Thursday, January 31, 2008
Tuesday, January 29, 2008
Toyota’s plans for India .
As arguments prevail on whether Toyota is No.1 or 2, the manufacturer is now here to give some non-controversial news.
On Monday, Toyota President Katsuaki Watanabe called on Indian Prime Minister Manmohan Singh and Commerce and Industry Minister Kamal Nath and informed them of the company’s agenda. Toyota has been working on a small car and the development stage according to them is now in the advanced stage and they are apparently finalising key vendors for the project.
Watanabe along with Indian joint venture partner Vikram Kirloskar, remained tight lipped when asked about the future plans of the company.
However, Nath confirmed that Toyota would finalize small car plans in the next 3-4 months before going in for expansion of production. Nath quoted saying "He (Watanabe) met me and informed me that Toyota would be doubling its investments in India and would also make small cars in the market that would be exported to other countries as well"
"They have said they would be expanding at their current manufacturing location, near Bangalore, and would not go for any new location,", added Nath.
Toyota enjoys a meager 3.6% share of the Indian passenger vehicle market. But one thing that cannot be taken away from them is the success they have with all their models so far. Toyota entered the market with the Qualis MUV almost a decade ago and subsequently brought in other models like Corolla, Innova, Camry etc. With increase in production, Toyota hopes to churn out 600,000 units by 2015 compared to the current statistic of about 55,000 units. 15% share is what they have in mind as far as India is concerned and lets see how they accomplish it. And whats GM upto?!
Source:-Topspeed.com
India All Set to Become Global Player in Auto Component Industry .
The Indian auto component industry has the potential to earn 50% of its total revenue from exports only by 2015 as the industry has been drawing the attention of global auto players.
Source:-RANCOS
The environmental impact of India’s Nano car
The environmental impact of India’s Nano car
Tata Motors this week launched the Tata Nano, a compact, shoe-boxy sort of car, with four tiny wheels and one wing mirror.
Environmentalists are already crying murder, saying that this will just encourage more pollution and congestion in a nation that is already suffering severely from both. So I thought I would have a quick look at how things stack up.
The Tata Nano will meet European emissions standards on exhaust. If you want to see details, check out the Euro IV line in this table. Bear in mind that exhaust emissions standards regulate the particles that make up smog, not emissions of the greenhouse gas carbon dioxide (which the EU does not currently regulate, although it’s trying).
The numbers come out in favour of the Tata Nano. Euro IV standards are more stringent than those in place for the motorcycles and scooters, which make up a big chunk of India’s motorised traffic.
For instance, according to the Indian Federation of Automobile Dealers Association and the Society for Indian Automobile Manufacturers, the 2005 standards for two-wheelers limited carbon monoxide, hydrocarbon, and NOx emissions to 1.5 g/km travelled – compare that to just 0.5 g/km (carbon monoxide) and 0.3 g/km (hydrocarbon and NOx) under Euro IV.
But look at fuel efficiency and the balance is flipped. Tata’s Nano travels 21 km for every litre of fuel it is fed, compared to up to 80 km/l you could achieve with a two-wheeler. That means not only a larger bill for the owner, but also more CO2 chucked into the atmosphere.
Still, maybe this is the first of a new wave of ingenious new car models to be produced in India. Given the nation’s considerable engineering workforce, and the growing demand for green transportation, it could be lucrative for Indian companies to start shifting their attentions to supplying the world with new environmentally friendly forms of transportation.
Tata is a massive company, but so far its only environmental line of business is a joint venture in solar energy with BP. Time for a change?
Catherine Brahic, online environment reproter.
Tata's Nano shows way past West's blind spot
This underscores how India leverages its white-collar strengths in the knowledge economy to exert a powerful force on global blue-collar manufacturing.
In doing so, it engages in a direction diametrically opposite from China.
After India succeeded in its quest to "Wal-Mart" the global knowledge economy - through a combination of value and volume, skills and scale — the Indian economy's effect on global manufacturing could prove to be massive.
And yet, like the Nano itself, none of this should be seen as a bolt from the blue.
The strengths of the Tata Group as global technology titans have been in evidence for some time.
What this illustrates are two principles of the 21st century New Economy. Few will be able to compete in the same space as India - least of all those from the high-cost zones of the Western world.
In the information technology (IT) world, such trends have now taken on almost the character of a parody: every rumour of an Indian bid sends the share price of CapGemini, Europe's largest IT services company, soaring.
And it was Tata Steel that demonstrated exactly this New India principle when it swallowed Corus, a European steel maker several times its size.
Tata is not alone. Other Indian conglomerates are following suit.
And yet, all that Western media manage to see is that "the planet is doomed" once millions of Indians and Chinese get their own cars.
Still, India is encouraged to emulate our "good new" habits rather than our "bad old" ones. Talk about skating on very thin moral ice.
Such ingrained Marie Antoinettesque assumptions - having one's cake and eating it too - are, of course, emblematic of the entire debate in the Western media about shifting global economic powers.
It ignores the fact that India has its very own "good new habits".
It already boasts one of the planet's largest public transport systems.
Also overlooked are India's huge efforts to encourage alternatives to fossil fuels.
Despite all its detractors, India is looking quite good, especially when compared with growth-at-any-cost China - or, frankly, the West's thoughtless legacy and continuity of overconsumption.
As far as the Nano is concerned, its effect on the world car market is going to be dwarfed by the convulsions the little car will herald in the world engineering industry.
And such tremors won't end with the car industry. There are other cases worth noting, such as the Indian space programme.
India also boasts the largest national constellation of communication, remote-sensing and special-purpose satellites, including those for distance education, and the soon-to-be-launched world's first e-Health satellite.
Once again, this monumental technological shift is occurring in the West's blind spot - not because India is hiding it, but because the Western powers that be have chosen not to look closely.
They evidently prefer an India wrapped in Gandhi's loin cloth. But the times, they are a-changing - and rapidly so.
Source:-Business Report
Increased adoption of diesel in the passenger car segment.
What is the most significant trend in the Indian passenger car segment? The increased adoption of diesel, says Mr Sanjay Sondhi, Managing Director, Honeywell Turbo Technologies.
“In Europe, more than 50 per cent of passenger cars are diesel, and all indications show that India is following this trend,” he adds, in a recent email interaction with Business Line. Mr Sondhi estimates the penetration of diesel vehicles in India to increase from 37 per cent today to 42-45 per cent over the next 5 years.
Two other major trends that he sees are:
The increasing popularity of small sized diesel engines, driving both Indian and global OEMs (original equipment manufacturers) to develop low-cost cars to bridge the price gap between the two-wheeler and the current range of small cars available in the market; and
A significant share of the three-wheeler passenger cars and commercial vehicles being upgraded to four wheelers such as the Tata ACE, driven by tightening emissions and safety regulations.
Excerpts from the interview.
How do these trends impact your company?
With the help of modern diesel common rail and turbocharging technologies, diesel cars now deliver better fuel economy and lower emissions while providing superior driveability. As India adopts more stringent emissions (the auto industry is gearing up to adopt Bharat Stage 4 norms by April 2010 in the major cities), the demand for advanced turbochargers for diesel car applications will only increase. Thus, we anticipate that the increased demand for small sized diesel engines which deliver more power with low fuel consumption will translate into wider adoption of turbochargers.
What are turbochargers? How do they help?
The basic concept of a turbocharger is to recycle wasted energy from exhaust gas, thus transforming more of the fuel energy consumed into power. While the principle of turbocharging is very simple, the application of the technology is increasingly challenging and complex from an engineering perspective.
Turbo diesels exhibit significant advantages over naturally aspirated gasoline engines, showing typical fuel efficiency gains of 30 per cent, with CO2 reductions of more than 20 per cent. On the gasoline front, double-digit improvement in fuel economy is predicted as a result of both direct injection and turbo technologies.
Honeywell Turbo Technologies is recognised around the world as one of the leading manufacturers of engine boosting systems for passenger cars and commercial vehicles. From providing its first turbo for Caterpillar tractors in 1950s to pioneering the groundbreaking VNT™ (Variable Nozzle Turbine) technology for passenger cars in the 1990s, and more recently, launching the first parallel sequential dual-stage turbo system, Honeywell has been leading the way.
Is there a slowdown, as being talked about? How ‘leading’ is auto sales as an economic indicator of growth?
The automobile industry in India has witnessed tremendous growth in recent years and is all set to carry on the momentum in the foreseeable future.
Though, recently India’s auto market, which is mainly financed by loans, has been hit by the central bank’s moves to curb liquidity and stem inflation, this could get offset by the car purchases which usually rise during the festival season from October to December.
As the industry being an indicator of economic growth, today, the automobile sector in India is one of the key sectors of the economy in terms of the employment providing directly and indirect employment to more than 10 million people. If we add the number of people employed in the auto-component and auto ancillary industry then the number goes even higher.
By 2016, the automotive industry should have created employment for 25 million people in India, according to government predictions, set out in its Automotive Mission Plan. Of this, 62 per cent will be skilled workers, and 10 per cent, unskilled; the balance 28 per cent would comprise management and general personnel.
For every job created directly by the automotive industry, a further seven are created indirectly in the economy at large. Taking these factors into consideration, it can be said that the automotive industry is set to have a major impact on India’s future economic growth.
Currently, the sector accounts for 5 per cent of India’s economic output, but it is set to grow much faster than the rest of the economy.
Is the Indian automobile industry seeing a shift from the replacement market to the original equipment market?
Traditionally, a significant part of India’s automotive component exports was for the automotive aftermarket. However, with increased capability of Indian suppliers, there is significant growth foreseen in auto-component exports to global OEs.
The Automotive Mission Plan very clearly states that India will become a design and manufacturing hub of small cars for the automotive industry with players like Suzuki, Toyota, Hyundai, Tata, Renault/ Nissan all exporting cars from India with Indian made components. This then is also providing additional opportunities to the auto component industry to export components from India. Currently the auto component industry is exporting $2 billion worth of components directly; and the Automotive Mission Plan predicts this export to increase to $15 billion by 2015.
Has the auto component industry been able to attractive FDI (foreign direct investment) to the optimal extent?
Recent years have witnessed more and more global players making their entry into the Indian market through joint ventures, collaborations and wholly owned subsidiaries. With the new found interest of leading global giants, the Indian auto market has turned fiercely competitive with India’s dual advantage of a ready market and low cost manufacturing base.
The government has also relaxed rules to promote expansion of the auto industry in view of the escalating demand from the newly affluent middle class. Foreign automakers can now set up fully owned subsidiaries giving India a potential edge over China with its local partner mandate.
There is also a boom in auto ancillary companies. India is an attractive outsourcing destination for global auto companies because of its strong engineering skills and low costs. Sourcing parts from India is 10-20 per cent cheaper for US automakers and about 50 per cent cheaper for their European counterparts.
Among the car companies that are investing in India are US automakers General Motors and Ford, Germany’s BMW and Daimler Chrysler AG, France’s Renault, Japan’s Suzuki, Toyota and Honda, and South Korea’s Hyundai.
Are there inefficiencies that need to be ironed out to attract more investment?
Though things have dramatically changed in the country’s operating environment and stumbling blocks like poor infrastructure and complex policy environment have considerably improved, we are not yet at par with global standards. Also factors like high cost of power and high interest rates make us less competitive than many other countries.
How does the Indian auto industry fare on quality and cost factors globally? Has the fallout been felt by Honeywell too?
The Indian automotive industry has taken big strides in improving the cost, quality and delivery of its supplies. However, the Indian auto component industry has a long way to go before it can deliver cost, quality and delivery on a consistent basis. Also, the most visible improvement is among the bigger suppliers, while the medium/small sized suppliers have much to do before they can call themselves world class.
There is a clear need for the Indian auto-component industry to make significant investments in its R&D capabilities to become full service supplier to Indian and global OEs.
What is the R&D happening in Honeywell?
Honeywell Technology Solutions Lab in Bangalore has more than 5,000 engineers involved in developing products and solutions for our global businesses. Behind Honeywell Turbo Technologies’ impressive track record of innovations lie its engineering services and manufacturing facilities that span the globe. Wherever customers are located, the aim is to provide a seamless pathway that begins with turbo concept and product development and leads to program application and launch.
Big auto majors (both the domestic and foreign) have an ambitious plan of bringing low-cost small cars to India from next year. How will the auto component makers benefit from this new segment? Do you think there is an undue focus on petrol vehicles?
Honeywell is very excited by the opportunity of small sized diesel cars for the Indian market, and is in the process of developing turbochargers for small sized diesel engines specifically for the Indian market. These turbochargers are being developed by a team composed of Honeywell engineers based in India and in our passenger vehicle worldwide engineering centre in France. We are well positioned to play a key role in this growing segment.
While the use of turbochargers in India is currently restricted to the diesel segment, we believe that India will follow the European trend of increased use of turbochargers for petrol engines, driven by concerns of CO2 emissions and global warming.
Rising fuel prices and strict emission norms across the world forcing auto majors into go for manufacturing hybrid vehicles. Will these hybrid rollouts test the turbocharger market?
Beyond 2012 towards 2020, the internal combustion engine will remain the powertrain of choice with significant contribution from turbocharging technology coupled with extended use of biofuels and light hybrid technology.
With more automakers making an inroad to emerging markets, what will be the Honeywell’s expansion plan to meet the burgeoning demand?
Honeywell set up a state-of-the-art manufacturing plant in Pune in 2005, and has since invested significantly in establishing a local supplier network and local engineering for Indian customers. Catering to the growing demand for turbochargers, the plant has been manufacturing turbochargers for local customers and export. Honeywell is also introducing its innovative VNT™ technology to India.
Honeywell intends making India a hub for global sourcing of auto components and is making a significant investment in upgrading the skills and competencies of Indian suppliers.
Do you have a service network here?
Honeywell Turbo Technologies has already established a service network in India for its products with service centres in 8 major cities and plans to double this number over the next 12 months.
Source:-The hindu.
The way ahead for the auto industry.
"The new office in India is a testament to Magna Steyr's commitment to India and its importance in our global strategy," said Guenther Apfalter, president of Magna Steyr. "Additionally, it creates an important base for engineering and research for both our global and local activities."
Magna Steyr has strategically chosen to grow its presence in the Chakan/Pune region to target the fast-paced automotive growth in the western part of the country, where many local and foreign OEMs have established operations.
NEW DELHI: India's famed automotive growth story has found many admirers and believers across the world. But the fast growing Indian auto sector may fail to become the global provider of vehicles and auto services that official targets envision unless government endeavours to provide more support and Indian companies themselves raise the bar. These are the views of leading Indian auto companies, contained in a new report from KPMG International on the Indian auto-manufacturing sector.
KPMG's India Automotive Study 2007 acknowledges that the Indian economy overall is growing faster than even the most optimistic projections, and that manufacturing is making an outstanding contribution to that growth. But companies themselves question whether Indian firms are fully prepared to make the leap to global scale. The Indian automotive industry is worth around $ 34 billion a year and contributes about 5 per cent of India's GDP.
It produces about 1.5 million vehicles and employs - directly and indirectly - in excess of 13 million people. The government's Automotive Mission Plan calls for automotive sales to more than quadruple to US$145 billion by the year 2016, and for auto sector employment to grow from around 13 million today to 25 million. But companies interviewed by KPMG expressed the view that this rate of growth would be difficult to achieve while infrastructure investment remains relatively low, and while few companies have achieved anything like global scale.
But even as the sector grows some concerns are becoming more pressing. KPMG found that senior auto executives are also concerned about India's eroding cost advantage and the increasing challenges of rewarding and retaining talent, about the pace of consolidation in some parts of the industry, and about the challenge companies face in building Indian auto brands. There are also some concerns expressed about government commitment to building the sector. Labor costs are becoming a big concern in an economy that historically was reliant on low wage rates. Companies now report that a shortage of talent is driving up rates and increasing staff turnover. "The turnover rate is already almost 20 per cent a year in many management levels," says the CFO of a leading auto component maker. "Unless companies can learn to retain people for longer all the benefits of having talented people available will be lost," the company adds.
Many companies believe that Indian manufacturers will have to work hard to increase productivity as labour costs rise. Yet automating India's production lines would require more capital than small companies can raise, according to the CEO of Kalyani Lemmerz, another component company: "Indian auto companies can't just imitate the developed country model, with high productivity through massive automation," he says. "It is still too costly to attempt that."
Above all, companies are concerned about the ability of India's own carmakers to build their brands. "Establishing our brands as quality brands in key markets is going to be a huge challenge," says the head of manufacturing at one large Indian vehicle maker. "We have to sell against established players, and we are going to have to spend a huge amount of time and energy on demonstrating the qualities of the brand."
A number of companies raised doubts that the Indian government being able to recognise the size and scope of the challenge of building a manufacturing sector of global scale. Companies say that government needs to move faster in building domestic and export infrastructure, and in encouraging research and development investments. And one concern voiced by many companies was the fear that India may slip behind competitors in creating an alternative fuels sector.
"Fossil fuel is coming to an end and the whole of mankind needs something to replace it," says the CFO of General Motors in India; "I am not sure the government is really geared up to deal with this fact." Despite the reservations, Indian auto companies are confident - many say that they are more confident than at any time in the recent past.
But Yezdi Nagporewalla, national industry director, Industrial markets in KPMG's India practice, says that it is just when confidence is running high that questions need to be asked. "India may be full of potential, but it faces more than its fair share of challenges too," he says. "From the remotest road-building site to the highest levels of government where policy is hammered out, there is work to be done."
During 2007 KPMG professionals interviewed 40 CEOs and CFOs from different segments of the Indian automotive industry, asking them for their own forecasts of how their sector would perform over the next few years. Many executives were upbeat about India's potential as a high quality manufacturing nation, and some believed that India should be able to build a range of world-class auto businesses in the next decade.
Source:-ET
Tough time ahead for automakers.
The bumpy ride for the Indian automakers will continue. The number one demand from Motown to reduce interest rates has been disregarded by RBI Governor Y V Reddy. The sales have been on a steady decline the past three quarters and no relief seems to be in sight.
The two wheeler and medium & heavy commercial vehicle sales have slumped over the April-December period. The auto companies felt a 25 or a 50 basis points would have improved the lending norms and thereby customer sentiment.
But it was not to be and the consensus now seems to be that the slowdown will continue unless the RBI steps in.
"The industry would continue to slump," said VP-Sales & Marketing, Suzuki Motorcycle India Pvt Ltd.
The banks have reduced their exposure to the auto industry as default rates continue to pile up especially on the two wheeler front. Lending norms too have become tighter resulting in reduced availability of credit but bankers are optimistic and do foresee a cut soon.
"We expect a rate cut in the next two quarters and would improve exposure," said Harpreet Singh, Business Director, Wealth Management, Distribution, Centurion Bank of Punjab Ltd.
With the growing competition and highly volatile market scenario the Indian auto makers have been compelled to think out of box. Experts say with no favours from RBI's monetary policy on Tuesday, the Indian automakers would surely be working overtime to revive their falling fortune.
If and when RBI decides to chip in, automakers would accept it with open arms till then its tough drive ahead
Source:-NDTV.COM
Audi production successfully launched in India at Aurangabad.
With this step Audi is continuing the company’s worldwide success story and growth trend, and is making a long-term investment in one of the world’s most promising automotive markets.
“Starting our own production there is the best way to adequately serve such a promising growth market like India,” said Rupert Stadler, Chairman of the Board of Management of AUDI AG.
“India is one of the components of our Strategy 2015, which aims to achieve sales of 1.5 million Automobiles per year worldwide. We want to be the most successful premium brand in India as well.”
The carmaker has set up an exclusive assembly line on the premises of the group production facility in Aurangabad for production of the Audi A6. Here Audi consistently relies on the company’s high worldwide standards.
Cutting-edge technology and highly skilled employees are the key to efficient production: the Indian team has been intensively prepared for their jobs with extensive training at the Audi plant in Neckarsulm.
In selecting the location for Audi in India, the group plant for SAIPL (Skoda Auto India Private Limited) In Aurangabad provided several decisive advantages. “Audi benefits from an outstanding infrastructure, highly developed working processes, a large pool of skilled workers and favorable logistical conditions,” said Frank Dreves, Member of the Board of Management at AUDI AG for Production.
He clearly indicates the standards applied at Audi’s second automotive production plant in Asia (after Changchun in China). “Top quality is a worldwide standard for Audi,” Dreves said. “It’s ‘Made by Audi,’ to put it simply. A highly skilled and motivated team of employees there also helps ensure this quality.”
There are currently 35 employees working in Aurangabad on the Audi production line, in quality assurance and in logistics. In 2008, more than 300 A6 sedans will be assembled in single-shift operation. The Audi A6 is intended exclusively for the Indian market.
As well as exclusive Audi production, consistent development and expansion of the sales and dealership structure are also key factors in the company’s growing presence on the Indian market.
Audi has been successfully represented on this market for about three years now. In the spring of this year Audi established a sales subsidiary, headquartered in Mumbai. All market activities in India are managed from here.
Audi adjusted prices for the Audi A6 to coincide with the start of local assembly. There are savings for customers thanks to the more favorable customs conditions. Depending on engine, these range from 140,000 to 210,000 Indian rupees (INR) – EUR 2,500 to 3,800 per car. Aside from the production of the A6 for the Indian market, Audi also imports models such as the Audi A4, Audi A8, Audi Q7 and Audi TT.
Source:-Machinist.in
Ford to invest $500 Million to Expand India Operations.
Current manufacturing facility will be expanded to accommodate volume production of new small car
A fully integrated and flexible engine manufacturing facility will produce petrol and next generation diesel engines for domestic and export markets
Chennai: Ford Motor Company today announced plans to invest US$500 million to expand its India operations, reaffirming its commitment to developing and implementing an aggressive growth strategy in the country. The new investment will fund several new initiatives, including the expansion of Ford India's current manufacturing facility in Chennai to begin production of a new small car within the next two years, and construction of a fully integrated and flexible engine manufacturing plant that will go online by 2010.
The new investment increases Ford's total financial commitment in India to more than US$875 million, and underscores its plan to elevate India as one of the strategic production hubs for small cars in the Company's Asia Pacific and Africa region. In 2007, Ford announced a $500 million investment to build small cars in Thailand, just weeks after launching production of small cars at a new $510 million, state-of-the-art facility in Nanjing, China.
John Parker, executive vice president, Asia Pacific and Africa, said, "This new investment highlights the significance of India's role in our continued expansion and overall strategy for the Asia Pacific and Africa region. We've developed a long-term and strategic plan for India that's anchored on a substantial product program and new engine manufacturing facility.'
The overall investment plan for India has already commenced, and will be implemented in phases over the next three years. The first phase currently underway includes the addition of a diesel engine assembly plant at the Chennai site that will have an initial annual capacity of 50,000 units. The first engines are scheduled to roll off the line in April, and will be used in the local production of the Fiesta and Fusion to satisfy domestic demand.
A significant part of the investment will be utilized for the development of new product programs, primarily to expand the Chennai plant and accommodate volume production of the new small car. Production of the small car is scheduled to commence within the next two years, increasing our overall annual production at the expanded plant to 200,000 units by 2010.
"Ford India's small car will be a worthy addition to the already successful and robust product mix that we offer to Indian consumers, and will further strengthen our competitive position in this increasingly dynamic market," explained Arvind Mathew, president and managing director of Ford India.
The second major component of the investment plan is a new, state-of-the-art and fully-integrated engine manufacturing facility to be constructed adjacent to the current vehicle plant. This new flexible facility will be capable of manufacturing both petrol engines and Ford's next generation diesel engine. Initial annual production capacity is planned for 250,000 units, with the first engines coming off line by 2010. Production at the diesel assembly plant that's currently being set up will be integrated into the new facility.
“Our investment plan clearly signals Ford’s intent to implement an aggressive and comprehensive growth strategy for the India market. Reaching volume production of vehicles and engines will not only allow us to participate in the future growth of India's auto industry, but really to help drive it, both in terms of domestic sale and export potential,” asserted Mathew.
The new facilities and capacity expansion will create more than 9,000 jobs – including 1,500 direct and 7,500 indirect jobs – as Ford India considerably increases its supplier base to meet the expanded production volumes. This, in turn, will compound additional investment by its suppliers and vendors and contribute to the overall growth of India's auto industry.
"We'll be significantly increasing our local sourcing to meet the requirements of our expanded production. One of the factors in deciding this investment was Ford's confidence in the international standards and capabilities of India's supply base," said Mathew. "We're also committed to the ongoing development of our own human resources, and we'll be providing skills training for the additional work force."
Ford India added 20 new authorized dealers to its network in 2007, bringing the total to 130 locations throughout the country. The Company plans to further expand its dealership base to accommodate the planned rise in domestic sales.
Ford will continue to introduce world-class customer service programs in India, such as the introduction of a 24-hour Ford Roadside Assistance Program in 2007, as well as professional service programs that include Ford's Quality Care, Brand@Retail and Total Maintenance Plans.
Ford India Pvt. Ltd.
Established in 1995, Ford India is a wholly owned subsidiary of Ford Motor Company, a global automotive industry leader. Ford India manufactures and distributes automobiles made at its modern integrated manufacturing facility, at Maraimalai Nagar, near Chennai. With more than 2,000 employees, the Company's models include the Ikon, Fusion, Endeavour and Fiesta. Ford India is in its eleventh year of operations in the country.
Source:-Machinist.in
Volkswagen to manufacture engines and components in India.
Having started the sale of its 'Passat' luxury sedan in India last year,VW India Managing Director (Passenger Cars) Andreas Prinz and Vw India president Joerg Mueller has announced aggressive growth plans for the Indian market.
By 2012 they could be building as many as 240,000 cars a year in India with the production version of the 'up!' making up a large share of those. In addition to the up! VW will also build the the next generation Polo at the plant in Chakan. Although building the micro-cars in India for the local market would seem logical, there is also the possibility that they will export the cars from there to the US market.VW will launch its Jetta sedan later this year and is also bringing in the 'Phaeton' luxury car, SUV 'Touareg', apart from the iconic 'Beetle' to India.The original 'people's car,' Volkswagen's Beetle, is all set to roll out on Indian roads as the company plans to bring it by the middle of this year.
Although they would be importing engines initially, VW plans to manufacture engines in India for the local market and for export, as part of their long term strategy. The company is looking at using the extra land area at its plant near Pune to develop the component hub there and hopes that this will later cater to other entries into the market.
Source:-Machinist.in
Ashok Leyland and Nissan to set up $500 million LCV plant in TN.
The new company is a 51% - 49% Joint Venture between Ashok Leyland and Nissan and the initial target is to manufacture 100,000 LCVs in the first phase with plans to double the production in the second phase.
Nissan's new generation light duty truck would be produced in this plant to take on the now popular LCV 'Ace' from Tata motors. The first vehicles are supposed to roll out from this factory in 2010. In addition to 1.2 tonners the company also plans to produce 2, 3, 6 and 8 tonner vehicles in the future.
A power train company is also planned by the Ashok Leyland and Nissan to produce Engines and Gear boxes for LCVs for the domestic market and also for export. Nissan will have 51% shares and Ashok Leyland will have 49% shares in this company.
Source:-Machinist.in
Renault-Nissan alliance announces rival for Tata's Nano.
Last year,the company's CEO Carlos Ghosn had announced plans to to build a small, ultra-low-cost car in association with an Indian company. He had said that his company would gain from the Indian partner's skills in frugal product planning and frugal engineering since the objective is to make a low-cost car, and still make a profit.
The company is in talks with India's Bajaj Auto to explore the possibility of a tie- up with the motorbike major to build a car that will be priced at around $2,550.
Ghosn told Bloomberg TV in an interview at the World Economic Forum in Davos that the car is likely to be rolled out 18 months after the Nano's launch which is expected to take place in the third quarter of 2008.
Renault currently manufactures and markets the mid-size sedan Logan in joint venture with India's Mahindra and Mahindra group.
Source:-Machinist.in
The Indian Auto Industry - poised for further growth.
According to KPMG's India Automotive Study 2007, if India has to meet the official targets set by the Automotive Mission Plan, leading Indian auto companies feel that the government will have to provide more support and Indian companies themselves would have to raise the bar.
The Indian auto industry has been growing at a frenetic pace. During 2006-07, it produced a wide variety of vehicles including over 2.06 million four wheelers (passenger cars, light, medium and heavy commercial vehicles, multi-utility vehicles such as jeeps), and over 9 million two and three wheelers (scooters, motor-cycles, mopeds, and three wheelers) in 2006-07. Growth continued apace in 2007 and cumulative growth of the Passenger Vehicles segment during April-August 2007 was 13.60 percent. Passenger Cars grew by 13.50 percent, Utility Vehicles by 10.10 percent and Multi Purpose Vehicles by 24.40 percent in April-August 2007 compared to the same period last year. Simultaneously, automobile Exports continued to grow at 18.96 percent during April-August 2007 over the same period last year.
Companies interviewed by KPMG expressed the view that this rate of growth would be difficult to achieve while infrastructure investment remains relatively low and senior auto executives are also concerned about India's eroding cost advantage, the increasing challenges of rewarding and retaining talent, the pace of consolidation in some parts of the industry, and about the challenge companies face in building Indian auto brands.
Labor costs are becoming a big concern in an economy that historically was reliant on low wage rates. Companies now report that a shortage of talent is driving up rates and increasing staff turnover. Many companies believe that Indian manufacturers will have to work hard to increase productivity as labour costs rise.
Companies say that government needs to move faster in building domestic and export infrastructure, and in encouraging research and development investments. And one concern voiced by many companies was the fear that India may slip behind competitors in creating an alternative fuels sector.
Despite these concerns,many executives interviewed by KPMG professionals were optimistic about India's potential as a high quality manufacturing nation, and some believed that India should be able to build a range of world-class auto businesses in the next decade.
Source:-Machinist.in
Toyota to make India small car hub.
Toyota President Katsuaki Watanabe on Monday called on Prime Minister Manmohan Singh and Commerce and Industry Minister Kamal Nath and apprised them of the company's plans for the market. "He met me and informed me that Toyota would be doubling its investments in India and would also make small cars in the market that would be exported to other countries as well," Nath said after the meeting.
Watanabe, whose team included Indian joint venture partner Vikram Kirloskar, refused to speak about plans for the market and officials dubbed his meetings as a "courtesy call".
However, Nath said the company would finalise small car plans in the next 3-4 months before going in for expansion of production. "They have said they would be expanding at their current manufacturing location, near Bangalore, and would not go for any new location," Nath added.
Toyota Kirloskar's small car project is believed to be in an advanced stage. The company is currently finalising key vendors for the project that would help it get it sales numbers, considering it had a poor 3.6% share of the passenger vehicle market last fiscal.
Government officials said Toyota's plans were in line with India's intention of becoming a hub for small cars.
Toyota has already signalled that India could play a big role in the coming years. The company has said it would increase production capacity in the country more than ten-fold to 6 lakh units by 2015 from the current about 55,000 units as it hopes to corner a big 15% share in one of the world's fastest-growing auto markets.
Source:-TOI
Indian Automotive Industry- The sector that is creating waves globally !
Just to give you a perspective of how Indian Auto Industry has performed in last couple of years, here are some facts:
At present there are 15 manufacturers of passenger cars, 9 manufacturers of commercial vehicles, 14 of 2/3 wheelers and 14 of tractors besides 5 manufacturers of engines. The industry has an investment of more than Rs.50,000 crore in 2002-03 which is slated to go up to Rs. 80,000 crore by this year end. The Indian automotive industry has already attained a turnover of Rs.1,65,000 crore ($34 billion USD). The contribution of the automotive industry to GDP has risen from 2.77% in 1992- 93 to 5% in 2005-06. The auto companies have a manufacturing capacity of over 95 vehicles per annum.
India is the world’s second largest manufacturer of two wheelers, fifth largest manufacturer of commercial vehicles,manufactures largest number of tractors in the world and is the fourth largest passenger car market in Asia.
One of the reasons of growth in this Industry is also because of friendly policies laid down by government of India. At present 100% Foreign Direct Investment (FDI) is permissible in this sector including passenger car segment. In last three years alone, 14 car manufacturers have setup their shops in India.
Here is the Vision statement for Indian Automotive sector by Indian government.
To emerge as the destination of choice in the world for design and manufacture of automobiles and auto components with output reaching a level of US$ 145 billion accounting for more than 10% of the GDP and providing additional employment to 25 million people by 2016.
Source:Track.in
Monday, January 28, 2008
The booming Indian Automotive Industry: Should we rejoice ?
India is booming in every nook and corner, be it the retail sector or the telecom sector, the real estate or even the panwala next door ! Money is flowing into India and its people like never before. And why not, after all Indian middle class is set to expand nearly 10 times from its current size of 50 million to 583 million by 2025, according to consultancy firm Mckinsey.
Like any other sector Indian Automotive Industry too is booming. I have earlier written about the how car manufacturers are making a beeline in India by announcing their plans to make cheap $2500 (Rupees 1 lac to 1.5 lac ) cars. With the growth in Indian middle class consumer, the Indian Auto Industry is set to grow exponentially. Currently, India has low car ownership rates ? there are 7-8 cars per 1,000 people compared with 300-500 cars per 1,000 people in many Western nations, but annual passenger vehicle sales in India are expected to double to 2 million units by 2010.
However, the fallout of all this growth may turn out to be a Traffic and Environmental disaster. Is any body thinking about where are we going to drive these cars or what will happen to all the emissions of the greenhouse gasses tied to global warming ?
Another issue is the pollution that these news cars are going to cause. I am not sure of how strict are emission standards in India. According to me, we are far behind the western countries, when it comes to clean emission standards (correct me if I am wrong on this one). Even in today’s situation, the pollution levels in India are much above critical levels - and mind you, I am talking about pollution in Tier 2 cities like Pune couple years back. I have not been in India recently, but I really do not think that the situation must have changed too much there.
India has normally been a country of two wheelers. Last 10 years have seen millions of new motorbikes come on roads. These bikes cost anywhere between Rs. 40,000 to 70,000 on average. These users will happily buy a car which is around lac of rupees ($2,500). Just imagine the kind of colossal growth we are looking at !
Tata had announced there 1 lac car couple of years back and they expect it to hit the road by as early as next year. A lot of other car manufacturers have joined the bandwagon, latest being Renault, who very recently announced their $3000 car for India.
Automotive R&D.
In its monthly flash report for November 2006, the Society of Indian Automobile Manufacturers (SIAM) proudly stated that automotive production in 11 months had crossed the 10-million mark, a feat that took the whole of 2005, even when tractors were added to it.
A commendable performance that may be, but this enthusiasm to push the topline is not exactly reflected in the vigour with which investments are happening in research and development.
Going by the numbers put out by listed automobile and component companies for the year ended 31 March 2006, investment in R&D as a percentage of turnover is an abysmal 1.6 per cent. Even if borrowed technology (the royalty and fees paid by these companies to their JV partners abroad) were to be included, the number does not go beyond 2.5 per cent of the revenues.
Global automobile and component makers, on the other hand, invest anywhere between 5 and 8 per cent in R&D, and that too, on much higher revenue numbers. Ford Motor, for example, is the world’s biggest R&D spender ($8 billion last year or 5 per cent of its revenues), despite all its financial woes.
But that’s not a new story. India’s automotive industry has always lagged way behind global peers. That was acceptable for three reasons. First was the want of volumes in the marketplace. Traditionally, heavy investments in fixed cost with long gestation periods have discouraged any serious attempts at basic research in India. Second, the global aspirations of the industry is a recent phenomenon. The earlier ‘India is enough’ mindset did not demand much research. Three, very little product development was happening.
Now all three have changed. India’s passenger vehicle market alone will double to two million units by 2010.
In the past eight years, automotive companies have put at least four or five new platforms on Indian roads like Tata Motors’ Indica, Safari and micro truck Ace, Mahindra & Mahindra’s (M&M) Scorpio and Sonalika Group’s Rhino. They are also developing at least four to five new platforms. M&M and International Truck and Engine Corporation are working on a complete range of commercial vehicle platforms for Indian and global markets. Tata Motors’ Rs 1-lakh car, currently under development, could well turn out to be India’s own Model T — a car that will allow mass production and give consumer access a new meaning altogether. Indian two-wheeler makers like Bajaj Auto and TVS Motor, too, have been working on new platforms, not to mention their diversification into cargo carriers on four and three wheels.
This is beginning to show in the sector’s R&D spending data, though India will take many years to get into the global league. In the past four years, the automotive industry’s (excluding component makers) spending on R&D has increased from Rs 243 crore to Rs 954 crore. The industry also invests 1.5 per cent of revenues in R&D (0.68 per cent four years ago.)
“A lot of R&D is happening in India outside the public purview and, therefore, does not get reflected in the annual reports. In fact, one of the industry’s recommendations is to expand the scope of allowing tax concessions on investments by Indian companies in such collaborative work,” says Dilip Chenoy, director general, SIAM.
Chennai-based Ucal and TVS Group are working on pioneering engine management systems that on successful completion can find their way into the global arena. “The transition from Euro II to Euro III emission norms saw some pioneering work in India — it had no parallel even in the West. In terms of fuel efficiency, too, some of the models made in India have been giving better results,” Chenoy points out.
But Indian auto companies are not the only ones investing in R&D in the country. Two other groups of companies are joining the fray. Global automobile giants are keen to outsource research work to India, and Indian information technology companies are beginning to do interesting work. Investments in R&D in the automotive sector in India is likely to take three paths, with some overlapping at different points.
Given the cost advantages India offers, more and more global automobile and component players are likely to scale up their R&D outsourcing to India. A simplistic explanation offered for this is the shrinking of concept-to-commissioning from 36 months to 12 months — a truly attractive proposition for the automobile majors in the developed markets where the timely launch of a new car, or even a new breakthrough feature, matters the most.
Many global automobile and parts companies like General Motors, Volvo, DaimlerChrysler, Bosch and Honda are scaling up their investments in R&D done out of India. A few others, like Ford and Nissan, have tread different paths, where part of the work is done out of dedicated Indian IT companies. “Indian engineers are very efficient and have a sense of frugality,” Patrick Pelata, executive vice-president (product planning and programme) with French carmaker Renault told Businessworld.
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The role of IT in the automotive space has so far treaded a very familiar path — much as in any other sector. IT support systems like supply chain management, customer relationship management and payroll continue to play key roles. But now, embedded software that go into chip management systems that drive cars are increasingly being developed in India.
All that is well documented. But more importantly, a few IT companies have started showing interest in developing solutions for the automotive sector. This is by far the closest the IT industry in India has come to research in the automobile sector.
Already, a large number of domain experts, traditionally found in shop floors in the US, Germany or Japan are keen to join IT companies. “Making automobiles more intelligent like building collision avoidance systems, engine management systems and even entertainment features in cars are some of the areas the IT companies in India are working on,” says Subu D. Subramanian, director and senior vice-president (manufacturing and automotive business group), Satyam Computer Services. Satyam is working with seven out of 10 global automotive makers. “In the next two to three years, we will see several collaborations signed between global automotive giants and Indian IT companies. This will call for software coding, domain knowledge and deep pockets,” he adds. He believes that the $1-billion automotive vertical now has the potential to grow into, say, $50 billion-60 billion by 2020.
For that to happen, the three stakeholders will have to work closely. In the future, it is very likely that global auto firms, their Indian counterparts and IT companies will get into collaborative research. In fact, the first such loose alliance may already be in the making. Tata Motors uses its engineering and design services subsidiary Tata Technologies (it recently acquired the US-based INCAT) extensively.
Besides, in many areas, TCS and INCAT also work seamlessly as one organisation and collaborate on various projects. Now, with the Tata-Fiat alliance unfolding, analysts expect the INCAT-TCS combine to do more development work for Fiat. If that happens, the first research triumvirate will be in place.
Source:-businessworld.com
Dragns hiting the markets.
Their huge participation speaks volumes about India’s growing car market. If 400 out of the 600 participating Car components manufacturers are Chinese and Taiwanese, it’s time for the domestic and other foreign companies to think and bounce back on the dragon force.
Source:-carzoo blog..
Intelligent cars from GM - the future is here
Indians, who have a record number of road accidents, will soon get GM cars fitted with this intelligent software and if the car is in an accident, the software automatically alerts the back office which in turn will rush to help to spot. The software can also send out warnings to the owner of the vehicle in case of attempt at theft or damage.
The concept, already in use in the U.S, can be extremely beneficial for Indian car users. In the event of an accident, the release of the airbags could send out alert signals to the back office service providers. GM is also working on components for engine and safety controls.
According to a GM spokesman, the sophisticated back office service will also assist if the car develops problems. The driver can personally call the back office service provider to intimate them of any specific problem that the vehicle is giving and it will be taken care of immediately.
Once the sophisticated software is in place, it would mean that a car breakdown would have to be struck off from the list of ‘most common excuses’, a reason most often made for showing up late for work!
Source:-Carzoo.com
Caparo Group enters INDIAn markets.
The group is set to invest Rs. 3,500 Crore to lay down a Special Economic Zone (SEZ) in a small district near Andhra Pradesh. They have already singed the MoU (Memorandum of Understanding) with the state government.
Good news for the country as work is expected to start by March this year and the new venture promises to create as many as 10,000 job opportunities.
Source :Carzoo blog.
New Hundai i10
New Hyundai i10
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- Intelligent Responsive Drive Engine.
- Wide range of colours.
- Optional anti-lock braking system.
- Elegant styling.
- Spacious interiors.
- Affordable family car.
- Lack of adjustable headrests.
Hyundai Motor India Limited launches i10 under the PA code name in November 2007. Taking advantage of the demand for more small cars in the Indian auto industry, Hyundai rolled out i10 with a powerful engine and an upscale interior. It is one of India’s most popular ’A’ segment small car. It is built to take on sub-compact segment cars such as the Chevrolet Spark, Maruti Suzuki Zen Estilo, Maruti Suzuki WagonR, and Tata Indica Xeta.
The well-equipped i10 is an affordable small car and a perfect combination of superior technology, roomy interiors, and the stamp of reliability. It was the most talked about car in small car segment before its launch and it is sure to gain the confidence of car enthusiasts with its aerodynamic design, array of standard convenience and comfort features, and luxurious fittings. It comes with all elements that would please a buyer looking for a small family car at an affordable price.
It is available in 4 variants: D-lite, Era, Magna, and Magna O. All these variants come with a 1.1-liter engine and are available in a wide range of colours. Magna O is a top-end variant. It comes with safety features like an anti-lock braking system (ABS) and airbags. It also comes with an optional sunroof with slide and tilt feature.Under the hood, the i10 boasts of a 1.1-litre Inline-four Intelligent Responsive Drive Engine (iRDE) that churns out 66 bhp at 5,500 revs and 99 Nm of torque at 2800 rpm. Hyundai’s intelligent responsive technology strengthens and powers the engine to improve performance and mileage. The 5-speed manual transmission with overdrive that comes standard across all variants is quick and responsive. The i10 is designed with ventilated discs in the front and self-adjusting drums in the rear.
It is lively and handles well with its short wheelbase and turning radius that makes it ideal for swift maneuvers. The car shows minor body lean while cornering, so that is something to watch out for. The new i10 sports top class McPherson Strut suspension in the front and CTBA with coil springs in the rear that best suit Indian road conditions. It rolls on steel wheels with tubeless tyres to increase the level grip and comfort while negotiating slippery surfaces.
The i10 is a wide and smartly designed small car that draws the attention of enthusiasts with its stylish and aerodynamic design. It is built and styled contemporarily similar to that of the Ford verve concept and the new Aveo U-VA. Its low slung grille flanked by the two large headlamps distinguishes the i10 design from its competitors in the segment.
The most impressive and stylish cues are the sharply raked windscreen and ellipsoidal glass that enhance the overall look of the i10. The interiors display luxurious fine fittings to provide unsurpassed comfort and the interior looks quite modern with dashboard integrated center console instead of conventional floor shift pattern.
Elegantly designed interiors are not only plush but also provide a luxurious feel. Dual Tone Beige Interior features 3-spoke steering wheel that makes handling easier and nimble. The design of the dash is impressive and appealing. All equipments including the instrument cluster, the AC, and the audio system have been fitted and placed properly on the console. Five persons can comfortably fit in its spacious interior. The seats are supportive and offer good comfort but the lack of adjustable headrests would slightly reduce the level of comfort on long drives. Standard interior features include an Electronic Trip-meter, an Electronic odometer, a low fuel warning lamp, an air conditioner with heater, and an internally adjustable ORVM. It is packed with safety features including child safety door locks, seatbelts, and crumple zones.
Source:-Carzoo.com
Tata's electric car plan.
Tata need to thoroughly think of a strategy to make good feasible cars for the use of the common middle-class man across the world. Electric cars have performed poorly in India mainly because of re-charging problems, low output, and absolutely no help as petrol bunks.
Tata needs to develop a performance oriented electric car if it wants to compete in this line of cars being manufactured.
Source :-Carzoo Bolg
SUVs — New, Hot, & Happeni
As this industry has grown dramatically in the past decade and a half and is poised to take India to a position of the next superpower for automobiles, newer sub-trends and segments are becoming discernible. Of these, a prominent one has been that of multi utility vehicles (MUVs) and sports utility vehicles (SUVs) in particular, although this segment took some time to kick off.
The growth of this particular segment is perhaps a logical outcome of the burgeoning upper middle class, as it is considered a lifestyle product. Among the estimated 300 million or so people who make the teeming middle class population, the profile these manufacturers have narrowed down for SUV’s is the 35-55 age group that is upwardly mobile and has been quite a globetrotter.
Carmakers estimate that typically, these buyers would have owned a car for some time, and would be looking for this type of a vehicle as a second buy. This is a vehicle that is used primarily to take the family out for long drives. This last aspect makes this segment a highly narrowed one, because the idea of taking off for vacations and long weekend rides is just about beginning to catch up in India, as compared to developed economies.
While there are a good number of carmakers in India, not all of them are keen or ready to enter this particularly specialized segment. Currently, there are no more than a handful of big players that make SUV’s – Ford, Honda, Hyundai, Suzuki, and Chevrolet are the names that come to mind among foreign companies, while Tata and Mahindra are the leading SUV makers among Indian manufacturers. One of the important factors that make the entry into the fray challenging is that SUV customers are generally well-traveled and aware of automobile brands from around the world. Another factor is the price. An overwhelmingly huge percentage of the brands are priced between 13 and 23 Lakh, a sum most Indians would think twice about before spending on a second car for the family.Having said this, it needs to be borne in mind that this is still very much an expanding market. It is in the process of evolving and it is difficult to predict major trends for the distant future. One thing is certain – it has seen a notable growth in percentage in the last few years. Yet, this market size, even after what has been termed as an exponential growth, is puny by European and American, or even Indonesian standards. Despite the much touted expansion of the market, we are still talking about figures that run into the lower thousands annually. So, are figures like these enough to encourage big names to enter the bandwagon and claim a piece of the pie?
It is the expected growth that is making these big names think about concentrating on this segment. Although no one can say with certainty what the market size is going to be in the next 5-10 years, everyone is looking for an expanded market.
The expansion of the automobile industry in general depends heavily on increased income levels, which is cited as key for the expansion of this particular segment, but it is difficult to say how long this trend will sustain. The major consolation for most players is that the market for small cars had also got off to a slow start, and that SUV’s would pick up as more choices are offered to buyers at lower prices. For the time being, one of the prime factors driving people to the purchase of an SUV is the legacy of the manufacturer. Maybe, in the not so distant future, glancing from the same rooftop, you will see more SUVs than other cars in the parade of vehicles.Source:-Carzoo.com
Sunday, January 27, 2008
Facts & Figures..(c0ntd)
The automobile industry in India offers significant employment opportunities. The automobile industry including component industry employs 0.45 million people directly and around 10 million people indirectly.
The auto industry recorded a turnover of US$ 10 billion while the auto-component industry recorded a turnover of US$ 2.7 billion in 1999-2000.
• Many international auto majors entered the country post liberalisation in 1991.
• India’s largest car-maker Maruti Udyog Ltd (MUL) was recently privatised with Suzuki Motor Corporation moving into the driving seat after acquiring a majority stake and management control in the Maruti Suzuki joint venture in early 2002.
Facts & Figures..
The first auto vehicle rolled out in India at the end of 19th century. Today, India is the the 2nd largest tractor and 5th largest commercial vehicle manufacturer in the world. Hero Honda with 1.7M motorcycles a year is now the largest motorcycle manufacturer in the world.
The passenger car and motorcycle segment in Indian auto market is growing by 8-9 per cent. The two-wheeler segment will clock 11.5% rise by 2007. Commercial vehicle to grow by 5.2 per cent.
India is the 11th largest Passenger Cars producing countries in the world and 4th largest in Heavy Trucks. Maruti Udyog Ltd. is the leading 4-wheelers manufacturer. Hero Honda is the leading 2-wheelers manufacturer.
Hero Honda is the largest manufacturer of motorcycles. Hyundai Motors India is the second largest player in passenger car market. Tata Motors is the fifth largest medium & heavy commercial vehicle manufacturer in the world.
According to the research every fifth car sold in India is Alto.
Indian Automobile Players.
- Maruti Suzuki
- Hundai
- TATA
- Skoda
- Toyota
- M&M
- Hindustan Motors
- Audi
- BMW
- Mitsubishi
- Chevrolet
- Opel
- Toyota
- Honda
- Mercedes-Benz
