Car dealers bank on price hike

After a two-month dip in the sale of automobiles, March may see a boom in business for auto dealers, said industry watchers.

Contrary to customer anticipation of reduction in car prices in the budget, auto majors are hinting at a price hike from April.

In addition to the existing 2 per cent levy, the finance minister also announced a cess of one per cent on all taxes of corporates and individuals to fund secondary and higher education for the financial year starting April 1, 2007. The expected deduction in certain taxes for the automobile sector did not happen. Therefore, most automobile manufacturers have announced a hike in prices, though the extent or model range is yet to be declared. However, said experts, a window period during March will probably be allowed by auto players to allow customers the pre-budget price advantage.

“We were planning to buy a family car. I was advised to wait for the budget after which prices are expected to fall. Now, I think we should hurry before prices rise,” said Sumit Das, a resident of Kadma.

This attitude among car buyers has come as a welcome relief after city auto dealers registered a dip of nearly 15-30 per cent in the two months of pre-budget sales.

“We have had a 15 per cent dip in the past two months for all our vehicles,” said Girish Mandal, general manager of Pebbco Motors, who are dealers for Maruti Suzuki.

High-end cars also registered low sales. “This has hit us hard as the market for high-end cars is more price-sensitive than for small cars,” said an auto dealer.

R.K. Nayak, manager in a Tata Motors dealership firm, said: “It is the high-end segment such as sports utility vehicles that was worst hit with about 30 per cent reduction in sales during February.” Sales of small cars such as Indica have only been hit by about five per cent, he added.

Cars ranging from Santro, costing Rs 3,00,000, to upmarket cars, costing up to Rs 17,00,000, have undergone a 16 per cent dip in the pre-budget sales, said P.K. Hazra, senior manager of sales in Fairdeal Hyundai.

Customer awareness has also contributed to low sales, said dealers. “Now customers wait and watch till the budget. The range of cars is also vast, so we are dealing with mature customers,” he said.

An additional factor that added fuel to fire is superstition. Members of many communities do not buy metal before Sankranti. Hence the auto companies lost out on business in the first half of January, added the dealers.

Maruti sold 62,999 vehicles in February

India’s leading automobile manufacturer Maruti Suzuki has released its sales figures for the month of February. The company continues to lead the sales chart.

Maruti sold as many as 62,999 vehicles in February. This is up 53 per cent from 41,095 units a year earlier.

Out of these, the company sold 59,095 units in the domestic market. This figure is up 61 per cent from 36,608 units a year earlier in the same period.

The export figures for the company are however down. They exported 3,904 last month compared to 4,487 units a year earlier.

The company has also announced that they are going to raise the prices of their cars from March 15 due to implications from budget.

Auto makers to raise prices marginally

Auto makers plan to raise prices marginally to offset an additional tax proposed by the government to raise funds for education.

Top Indian car maker Maruti Udyog Ltd said on Wednesday it would raise prices of its vehicles from March 15. It did not specify the extent of the increase or say which models it would apply to.

"In the run-up to the budget there was speculation that certain taxes or duties may come down," Maruti said, referring to an expectation that excise duty on passenger vehicles might have been cut.

"Owing to that, several customers postponed purchase of new cars till after the budget. In light of this, the company has decided to defer the hike to allow these customers to purchase cars at pre-budget prices," it said.

In its budget for the fiscal year starting April 1, the government said it would impose a levy of 1 percent on all taxes to fund secondary and higher education, in addition to the existing 2 percent levy which raises funds for basic education.

Maruti, a unit of Suzuki Motor Corp last raised prices on some models by up to Rs 12,000 ($271) on Feb 1.

Mahindra & Mahindra Ltd, the top utility vehicle maker, will raise prices by Rs 1,000-2,000, the paper quoted Pawan Goenka, President of Mahindra's automotive unit, as saying.

A spokeswoman for Hyundai Motor India Ltd, a unit of South Korea's Hyundai Motor Co, said there would be 'a modest price increase'.

Shares in Maruti rose 2.4 per cent to Rs 860, helped also by strong February sales, while shares in Tata Motors gained 2.3 per cent to Rs 802 in a slightly firm Mumbai market.

Auto makers to raise prices marginally

Auto makers plan to raise prices marginally to offset an additional tax proposed by the government to raise funds for education.

Top Indian car maker Maruti Udyog Ltd said on Wednesday it would raise prices of its vehicles from March 15. It did not specify the extent of the increase or say which models it would apply to.

"In the run-up to the budget there was speculation that certain taxes or duties may come down," Maruti said, referring to an expectation that excise duty on passenger vehicles might have been cut.

"Owing to that, several customers postponed purchase of new cars till after the budget. In light of this, the company has decided to defer the hike to allow these customers to purchase cars at pre-budget prices," it said.

In its budget for the fiscal year starting April 1, the government said it would impose a levy of 1 percent on all taxes to fund secondary and higher education, in addition to the existing 2 percent levy which raises funds for basic education.

Maruti, a unit of Suzuki Motor Corp last raised prices on some models by up to Rs 12,000 ($271) on Feb 1.

Mahindra & Mahindra Ltd, the top utility vehicle maker, will raise prices by Rs 1,000-2,000, the paper quoted Pawan Goenka, President of Mahindra's automotive unit, as saying.

A spokeswoman for Hyundai Motor India Ltd, a unit of South Korea's Hyundai Motor Co, said there would be 'a modest price increase'.

Shares in Maruti rose 2.4 per cent to Rs 860, helped also by strong February sales, while shares in Tata Motors gained 2.3 per cent to Rs 802 in a slightly firm Mumbai market.

Maruti Feb sales up 53 pct on year

India's biggest car maker, Maruti Udyog Ltd., said on Thursday it sold 62,999 vehicles in February, up 53 percent from 41,095 units a year earlier.

Maruti said it sold 59,095 units in the domestic market, up 61 percent from 36,608 units a year earlier. Its exports fell 13 percent to 3,904 units from 4,487 units a year earlier.

Maruti, a unit of Japan's Suzuki Motor Corp., said on Wednesday it would raise prices of its vehicles from March 15. It had raised prices by up to 12,000 rupees from Feb. 1.

Rival For Maruti?

Nissan will focus on compact cars -- the biggest market in India -- where Maruti, part of Japan's Suzuki Motor Corp., dominates with models such as the Maruti-800 and Alto.

Renault officials said the French firm would initially stick to products under the Logan platform, but may expand that to include other models.

The new plant will also have a powertrain facility to supply the local market and may at some stage consider exports.

Officials did not give details of the plant's powertrain capacity.

Japan's Toyota Motor Corp. plans to build a plant by 2010 near its unit in Bangalore, concentrating on cheaper, smaller cars, a newspaper reported earlier this month.

The facility will aim to produce 100,000 cars a year, roughly doubling the firm's capacity in India, it said.

Tata has a deal with Italy's Fiat SpA to build more than 100,000 cars and 200,000 engines and transmissions together in India from next year.

Nissan has a separate agreement under which Maruti is to build 50,000 compact cars under Nissan's badge, mostly for export to Europe from 2008.

Mahindra also has a separate pact with U.S. firm Navistar International to make trucks and buses in India this year.

Nissan shares closed up 1 percent, Renault was up 0.4 percent and Mahindra added 0.2 percent.

Maruti to raise prices from March 15

Top Indian car maker Maruti Udyog Ltd said on Wednesday it would raise prices of its vehicles from March 15, after the government said it would impose an additional tax levy to raise funds for education.

In its budget for the fiscal year starting on April 1, the government said it would impose a levy of 1 per cent on all taxes to fund secondary and higher education, in addition to the existing 2 per cent levy which raises funds for basic education.

Maruti, a unit of Japan's Suzuki Motor Corp, said the new levy was the reason for the price rises.

It said it was not raising prices immediately so consumers could buy cars at pre-budget prices, but did not specify the extent of the increase or say which models it would apply to.

"In the run-up to the budget, there was speculation that certain taxes or duties may come down," Maruti said in a statement, referring to an expectation that excise duty on passenger vehicles might have been cut.

"Owing to that, several customers postponed purchase of new cars till after the budget. In light of this, the company has decided to defer the hike to allow these customers to purchase cars at pre-budget prices," it said.

Maruti, which makes the popular Alto and Swift hatchbacks, last raised prices on some of its models by up to Rs 12,000 on Feb 1 to help offset higher costs.

Shares in Maruti ended down 5.4 per cent at Rs 839.70 in a Mumbai market that fell 4 per cent. The news of the price rises was released after the market close.

Suzuki gears up to enter new segments

Suzuki, which is the majority shareholder in domestic car market leader Maruti Udyog, has said its fully-owned two-wheeler subsidiary, Suzuki Motor India, will venture into the fast-growing segments of high-powered motorcycles and gearless scooters.

SMILP will invest Rs 320 crore in capacity expansion and new launches, taking its cumulative investment in the country to Rs 550 crore.

The company now offers only two bikes, Heat and Zeus, both fitted with a 125cc engine and the new launches are expected to widen its product portfolio in the Indian market.

Said Satya Sheel, the company's managing director, "We will expand our capacities gradually in the Indian market to corner a double-digit market share in the next three-four years, first with the launch of ungeared scooters in the 125cc-150cc segment, followed by high powered bikes in over 150cc segment."

SMIPL, about a year since it launched its motorcycles in the country, has not been able to make much headway in the market. At present, it has a meagre 0.8 per cent share of the market.

SMILP, despite having an installed capacity to manufacture 100,000 vehicles, sold a little over half that number between April and December last year and 5,753 units in January 2007.

Its earlier technology partner, Chennai-based TVS Motor, sold over a million two-wheelers till December 2006.

Kutsumi Takata, the joint managing director of SMIPL, said, "The demand for high-powered bikes is increasing. Our premium bikes in the 150cc category and un-geared scooters will cater to the new generation and will be out in a few months after the feasibility studies are completed.

We are determining the right product mix for the Indian market in order to be a volume player in the long run."

Maruti likely to renew Maruti 800 with a brand new car

Maruti likely to renew Maruti 800 with a brand new car

India’s dominating automaker Maruti is rumored to be planning a brand new updated Maruti 800 for the Indian market.

The current car is more than 20 years old and has seen several upgrades both in the design and the engine design.

This new updated Maruti 800 model is likely to be launched sometime next year. India auto magazines have speculated that this updated model might be based on the concept model Cervo from Suzuki.

Maruti is also likely to launch a new car based on the 660cc small car being developed at Suzuki’s headquarters in Hamamatsu, Japan.

This car could become the next best selling model from Maruti and would take on the much talked about Rs. 1 lakh car from Tata Motors.

A market source has been cited as saying: “The company has started discussions with us for launching the completely revamped version of the over 23-year-old Maruti 800. The new car would look completely different from the existing one, but sell at the same price.”

Both of these models are expected to be contemporary looking all set to take the competition by surprise. Maruti has already shocked the market by launching to cool looking models with Suzuki Swift and Zen Estilo.

The magic is expected to continue in the coming years.

Suzuki aims to invest $1.6 billion in India by 2010

Suzuki aims to invest $1.6 billion in India by 2010

Japanese automaker Suzuki has said in a statement that they are planning to invest an additional 200 billion yen in its Indian venture by 2010.

The company would spend this money on expanding the capacities of its car and engine plants.

Suzuki has already invested 100 billion yen in the plants run by Maruti Udyog Ltd.

They are aiming to boost the manufacturing capacity of Maruti to 1 million cars a year from 630,000 now.

Maruti recently opened its fourth car plant with a manufacturing capacity of 1 lakh car per year.

Maruti Udyog Managing Director Jagdish Khattar spoke about the company’s plans for the coming years: “Suzuki made a commitment to India at a time when it was not fashionable to invest in India. This (new plant) marks the most important milestone in our partnership.”

The company is the leading automaker in the Indian market and holds a majority of the small car market share.