Friday, January 1, 2010

Toyota gears up to roll out two compact cars in Indian market

After serving the above Rs 7 lakh bracket with its vehicles in the country, Japanese car maker Toyota Motor Corporation (TMC) is all set to expand its reach in the Indian sub-continent with its compact car platform variants including a hatchback and a sedan. The two cars will be showcased at the forthcoming Auto Expo in New Delhi ( from January 5-11) with another 12 models from the company. Other models include the hybrid Prius that the company will be launching at the Auto Expo, along with display of a concept, CNG Innova and Corolla Altis, and two more hybrids from the stable.

Toyota has still not taken a call on which one of the two compact car variants will be launched first in 2011. The compact car platform is a brand new platform called the entry family car (EFC), keeping in focus the Indian market. The R&D for the said platform has been done in Japan, while the manufacturing will take place in India.

The hatchback and sedan will be powered by 1.2 and 1.5 petrol engines, respectively. The hatchback will be competing against the Maruti Swift and Hyundai i20 in the market.

The sedan will compete against Tata Manza and Maruti SwiftDzire category, said Sandeep Singh, marketing deputy managing director, Toyota Kirloskar Motor (TKM). While putting a price to the product is too pre-mature considering one long standing year yet to go, experts expect the hactchback to be around Rs 5.5 lakh and the sedan at Rs 6.5 lakh.

To put things into perspective, a Hyundai i20, a hatchback, in New Delhi with 1.2 litre engine costs approximately Rs 5.3 to 6.3 lakh on-road, while Tata Manza, a sedan, with Saffire (petrol) engine costs approximately Rs 4.8-Rs 5.9 lakh on-road in New Delhi.

Singh said that the feedback the company gets at the Auto Expo will be crucial in the decision of the launch. Further, on diesel variant of the two cars, Singh said that the company is not denying the possibility of having a diesel engine, which are being imported by the company.
Source:[financialexpress.com]

Big plans for the small car

From the time when the Maruti 800 put Indian women in the driver's seat, to the more recent Nano, which put the car within common man's reach, the Indian small car segment has seen a lot of action. But nothing can hold a candle to what 2010 has in store.

To begin with, the segment is heading for a complete makeover. It's time to start thinking international as several global auto giants are planning to launch their small cars in the country next year. Japanese car maker Nissan is way ahead in the race and is reportedly planning to start trial production of its small car as early as this November. Ford Motors' Figo is slated to be launched next year. Toyota is busy setting up a small car plant for its offering that is targeted to hit the showrooms by the end of 2010. And the German Volkswagen is making India-specific alterations to its small car, Polo.

The reason all these automakers are queuing up is the potential of the Indian auto market. A little over 88,000 passenger cars were sold in September 2009 alone. "It is an untapped market. Automobile markets in the US, Europe and Japan are near stagnation. On the other hand, in India, the car and two-wheeler penetration level is at its lowest. This will result in a shift of new capacities and flow of capital to the cost-competitive Indian car market, states research firm Kredent.

Also, considering that 73% of the cars sold in India are small cars, driven by price sensitivity, Justify Fullpundits expect most of the new launches to be competitively priced, at around Rs 3 lakh for the base model. For instance, Ford is expected to price the Figo just below the Rs 4 lakh and Nissan's car is expected to follow suit.

India sells, makes more small cars than

India is emerging as a leader in small cars as declining sales in Western markets coupled with robust growth in Asia rapidly redraw the global map of the auto industry.

It's well known that China overtook the United States as the world's largest car market in 2009. Less noticed is that India will top Japan for the first time in sales of super-compact cars. It overtook Japan as the world's No. 1 producer of basic cars in 2007.

Automakers like Ford Motor Co., Nissan Motor Co. Ltd., Volkswagen AG, General Motors Co., and China's Shanghai Automotive Industries Corp. are pouring hundreds of millions of dollars into the country, hoping to capture a piece of the growing market for tiny, inexpensive vehicles. As they do so, they are quietly transforming India into an export hub for small car manufacturing.

"India is right in the center of the radar," said Michael Boneham, head of Ford India, which plans to roll out its first India-made compact, the Figo, in the first quarter.

More than 892,000 basic cars - the smallest category of passenger vehicle - were estimated to have been sold in India in 2009, up 14 percent from 2008 and surpassing the 708,034 forecast for Japan, according to J.D. Power and Associates.

Unlike China, Russia, and Brazil, where consumers buy a range of cars from basic to luxury, Indians overwhelmingly prefer small, affordable cars.

Nearly half of all cars sold in India fall into the basic category. These are cars so small they're almost nonexistent in the U.S. market. They could be called sub-subcompacts.

A trip down the streets of a typical Indian megacity, where the bulk of car buyers live, makes the reason clear. Drivers squeeze through any remotely plausible opening on the clogged streets, grazing handcarts, bicycles, cars, pedestrians, and livestock.

And executives say most Indians won't spend more than $8,000 on a car.

To manufacture these low-margin vehicles profitably, car makers must localize production.

Auto industry registers robust sales in December

India’s auto industry ended 2009 on a strong note with car and two-wheeler makers reporting robust growth in December sales as increasing economic activity and easy availability of loans prompted buyers to rush to dealerships.

December is traditionally seen as a weak month for sales as customers prefer to wait for the new year to make purchases as cars bought in December attract lower resale prices than than those bought a month later. However, in the past few years car makers have rushed to attract buyers with discounts and other rebates to shore up December sales.

Maruti Suzuki India Ltd, the country’s largest car maker reported a 36% jump in sales. The company sold 71,000 units in December, compared with 52,029 units a year ago.

Sales at rival, Hyundai Motor India Ltd, rose 42% to 22,252 units. Mahindra and Mahindra Ltd clocked the biggest percentage jump, with sales rising 122% to 22,754 units.

Tata Motors Ltd did not release its numbers.

The growth was also helped along by the base effect when muted growth in one month leads to the next year’s numbers looking stronger then they would have otherwise. Car and two-wheeler sales started falling in October 2008 and continued to do so till February.

Smaller players such as General Motors India and Skoda Auto also reported brisk growth. Sales at General Motors doubled to 8,258 units. Significantly, the Spark, its small car, accounted for 4,147 units. It plans to further strengthen its offering in the small car segment with the launch of the Chevrolet Beat at this month’s New Delhi Auto Expo. Skoda sold 1,113 units compared with 732 a year ago.

Car makers also benefited from buyers advancing purchases due to price hikes, which several companies have said they plan to do in the next few months. Some, such as Ford India Pvt. Ltd, have already announced an increase in prices from January.

Among two-wheeler companies, Hero Honda Motors Ltd ended the year with the company selling in excess of 300,000 units every month in 2009. It sold 375,838 units in December, a 42% increase over the year-ago period. TVS Motor Co. Ltd sold 102,479 two-wheelers in December, compared with 72,355 a year ago, a growth of 42%. India Yamaha Motor Pvt. Ltd’s sales fell 15% to 13,612 units.
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