New Delhi: Though the cut-throat competition in the voluminous passenger car market is well documented, a quiet war is now breaking out in the niche luxury car category, which industry experts feel is becoming the new battleground and would script the next phase in the Indian auto story.

After selling 6,281 units in 2010-11 to topple Mercedes-Benz (5,987 units in 2010-11) as the No. 1 luxury car maker in India last fiscal, BMW is now gearing up to introduce its small car Mini for Indian roads in 2012. Even before the ramifications of the move could be felt, Audi has announced that it aims to become the number one luxury car maker in India by 2015. According to Audi India head Michael Perschke, the company would achieve the target by introducing products with cutting-edge technologies.

At the Auto Expo next month, Audi would be showcasing two new products to catch consumer eyeballs — Audi A3 (a budget sports sedan which could be the cheapest offering from the company till date) and the S6 (a stylised luxury limousine).

Meanwhile, sources said that Audi’s German rival Mercedes is also firming up plans to introduce a small sport utility vehicle B-class next year to take on BMW’s high-selling X1. However, it could not be officially ascertained since an email sent to the company remained unanswered.

So what is making India tick with luxury brands?

“Higher disposable incomes and a relatively younger population of affluent people is making India a very attractive destination for luxury brands. Look at the number of luxury foreign watchmakers that are looking to enter India,” Perschke said, and added that “strategically” India is among the top 10 markets for Audi.

In the April to September period so far this year, while the overall car market grew at a tardy 1.8%, BMW has grown at 87% to 5,005 units, Mercedes-Benz at 19.5% to 3,501 units and Audi at 85.3% to 2,864 units.

Perschke said that by the end of the calendar year Audi would have sold over 5,000 units.

“Audi’s global plans is to become the number one luxury car maker in the world by 2015. In India, we also aim to do the same. And our India strategy would be the same as the one followed globally,” Perschke told The Financial Express.

In fact, globally Audi expects to pip its former owners Mercedes Benz in 2011 (Audi was sold to Volkswagen by Mercedes in the 1960s) and sell close to 1.3 million cars in the calendar year. While India currently accounts a small percentage of Audi’s global sales, Perschke said that in the years ahead the country would emerge as the new China — where for the first time more Audis would be sold than in home country Germany.

Leader automotive practice at PricewaterhouseCoopers Abdul Majeed said that the competition in the luxury space is only going to intensify from here on. “The segment has been growing at an exponential rate. Today the numbers might not be great, but they are bound to increase,” he said. According to Majeed, the strategy of Mercedes-Benz, BMW and Audi to introduce lower price point products is redefining the segment.

New Delhi: The depreciating rupee is set to make cars dearer as increased manufacturing costs due to expensive imported parts is forcing companies to look at a price hike, despite the industry being affected by one of its worst slowdowns.

Top auto companies like Hyundai, General Motors, Toyota and Mahindra have all said prices will go up from the New Year as costlier parts have increased manufacturing cost. Market leader Maruti has already raised prices of its diesel variants and is also complaining of the increased pressure from the rupee slide. “We are very badly impacted and will be passing on the increased cost from January. The price increment should be in the range of 1-2%,” said P Balendran, V-P at GM India. Fresh counter measures like hedging will be worked upon at the end of the month, Balendran added.

Maruti said the pressure is immense. “The rupee fall has been very sharp and taken everyone by surprise. No one would have predicted that the slide will be like this,” CFO Ajay Seth told TOI. He said the rupee had depreciated as much as 30% against the dollar since April this year. While the company has a high degree of indigenisation, it also has substantial imports which are not only done directly but also by its vendors. “The total import content is about 21% of net sales, directly as well as indirectly. There has to be some intervention by the RBI now,” Seth said.

Arvind Saxena, sales and marketing director at Hyundai India, also said prices will increase by 1.5-2% due to many negative factors, including the rupee fall. “The pressure of rising inflation, higher fuel costs and sharp rupee depreciation has compelled us to look at a price increase on our models. All these factors have now made it very difficult for us to absorb the rising costs.”

Toyota has also said that it will hike prices. “The rupee depreciation is adding to the cost and we will be going in for a revision from January,” Toyota Kirloskar Deputy MD (sales & marketing) Sandeep Singh said. Toyota had last raised prices by 1-1.5% in October. “The hike could be of a similar range or even more,” Singh added. Toyota’s vehicles like Innova and Fortuner have 50% imported parts and the rupee has made their costs higher.

Michael Perschke, head of Audi India, said, “With the continuous devaluation of the rupee vs the Euro and the dollar, we cannot rule out the necessity of realigning our pricing.” “Copyright © 2011, Bennett, Coleman & Co. Ltd. All Rights Reserved”

On the radar is a multi-purpose vehicle (MPV), a sports utility vehicle (SUV) and three small cars, which will be unveiled at the Delhi auto expo in January.

“We want to be present in all the categories where a customer may want to purchase a passenger vehicle,” Shashank Srivastav, chief general manager (marketing), Maruti Suzuki India, told The Telegraph.

Analysts said Maruti needed an aggressive product expansion strategy to arrest its falling market share.

Over the last one year, the car maker’s market share fell to 38 per cent till October from 45 per cent in the same month last year because of labour strikes at its factories and launches by its rivals.

The company has started expanding its portfolio with the launch of the Kizashi, a premium sedan, earlier this year. It also imports the Grand Vitara, a premium SUV from its parent Suzuki Motor, on demand.

The compact MPV Ertiga has been developed in collaboration with Suzuki and is expected to be the next growth driver.

The Ertiga will be available in both diesel and petrol versions with a seating capacity of around seven.

“Demand for compact MPV is steadily rising in India. It accounts for around 12 per cent of the market and is expected to grow very fast,” Srivastav said.

The Ertiga will compete with the Toyota Innova and the Chevrolet Tavera. Srivastav said the price would be “competitive”.

According to analysts, the car could be priced around Rs 6-9 lakh.

A concept version of a compact SUV will also be unveiled in January. Apart from the Gypsy, which is mostly used by the armed forces, Maruti does not have a presence in this category.

Around 7-8 per cent of the 2.5-million passenger vehicles sold in India are SUVs, according to the Society of Indian Automobile Manufacturers. Mahindra and Mahindra and Tata Motors dominate the segment, which is expected to double its market share over the next decade.

Maruti will showcase three small cars in the expo to “gauge viewer response”. Called the Solio, Palette and the MR Wagon, these cars are powered by 660cc engines and are already available in Japan.

“We are displaying these special category of compact cars to get customer feedback,” Srivastav said, adding that no plans were afoot to bring them into India.

However, analysts feel at least one of the three small cars is likely to be on the Indian road in the next 2-3 years.

Chennai: Skoda Auto India is bullish on its growth prospects, notwithstanding the rising interest rates and lack of enthusiasm from customers.

The company, which sold about 20,000 units in 2010, is looking at a 50% growth in the current year , said Thomas Kuehl, member of the board, sales and marketing, Skoda Auto India. The optimism stems from the C-segment Rapid, which has received an overwhelming response and crossed the 1,500 booking mark within days of launch.

“The company, for the first time in India, has introduced online booking for Rapid and sold more than 25 cars through this channel,” said Kuehl, adding: “We seek to introduce the online booking system for all our models in the near future.” Responding to a volley of questions, he said: “We have plans to introduce Fabia and Yeti variants, apart from a few models on the existing line. We expect Rapid to garner 50% of our total sales next year, with diesel variant expected to hold 70% of total Rapid sales.”

Kuehl said the company was bullish on Rapid as it was set to take on the premium C-segment competitors like Honda City, Sx4, Verna in a big way. “We do also see customers of other C-segment cars like Sunny, Fiesta, Dzire, Etios making inquiries on Rapid. India is a great market for us and Rapid, as an entry-level car for Skoda, with a made-in-India and made-for-India slogan, is set to ride high.” Kuehl said the company planned to sell 2,000 Rapids a month and hoped to sell 3,000 units by December.

He said: “While customers are showing interest in owning a car, the current interest rates, inflation and market sentiment have forced them to postpone their buying decisions. We hope things will normalise in the near future as India is a matured market.”

Gurgaon: German luxury carmaker BMW, which has grown 70 per cent and sold over 8,042 cars in the country till October, expects India operations to become its most successful operations in the world this year surpassing even China.

“Luxury segment was growing well till October but after that it is getting much more difficult as the market has changed. We had set a target of selling 10,000 units this year, which is becoming difficult now,” said BMW India President Andreas Schaaf.

“BMW India has grown 70 per cent this year and sold 8,042 cars till October compared to 4741 cars last year and we expect Indian operations to become our most successful operations in the world this year,” added Schaff.

Despite Indian operations becoming most successful this year for BMW, the No1 luxury carmaker in the country is leaving no stone unturned to further consolidate its position in the luxury car market. The company on Thursday launched its pre-owned car business BMW Premium Selection in a bid to enhance its position in the country and will also be launching leasing car scheme this year only.

“The pre-owned car business will play an important role in the success of the company in India and we expect the used car business to be about 10 percent of new car sales. As regards leasing of our products, we are working on the same and will launch this year only,” he said.

Chennai: Nissan Motor India’s urban multi utility vehicle (MUV) is expected to be launched in August 2012, a company official said. The MUV will resemble Nissan NV 200, sold in Europe and other parts of the world , and will be pitted against Toyota Innova . The MUV will be unveiled at the Delhi Auto Expo to be held in January , the official said.

The MUV will be developed in partnership Ashok Leyland , under an existing joint venture, and will be rolled out with a Nissan badge . Earlier , the partners had launched the Dost, a 1.25-ton mini truck . The company’s city-based plant , capable of producing 2 lakh vehicles annually , will attain a capacity to produce 4 lakh vehicles by next year. Eighty per centof the vehicles manufactured at the plant are exported.

Nissan, which sold 13,000 vehicles so far this fiscal, is short of reaching its annual target of 40,000 units.

Its CFO Sunil Reikhi said , “We’re 80% on track to achievethe 2012forecast,” and expect 2013 sales to more than double.

The passenger vehicle market in India is going through a lull phase with October cars sales dropping by 23.8%. This is the biggest drop in sales since December 2000, when car sales fell 35%.

Nissan’s passenger vehicles in India are Micra and Sunny. Nissan Sunny will have its diesel version in the market by mid-2012.