BMW launches limited edition Gran Turismo

BMW steps into the Financial sector to boost the sale of its cars in India. For this $50 million have been allocated and the official transaction might commence from mid-2010, said the President of BMW India. He disclosed this at the launch of the limited edition of Gran Turismo. In addition, there will be an insurance concern in alliance with Bajaj Allianz and installation of pre-owned cars showroom. In 2009, BMW mustered a sale of 3619 cars and the premonition about the scope of pre-owned cars is wide open.

BMW boasts the stake of 40 % in the monthly sale of premium cars(numbering about 10000). 2010 seems to be prospective after a soft pedaling in the market, he said. The Chennai unit of BMW has the capacity to produce 3000 units of BMW X1 in a single shift. With an investment of $30 million the capacity will be increased for meeting the demands for ensuing models. The assessment of cost involved in enhancing the manpower and fresh investment is being made along with capital investment, he further added.

Volvo

In a bid to increase its sale and to strengthen its base, Volvo is increasing its dealers from the current 7to 12, covering 7 cities. The dealers will be appointed before this year end, said its MD for India. Presently, dealers are in Delhi, Cochi, Hyderabad, Chennai, Chandigarh, Pune and Mumbai and new dealers will be in Kolkata, Goa, Ahmedabad and Coimbatore.

The domestic arm of the Swedish Volvo, the company’s upgraded version of its Volvo S80 diesel car was recently unveiled. The new version is built with many new features- quality and driving excellence. The new version car has D5 Twin-Turbo engine, and comes in 9 colors at Rs38.79 lakhs (Mumbai) and Rs37 lakh(Delhi).

The company’s existing models- Volvo XC90 and Volvo S80- will be added with two new models, Volvo XC60 and S60 in another two years. The company has so far sold 300 units in India, since its entry in 2007, as a constituent of Ford Motors. In 2009 it broke its tie and is operating as a whole subsidiary- Volvo Auto India. For Volvo, the number is not mean but the long term presence, said its President.

Toyota

Toyota has just recalled its many vehicles on the basis of various defects and the recent one is with its Prius. The car is facing brake problem and dozens of such complaints have come from North America and Japan. According to the company’s spokeswoman, the complaint is with the model launched last year and the Japan’s transport ministry too received similar complaints with Prius.

A large pool of such complaint has come in a short period of time and the ministry is on the investigation process. In the US, the National Highway Traffic Safety Administration too received 100 such complaints with Prius. Toyota, under the banner shade of GM in the US, is totally in the lurch following these complaints. The reputation has become stake and it has to recall its 8 million vehicles globally. This figure equals the net sale of its cars in 2009 and the recall is due to snags in pedals and accelerators.

BMW on the Financial extension

To consolidate its presence in the Indian market, BMW has found a new entity- Financial service- with an investment of $50 million. Binding with the norms prescribed for the Non-Banking Finance Company, the company will operate with a license. The deal will be with retailing automobile financing for its vehicle, fleet owners and commercial financing. For the car sale, the company seeks to achieve double digit growth in 2010, and with a share of 41% in luxury car market(9000 cars in 2009).

The target for this year is 11000 units, said its President for India. The company is understood to have found that the luxury car-Grand Turismo- in India is highly competitive but it could muster 3690 cars. Going by the sale volume, the company sees the growth to attain 20000 mark by 2015. In addition, dealers would also be increased from 12 to 22 by this December. Grand Turismo is a contemporary SUV sporting all of a sedan and is earmarked as an elite product(from the limited version of 100 units). It is available in 3.01 diesel variant at Rs63lakhs.

A race ahead for two wheeler makers

Hero Honda and Bajaj both had a good stint in 2009 with new sale hits. Hero Honda grabbed the sale volume of 4.4 million with a market share of 59%. But the beginning of 2010 saw the entry of more companies who are likely to launch some 20 models. Yamaha, Suzuki and Honda are in vigorous stature to penetrate the two wheeler market. these companies put together are coming out with 15 new launches in a phase of three years. By that time, it is estimated, the market would have reached 11million mark.

Yet, the pioneers Hero Honda and Bajaj are ready to face the task, as Hero Honda is on the defensive with nine models- three displayed at Auto Expo, three in the pipeline and another three launched during Deepavali. Both the companies are confident of regaining their position in the segment with the available product ranges and new markets. Hero Honda will take on scooters and premium bikes; Bajaj is depending on its KTM and Kawasaki. Industry experts foresee the growth of these two companies as unperturbed one, in the years to come. The rural sector, wherein Hero Honda and Bajaj have a major chunk, will be a litmus test for Yamaha and Honda.

Bajaj to thrive on its new spirit of Pulsar and Discover

Bajaj Auto has set a target of 1.25 lakh Pulsars and 1 lakh units of Discover in the coming days, said its CEO for two wheelers. This figures are for the domestic market inducing the growth rate he added. The target for the period till March is 1 lakh units of Pulsar and Discover and the new target is for the ensuing FY. The sale during the month of January 2010 was 232939 units which includes export and the figures are twice the units done in the same month last year. Of these, Pulsar achieved a sale of 71970 units and Discover with 92035 units.

The CEO said the prescribed target for the new FY will be exclusively for the domestic market by enthralling new customers on the form of sports style secured in new areas of marketing. The company intends to take a new leap of growth by promoting these two brands for which the focus has already been set by the industry. Bajaj, by now, occupies 32% share in the market which means the growth of 200% compared to the previous year’s. Pulsar range includes 150, 180 and 220 cc versions and it has added the latest 135 cc version which accounts a sale of 40000 units a month. Discover has the versions of 100 and 135cc to penetrate the market agog.

Maruti to gain out of tax relief

Maruti Suzuki is likely to gain a lot, say Rs40000, from its new Swift which has procured tax reliefs. The losers are the customers, on the other hand. The company is in the market sharing a lion’s share(50%) and has launched the new petrol version (1.2lit) Swift while retaining the 1.3lit version at Rs4 lakhs. The move is to switch over to smaller engine which brings in 8% tax relief than the other one. The government has relaxed the tax for the cars with 4mt length and with 1.2 lit petrol and 1.5 lit diesel engines demands the same amount of tax. Whereas the regular cars attract 20% tax.

It is in the practice among the car makers to deliver this tax exemption to the customers by reducing the price. But Maruti does it only for this Swift which includes more price for its engine, says the company. SIAM refused to divulge on this issue and it is analyzing the situation. The industry experts defend Maruti’s move on the price of the engine cost for this new Swift. In addition, Maruti has to face the competition from the global small car makers like VW(Polo), Toyota (Etios) and Ford (Figo) who are launching them soon. Hence Maurti’s intention is to leverage on the price of its new Swift.

However, the competitors cannot compete against Maruti, observe the industry analysts. Swift is on the top in this segment which includes Hyundai’s i20, Honda Jazz, Skoda Fabia and Fiat Punto. Swift, launched in 2005, is leading the winning streak with a sale of more than 1 lakh units per year combined petrol and diesel versions. Maruti is confident of boosting its position in this segment with this new Swift.

Cars for lease from BMW

Now the trend towards car being leased is initiated by BMW for its luxury cars. This will benefit those who cannot afford for outright purchase and the lease is available on time bound with an option of resale. BMW, after taking over the reign of supremacy in the luxury car, from Mercedes is keen on promoting its business and consolidate its position. Thus the company is instilling to upgrade its used car business firm, the BMW Premium Selection. This company will deal with the selling of cars used by customers either on purchase or on lease.

BMW will refine these cars into new form and sell through the dealers as in the case of new cars. The company’ s India President said that many customers intend to own a BMW but they could not due to the finance constraints. Hence this lease on time bound scheme is launched. The company is investing $50 million for financing the car business for customers’ sake. The lease scheme will be on par with new car business including insurance coverage for the customers.

It is to be noted that BMW’s sale figure is 3619 units against Mercedes’ 3247 units. Soon, BMW will start making its SUV X-1 from its Chennai factory, and this car will be under 3 series at nominal price range of Rs27 lakhs.

Switch over to safety, Honda proclaims

City Cars made from Honda in 2007, numbering about 8532 , will get a new lease of life with the switch over of safe switch by the company. This is a third such attempt by Honda in India, and a part of its global recall of 6.46 lakhs for such defects in its series – City, Fit and Jazz. In 2007, Honda made its earlier attempt to recall 4459 units of SUV CR-V and 2200 Accord sedan as back as 2004 for faulty parts and replacement.

For the City owners, the task is not too risky and they can drive along till the switch is replaced by Honda. The company’s VP for marketing is too committal that the company has no second thought on safety and at the sametime the current situation is not shocking. Honda is one among those global car makers – Toyota, Peugeot- who have recalled lakhs of their cars for replacing defective components. Toyota had to replace the cars for pedal acceleration fault.

Honda said the company is in the mood of replacing the switches to its customers and it is about a matter of two minutes job. It is customary for car makers to recall cars for replacing the defective components and it involves substantial money for the company. The recalls, instead of damaging the brand popularity, boosts the image of the company. This is true in the case of Honda’s City which is in third generation and Jazz which is in second generation.

Toyota in a jeopardy over the recall

Toyota recalled millions of vehicles for defective functioning and it sees a grave danger in the sale in 2010. The hit will be severe for Toyota in the US wherein the company has withdrew 8 most popular models last week on the basis of accelerator pedal snag. But the company expects the reversal of fortune, that the recall may impede sale increase in the future. The VP of the company expressed fears over the fall in the sale due to recall and the figures in January was alarming. The sale report for the Q3 will be revealed on Thursday, he said. The slippery floormats and accelerator snag costed the company to recall 8.1 million of its vehicles, which overtook the net sale in the last year.

The snag is a freak one, according to the company, and the company is on the verge of reviving the confidence from the customers. The VP said this has been the first such instance from Toyota in the history of the company. No official response to the accidents and casualties has been made from the company sources. But the President of the company(grandson of the founder) made an apology in Switzerland last week. In the US, the company’s head offered apology and regrets over the ongoing events.

Toyota has made initiatives to rectify the faults in more than 4.2 million of its vehicles running in North America and Europe. The defect will be corrected with a small metal shim, or spacer thereby preventing the stickyness. From the next week, the resurgence process will start for Camry, Corolla, and Rav4 in addition to other 5 models. It is to be remembered that the production at six plants in the US and Canada came to a grinding halt after the defect prone information. By the existing situation, the company is closely monitoring the developments with regard to the sale in the 2010. Prior to this debacle, the company foresaw a growth of 6% in the sale but the recall might cost the company about 100-200 billion yen. The costs, by way of both direct and indirect, may be a positive one to analyse the exact situation, said an analyst from Japan.

Toyota’s share shot by 4.5% due to the recall measure in the US as the earlier downfall by 18% in the last week succumbed to the market capitalization around %20 billion. In the meanwhile, Toyota faces an uphill task of dealing the law suits and damages in this regard. Many drivers of the vehicles went ransacking in claiming the damages for not rectifying the defects on time.

But the observers see the lawsuit as the element of litigation against Toyota. The claims include resale value and casualties including death. The problem cannot be solved in the near future, say analysts, and Toyota would face a tough phase in easing the situation. The grave situation of Toyota alerted GM, Ford and Hyundai to capitalize on by offering discounts and other privileges to the Toyota customers.