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New Delhi: The country’s largest carmaker Maruti Suzuki India, largest automaker Tata Motors and Volkswagen’s Skoda Auto India plan to enter the crossover market, the fastest growing segment in the passenger vehicle market.

It is one detail that you may have missed out in a booming market where every carmaker seems to be reaching a new milestone every month, but clearly our big carmakers are alert even when they party. They can cross over in no time.

Tata Motors will roll out its Tata Aria, developed from the Xover concept, in the last quarter of 2010, while Maruti’s first crossover based on its R3 concept and Skoda Roomster will hit the Indian road next year, according to industry executives familiar with company plans.

Crossovers, or multi-utility vehicles, are positioned between larger sports utility vehicles and smaller hatchbacks, mixing the silky comforts of a car with the rough and tough built of an offroader.

“As the market shifts towards compact cars, MUVs are gaining ground with their higher utility and lower cost of operations,” says Sundeep Singh, deputy MD (marketing) at Toyota Kirloskar Motors, maker of Innova crossover.

The segment, dominated by Innova and Mahidra & Mahindra’s Xylo, grew 41% to 1.5 lakh vehicles, or close to 10% of the country’s passenger vehicle market, last financial year.

Industry analysts point to increased incomes, higher aspiration levels, more young buyers and multi-purpose utility as factors boosting crossovers. Also, crossovers are priced lower, Rs 6-11 lakh, than SUVs coming at Rs 8-25 lakh and more.

“There is a complete transformation with MUVs generating a huge demand off late with changes in urban demography and the emergence of rural markets,” says Anjali Jajoo, auto analyst at Mumbai-based Angel Broking. “Its growth is also helped by the buoyant economy as a high number of these vehicles are used for commercial operations.”

Automakers expect the demand to soar, driven by nucleus facilities looking at bigger crossover vehicles that can change into outstation wagons.

All three new vehicles — Maruti’s R3 concept, Tata Aria, built on the new Xover platform, and Skoda’s Roomster MUV, based on its Fabia hatchback platform — were showcased at the Delhi Auto Expo earlier this year.

Tata Aria, which will take off later this year, may have a ready market as both Toyota and M&M are struggling to meet the demand for Innova and Xylo.

“We are facing huge customers discontent as waiting for the Innova go up to three months in many regions now,” says Toyota’s Sundeep Singh. The company plans to increase Innova production to meet rising demand, he adds. Mahindra Xylo, priced at the entry level, also enjoys a two-month waiting for delivery. Tata Aria will be bigger and roomier than both. It is 4.85-meter long and will have flexible seating that can comfortably accommodate seven adults and offer ample cargo area.

Sources in the component industry say that Volkswagen also may enter the crossover segment in the country with a vehicle built on the Suzuki SX4 platform and that the unnamed vehicle could hit the market next year.
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Mumbai: Hoping to be third time lucky, country’s second-largest carmaker, Hyundai Motor India, is launching sports utility vehicle Santa Fe in an attempt to capture a slice of the highly competitive SUV market, said a senior company official. To be priced in the range of Rs 22-24 lakh, Hyundai is targeting the festive season in October for the launch.

“We will launch Sante Fe in October-November, ahead of the festive season. If volumes pick up, then we will consider assembling the vehicle here,” said Arvind Saxena, director, (marketing & sales), Hyundai Motor India. The seven-seater SUV, as against the earlier five-seaters, will be powered by a 2.2-litre diesel engine, and initially the company plans to import it as completely-built units.

The Korean auto major had earlier launched its SUVs—Terracan and Tuscon—but withdrew them from the Indian market after the SUVs went in for a `model change’ globally.

Hyundai Motor India is well entrenched in the budget segment with Santro, i10, i20. However, some of its premium products such as Sonata and Elantra have not met with much success. While the company has stopped retailing the Elantra, it plans to bring the new Sonata by the year-end. “We intend to give significant focus to our premium product category with the launch of the Santa Fe, and then follow it up with other models, said Mr Saxena.

The SUV segment is the fastest-growing segment in the Indian luxury car market, with a growth of more than 18-20% coming from the premium segment. The recently-launched Toyota Fortuner, which dominates the premium SUV market, will take on the Santa Fe. Some of the new challengers in the SUV space—Skoda Yeti and Nissan Murano—will compete with existing players like Honda CR-V, Chevrolet Captiva, Ford Endeavour, Nissan X Trail, Mitsubishi Outlander. “There is a huge untapped market for premium SUVs and every car player is looking at launching models,” said Abdul Majeed, auto practice leader, PwC.

Globally, premium SUV sales are under the weather as manufacturers are increasingly focusing on selling fuel-efficient small cars.
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Mahindra and Mahindra Ltd (M&M), India’s largest maker of utility vehicles, plans to launch at least eight models in the next 12 months, including variants of existing models.

The company intends to unveil a new sports utility vehicle (SUV) as well as variants of the utility vehicle Xylo and the small truck Maxximo, president of automotive and farm equipment Pawan Goenka said in a conference call with analysts.

All the models will roll out from M&M’s factories at Nashik and Chakan in Maharashtra. “It’s going to be one of the busiest years for us in terms of new product launches,” said Goenka.

The announcement follows the utility vehicle maker reporting a 40% jump in quarterly profits on 28 July, beating analyst estimates.

Ajay Sethia, analyst at Centrum Broking Pvt. Ltd, said the launches may not boost sales significantly unless they include a compact SUV. M&has M been planning such a launch, but did not speak about it on Thursday.

“The SUV, expected to be priced at Rs5.5 lakh, can lead to incremental volumes,” said Sethia.

Goenka said the demand for its models was robust, but the company was facing production worries as three key inputs—tyres, casting components and fuel injection systems used in diesel vehicles—were in short supply.

As a result, M&M had suffered a production loss of 7-8% in the June quarter. This included tractors, utility vehicles and smaller vehicles, whose combined sales rose 12% to 101,864 units.

The firm is now considering importing some of these parts, said Goenka, but the impact will only be visible by the third quarter of the fiscal.

M&M is also considering setting up a tractor manufacturing unit in Tamil Nadu. This will help the company compete with India’s second largest tractor maker, Tractors and Farm Equipment Ltd, or Tafe, which has a strong presence in the southern states.

Another analyst with a foreign brokerage said his firm is positive about M&M’s performance in the coming quarters, but he is sceptical if it can sustain the margins. “The margins can play a spoilsport for any auto company,” he said, requesting anonymity.

Shally seth
mint (Web & Print Edition)

Mumbai: German luxury car maker Porsche has launched its second-generation Cayenne, priced between Rs 65.82-lakh to Rs 1.27 crore in India (ex-showroom).

Porsche, which launched its new five models, Cayenne, Cayenne S, Caynne Turbo, Cayenne Diesel and Cayenne S Hybrid–in the Indian market has already received bookings for all models.

6BC_Porsche_Cayenne_Turbo

The company’s ex-showroom price for the five models are, Cayenne (Rs 65,82,000), Cayenne S (Rs 78,62,000), Caynne Turbo (Rs 1,27,10,000), Cayenne Diesel (Rs 59,22,000) and Cayenne S Hybrid (Rs 75,46,000).

“We have already received bookings of at least 70 units. This model represents the perfect balance between elegant design and powerful driving dynamics. Efficiency has significantly improved making this model an outstanding trendsetter in its segment,” Porsche India’s Director, Ashish Chordia, told reporters here.

Presently, the company has two showrooms and plans to open five more by December 2020.

“We will open five more showrooms in Chandigarh, Channai, Kochi, Hyderabad and Ahmedabad by this calender year,” Chordia said.

Its Cayenne S Hybrid’s highly sophisticated parallel full hybrid drive ensures fuel consumption of just 8.2 litres/100 kilometres. Cayenne Diesel with its 240 bhp three-litre V6 likewise reduces fuel consumption by 20 per cent, down from 9.3 to 7.4 litre/100km.

Fuel efficiency is also up significantly on the high-torque Cayenne S with its 4.8 litre V8 power unit. However, Cayenne Purbo, with its 500 bhp 4.8 litres V8 biturbo consumes just 11.5 litre/100 km, representing a reduction in fuel consumption of 23 per cent.

“Yet in today’s world, it is clearly not enough to pour on more power, there must be a clear, simultaneous improvement in fuel consumption. We have optimised this objective to a maximum by reducing CO2 emission of up to 26 per cent and reduction in fuel consumption of up to 23 per cent less,” Porsche’s Managing Director (Middle East), Deesch Papke, said. “This car clearly brings a new dimension to the SUV market,” Papke said.

Agencies
See this story in: The Economic Times (Web & Print Edition)

Mumbai: Mahindra & Mahindra (M&M) is looking to do a Nano by rolling out the country’s first sub Rs 5-lakh sports-utility vehicle a compact version of the Xylo — this year, two people familiar with the development said.

The country’s largest utility vehicle maker is quietly working on introducing a mini version of the Xylo in the Rs 4.5-5 lakh range, or 35-40% cheaper than the existing base model, by 2011, they said on condition of anonymity.

The company hopes to achieve this by shortening the length of the vehicle to within four metres so it attracts a lower excise duty of 10% compared to 22% for bigger cars and utility vehicles, they said. Mahindra & Mahindra officials declined to comment.

If it manages to bring down the Xylo’s price to less than Rs 5 lakh, the SUV will enter a price band that accounts for 60% of the country’s car sales and directly compete with compact cars such as the Maruti Suzuki WagonR, A-Star, Hyundai Santro, i10, GM Beat, Ford Figo, Fiat Punto and Tata Indica.

When it launched the Xylo in January 2009, M&M wanted the vehicle to challenge mid-level sedans, or three-box cars. Now it wants the mini Xylo to take on mid-level hatchbacks, or compact cars.

The compact Xylo will sport a much smaller engine than the 2.5-litre diesel engine that powers the vehicle now and Mahindra is yet to decide on the number of seats in the new vehicle, said one person close to the development.

Compact SUV market is an untapped segment in India where the only available vehicle is the recently launched Rio, a 5-seater SUV marketed by Premier. It uses body parts from a Chinese auto company Zotye and is priced in a range of Rs 5.6-6 lakh. Premier has sold around 200 Rios since January 2010. Compact Xylo will mark the entry of a big player into this segment.

Meanwhile, M&M is also planning to launch a micro-hybrid version of the Xylo before the year-end. The Mumbai-based automaker will also be introducing the Xylo in several overseas markets in the next few months.

The Xylo, which is the most ambitious project of M&M after the Scorpio, is currently priced in the range of Rs 7.57 lakh to Rs 9.69 lakh (ex-showroom Mumbai). It is produced on the same assembly line as the Scorpio.

While the company does not release product-wise sales, M&M’s sales of utility vehicles, including Scorpio, Xylo, Bolero and pick-ups, slipped 3.6% year-on-year in June 2010 at 17,010. The company blamed constraints in supply of critical components for this. Cumulative utility vehicle sales during January-June stood at 53,948 units, up 11% year-on-year.

“Copyright © 2010, Bennett, Coleman & Co. Ltd. All Rights Reserved”

Lijee Philip
The Economic Times (Web & Print Edition)