Monday, October 30, 2006

PLM (Product Lifecycle Management)-Simulate car designs in virtual world?

Take a look at any new vehicle model hitting the roads. Chances are it may never have begun life as a clay model prototype. Chances are also that it may never have undergone physical crash testing. All of these may have been done in the virtual world and perhaps the Maruti Swift model you are driving is the first off the assembly line.

Advanced software tools have been used in the automotive industry for a long time, like CAD/CAM for instance. But the latest trend to hit the Indian automotive space is PLM or product lifecycle management where the entire lifecycle of a product from concept and design to junking it is first simulated in the virtual space before translating it into reality. While the Indian automotive industry has been using PLM for some time now, it has been mainly confined to CAD/CAM end for design.

Now, Indian original equipment manufacturers and their vendors are catching up with advanced countries to increasingly use PLM for advanced uses like reducing physical prototyping and simulation including crash testing and crash analysis.

OEMs like Maruti Udyog, Ashok Leyland, Mahindra & Mahindra, among others, have been using this tool for some time now, not only for product planning but also for process planning, factory modelling, operation simulation, assembly sequencing, quality issues, scrap rates, etc. The costs associated with these processes too decline by 30% on an average with the use of this tool with some like Maruti Udyog reporting savings as high as 50%.

“The reason for faster adoption by the auto industry is driven by the need for faster shorter cycle time. With competition being rather fierce, vehicle makers need to hit the market faster and faster," says an analyst. On an average, the adoption of this tool reduces the cycle time (from concept to production) by six months. The gestation period of a vehicle is typically three years. Ashok Leyland expects a significant reduction in development lead-time and effort to the order of 15%. Maruti Udyog also reports a 25% reduction in the design-to-launch time and expects 15% more reduction as a result of more collaboration with its parent Suzuki and vendors on a real time basis.

OEMs are also increasingly using this tool for factory modelling and layout planning. Maruti, which has used this system for its new plant at Manesar, for instance reports a 50% reduction in assembly/build issues and engineering change notice time (ECN). The number of ECN errors cut by 50%.

Sunday, October 29, 2006

Maruti begins production at Manesar plant

Maruti Udyog Ltd has started production of cars at its new plant in Manesar and hopes to reach full production capacity of 3,00,000 units in the new plant by the middle of 2008.

The company, which began production at Manesar last month, has shifted the production of its popular premium hatchback 'swift' to the new plant, company Managing Director Jagdish Khattar said.

Maruti currently has a capacity of around 6,00,000 units at its existing manufacturing facility at Gurgaon and Khattar said the company will initially scale up production levels to 1,00,000 units at the new Manesar plant, in which the company will invest a total of Rs 1,524 crore.

The company will be manufacturing its proposed new compact car at the new facility which will be meant both for the domestic as well as the export market.

Khattar said the company will invest a total of Rs 9,000 crore by 2009-10, of which Rs 4,000 crore will be pumped in the existing Gurgaon facility for launching new models, expansion, automation and for new engine series.

The balance investments would be for the Manesar plant as well as the company's diesel engine plant.

Backed by the massive investments and new model launches, Maruti is eyeing sales of one million cars in 2010. The company, in which, Japan's Suzuki Motor Corp owns 54.2 per cent stake, plans to launch five new models over the next five years.

Backed by high sales and realisations, the company reported a 40 per cent rise in net profit in the quarter ended September 30 at Rs 367.4 crore while its total income (net of excise) shot up 12.5 per cent at Rs 3,540.8 crore.

Saturday, October 28, 2006

Maruti to review car prices in December

India's biggest carmaker Maruti Udyog Ltd today said it will review car prices in December this year.

"We will take a call in December for a price review from January," Maruti Managing Director Jagdish Khattar said when asked whether the company plans to hike car prices.

Maruti had last reviewed car prices in August this year, when it raised them by 0.17-1.47 per cent, translating into a hike ranging between Rs 500 and Rs 5,000.

Cars covered under the last review included the 'Alto', 'Maruti800', mid-size 'Esteem' and van 'Omni', though others like the 'Swift' and 'Zen' were spared.

Khattar, however, refused to specify the models which can see a price review or the possible quantum. "How much and when cannot be specified now," he said.

Buoyed by higher sales and realisations, the car market leader today reported a 39.8 per cent rise in net profit for the quarter ended September 30, at Rs 367.4 crore against Rs 262.6 crore in the same period last year.

The company, 54.2 per cent owned by Japan's Suzuki Motor Corp, said the total income (net of excise) in the period grew 12.5 per cent in July-September 2006 period at Rs 3,540.8 crore from Rs 3,146.8 crore in the same period last year.

Friday, October 27, 2006

Maruti Q2 net up 39.5 pct, sells more cars

Maruti Udyog Ltd. reported a rise in line with forecasts in quarterly net profit as demand for its fuel-efficient small cars outpaced rising raw material costs in a booming market.

New Delhi-based Maruti, majority-owned by Japan's Suzuki Motor Corp., said July-September net profit rose to 3.67 billion rupees ($81.1 million) from 2.63 billion rupees a year earlier, marginally ahead of a forecast of 3.62 billion rupees in a Reuters poll of 10 analysts.

Maruti's sales, including the popular Zen, Alto and Swift models, rose 12.2 percent to 157,683 units in the July-September fiscal second quarter. April-June sales were 144,948 vehicles.

Maruti shares, valued at $6 billion, gained 23 percent in July-September, outpacing a 12.9 percent gain on the BSE auto index.

Thursday, October 26, 2006

Centre to sell Maruti stake to PSU banks

The government has set in motion the process of exiting Maruti Udyog with an eye to sell its remaining 10.27% stake in India's largest car manufacturer by the end of the current fiscal.

Sources said finance ministry had initiated consultations with other ministries on the issue and was expected to float a cabinet note soon. It is, however, playing safe and is planning to replicate the earlier model of selling the stake to state-owned banks, financial institutions and insurance companies through a process of competitive bidding.

The government plans to use Maruti's closing price for July 29 (Rs 926.70) as the reserve price for this tranche of stake sale. At this price, the Centre can mobilise Rs 2,700 crore from the equity sale.

The government, during NDA regime, sold a part of its stake to Suzuki, its joint venture partner in India's largest car manufacturer, at a negotiated price. It followed it up by divesting a 25% stake through a public offer. In January this year, following a change of guard at the Centre, government opted to sell 8% stake to public sector banks, FIs and insurance firms, which helped it raise over Rs 1,560 crore. Recently, the cabinet approved the allotment of 20 shares each to the 3,500-odd MUL employees at a discount.

Unlike opposition to disinvestment in PSUs, government does not see any pressure on MUL sale with the allies not opposing the move, saying that the firm has already been privatised and even the government nominee on its board has been withdrawn. The heavy industry ministry too is on board and the proposal to sell the remaining stake had come from it. In fact, finance ministry had earlier this year advised the heavy industry ministry to postpone the sale for a while, hoping that the market conditions would improve.

The move comes at a time when the government is under pressure to meet the fiscal deficit and revenue deficit targets for the current fiscal with expenditure ballooning during the first half of the fiscal despite revenues remaining buoyant.

Wednesday, October 25, 2006

Govt plans to sell residual stake in Maruti within FY07

The government may sell its remaining stake in Maruti before the end of this fiscal year, that’s before the end of March 31, 2007. It is to place the issue before the cabinet shortly. CNBC-TV18 finds out more.

Now the government has decided on the price on the basis of the company's NSE closing price on 26 June 2006, which was Rs 926.10. On that basis, the money is expected to be raised should be around Rs 2,700 crore.

But the government wants to put up a competitive bidding, so that they could get higher prices for the stake. They are expecting to raise more than Rs 3,000 crore.

For this, the government is expected to take the same route as they did in January 2006 by selling 8% of its scheduled stake at the cost of around Rs 1,800 crore. But this is not a stake sale to Suzuki, instead it is to the FIIs and public institutions.

The Department of Disinvestment has been advised to structure this offer as a private placement to domestic banks and financial institutions. So the government is expecting the banks and financial institutions to quote higher prices by taking the same route. SBI Caps and KMCL are likely to appointed as the merchant bankers.

Also, since the government has just 10.2% left in that company, there will be no public issue or no sale to the employees.

Tuesday, October 24, 2006

Alto-Betim punter wins Maruti Swift at Casino

Customers generally hope to win big when they visit Chances Casino in Dona Paula and this time, a punter struck the mega jackpot — a Maruti Suzuki Swift car.

Gracel Gonsalves of Alto-Betim was the lucky ticket holder, which was drawn from among 1.2 lakh tickets at a raffle draw.

The raffle, which was drawn at a special function at Chances Casino as part of its Diwali celebration on October 20, also featured prizes, which included return tickets to Mumbai and Bangalore sponsored by Kingfisher Airlines and Holiday Packages at leading five-starred hotels in India.

Others present on the occasion included Dr William and Muriel Britto, proprietors of Chances Casino, Phil Sanders, Casino Operations Director and Francisco Fernandes, Casino Manager. The celebrations included live music from Purple Rain, Broadway Dances and a grand buffet to keep everybody happy.

Sunday, October 22, 2006

Here comes the Raid again

She started preparing for the Raid last year! So how does she fare?

I hate numbers. They never seem to add up. I find most efforts to quantify things a tad too disturbing, which is why till date, TSD rallies still remain a mystery to me. So at last year’s Raid De Himalaya Reliability Trial, I announced out of the window of my eight-year old Maruti 800 to both man and mountain that I would be back in 2006 driving a Maruti Gypsy in theX-treme category.

The year went by faster than I had expected, and with less than a month to go for the 2006 Raid, there was still no sign of what was to be the most integral part of my enterprise — a Gypsy.

But somewhere in the middle of all hell breaking loose and meeting a psychic who told me that I was a mermaid in my past life, I decided that not going for the Raid was just not an option. This was no time to go que sera sera. Whatever would be would only be if I put my head to it.

Which wasn’t difficult because in my head I had been going sideways, negotiating the fast-medium-right-onto Batal bridge for a while now. So after 727 fights, 392 tantrums and endless fits of rage, I found myself looking at what was in all actuality my rally-ready Gypsy. Next stop, Shimla. Note to self: seemingly violent behaviour and sheer pigheadedness actually yield results.

Top pick at Suzuki is profit

Suzuki Motor is relinquishing its ranking as the world's biggest maker of minicars, the pool-table-size autos that crowd Japanese streets, but beating No. 2 Daihatsu Motor in the stock market.

Suzuki will make 5.1 percent fewer minicars in Japan this fiscal year to focus on selling more profitable compact vehicles in Asia and Europe. Daihatsu, a unit of Toyota Motor, is building a new factory to expand minicar sales.

So far, investors prefer the strategy of Suzuki, whose shares have surged 48 percent this year to become the fifth-best performer in the Nikkei 225 stock average. Daihatsu stock is down 12 percent.

Demand for vehicles in India, China and Eastern Europe will rise faster than in Japan, according to Credit Suisse Securities Japan. Domestic sales have slumped for the past six months.

"I like Suzuki because it is an aggressive company," said Ichiro Takamatsu, chief investment officer at Alphex Investments in Tokyo. "Investors are looking for a chance to buy companies with quality, and Suzuki is one of them."

Japan is the only country with a legally defined minicar category, and the only country where making them is profitable. The Smart minicar, made by DaimlerChrysler, the world's fifth-largest automaker, has never made money.

Shares of Suzuki rose 0.6 percent to ¥3,210 on the Tokyo Stock Exchange on Thursday. Daihatsu shares declined 0.3 percent to ¥1,121.

Japanese minicar sales may exceed two million units this year, a record, as drivers strive to cut spending on fuel and benefit from lower taxes. The growth has enticed rivals including Nissan Motor and Mitsubishi Motor to bring out new minicar models, stealing market share from Suzuki and Daihatsu.

Suzuki, based in Hamamatsu City, southwest of Tokyo, has responded by trimming minicar production in Japan by 60,000 units over two years.

Suzuki's overall domestic production will rise 2.5 percent to 1.16 million vehicles in the year ending March 31. Its overseas sales jumped 9.9 percent to 588,000 units in the five months through August. Daihatsu sales abroad were little changed at 65,354 units. The Osaka- based company plans to raise domestic output 20 percent to 1.09 million units in fiscal 2007.

"I chose sales and profit over market share in Japan," Suzuki's chairman, Osamu Suzuki, said at a press conference in August. The company announced a plan to spend ¥60 billion on a new factory to start production in 2008. The factory, to be located in Shizuoka prefecture, will not build minicars at all.

Investors are willing to pay more for Suzuki, whose shares trade at 25 times earnings. Daihatsu's price-to- earnings ratio is 14.2, slightly less than Toyota's 15.8.

"Suzuki's strategy is driving the share price higher," said Hitoshi Yamamoto, president of Commerz International Capital Management in Tokyo.

Suzuki, also the world's third- biggest motorcycle maker, was faster than Daihatsu in expanding abroad. It was the first Japanese automaker to build vehicles in India in 1983 and owns 54 percent of Maruti Udyog, a New Delhi company that makes half the country's cars.

Saturday, October 21, 2006

Govt to shed remaining stake in Maruti Udyog

The government wants to shed its remaining 10.27 per cent stake in Maruti soon.

The finance minister is pushing for a sale before the Winter session of parliament.

The decision comes less than two months after Chidambaram had said the government should wait for the stock markets to stabilize.

Heavy Industries Minister Santosh Mohan Deb is also signaling green. He argues that there was no merit in holding just over 10 per cent stake in the company.

In June this year, the government stopped having any representation on the board of Suzuki.

The government can raise Rs 2,200 crore by selling the stake and it needs the money for social schemes.

A decision on whether the stake will be sold to a PSU bank as happened in January last year or through a public offer will be taken soon by a group of officials headed by finance ministry.

In 2002, the government handed over majority stake to Suzuki. A year later it shed 27 per cent of its stake through an IPO and then sold eight per cent in January 2005 to raise Rs 1400 crore.

The deal is likely to go through because the Left has not raised any objections.

But sources say this is just the beginning. The finance ministry is preparing a list of PSU's in which minority stake can be sold after negotiating with the Left.

Friday, October 20, 2006

Maruti plans expansion in overseas market

Maruti is busy diversifying its exports and is bullish that the efforts will make up for the loss in exports to Europe. The company is seeding the small car markets globally, reports Economic Times.

Maruti`s exports to non-European countries have grown to 23,696 in 2005-06, a jump of over 78% over last year. According to sources, this is likely to cross 42,000 in the current year. The steady decline in exports in 2005-06 was a result of the company`s decision to stop exports of Alto, the brand which constituted nearly 80% of its total exports to Europe, from India. The discontinuation of Alto sales in Europe followed Maruti`s parent Suzuki`s plan to sell Swift in Europe, made at its Hungarian plant.

Algeria has emerged as Maruti`s largest overseas market with sales growing from few hundred in FY`02 to over 6,500 (FY06). The company says it may cross 9,800 this year.

Maruti is quite bullish on markets like Chile, Morocco, Egypt and Sudan, apart from the neighbouring countries. The auto major expects its exports to Chile and Morocco to go above 5,900 and 2,300, respectively, this year. Its volumes from there have moved from under 700 in FY`02 to 3,115 (FY`06), and exports to Sudan was nil two years back.

Meanwhile, Maruti is also reporting a high on current year exports to the neighbouring countries. The company expects to export 9,200 units to Sri Lanka this year, a growth of over 50%, 1,200 units to Nepal, over 1,175 to Bhutan and 700 to Bangladesh.

Maruti, which saw exports dip by 29% last fiscal, also plans to launch a new export model during `08-09, which will target the European market. The company targets to export one lakh units of the model annually.

Buy Baleno with a discount of Rs 50,000!

Hot wheels and hot deals are doing a tango this festival season. Cash discounts ranging from Rs 50,000 to Rs 2 lakh, gift cheques worth Rs 10,000 or more, free petrol and free accessories like music systems are invitations for the customer to open his wallet wide open.

No wonder the Dasara-Diwali fests contribute 20% of the total automobile sales in the country and that amounts to 1.6 million units. The marketing machines of automobile manufacturers come up with the best offer during this period, and it's certainly the best time to head to the nearest dealer.

The nation's largest car manufacturer Maruti Suzuki is giving its Baleno a discount of Rs 50,000, Swift is down by Rs 20,000 and most other models are driving out with free insurance for the first year. TVS Motors' head of marketing Prasad Narasimhan says: "Festive season is the backbone now. Every year the sale is getting better.

Tuesday, October 17, 2006

Nissan's may locate manufacturing base with Suzuki in Gujarat

Japan's second largest carmaker Nissan is close to finalising its new manufacturing location in India. According to a report by CNBC-TV18, Gujarat may be chosen as the destination.
Nissan is set to establish its manufacturing base in Gujarat.

According to sources, the company along with Suzuki is planning to invest upto Rs3,000 crore for a 600,000-car per annum plant. It has already submitted a proposal to the Gujarat government and held talks with promoters of Mundra, Kandla and Pipavav ports.

According to sources, the plant will come up by second half of 2008. When contacted, a senior Nissan official said that various options to expand its India business are being considered and a decision would be taken sooner rather than later.

However, a Maruti Udyog spokesperson denied this saying, "There's no decision taken about a joint manufacturing operation apart from the one where Maruti's new Manesar plant will manufacture cars for Nissan."

Sources say, Nissan and Suzuki are looking at a location with a population of atleast 15-20 lakh so that it offers fairly good social infrastructure. Nissan is also learnt to be developing a new B segment vehicle for global markets, and it is possible that car may also be manufactured in India.

Sunday, October 15, 2006

Suzuki MR Wagon to hit Indian roads soon


In the next six months or so, a slew of cars are to be launched. The more significant ones being the Suzuki MR Wagon, Fiat Grande Punto, Skoda Fabia, Renault Logan and the New Honda CR-V. Here's a preview of Suzuki MR Wagon.

Maruti is basking in the success of the new Wagon-R Duo, but bigger action for this company in the small-car segment is just around the corner. The ace up the sleeve for Maruti could well be the Suzuki MR Wagon that is rumoured to hit Indian roads as the new Zen.

The MR Wagon will be one of Suzuki's crispest and refreshing small-car designs to be launched in India. After the aggressively young, squat design of the Swift, the MR Wagon will be more universally likeable with its amalgam of jellybean and tallboy designs. The MR Wagon has been withdrawn from the Japanese market and is not widely available in other markets, but in India the car will have novelty value.

However, Maruti, which has also in the past used either the same platform or an existing engine for its new models, could continue to adopt the strategy for the new MR Wagon. The current Wagon-R's platform and engine are likely to be doing double duty in the new Zen. So, the price of the new MR Wagon could well be a surprise, positioning the new car along side the Wagon-R.

Tuesday, October 10, 2006

Suzuki-Nissan seek port for cars

Car manufacturer Maruti Suzuki is planning to team up with multinational automobile major Nissan Motor Company for developing a greenfield dedicated port to ship out vehicles.

The two vehicle manufacturers will be setting up this facility in Gujarat at an estimated investment of Rs 3,000-3,500 crore.

“Maruti and Nissan will together construct a dedicated port for handling vehicles. For this, they have visited non-major and major ports of Gujarat. The location has not been finalised yet,” Shipping Secretary AK Mahapatra told Business Standard on the sidelines of the India Shipping Summit 2006.

Mahapatra said this exclusive port would be able to handle 400,000 cars a year.

Earlier this year, Maruti Suzuki and Nissan Motor Corporation announced plans to manufacture small cars at the Maruti Suzuki facility in India. The cars will be sold under the Nissan brand and exported to select markets around the world.

Japanese automobile major Mitsubishi Motors has visited Vansi Borsi Port and Maroli Port in Gujarat for setting up a Rs 3,000 crore exclusive car handling terminal.

“The cost of a greenfield facility will go up to Rs 3,500 crore as port operators will have to dredge up to 15 metres depth for a shipping channel. The cost may come down if a major port extends a terminal to these players,” port experts said.

Sources close to the development said Maruti Suzuki and Nissan were in talks with Kandla Port, Shell Hazira Port and Adani Ports for the project.

“The coming together of Maruti Suzuki and Nissan makes sense as the latter has a tie-up with Maruti for design of cars in India. A common automobile port will cut down the cost for both players,” they said.

At present, automobile majors are shipping their cars primarily from Mumbai and Chennai.

Mahapatra said the idea behind such a port was to cut down the logistics cost and streamline the export operations of these companies.

Monday, October 09, 2006

Maruti exports via port in Gujarat

With Maruti Suzuki aiming to increase its exports from India eight-fold to 400,000 units, it has started scouting for a port site in Gujarat. Among the sites on its radar are Hazira, Kandla and Maroli.

Shipping secretary AK Mohapatra told DNA Money that the company was targeting Gujarat because of its easy accessibility from the company’s manufacturing base in Haryana. “They are looking for a space of 70,000 sq metres to begin with and the requirement can go up further depending on their capacity,” he said.

Suzuki had last month announced fresh investment to the tune of Rs 3,000 crore in India.

This money will be over and above the Rs 6,000 crore investment SMC and Maruti have already committed to India till 2010. The fresh investment will flow into the new car plant Maruti is commissioning at Manesar and the diesel engine facility coming up alongside.

While stating that the Jawaharlal Nehru Port Trust in Mumbai was not on the company’s list of proposed sites, Mohapatra said the company was more keen on Gujarat.

While Hazira and Kandla have good ports, Maroli is a greenfield site for which the Gujarat Maritime Board (GMB) is looking for private investment. The GMB has already prepared an engineering pre-feasibility report for the project that is estimated to cost Rs 600 crore in the first phase.

Maroli is in Valsad district, about 11 km from Umergaon in South Gujarat on the Arabian Sea.

Sources said the Gujarat government-owned available land at Maroli was far in excess of the company’s requirement. Maroli is about 21 km away from NH 8, which links directly to the company’s plant in Gurgaon and Manesar in Haryana. A broad gauge railway link is also available just 9 km away from the port site.

The site also has water depth of around 10 metres which, according to Mohapatra, is the requirement of the company.

Sunday, October 08, 2006

Raid-de-Himalaya : Historic hattrick help Rana seal victory


Suresh Rana made a hattrick of wins in the Xtreme four wheeler category while Damon I'Anson claimed the top honours in the bike category in the 8th Maruti Suzuki Raid-de-Himalaya.

Himachal boy Rana drove his Maruti Suzuki Gypsy, with 02:09:20 penalty points beating his close and arch rival Sunny Siddhu in a nail biting finish, who clocked in second with 02:16:32 penalty points, an official release said.

Sqn. Ldr. Ashish Kumar of the Indian Air Force came third with 03:20:31 penalty points.

In the two-wheeler category, British national I'Anson with 02:36:20 penalty points gave a close fight to Ashish Moudgil to claim the title.

Ashish closed in second with 03:32:27 penalty points while Yogesh Lakhani came in third with 04:16:19 penalty points.

Rajesh Chalana and Farhan Vohra claimed the first positions in the car and SUV category of the reliability trial with 00:32:25 and 00:26:46 penalty points.

The rally flagged-off from Shimla on September 30 with nearly 92 motorsport enthusiasts, had a total prize money of Rs 6 lakhs.

In the last seven days, the rally covered a distance of 2139 kms with 725 kms in the 16 competitive stages running across six of the world's highest mountains passes some well over 5500 meters.

The rally traversed through Gramphoo, Kaza, Dhankar, Patseo, Leh before ending here.

Himachal Pradesh Sports Minister Ram Lal Thakur was present in the prize distribution ceremony.

Saturday, October 07, 2006

Cost cutting in focus at Paris Motor Show

Cost cutting is the big concern of the global auto industry. And India's cost management prowess is luring more than one global giant.

Audi plans an India sourcing office by the end of the year and the company is even talking about an assembly plant in India in the very short term.

But no stall is more relevant for India than the Suzuki stall at the Paris Motor Show. And Suzuki doesn't disappoint.

A new compact car caught one's attention, Concept Splash, a super mini Multi-Purpose Vehicle which is set to replace the Wagon R in most overseas markets late next year.

The Splash is a five-seater and shares a platform with the new Swift. With an approximate entry price tag of about 9000 Euro or roughly Rs 5 lakh 20 thousand, the obvious question is, when is Suzuki bringing this car to India?

Once the Splash hits production, it is likely to be made in India too. In fact, this could well be the car that Maruti makes for export to Europe.

There's no clarity yet on whether Suzuki and Nissan will share the Splash with Nissan branding for European exports and Suzuki branding for sales in India, as well as its own exports.

Suzuki thinks it could be a possibility. But clarity will emerge in a month from now when Suzuki and Nissan thrash out the details of their alliance in India.

Thursday, October 05, 2006

Carmakers hike export targets

When the government announced excise duty sops for small cars earlier this year, many automobile industry experts had doubts about whether the move would actually help India become a global hub for such cars. But, within six months of the policy initiative, it has become obvious that global car makers are indeed pulling out all stops to make this country an export hub for their vehicles.

Japanese giant Suzuki Motor Corporation has already set itself an ambitious target of exporting 40% of its total production, or four lakh vehicles, from India by 2010, against only about 50,000 at present.

Hyundai Motor Company is set to follow suit, with its Indian operations targeting exports of 50% of the total production, or three lakh units. And Hyundai is expected to beat Suzuki by at least three years, since its three lakh car export capability would be achieved next year itself.

Tuesday, October 03, 2006

Maruti September sales rise 20.58 per cent

Volume growth for passenger car market leader Maruti Udyog remains strong and monthly volumes for September has come in close to analyst expectations. The company has reported total sales of 59,420 units for the month of September 2006, including exports of 2,814 units, as compared to 49,278 units during September 2005 - an increase of 20.58 per cent. On a sequential basis, sales have increased 14.59 per cent from 51,855 units reported for August 2006.

Total domestic sales for the month increased by 22 per cent to 56,606 units from 46,393 units a year ago. Domestic sales for the month have increased 17.3 per cent sequentially from 48,259 units during the previous month.

The premium hatchback (or B segment in industry parlance) remained the best performer for the month. Volume growth in the segment, which includes models like Alto, Zen, Wagon-R and Swift, increased 28.9 per cent to 37,955 units for the month as compared to 29,456 during September 2005. On a sequential basis, sales in this segment have increased 16.91 per cent.

The re-launched Wagon-R is reportedly receiving very good response in the market. The model is now also available in a petrol-LPG dual fuel version which offers lower running costs.

Sales of entry level model Maruti - 800 increased modestly by 3.5 per cent to 7,680 units as compared to 7,423 units for September 2005. Sales for the month were 19.53 per cent higher than August 2006. Analysts reckon that Maruti is keeping the model alive to fight the low-cost car from Tata Motors expected in early 2008. They expect prices of Maruti - 800 to be cut substantially to take on the Tata car.

In the passenger van segment, the company recorded a growth of 21 per cent with sales of the Omni and Versa increasing to 7,289 units as compared to 6,022 units for September 2005.

Sales growth in the mid-sized sedan segment remained modest at 7.6 per cent. Sales of Esteem and Baleno were at 3,410 units as compared to 3,168 units for September 2005. The company is readying to launch a new model to replace the Baleno in the mid-size sedan segment. Road tests are reportedly going on and a formal launch is expected by early next year.

Exports declined modestly by 2.5 per cent for the month and send this article to a friend monthly export volumes went down to 2,814 units from 2,885 units. Exports would get a leg up once Suzuki starts sourcing more cars from Maruti's new plant, which is under construction. Maruti would also start supplying cars to Nissan at a later date, under a production alliance between Suzuki and Nissan.

Sunday, October 01, 2006

Suzuki Baleno: A value for money

The Maruti Suzuki Baleno is great value for money, even before you consider the additional discounts that may be offered by the company's dealers. For a car in its size class, the Baleno is surprisingly well loaded with features that comparable cars offer for a much higher price.

But that is of course because demand for the car has just not taken off given its dated design and unexciting pedigree. It is obvious that Maruti is discounting the product to push sales and that is reason enough for its much lower resale value.

The current Baleno's resale value will be further affected, if and when it is withdrawn from production. Going by market rumours, Suzuki is likely to both withdraw the Baleno completely and replace it with a new premium sedan with a new name or may launch the new model as an upgrade to the current Baleno.

The new sedan is said to have been developed on the Suzuki SX4 platform and may be launched by March next year. There is also news that Suzuki is planning to launch a three-box version of the Swift. Even if the names are retained, the current Baleno and the Zen may actually be the first Maruti models to face the axe.