Indian angle to a global auto story

We must leverage the emerging alliances in the industry

N Chandra Mohan

Weaving in an India angle to an international motor show is not easy. Not because the country figures only marginally in the plans of global auto majors. These events are basically occasions for the latter to showcase their latest concept vehicles, which may not even get to the shop floor in a hurry. A big theme for most companies at the recent Tokyo Motor Show was environment-friendliness — with various prototypes having hybrid engines and other advanced technologies, including information technology.

Toyota’s theme was ‘new dream-filled mobility’ and it showcased ultra fuel-efficient cars like the ES cubic, and a fuel cell hybrid one with zero emissions that has already started running on public roads. Honda emphasised the ‘fun of mobile space’ with its Unibox. Nissan’s CEO Carlos Ghosn unveiled the GT-R as a contender for the ‘ultimate road vehicle’. Fuji Heavy Industries exhibited vehicles which personified the theme ‘driving emotion’. Suzuki’s theme was ‘make it unique’.

There isn’t much in all of this to write home about. The India angle is problematical as many of the exhibits remain aspirational and may take a long time to hit the country roads. With its agility and muscular strength, the two-seater, two-door coupe Lamborghini Murcielago is a beauty to behold but alas may not be seen in this neck of the woods. The same applies to the offerings of Audi —- which symbolises German engineering excellence as opposed to Italian styling, Japanese quality and American muscle — whose new A4 incorporates the Multitronic continuously variable automatic transmission.

What does that mean? The motor show not only is an exhibition of wheels and leggy models but also design innovation. The deeper you get, the more exciting is the feel — the redesigned Audi A4 with its Multitronic system accelerates smoothly and extracts the maximum performance from the engine without sacrificing fuel economy. This system bids fair to replace the conventional automatic gearboxes and exemplifies how old vehicle technologies stage a comeback as potential industry standards.

Back to the India angle, the only way of getting one is to approach global majors with a presence in the country and enquire of their plans. Not that they will reveal details regarding new model launches, but surely they will provide the broad contours of their plans. The big one in this regard is the US car giant General Motors which is seeking to intensify its presence in the Asia-Pacific region with its alliances with Suzuki, Isuzu and Fuji Heavy Industries and majority ownership of Daewoo Motors.

GM has a 20.1 per cent stake in Suzuki, which has a dominant presence in India’s passenger car market as the equal partner of the government in Maruti Udyog Ltd. The US company itself produces mid-size cars in its facility in Gujarat. Daewoo India makes small cars, but taking over this running facility is not a part of GM’s plans. “Daewoo India is not a part of the proposals we have put on the table. We took a decision that it is not one that we would go after”, stated Rudy Schlais, head of GM’s Asia-Pacific division. Why is this so? After all, doesn’t GM need a small car facility to get volume growth in India? Part of the reason, perhaps, is the recent flurry of activity to kickstart disinvestment of the government’s 50 per cent stake in Maruti. When that happens, GM indeed will be in a position to utilise Suzuki’s production facility to make low end vehicles to register its presence in the country in a big way.

This cautious optimism underlies Schlais’ response when asked which brand GM would like to introduce here: “I think it will be Chevrolet.” GM already has made strides in this direction. At the Tokyo Motor Show, its Asian car made jointly with Suzuki, the Chevrolet Cruze, was unveiled. The latest offering is expected to hit the Japanese market next month at a base sticker price of 1.3 million yen or roughly Rs five lakh. This Asian car is being made in Suzuki’s flagship Kosai plant and uses the latter’s Wagon R plus platform. Currently, around 500 cars have already been assembled and indications are that it will also be produced in Indonesia from 2003.

Why not India? All that GM noncommittally admits to is that it’s not a bad idea and that such an option definitely does exist. That even if Maruti produces the Wagon R, a line can be devoted to the Cruze. Actually, it does make eminent sense for this Asian car — which was code-named the YGM-1 — to be made locally and marketed by GM in India. Elsewhere in Asia, the Cruze will be sold through GM’s AutoWorld dealerships as well as Suzuki’s network. The latter in India is extensive given Maruti’s dominance.

The Cruze happens to be GM’s first car to be made in Japan carrying its marque since 1939. Suzuki by the way is not only making cars for the world’s largest car company but also for Nissan, besides Mazda and Subaru using identical platforms. Speaking at the Tokyo Motor Show, the Brazilian-born Ghosn mentioned that next year Nissan would enter the mini-vehicle market for the first time and it planned to source one such car (the MR Wagon) completely from Suzuki. The Cruze symbolises GM’s efforts to grow in Asia through its alliance partnerships. It symbolises its efforts to build cars in the region for the region’s customers, rather than resorting to the quick fix of exporting vehicles. It has aimed for a market share of ten per cent on its own and 20 per cent with its alliance partners in the Asia-Pacific region. And India happens to be one of the eight emerging markets, after China and South Korea, in which 60 per cent of the market growth is expected to occur. But this remains only a potentiality as it has not yet leveraged the global auto alliances. Perhaps this is also why an India angle is elusive when covering an international motor show.