Race for the indian market

When the Auto Expo 2010 kicks off in Delhi on Tuesday, the world?s biggest car manufacturers will be there, eager to display their products before the Indian consumer. Promising to be the glitziest show in size and scale, dwarfing even the likes of the Tokyo Motor Show, the week-long event will set the tone for 2010 with over ten global launches and participants from 30 countries.

One of the fastest growing auto markets, India is emerging as an epicentre for the growth of global biggies, who are falling over themselves to add fresh capacities and churn out more cars for the insatiable Indian car buyer. A whopping Rs 30,000 crore is proposed to be invested in the Indian auto market this year.

True, Auto Expo 2010 may not have a showstopper like the Tata Nano that caught the fancy of the world during the 2008 event or the Tata Indica even further back in 1998, but the growing interest in the biennial event is an indicator of India?s coming of age in the global auto arena. As Pawan Goenka, president of Society of Indian Automobile Manufacturers? Association (SIAM), and also the president of automotive at Mahindra & Mahindra, puts it, ?The expo is getting bigger by the day. We are very happy with the turnout.?

As far as trends go, this year?s auto expo will see small cars getting big space. Keen to boost sales, global automakers will unveil a slew of cheap, compact cars. While the likes of Volkswagen and General Motors will launch their much-awaited small cars Polo and Beat, respectively, Japanese majors Toyota and Honda will showcase the concept small car. Maruti Suzuki, too, will have a new launch with its own concept small car. There would also be a huge focus on green technology with hybrid vehicles and green engines.

In the truck space, there would be big launches from M&M, Tata Motors and Ashok Leyland. Indications are that these could include the World Truck range from Tata and M&M?s trucks being planned with ITEC of the US. In the two-wheeler space, Honda Motorcycle India will launch its first mass-market motorcycle, Twister.

The expo is also important to some companies keen on sending out the right message to the Indian market. Volkswagen, for instance, will showcase the Polo, which will be launched in the coming months. The German carmaker, one of the most powerful players in the world market, has taken its time in entering India, possibly because it has had a good run in China.

General Motors’ Indian operations will now be part of a new 50:50 joint venture with Shanghai Automotive Industry Corporation. This will see the launch of Chinese-made light trucks and passenger cars in the near future, which are intended to increase GM’s market share in India. The company will be launching its Beat mini-car on January 4, a day ahead of the official opening of the expo.

Though the duration of the expo has been reduced by two days, SIAM still expects over 1.8 million visitors through the week. The entire space was already booked three to four months in advance. The golden run in 2009 would not have happened had it not been for the reduction in excise duty on small cars to 8% (from 12%) and others to 20% (from 24%). In addition, the JNNURM (where cities got funds from the Centre for infrastructure) was the best piece of news for commercial vehicle manufacturers, as they saw new orders coming for their buses.

Halfway into 2009, carmakers? cheer seemed to be giving way to worry, as a drought gripped parts of northern India. But that did not deter customers one bit. Buying cars and two-wheelers continued at their frenzied pace, though it was also clear that only new products did the trick. ?Companies such as Maruti, Hyundai, M&M and Bajaj Auto saw sales soar because they had something fresh to offer from time to time,? says SIAM secretary general Dilip Chenoy.

Global CV players to park at Pragati maidan

Shweta Bhanot

The Auto Expo in New Delhi is expected to see action across the commercial vehicle segment, with light commercial vehicles as the focus. Bajaj Auto, M&M, Ashok Leyland-Nissan, GM-SAIC, AMW and Tata Motors, along with Chinese makers, are expected to display their light commercial vehicles at the event. The 10th Auto Expo will also see enhanced participation by international CV players that will be parked at Pragati Maidan with their range of products. Some international names to be there include Daimler, Mercedes-Benz, Navistar Inc, Nissan, Volvo and Chinese makers SAIC.

Other than LCVs, the Tata Motors? World Truck range and Mahindra-Navistar?s grand entry will be the highlight of the expo. Tata Motors will unveil a new vehicle and display three other vehicles for the first time. These include the Prima range of trucks from the World Truck platform and the CNG Xenon from Thailand.

After the proposed joint venture with Hero Group fell apart, Daimler Motor is going ahead with the launch of a new range of buses at the Auto Expo. The world?s second-largest truck maker, Volvo, will also launch its new global truck. Mahindra & Mahindra will launch a one-tonne LCV, Maxximo, besides unveiling a new medium and heavy truck from the Navistar joint venture. Other vehicles to be on display will be the recently launched 0.5-tonne Gio. Volvo-Eicher Commercial Vehicles (VECV) is expected to showcase semi low-floor buses among other upgraded range of its products. GM with SAIC is also expected to showcase its range with a one-tonne truck at the expo.

Wilfried Aulbur, managing director and CEO, Mercedes-Benz India, said, ?There will be a lot of excitement at the expo. We plan to launch a bus at the event.? Ashok Leyland, too, is expected to display its light commercial vehicle with Nissan. The new platform Unitruck (range of 16-49 tonnes) from Ashok Leyland is scheduled to be launched in mid-2010. ?LCVs are doing much better than the MHCV segment, which has taken a beating,? says Rakesh Batra, partner and national automotive leader, Ernst & Young, India. He adds that while LCVs saw a growth of 20% in September this year, MHCVs were down 14% in the same period. Overall, the CV market fell by 1% due to the significant decline in MHCVs. The share of LCVs in the total sales of CVs is expected to grow steadily due to changes in the freight movement system, such as hub-and-spoke model and improvement in road infrastructure.

In FY?08, the share stood at around 52.2% and the segment is expected to grow at a CAGR of 20% in the next three years, says Sanjay Vasudevan, industry analyst, Frost & Sullivan. The segment was growing at 41% before October 2008, when the economic slowdown struck.

Super bikes lead the pack

Yogima Seth

Super bikes are set to steal the show at the Auto Expo, with the entire range of Harley Davidson and Bajaj-KTM bikes, to name a few, on display. These bikes will eventually be launched in the country.

While Harley Davidson will showcase Touring, Dyne, Sportster, Softail and VRSC, Suzuki Motorcycle India is expected to unveil Gladius, which is a 645-cc, 2-cylinder street bike with a price tag of around Rs 7 lakh. Then there will be the 1200-cc VFR from the stable of Honda Motorcycle and Scooters India, the recently-launched YZF R1 from Yamaha India Motorcycle and the new Karizma ZMR from Hero Honda Motors, which was launched in October this year.

Besides, the Indo-Austrian motorcycle alliance of Bajaj Auto and KTM is also expected to roll out its 125 cc and 250 cc motorcycles. The two companies entered into an agreement in November 2007 and have been working on these products since then. Both bikes will be powered by liquid-cooled, four-stroke engines and are expected to be produced at the Chakan facility of Bajaj Auto.

Currently, as many as 10 models are sold in the 125 cc category, including those of Hero Honda, Yamaha, TVS Motors, Honda, Suzuki and Bajaj Auto. However, no Indian manufacturer sells bikes in the 250 cc segment. ?The aspirations of Indian youth and rapid improvement in infrastructure have led all two-wheeler manufacturers to foray into super bike segment, which has gained popularity in the recent past,? says a Mumbai-based analyst.