8th Auto Expo, New Delhi, India
The biennial automotive exposition held in New Delhi recently was a much-awaited event in India because of the progress made in the automotive industry since the last expo two years ago. But the 2006 show came across as more an industry focused than a consumer oriented show. Deepesh Rathore and Tilak Swarup were there.
This year's show saw many large vehicle manufacturers opting out and very few commercial launches of passenger vehicles. However, the automotive supplier industry saw an increase in participation with many more companies showing up. Indian automotive suppliers exhibited their product development and production capabilities and plans for business expansion. There was much talk of outsourcing, which was a common thread in suppliers' plans. Amongst the vehicle manufacturers participating there was the promise of a regular stream of vehicle launches in India as well as increased domestic manufacture, new technologies and new alliances.
Maruti ups investment plans
Suzuki Maruti Udyog announced large capital expansion plans in addition to those previously announced. The display was spearheaded by the Escudo SUV, known as Grand Vitara in other markets, various versions of Swift, including a sports version with a 1.6 litre engine and modified detailing, and Solio, a vehicle specifically designed for the physically challenged.
At the show, Maruti announced that it will invest additional INR27.18 billion for research and development as well as the upgrade of facilities by 2008 and the introduction of five new models. The new models planned include a diesel-powered passenger car and a premium segment offering - all within the next five years.
The new investment is in addition to the INR32 billion announced by Suzuki earlier for establishing a passenger car and diesel engine plant. The diesel engine plant will begin operations by the end of 2006 along with the launch of a new diesel car model in the market.
Tata and Fiat MoU
Tata Motors and Fiat India announced a signing of a Memorandum of Understanding (MoU) that means Tata dealerships will provide sales and service points for Fiat cars. This arrangement, beginning in March 2006, includes the provision that Tata dealerships will sport the Fiat Logo alongside the Tata badge and also stock Fiat spare parts. Tata Chairman Ratan Tata and Fiat CEO Sergio Marchionne said this partnership has endless synergies which will be leveraged in the future which may include joint product development and platform/technology sharing. Individually, Tata displayed a long-wheelbase Tata Indigo saloon and a Crossover concept. Tata-Fiat is a relationship to watch.
Skoda displayed its range offered in India including the Superb, new Octavia (known as Laura here) and Octavia models. Skoda also displayed the three-box Fabia and the Yeti concept. Skoda announced 2005's full year's sales 95% over 2004 at 8,953 units (beating previous expectations); the company has set a 2006 sales target growing 50% to 13,500 units. Mr Lukas Folc, the new Managing Director, Skoda Auto India, said the company will introduce six new cars this year to achieve the sales target including the Fabia, and a new range of Octavia.
Hindustan has MMC Lancer Cedia
Hindustan Motors launched the Mitsubishi Lancer Cedia at the show. The 1.8 litre petrol version may face stiff competition from Hyundai Elantra, Toyota Corolla and Skoda Octavia though the Cedia is priced lower in the price range at INR987,000 (ex-showroom, New Delhi). Cedia will be powered by a two-litre, 4-cylinder petrol engine with maximum power output of 115 PS and a maximum torque of 175 Nm. It will be equipped with safety features including dual air bags, ABS and electronic brake force distribution.
Audi launches A4
Audi introduced the new A4 saloon in India in two engine options, including the 1.8 litre turbo petrol, and the two litre turbo diesel (TDI) engines. The A4 has been homologated for Indian driving and climatic conditions. Nationwide, Audi has three dealerships - based in Mumbai, Delhi and Bangalore - and more dealerships are planned this year in keeping with its plans to market the new A4 here.
Since introduction in 2005 Audi sold some 105 cars in the year, including 75 units of the A6, 15 units of the A8 and 15 units of the TT Coupe. Audi targets sales of 300 units in 2006 including 150 units of the A4. The A4 supplements the Audi A8, A6 and TT models offered in India. The Q7 was displayed to exhibit the next introduction in the country in 2006 after completion of the homologation process. There was news that Audi might use the assembly facilities of Skoda based in Aurangabad for its models as sales volumes grow.
Honda shows new Civic
Honda showcased the new Civic for India planned for a launch soon and to be positioned between the City ZX and the Accord. Globally a new product and very modern in its design, the Civic was well received by the industry and general public alike. Civic is likely to come to India priced between INR1.1 and 1.3 million in two variants. The car design is similar to the 8th generation Civic launched in the US market in 2005 with a few modifications to suit Indian tastes and conditions, such as curved headlamps, a tropicalised air-conditioner, a higher ground clearance and strengthened suspension. Engine will be the same configuration as in USA, the 1.8 litre, i-VTEC.
Honda SIEL Cars has meanwhile hiked its production capacity at its plant in Greater Noida near New Delhi to 50,000 vehicles per annum from 30,000. To include the Civic model into its Indian subsidiary's portfolio, Honda commissioned an additional investment of INR1.5 billion in November 2005.
Ford Mustang excites
Ford did not display any new product for launch in the market though the Ford Mustang proved a major show-puller. Ford displayed its recently introduced Fiesta saloon cars and cross sections of their modern 1.4 litre CRDI and compact 1.4 litre petrol engines. Other cars on display were the Endeavour SUV, Mondeo and Ikon models.
Mahindra & Mahindra showcased its in-house engineering capability by unveiling the Mahindra Scorpio HEV hybrid vehicle with assistance from undisclosed consultants based overseas. The USP of Mahindra's hybrid technology will be its price competitiveness at its commercial introduction in a few years time. But the commercial launch is still 4-5 years away. In the words of the M&M President for the automotive sector, Dr Pawan Goenka, "the green machine is currently at a work-in-progress stage."
The concept has a CRDe (common rail diesel engine) and an electric transaxle supported by a traction battery with fuel efficiency of 15-16kms per litre. The hybrid development was done under the supervision of Arun Jaura, vice-president, R&D and product development at M&M. He said that the Hybrid Scorpio will be launched commercially in the domestic market over the next few years and is "not going to be very much more expensive than the present Scorpio."
M&M also showcased customised Scorpios such as the Scorpio Passion, a race-inspired wide body styling, and Scorpio CEO, aimed at top executives. The Bolero Commando concept had four-doors with 16 inch tyres. Mahindra also exhibited its hydrogen-engine three-wheeler called HY-Alpha Champion, a sub-one tonne category three-wheeler, fuelled by compressed hydrogen gas emitting zero carbon dioxide and carbon monoxide gases.
At the Auto Expo, M&M announced its plans to begin CKD (completely knocked down) operations in Russia for the Scorpio and will scout for an equity partner for a venture there. Currently the company has sold 100 Scorpios in Russia as CBUs (completely built units) as part of its test marketing efforts. Scorpio is sold under the brand name Mahindra Marshal in Russia.
International Cars and Motors (ICML) - part of the Sonalika Group - launched its first vehicle in the market, the Rhino Multi Utility Vehicle (MUV). The Sonalika Group, makers of Renault tractors, farm and agricultural equipment, formed a joint venture some time ago with now defunct MG Rover and Powertrain International Ltd for a CRDI engine and transmission development for the MUV. Staying on track for launch, the Rhino was introduced with a Hindustan Motors sourced 2.0 litre diesel engine as its own CRDI engine has not reached series production.
The company unveiled the Rhino at an entry price of INR545,000 with two other variants priced at INR595,000 and INR685,000 respectively. The excise duty and income tax breaks given to ICML in the northern state of Himachal Pradesh helped the company price the vehicle competitively.
ICML has established an INR2 billion plant in the state of Himachal Pradesh for manufacturing the MUVs and expects to sell 5,000-6,000 units of the vehicle in the first year itself. Further, the company is in the process of developing a hydrogen-powered four-wheeler in collaboration with the Banaras Hindu University. It has developed hydrogen and battery-powered three-wheelers, which were also displayed at the Auto Expo.
The group Chairman, LD Mittal, announced that the group has offloaded a 20 per cent stake in ICML to Citigroup and was in talks to place a further 10 per cent stake to a UK-based private equity firm which might also purchase a stake in the group company International Tractors Ltd, in which Citigroup holds a 10 percent stake already.
While the Auto Expo drew a record number of visitors and exhibitors, large domestic OEMs like Toyota Kirloskar, DaimlerChrysler, Hyundai India and General Motors, preferred to opt out on the basis of low returns from the show. On the other hand, it was an apparently lucrative event for many Indian automotive suppliers, with sourcing teams from large suppliers and OEMs scouting for outsourcing opportunities. On the whole, there was a marked improvement in the show organisation, which was much more in keeping with international auto show standards than previous Auto Expos.
Deepesh Rathore / Tilak Swarup