New Delhi: Indians might perceive Chinese-made goods as cheap and of sub-standard quality, but the world’s largest carmaker, General Motors, is banking on cars designed and developed in dragonland to catch up with the market in India. The company trailed the industry growth in 2011 and looks to have lost the momentum that it had generated a year earlier when it launched its third small car in India, the Chevrolet Beat. Now it is set to launch a bevy of new cars designed by its partner SAIC in China, and is unperturbed by the jinx associated with products from across the Great Wall.

“I am aware of the perception in India but what we will be making is no toy but a Chevrolet car,” said Lowell Paddock, president and managing director, GM India. “The iPads, iPods and laptops that sell in India are also made in China but they are still favourites here and all over the world. The cars confirm to our DNA of quality and reliability and though designed in China, they would be manufactured at our factories here.”

The firm vaulted back to the top of the global automotive industry in 2011 – a rank it had lost to Toyota in 2008 – but its position in India is starkly different. GM’s sales grew by just 0.6% to 111,056 cars and SUVs in 2011, lagging the industry growth of 6%. Ironically, Toyota nudged ahead of it to the number 4 position in the country.

“Last year was a tough year for the industry and saw a lot of shifts,” Paddock said. “We launched the diesel Beat and that has done well. We want to maintain and increase the product momentum and get back to the time when we were growing faster than the market.”

GM, which operates under the Chevrolet brand in India, will launch its fourth small car, the Sail, in the middle of this year. A multi-purpose van is slated towards the end of the calendar year. Both these vehicles come from China, the biggest automobile market in the world. More would be in the offing.

“We have resources all over the world and be it China, Korea, US or Brazil, we will bring cars that are suited to India from wherever it may be,” he said. “Where the car is built or designed is not important. We want to be a dominant player in this market with a double-digits marketshare.” GM India’s marketshare in 2011, was 4.4%.

New Delhi: The entry-level segment of the Indian passenger car market shrunk in 2011, perhaps for the first time in many years, and saw its market share dip below 50%. Eyed by many carmakers like Tata, Renault, Nissan, Bajaj and General Motors, the segment has proved to be the dullest, putting a question mark over whether the enthusiasm among many companies to spend millions in cracking the category is justified.

The share of the entry-compact segment – consisting of cars like the Tata Nano, Maruti Alto, Ford Figo, Maruti WagonR, Hyundai’s Santro, i10 and Eon and GM’s Beat – came down to 47%, thanks to a decline of 0.07% in sales.

The situation was quite different for premium compacts like the Maruti Swift, Hyundai i20 and VW Polo as the segment grew at a pace of 6.5% in 2011, and retained its 11% share of the market.

But perhaps the biggest surprise came from the expensive sports-utility vehicle (SUV) segment that registered the fastest growth rate in the year gone by. SUVs, which cost nearly three times (or even more) what an entry-level car does, grew a massive 32% in the year, fuelled by higher demand for both India-made and imported models.

An analysis of data collated by the Society of Indian Automobile Manufacturers (SIAM) threw up these surprising results, some pointing to the ‘maturing’ of Indian car buyers and their gravitating towards more sophisticated vehicles like premium cars and SUVs.

The year also saw that, while the market braved a slew of negatives like high interest rates and rise in petrol prices, the demand for pricier cars was not dampened. Sedans (market share 19%) saw demand rise by 15%, and this was powered by premium models like the Hyundai Verna, VW Vento and Chevrolet Cruze.

So what led to the fall in demand for the entry-level cars? According to market experts, the absence of diesel models and the rise in interest rates proved to be the biggest dampeners. Entry-level cars are bought mostly by the middle-class and first-time buyers, and many of them shied away from the market last year as the enablers were not conducive.

“Most buyers of this segment have a home loan already running and the rising interest rates meant a rise in their home EMIs. This reduced their disposable income and their ability to go in for a car loan. Also, since most models in the segment are petrol vehicles, many of the customers could not muster the courage to go for a new car as monthly fuel bills would be inflated due to the near-recurring rise in petrol prices,” an industry analyst said.

This perhaps explains why premium small cars were still in demand. Most premium compacts come strapped with diesel engines too, and the running cost advantage that the fuel provides (against a petrol engine model) meant that sales continued to happen.

So is it time to write off the entry segment completely? Experts are not so pessimistic. “Once the interest rates come down and petrol prices stabilize, this segment will again grow as the potential here is very high due to under-penetration of cars. Also, with a gradual increase in diesel options (Chevy Beat last year and Nano expected this year), the segment will get a new lease of life. It will bounce back, and perhaps strongly,” an analyst with a brokerage firm said.

And what explains the enthusiasm for SUVs? The rapidly-improving road infrastructure and the gradual love of Indian families to travel together between cities are fuelling the demand. Also, the presence of diesel engines plays an important part here.

“Another reason behind the success of the SUVs is that the number of offerings in this segment is rising exponentially,” an analyst says.

Models like Toyota Fortuner and Mahindra’s newly-launched XUV500 have the distinction of a long waiting list for them. Other companies that are set to launch new SUVs include Ford, Renault, Audi and Ssangyong. “The SUV segment has witnessed a fantastic growth rate in India over the last few years and holds the maximum potential in terms of demand,” says Abdul Majeed, who tracks the auto industry at PricewaterhouseCoopers India.

New Delhi: Honda Motor could introduce the diesel variant of its high-selling compact car ‘Brio’ in India this year, bringing forward plans to tap a car market skewed away from costly petrol.

The carmaker is testing its newly developed diesel technology, common rail i-DTEC, on the Brio and could introduce it in a 1.2-litre version. The diesel variants of its City sedan and Jazz hatchback, carrying larger engines, will be introduced later. The company had earlier planned to introduce diesel vehicles in 2013.

“Honda is committed to bringing its diesel technology to key markets like India. And to ensure that Honda diesel is best suited to local conditions and offers optimum performance levels, Honda is conducting stringent tests at its R&D centres across several locations,” a company spokesperson said in an email response. Honda, which operates in India through its JV Honda Siel Cars India, is keen on regaining market share from rivals Volkswagen and Toyota whose diesel cars account for a large chunk of their sales.

The Japanese automaker, which entered India in 1995, has seen sales fall 27% in the first nine months of the current fiscal, largely because it was unable to introduce any diesel variants, which have become popular in India because of the rising cost of petrol.

The carmaker’s output in India was also affected by shortage of components after last year’s tsunami in Japan and flash floods in Thailand, which led to a 36% loss in production, or 27,939 units, in the April-December period.

The i-DTEC engine, nicknamed “Earth Dreams Technology” will first be used in the new Civic sedan in Europe this year. According to some people working closely with the company, “its application for other models and markets is likely to come in the shape of Brio compact car for India in the initial phase”.

Diesel cars, which registered a 26% rise in sales in the first nine months of the current fiscal, accounted for about 60% of the passenger vehicles sold in the country. During the same period, sale of petrol cars dipped 18%. According to industry executives, diesel cars account for over 80% of sales in models like Maruti Swift and Hyundai Verna, where both fuel options are available.

With the advent of the all new Maruti Suzuki Swift, it was only a matter of time before the new Dzire made its debut. Vikram Gour spent a day out on the Buddh International Circuit with the new car. Read on to find if it hits the right spots!

A car is an object of affection. While function, practicality and logic do play their part, the drool factor has always played a major role in the decision making process of purchase for potential car buyers are looking for a vehicle that will make them look good, stand out and simply gel with their persona.

Having said that, there are a handful of cars that have been a market success based on their merit of being extremely practical purchases. Their looks are not something to write home about, but the vehicle itself has proved its mettle and gone on to become a success story. Such is the nature of the Swift Dzire.

When it made its debut around four years ago, one couldn’t phantom how MSIL would fit a boot onto a car that was designed to be round. That being said, I am yet to come across someone who doesn’t like the car! In terms of numbers the Swift Dzire clocked over 10,000 units a month and MSIL has sold over 3.3 lakh units till date in the domestic market.

With the advent of the new Swift, it was a wait and watch game to see how MSIL would treat the boot on the new Dzire this time around. Fingers were crossed that the designers would pay more attention to detail and design, however they seemed to have walked down a new path and enter the realm that has so far only seen the Tata Indigo CS occupy. That’s right, instead of working on a gorgeous rear, the new Dzire has been designed to fit the 4000mm length requirement that the Indian Government has stipulated as the definition in size for small cars and therefore benefit from the additional excise cut.

Fitting a boot onto a hatchback that measures 3850mm in length while keeping the overall length of the car under the 4000mm mark obviously isn’t any easy feat to accomplish and the designers literally had even less room to play around with. The result of all this tinkering and scalpel treatment is a notch. No, the new car isn’t a notchback, but a proper three box sedan, albeit with a very tiny looking boot.

The size is most apparent when the car is viewed from the side and there is no doubt that this is going to take some effort for those looking for a three box car to digest. The design is boxy compared to the rest of the car and the boot sticks out distinctively from the otherwise round sporty lines of the Swift. The factor that does light up the rear are the large tail lamps which now form a trapezoidal appearance and frankly look quite nice, but that is just a consolation prize to an otherwise mediocre design.

Measuring 3995mm in length, the new Dzire still manages to offer more than its hatchback sibling in terms of space. Despite the truncated boot, it offers 316 litres of trunk space, which is over 100 litres less than the outgoing model. While this does take away slightly on the whole practicality aspect, the new Dzire is still a decent purchase for those looking for a no nonsense entry level sedan.

The Dzire is based on the new Swift so it gains from the fact that interior space has been optimized for passenger comfort.

Moreover Maruti Suzuki has packed the Dzire to the hilt with goodies which includes a dual tone dash, integrated stereo on higher models, climate control air conditioning as well as a host of safety features such as front dual SRS airbags, ELR seatbelts, ABS, Brake Assist, EBD and an Engine Drag Control system.

The Swift Dzire will be available in both petrol and diesel engine options. The petrol variant boasts of the K12M VVT petrol engine which delivers 87PS of power @ 6000rpm and a decent 114Nm of torque @ 4000 rpm. Tuned to offer a spirited drive yet retain a decent mileage figure, the petrol

Dzire is capable of going from 0-100kmh in just 12.6 seconds and offer a company claimed fuel efficiency of 19.1 kmpl.

The diesel variant retains the tried and tested 1.3litre DDiS engine that generates 75PS of power @ 4000rpm and a solid 190Nm of torque @ 2000rpm.

Being a class leading engine in terms of fuel efficiency, the diesel Dzire offers a company claimed efficiency figure of 23.4kmpl and still manages to go from 0-100kmh in just 14.8 seconds.

Now all these figures might seem rather high for an entry level sedan, especially when compared to its hatchback sibling, but here is the key to all this wizardry. The Dzire weighs in exactly the same as the hatchback, despite the slight extension in size!

Now MSIL hasn’t just stopped here, but have taken the Dzire a notch further (pun intended) by also offering an automatic transmission variant.

The four speed automatic transmission will debut with the petrol engine initially however we are praying that this extends to the diesel in the future. The box is a smooth unit that is extremely well suited for city driving and will be a boon any city dweller.

It is worth mentioning however, that the automatic variant doesn’t come with climate control air conditioning and features the regular switch and blower unit that we are accustomed to on smaller cars.

So, after having spent a day out with the Dzire, I have returned with a mixed bag of emotions. On one hand, the car just doesn’t offer any visual delight, but there is brilliance in what MSIL has achieved. By making it less than 4000mm in length, it benefits from the excise cut and therefore lets the company pass on that benefit to the customer in the form of lower pricing.

At the same time, MSIL has packed the car with ample goodies and safety features that are comparable to sedans from a segment higher. Where this leaves the equation is just about exactly where the original Dzire started its journey-practicality.

The new Dzire is once again going to have to make its way into the market by trumpeting the practical vehicle badge. It might have lost out on a little trunk space but there is still no arguing the fact that it still remains a very practical offering that is hard to ignore and customers should be urged to look past the sheet metal and recognize the genius that lies underneath.

Mumbai: Jaguar Land Rover will invest aggressively in new products and technology over the next 3-5 years even as the slowdown in Europe continues to be a matter of concern. Tata Motors bought out these two British from Ford Motor Company for $2.3 billion in 2008. Today, they are among the largest revenue generators to the Indian automaker.

Dr Ralf Speth, Chief Executive Officer of JLR, told Business Line that it was not the easiest of decisions to invest in a downturn as any company would have to leverage wisely between growth and liquidity.

“During a crisis, cash is king since getting money from banks during these times is nearly impossible. This makes it even more challenging to balance things out in the right way,” he said.

Some companies opt for the safe route of cash conservation in difficult times while others try and find a way in between marginal investments while steering clear of product creation.

“The third route involves saving wisely while not interfering with the (product) development process. When the crisis is over, the company concerned emerges a lot stronger with new products. I personally am in favour of this option though it finally depends on how long the slowdown lasts if we have to maintain the R&D momentum,” Dr Speth said.
Be Flexible

From his point of view, it is imperative for JLR to be flexible and save in every way possible while giving top priority to product development. “This is what the market will demand when the slowdown is over. We should be financially cautious but still push forward with new products. The world has seen a lot of crises and we need to be constantly optimistic,” Dr Speth said.

This, however, does not take away the fact that the recent events in Europe are a huge cause for concern to carmakers especially when nobody has a clue on what lies ahead.

“I am very worried about 2012 and what is even more disconcerting is the unpredictable scenario. Just when we thought the worst was over post-Lehman, we are now up against this crisis,” he said.
US, emerging markets

The silver lining in the cloud is that the US is beginning to show some signs of recovery though Japan could still stay relatively flat in 2012. Eventually, JLR is pinning its hopes on emerging markets like India, China, South America and Russia with products like the Range Rover Evoque, Sport, Discovery and XJ.

China, in particular, has been the best piece of news in 2011 with sales of over 42,000 units which accounts for nearly 16 per cent of the company’s global volumes of 2.45 lakh vehicles. In contrast, sales from its traditionally reliable markets like the UK, North America and Europe fell to sub-20 per cent levels. This could just get worse if the slowdown continues through 2012.
Upbeat on India

Dr Speth was as upbeat about JLR’s prospects in India, a market where its owner, Tata Motors, is one of the oldest auto brands. “We think India has the potential to grow like China in the coming years. The team has done a great job in developing the overall base and I am very satisfied,” he said.

There are concerns that the India story could be derailed during 2012-13 thanks to the Europe crisis. However, global carmakers do not share this pessimistic outlook especially when the rest of the world is in a semi-paralytic state.

“If India has a problem with 7.9 per cent GDP growth, I think seven per cent would be fantastic in Europe though it may not be achieved in the next ten years. Obviously, there is a different perception of what a crisis means as emerging markets will eventually offset negative growth in one or more industrial nations,” Dr Speth said.

New Delhi: Green is in vogue at the current Auto Expo with automakers, including Maruti Suzuki, Hyundai Motor, Nissan, Mahindra and Mahindra and Hero MotoCorp lining up electric and hybrid vehicles for future launch. However, automakers feel that the road ahead for such cars is bumpy with no policy incentives and infrastructure support.

At present, Mahindra & Mahindra’s all- electric Reva is the first and only electric car on the Indian roads. As the two- seater vehicle attracted only few curious and green- conscious buyers, the company has unveiled a new four- seated version slated for commercial launch before Diwali 2012.

According to sources, the company is working on keeping the price in the range of ` 4- 5 lakh, as it is looking at larger commercial success.

“ We have been saying time and again that electric and hybrid cars are the future. But price is one factor that needs to be worked on. With more infrastructure support and incentives we are sure that more companies will come up with such technologies,” Pawan Goenka, president ( automotive and farm equipment sectors), Mahindra and Mahindra, said.

Another firm Toyota Kirloskar Motors launched the new Prius at the Auto Expo priced at ` 27,38,500 to ` 29,40,500 ( exshowroom Delhi).

“ Hybrid is the technology for tomorrow. We aim to raise awareness of hybrids.

With a solar powered ventilation system we hope to see more Prius customers,” said Shekar Viswanathan, deputy managing directorcommercial, TKM. Even companies like Maruti Suzuki that has stuck to the traditional fossil fuel- driven engines are looking at commercially manufacturing a hybrid Swift. According to reports, the carmaker has already started road- testing the Swift ‘ range extender’, which runs on an electric motor, and alternatively on petrol.

Two- wheeler companies are not far behind.

Hero MotoCorp, the leading two- wheeler maker in the Indian auto market, uncovered its first ever concept hybrid scooter, Lead, at the Auto Expo.