The global car safety organization has forced Japanese carmaker Nissan to improvise on its hatchback, which recently scored zero in the safety test conducted by the UK watchdog. The company has agreed to improvise the body shell and incorporate airbags of its Datsun Go model, which is currently being on sale in India and South Africa since 2014.
Initially, Nissan had defended the making of vehicle, but after the Global NCAP asked Nissan to withdraw from from Indian market, it clearly questioned the integrity of the vehicle. A car test conducted by NCAP showed that the Datsun Go totally collapsed and passengers were unlikely to survive a head-on collision.
The chief executive of Global NCAP David Ward said the test was a wake-up call for not only Datsun hatchback but all Indian carmakers who used to sell potentially dangerous cars in emerging markets.
After the published report by Global NCAP to take urgent action on vehicle safety, Nissan had to go in back-foot. The Datsun Go is specially sold out to low-income countries and this car is failed to meet even UN basic safety standards for head-on collision and side impacts.
The report chalked out 10 point plan with call to governments and the insurance industry to offer fiscal incentives and discounts for consumers who opt for safer models. Global NCAP chairman Max Mosley said that the safety improvement could be implemented by the government initiative and consumer awareness campaigns.
India’s auto production is inflating to a high where it will become the fourth-biggest producer by volume by 2015. The overall economic growth of India with Prime Minister Narendra Modi’s ‘Make in India’ project to put froth manufacturing facility in the front, additionally thrusts the automobile segment into a higher pedestal.
On the other hand, number of Australian cars manufacturing has been trended downward since 1970s and predicted to reach a stagnancy by 2018.
Austrade’s Nicola Watkinson, Senior Trade and Investment Commissioner, South Asia in her interview cited that the manufacturing sector in India was growing it would create opportunities for the Australian sector.
In her argument she said that 22 percent of all of manufacturing in automobile industry has been reached in a consolidate stage. Competition from foreign companies like Honda, Hyundai and even luxury carmakers like BMW and Audi are now a big players in India. Whereas, domestic companies like Tata and Mahindra are struggling hard to keep the momentum. In this open market, Australia has a big opportunity to enter into the Indian market when they are going for stagnancy.
Indian car manufacturers are looking for foreign companies to bridge the in-house capability gap, and in this respect Australian companies could be well-placed in the game.
Australia is also well-developed in the areas of process improvement, design, technology and engineering, and this could be a big advantage of Australian companies to capture the automotive market in India.
A top car designer company Pininfarina said that Indian automobie manufacturer Mahindra & Mahindra had expressed to buy them, but the deal was still be finalized. According to sources, Indian major automobile company was expressed an interest to purchase majority shares in Pininfarina, who is renowned for its top class designs of Ferraris and other luxury cars.
However, the Italian car design company is burdened with debt and now open themselves to an Asian investor. It is may be a sign of recovering debts after China National Chemical Corp announced a deal of 7.3 billion deal to buy major stakes into tyre-maker Pirelli.
The deal between M&M and Pininfarnina has not been finalized by there according to the sources, the Indian company would probably going to buy up to 26 percent of shares. At present the valuation of company is 140 million and the shares were trading down 7% in Milan exchange.
Pininfarina said that the deal would need to support of its controlling shareholder Pincar, which has a largest stake of 76 percent in the Group. There are also 13 creditor banks, who need to approve the deal.
Pincar’s shares has been put as collateral for the bank’s financing.
It is noted that M&M is one of the important clients of Italian car designer company, cleared in a separate statement that the report published by Pininfarina was speculative and there was no such agreement so far.
Magneti Marelli, an automotive component maker, a part of Fiat Group who introduced Automated Manual Transmission (AMT) in India with Maruti Celerio, is expecting to more than double its revenue. Currently the company has earned 160 milion euros ( approx. Rs. 3000 crore) and expect it to 400 million euros.
The company also expects the global revenue generation will also rise to 4% by 2018 from 2% of present.
Seeing the current success of AMT, the company plans to start two new plants in India for automotive lighting and AMT.
The Italian component maker said the company will set up a new manufacturing plant for AMT in India at an investment of Rs. 150 crore at Manesar. The plant is likely to be operational from the later part of this year.
The company plans to start it from the first line and then after the response, it will start the second line. The company expects to reach a capacity of 2 lakh units by teh Q3 of FY16. The company’s president and CEO said that to remain competitive in the market, it was important to reach cent percent localisation.
AMT was introduced in India by a joint venture with Maruti Suzuki to manufacture engine control units or ECU in its Maruti Celerio. Later on the technology was incorporated in Volkswagen. Since its inception in 2008, the company has already invested Rs. 750 crore in 10 plants.
Bajaj has recently launched its new variant Pulsar RS 200 bike at a price of Rs. 1,18,500 for non-ABS and Rs. 1,30,268 for ABS version. The company has drastically facelift the bike with a sport look, eyeing top slot position in the Super Sport segment.
Initially the company plans to sell at least 2,500 units per moth of this variant. The company hopes to get good leverage with is new design, engineering and performance.
The company has launched two versions of non-ABS and ABS. The price tag of both versions are more than 1 lakh that is quite for Bajaj brand. The company perhaps wants to compete in the sports segment where already there are companies who sell bikes in lakhs in India.
The company is optimistic in the success of new model, as it claims to be a market leader in two-wheelers, and try its hand in the Super Sports segment as well. The company’s initial plan is to sell 2,500 units in India per month, and if things go well, it will start export the bike.
The first Pulsar was brought by the company in 2001 when it became instantly hit in the market. Today Pulsar sells more than any bike in India, with more than 55,000 units every month in the domestic sports segment. The market share of the company has 43 percent and remains in the top position for 14 years in a row.
The automobile sector of India, particularly cars segment is growing fast, evident by its increasing improvement in customer sentiment and new models launch by companies in regular succession. ICRA predicts almost 7% growth in car segment in FY16, and it can be increased to 10 percent the year after.
In a statement issued by ICRA research service predicting that the growth momentum of the Indian domestic passenger vehicle industry is pretty much high, and it will reach around 7 percent in FY16 and could be accelerated to 8-10 percent in the next financial year.
The expansion is attributed to an improvement in customer sentiment, largely due to lower fuel price and new launches. Now, consumers in India have lots of options and they can choose various variants from a single segment. This will help to rise in sales and eventually overall growth of the industry.
The sizeable growth in the industry is owed to first time buyers whose buying decision is based on the operating costs and macroeconomic factors.
In 2014, the number of first time buyers declined to 37 percent because of continuous hike in fuel prices and also headwinds on the macroeconomic front. In 2015, things are getting even and people are again buying new cars because of fuel price correction.
The used car market has got boost due to declining interest in new car market. There are premium carmakers like Mercedes-Benz and BMW are now planning to enter into the used car market. Also, there are easy bank options available in India to buy first hand vehicles.
Swedish luxury carmaker Volvo Auto India (VAI) announced its target to sell at least 2000 cars by this year. The company is not doing well in compare to other multinational brands. Last the company sold only 1,200 units and it definitely wants to improve that figure in this year.
The company hopes for a promising future in India, creating more luxury car options in next few years. The company plans to sell 2000 cars in 2015 against the previous sale of 1,200 units in 2014. The company has recently opened a new dealership with KIFS Motors in Mumbai.
The company was started in India in 2007 but never really capitalized in the market in front of other luxury carmakers like Mercedes, BMW and Audi. Volvo still doesn’t have its own assembly plant in India and looking forward to establish one thought the company doesn’t fix any timeline to establish its plant yet.
Volvo has also planned four new models including all-new luxury car XC90 in India in 2015.
According to Volvo Auto India Managing Director Tomas Ernberg, the company is going to launch four new models globally in 2015. Two cars will the variant of V40 and a new XC90 luxurious 7-seater SUV in September 2015. The 7-seater SUV will be scheduled to launch in India in September, and it is expected to be priced between Rs. 80-85 lakh.
Presently the company has five luxury cars – Volvo S80, Volvo S60, Volvo XC60, Volvo V40 and Volvo XC90. The company is now giving emphasize on strengthening the dealership network in India.
Mercedes-Benz had already opened it its first pre-owned luxury car showroom in India called “Mercedes-Benz Certified”. The company is the third luxury carmaker in India to open a showroom for used cars. The used car market is steadily growing in the country and it is expected by the end of 2015, other luxury players will open their showrooms in India.
The price of luxury cars in India is pretty much expensive, but the aspiration level of the Indian consumers is getting higher. In most of the premium cars in India, more than 50 percent of prices go to taxes, which is not acceptable on the global market. The car prices dropped in the starting of the years, also the government had reduced the excise duty on cars and automobile parts in 2014. This came as a setback for luxury carmakers.
German car giant BMW has already hiked 5 percent and discontinued their models like 116i Prestige and 328i. The company is now more focused on the rich segment of the country, as a result the sales growth of the company dropped significantly in the last two years. At the same time, Audi has captured the market with its less expensive premium cars.
There is a hope for used luxury cars because premium cars depreciate more than 30 percent in six months period. Another good point is these cars are not used for daily grinding in the Indian traffic, so these are always in good condition and their quality is assured.
Tata Motors India, the country’s largest commercial vehicle maker, has got the contract of more than 4000 buses in national capital under the second phase of national urban renewal mission. The company already delivered these types orders earlier.
In another order, Tata has bagged the Bangalore Metropolitan Transport Corporation order of 30 hybrids and the company is finalizing the orders with the agency. These orders in the last six months came when the company wanted to turn around its local operations. The slow economic growth and drop in sales forced the company to pull some commercial vehicles and focused on on passenger vehicle.
In recent announcements by the government on infrastructural development, the company is hoping to gain some mileage in commercial vehicles segment. The economy of India is already started to impact on the medium and heavy commercial vehicle segment. The company has projected the growth of 15 percent to 112, 180 units in the current fiscal year.
However, the company has booked loss in commercial vehicles sales when the growth curve dropped to 17 percent in the first 11 months of this fiscal year. This is largely due to decreasing in demand of light commercial vehicles in India, in which the company’s sales dropped 30 percentt to 174,083 units.
According to a source, the present trend will continue but medium and heavy commercial vehicles growth is on uptrend, and the company is expected to gain significant sales in FY16 on possible turnaround in the domestic market.
Swedish truck and bus maker Scania AB, which is owned by German automobile company Volkswagen is planning to make India as one of the top 5 markets. This month the company has started the production of commercial vehicles at its factory near Bengaluru. The growth sales curve of medium and heavy vehicles in India gives a momentum to this Swedish company. According to the company, India presents a lot of opportunities for sales. The recent clarity of government policies, especially in the coal blocks allocation instilled a positive sentiment in companies.
Scania is planning to launch locally made tippers from April 2015. This heavy-duty tipper trucks was especially designed for the Indian mining industry in 2007 through Larsen & Toubro and sold 800 units since then.
The Indian factory of the company was set-up in 2012 with just a dozen people. Now, the company has expanded to 600 people working in Bengaluru sector. The company thinks India is one of the pillars for the growth of sales of heavy-duty vehicles, and thus gives high priority on this market. The company also plans to invest in people for their global business operations.
Unlike many foreign manufacturers, the company doesn’t want to sell only India-specific products. The company has decided to sell the same product that they sell all around the world. According to the company’s research, there is a huge potential in the Indian market.
Scania has already invested 40 million in the first phase of its infrastructural development in India. The factory is now capable of manufacturing 1000 buses and 3000 trucks in a year.