Tata one lakh car peers — Renault-Nissan, Bajaj Auto, Hero Group, Xenitis, Maruthi and Reva:
# Maruti-Suzuki will completely reskin Maruti 800 (similar to what the company recently did with Zen-Estilo) next year. The company will rebrand it and even power it with a 600cc engine against the current 800cc.
# The Munjal family behind Hero Honda, india’s largest two wheeler maker, which is mulling a foray into the four-wheeler segment .is said to be in talks with BRP (Bombardier Recreational Products) for developing a 500cc small car to rival Tata’s one lakh car. Hero Group was reported to have been closely monitoring the Rs one lakh project by Tata Motors and learn from it to de-risk its own endeavour.
# Renault Nissan is the first one to come up with a idea to rival Tata’s car it plans to produce a car priced at below $3,000 (Rs 1.30 lakh) in India. As Renault’s local partner Mahindra is not interested in making such a low cost car, Renault- Nissan may settle with india’s robust two wheeler manufacturer. Incidentally Bajaj is also planning to foray into four wheeler through a smart car. More are chances for a new JV between Bajaj and Renault – Nissan to rival Tata’s one lakh car.
# India’s lone electric vehicle maker is believed to be developing a small car based on its Reva platform for the redhot Rs 1-lakh car market. Reva’s one lakh car would be a four-seater , four-door model and will be powered by heavy batteries than its existing line-up and the new car can reach a top speed of 100-120kph (80kph for the current Reva products) . Reva’s low cost car is expected by 2010. The current Reva range comes in three variants priced in the range of Rs 3.3-4 .3 lakh in India.
# Chinese manufacturers like chery which are scouting to enter the indian market may use this opportunity for their debut since they already products in this price range. These subcompact car segment may also attract new indian players like ICML and Xenitis.
# Global auto a JV of Xentis Group and China’s Guangzhou Automobile Industry based in bengal plans to introduce a “people’s car that would be in sync with the affordability factor”. Xenitis signed a Memorandum of Understanding (MoU) with GAIG to manufacture four-wheelers. The proposed xenitis small car is likely to go on sale by the end of October 2008. Global Auto has launched a motorcycle called Xpression early this year.
Manufacturers Word on Tata one lakh car:
# The auto manufacturers all over the world are preparing to counter the tata’s assault. Some manufactures have decided to follow the Tata’s footstep while others doubted the possibility of manufacturing a car at such a price very few like opts the both.
# Bajaj says a USD 3,000 car project is simply not a profitable proposition. “I would personally think it’s impossible. You know while there might be some people who say they are going to put out a car for a lakh of rupees or thereabouts or USD 3,000 for example, that’s always possible. It’s a manufacturer’s prerogative to give a product away for free if they want to. But I haven’t heard anybody say, explicitly atleast, that it will have a reasonable return like say 10%,” Rajiv Bajaj explained.
# Carlos Ghoshn CEO, Renault & Nissan said, “If we do it, I’m pretty confident. But if we come to a conclusion that we can make a USD 3,000 car but we can’t make money out of it, we are not going to do it”.“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. “At the moment, I am very curious to see how this car(tata’s one lakh car) looks like,” Mathew added.
# Hyundai India VP (marketing & sales) Arvind Saxena said: “It’s not just the price that a consumer is concerned with. Power, performance, space and fuel efficiency are all important factors that score with consumers.”
# Honda’s India chief M Takedagawa wonders about the one lakh project and said it would be a “three-wheeler with an extra tyre”.
Tata One lakh car’s Launch and the price:
The one lakh car will be launched before Tata Motors next AGM (Annual General Meeting) i.e in the 2nd half of 2008.
Maruthi believes that tata’s car will be around 1.25-1.5 lakh.many analyst support the view. but tata is confident and firm in their price tag. Some believe given the high expectations in the market, Tata will stick to its highly-touted Rs 100,000 price, at least initially, as a matter of pride. We could see a higher price after a month, two months, but at least at launch they will absorb the additional cost,” said Mohit Arora, director for India at J D Power Asia-Pacific.
But Tata’s are singing a different tune “I hope so. Just like people ate their words on Indica, they would realise that there is something (Rs 1-lakh car) that can be done,” Tata told on whether the launch would be an answer to the sceptics.
Who should worry and what they are doing to counter it?
* Two wheeler manufacturers especially the Bajaj Auto, the international consultancy firm JD Power had said that the Tatas’ people’s car would severely affect the top-end motorcycle segment in which Bajaj is the market leader with Pulsar. Analyst are expecting 40% drop in volumes in two wheeler sales after the launch of the one lakh car. But Bajaj is
confident about its products and it says top end bike users will not go for a low cost car also it plans to foray into four wheeler industry.
* The country’s largest car manufacturer Maruti-Suzuki MD Jagdish Khattar has said new launches in the sub- compact small car will reduce the price gap and affect two-wheeler companies more. He has the proof too Maruti Udyog Ltd’s (MUL) True Value initiative has already dented the domestic high-end motorcycle market. Under True Value, Maruti dealers sell used car certified by the company at a considerably lower price compared with a new one. Maruti sells around 75,000 used cars a year under this initiative.
* But things are going to be critical even for the Maruti’s true value initiative as the tata’s one lakh car may turn out to be a nightmare for used-car dealers. Second hand car buyers who spends between 1.5-2.5lakh may move easily for the new Tata’s one lakh car. Used car dealers say the launch of the tata’s one lakh car will cause a 40% drop in volumes in the pre-owned car. Used car dealers are planning to face the Tata’s assault through new ways – they plan to shift focus on more upmarket cars. Dealers are planning to step up warranty and guarantee schemes to attract buyers. some dealers are planning to tie up with banks for inventory funding and consumer loans at competitive rates.
* Prominent small car players such Maruti, Hyundai and General Motors may get a heavy beating if the Tata’s much hyped one lakh car meets the expectation.