Hyundai to raise capacity to ensure 22% markets

In a bid to increase the market share in the Indian car market, Hyundai is taking steps to expand its production. The company is eyeing on 22% share of the net car sale in Indian market. If it happens then the net production will go to 6.7lakh units in another two years and will involve an additional investment at Chennai plant. The plant’s current capacity is 5.9 lakh units per annum. However, Hyundai has installed its third plant in China for the same reason. In the Indian plants, the company has been hit by the labor issues for a quite longer time. The CEO&MD of Hyundai India said there is a long way to meet the demand from the domestic market. The company’s current strategy is to concentrate on domestic market more than the export segment(42%).

The new plant will come off depending upon the demand in the domestic market (58%) he added. If needed, 80% production will allocated for the domestic market. The company’s sale volume for the last fiscal was 2.8lakh units with 20% share in the net car market. There was an increase of growth by 21% with a sale of 1.4 lakh units during the first five months of 2010-11. He categorically denied the link between the labor issue and investment hesitations. He expressed the confidence of settling the score with labors aided by the local government.

With launch of A-8 by this year end Audi to grab 30% share

Audi is expanding its business ventures in the Indian luxury car segment as it is increasing its dealer network to 18 for marketing its new launch A8 during this year end. Audi’s present share in the luxury car market is 24% at 1500-2000 units and now it is time for it to go for grabbing more profit said its Head for Indian operations. Audi’s target for the next four months from this September is 1000 units as there has been a sale of 1876 cars during January-August 2010 an increase from the last year’s 1128 units .In August the sale was around 250 units against 171 units during the corresponding period in 2009.

The brushed up focus will be on metros and Tier II cities, he added. On the lines of Volkswagen increasing its dealer from 10 to 18, Audi too contemplates on a similar move. The Head for India Audi said that the company is on the verge of accumulating more sales in the unrepresented cities like Patna and Bhubaneswar. By expecting 45% growth in 2011, Audi is on the move to erect showrooms in cities of Coimbatore, Ludhiana, Surat, Lucknow and Indore.

Maruti to source commodities to its apex plant

After a hectic start in the two wheeler segment in India, Suzuki Japan is now refreshing its sourcing from its ally Maruti. This comes to the effect of reducing the material cost and Suzuki’s bid to expand its operation and presence in India. Suzuki is not as strong as Maruti is in the four wheeler segment – nearly 50%. The VP for sales and marketing for Suzuki said that Maruti will supply the necessary parts to contain the price of two wheelers. The deal will be in proportion to the sourcing from regular suppliers to compensate the price.

Suzuki is badly in need of a push in the highly potential market where it has just 1.8% share and it has 30% share in scooter segment. Soon there will be a 125cc motorcycle from Suzuki, Slingshot and subsequent expansion in 100 cc segment. Suzuki’s need now is to tap the two wheeler market by doubling its production and brand range in another two years. Suzuki is to invest Rs500 crore to increase the production to 540000 per year in addition to launching three new models of which one will be a scooter. The existing range of vehicles from Suzuki are GS150R, Hayabusa 1300 , Intruder and Bandit 1250S.

Honda on the verge of foregoing its shares in Hero Honda

A sudden outbreak of news surged in the camp of Honda, revealing that it may peel off 20% share of Hero Honda to the benefit of Munjals. There is an unconfirmed reports that negotiations are on in Japan between Hero corporate and another equity company KKR in this regard. The report indicated that Munjals may receive a minimum 20%share from Honda with KKR receiving 6%. However, such reports are negated by Honda Motors. Consequent to the hoax, the index of Honda witnessed a fall by 7% at Rs1714.90 (< by Rs76.10 at 4.25%) making the closing rate to Rs1669.90. This reversal made a the counter turn over amounting 5.56 lakh shares. Hero Honda directs its status to the keen sense portrayed in the rural sector of India and the perfect dealer/service network. The company has 3500 customer touch points including dealers, service centres and stock points. There are two manufacturing facilities, in Gurgaon and Dharuhera, with global standards. The third and full-fledged facility at Haridwar is just one year old. Hero Honda’s sale figure for the Q1 of 2010-11 is up by 10.28% at a sale of 12,34,039 units against 11,18,987 units in the corresponding period of last year. The back up from Honda is coming by way of an investment of Rs530 crore for the expansion activities and erection of a new plant in Rajasthan during 2011-12.

LeasePlan to procure more cars at Rs300 crore investment

The car rental and lease company in India Leaseplan announced its plan to invest Rs300 for securing 5000 cars this year. This is double to the one in last year. LeasePlan is a car rental and leasing company of the Netherlands in which VW has 50% share.Started in 1999 the company has been making domestic business and schemes are there to lease buses. It also runs a software called Enterprise Resource through which customers can book cars on internet.

The company’s MD said that the growth in the sector is promising and funding will be through HSBC, ABN-Amro, ING and Indus-Ind banks. The
prospective growth of the industry is 20% and the company expects its own growth to 25% in 2010, despite a fall in last year due to slash in
corporate funding. Leaseplan expects its revenue to cross Rs320crore compared to Rs250crore in 2009 since it has 1000 corporate clients by
which a minimum of 2% profit is assured.

The company is promoting the investment in ERP software, to ease booking and filing of complaints. The company which earns 95% of the revenue from lease market is on the verge of entering the fuel management in India. With the initial tie-up from Bharat Petroleum the customers are issued with smart card. This card enables them to avail fuel at no payment and Leaseplan will pay at a defined period phases. This card is one way helps the customers to check the fuel efficiency.

The operation of Leaseplan in India is in 7 major cities covering 120 towns and cities dealing with Residual value. By this, Lease Plan not only rents out cars but also takes care of maintenance, road assistance, insurance management. LeasePlan has got handful of clients like Coca-Cola, ABN Amro Bank, Godrej Industries, LG and DHL.

Volkswagen to occupy the driver

Volkswagen has succeeded at clamping 49.9% share of Porsche deal at an outright purchase for $5.8 billion. This will make the reversal of fortune for Porsche AG to deconsolidate 51.1%. the acquisition deal will be in effect from 2011, when by there will be a merger of these two companies, said a statement from VW. The annual synergies out of this proposed merger would be around 700 million Euros.

In the process of revamping the 75% control of VW share, Porsche had accrued a debt about millions of euros; there was sacking of two top level managers. However, VW was fortunate to gain out of this and the management got the consent to accumulate the share transactions by 2014 (amounting to 135million). VW assessed the combined value of Porsche AG and Porsche Holding to 16 billion euros. Porsche happened to be the Europe’s largest car manufacturing group.

Yamaha to double exports from India

The Japanese motorbike giant, Yamaha, is on the verge of firmly footing its stand in the Indian market by doubling its sales –to 1.4 lakhs in 2010 -, increasing its domestic market by launching new models. With its latest launch of iconic bike VMAX (Rs20 lakhs) the company is mooting the idea to top the list among the high end bike makers. The target for this year is 70 lakh bikes export which is to be doubled in 2010, the company hopes. This is an increase in the target from 40000 units done in 2008 from India, the market which happens to be the ideal hub for the company’s export activities for 150 cc bikes.

The models currently dealt with by the company are Fazer, FZ-6, FZ 16 and YZF-R15. Yamaha is no exception to the global recession with its export sliding down from its previous year’s (2007) 50000 units. The company seemed to have recovered from the recession and is daring to meet the challenge in the coming years, with a minimum of two models per year to take the net increase to 10% in 2012. However, the net sales of motorbikes in India are 58,35,145 units of which Yamaha shared 3.5% in 2008. With a target of domestic sales of 2.2 lakhs- 2.5 lakhs this year, the company is pinning on the hope of raising it to 3 lakh by 2010. For this the company is to invest Rs800 crore with a plant in Faridabad with a capacity of 9 lakh units. Already Rs480 crores have been invested and in the next three years Rs200 crore would be allocated for developing new ranges.

The high end bike sector has the giants like Suzuki and Honda who normally sell bikes @Rs10 lakhs. In addition, Harley Davidson is too eyeing on the Indian market. Yamaha’s sales story in India is – 1670 cc  MTO1 and 998 cc bike YZF-R1 @RS12 lakh+. The next venture will be selling 25 units of 1670cc new VMAX in another year of which 8 bookings are already on records. There are limited editions of FZ bikes in three variants @Rs66,500 to Rs73500. The sole objective of the company is to secure 10% of the Indian bike market by 2012 in addition to 30% of the deluxe market and premium sector. The company has sensed the premium area in the Indian market.

GM India eyes 10% market share by 2011

Amidst global economy downfall in the US, General Motors had planned to safeguard its Indian market by setting a target of 10% market share by 2010. But this move is in the clouds with the company is yet to initiate the efforts which may go vain or may be delayed by a year – 2011. With the sales figure displaying a satisfactory 65,702 units this year,the company is pinning on the hopes of increasing it to reach the target within 2010.

The cars in queue to fetch the desired result are- LPG Spark(already 600 units), soon to be launched Cruze and the mini-car. Even though, the deadline is on the crisis, GM has no regrets to brood over and its targeting on regular sales of its cars. The revival of economy hitch may pull some rewards to the company. GM had to strive hard to get retrieved from the bankruptcy thanks to a trimmer new approaches. GM has no hard troughs in its Indian market.

Bajaj auto loses 2nd position to Honda

Bajaj auto which one came close to snatch the no 1 position from Hero Honda is now pushed back to 3rd position.

Dismal performance by Bajaj auto in last several quarters cost the 2nd position.On the other hand, Honda can jump to

its skies, while Hero Honda retains the 50%+ market share, its direct subsidiary Honda Motorcycles and Scooters India

managed to reach the 2nd postion in a period 6 years.

While in September, Bajaj was ahead of HMSI by as much as 72,262 units, the lead narrowed down to just over

10,000 units in October. And in November, HMSI beat Bajaj. Remember Bajaj lost the no 1 position to Hero Honda in 2001.

Bajaj Auto MD Rajiv Bajaj was quick to dismiss the trend as “premature”. “Corporate sales ranking is never done on a monthly or quarterly basis. Its always on an annual basis. As of now, we are number 2. In my view for this financial year a verdict is premature before April 1, 2009. As for the next year, let’s see who is ahead on May 1, 2009,” Bajaj said.

“The fact that HMSI has emerged Number 2 in November shows that our efforts to reach out to customer are paying off… HMSI has been in India for six years now and we have been expanding our dealer network to reach more customers in smaller cities. Our increased supplier network has also helped us deliver superior products at reasonable price,” M Takedagawa, head of Honda’s south west Asia operations, said.

Is the worst over?

India’s leading two wheeler manufacturer has come out with double digit growth after a long time. All the two wheeler manufacturers have posted negative sales for more than past 6 months. Hero Honda eported a 15.36 per cent jump in motorcycle sales during March at 3,20,594 units as against 2,77,915 units in the same month last year.The company’s total sales for the financial year 2007-08 marginally increased to 33,37,142 units from 33,36,756 units in the previous fiscal. “The year 2007-08 has seen a leadership performance from us. Despite the industry slowdown, we have been able to manage positive growth thereby taking our share in the domestic motorcycle market upward of 52 per cent,” Hero Honda Managing Director and Chief Operating Officer Pawan Munjal said in a statement. Buoyed by the demand Hero Honda has said it will open its third plant on April 8. Few months back Hero Honda put the idea of building a third plant on hold because of the continued negative sales.  Hero Honda has already announced it will launch as many as 12 new products in the next 18 months.