractive engine cowl and split grab rail

P.S: Our sincere thanks to Ramkay TVS (ramkay_tvs@yahoo.com), Velachery, Chennai (044 22441271)

Ford Fiesta Limited Edition

Ford celebrates the 50000 Fiesta cars on the road with a new limited edition. The limited edition of Fiesta is available on both petrol and diesel variants (Exi and Zxi only). Fiesta Limited Edition Prices start at Rs.6,25,499 (ex-showroom New Delhi). The Ford Fiesta Limited Edition brings an intense dose of style and comfort to the performance of the Fiesta. According to Ford, the Ford Fiesta Limited edition comes with an array of features that gives you a truly unique identity on the road. The Ford Fiesta Limited Edition gets sporty new five spoke Alloy Wheels. The limited edition Fiesta features gizmotronic Reverse Parking Sensors mounted on the rear bumper which alerts you about any obstacles behind the car while reversing. The Limited Edition adds a new dimension to the performance of the Ford Fiesta with a rear spoiler that gives the car aerodynamic stability. What’s more, it also adds that sporty look as you race by in your Ford Fiesta.

The Ford Fiesta Limited Edition comes with brand new, dynamic side graphics. These enhance the flow lines and add to the aesthetics of the car. Ford Fiesta limited edition also gets leather vinyl seats. Now you can feel the wind in your face and hear your engine roar in the fiesta since limited edition Fiesta features an electric sunroof. The Electric Sun-Moon Roof is optional and will be available at an additional cost of Rs 30,000. The launch of the limited edition Fiesta will see two brand new colours added to the Fiesta range – Brush Steel and Jeans Blue.