The performance driving academy at the Buddh International Circuit in Greater Noida, has met with tremendous response, Mitra said. “It will be held on two days every quarter. But before the launch, we had no idea that it would get such a good response. Looking at this, we can scale up the number of days,” he said, adding that by having such programmes; Mercedes-Benz is also trying to get synonymous as a brand that makes performance cars and not just luxury vehicles.

In another initiative, the German carmaker will have a C63 AMG car at every showroom so that every customer can experience it.The company has recored a growth of about 30 per cent over 2010 and is targeting a substantial double digit growth this year. But there has been a change in buying trends and it is not just the big cities like Delhi, Mumbai or Bangalore that is seeing sales of premium and luxury cars.Mitra said that the trend has been that Benz has been selling a lot of cars in the smaller cities also.“Our strongest sales are in the West, North and followed by the South. But cities like Nashik, Karnal, Lucknow, Jaipur, Surat, Baroda, Bhubaneshwar, Vijayawada, Coimbatore and Calicut. In fact, Aurangabad has seen massive sales of Benz cars,” he said.

Replying to a question, he said the other problem automakers like Benz are facing is that of government policy.“Now, there are talks that diesel vehicles will be taxed more. As a manufacturer, we invest a lot of time in developing technologies and we can’t change things overnight. There needs to be stability in direction of policies,” he stated.Outlining future introductions from the Mercedez-Benz line-up, Mitra said: “The B Class should be out by the end of 2012, A Class in 2013 and the SUVs by 2014. By 2014-15, the entire line-up should be in India.”

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Source:www.dnaindia.com  2/2/12

The JV company is the exclusive strategic alliance partner for Nissan in India and handles all sales, marketing, dealer development, and after sales activities for Nissan in India. “Once we become a national sales company, instead of selling vehicles on a commission basis we will be handling the entire inventory of finished products purchasing them from the manufacturer and selling it to the dealer network that is being rapidly ramped up from 45 to 100 over the next two years,” said a top official at Hover.

Incidentally India is perhaps the only market in the world where Nissan has a manufacturing plant and works through an alliance partner who handles all the sales & marketing activities.“In the Middle East Nissan has similar alliance partners but it does not manufacture its cars there,” said a top official familiar with the negotiations. Hover’s partners also plan to infuse fresh capital into the joint venture to fund holding inventory of Nissan vehicles and also to ensure they retain their joint majority holding in the firm.

The partners in Hover include Singh’s GM group — earlier one of Honda’s largest dealers and Whalen, a founding member of Group One Automotive — a Fortune 500 publicly traded automotive retail consolidator who has over 30 years of elite dealer development experience in the American automotive retail industry. Whalen also formed Ascent Automotive, a private consolidator of premier luxury franchises across the US and is a consultant to several international OEMs on new products and brand development. Mangalji, who serves as chairman of Hover runs the Westmont Group — a global consortium consisting of a diverse portfolio in hotels, real estate, customer service and marketing.

Hover, which has already appointed 80 dealers for Nissan in India hopes that by 2013 it will have 100 dealers covering 85 per cent of the automotive market in India. “Each dealer is expected to invest between Rs 6-10 crore to set up a full fledged dealership which meets Nissan standards. On an average they would take between three to four years to break even which is the industry norm in India,” said a top Hover official. Nissan, which launched the petrol version of its first sedan Sunny in the country with a base ex showroom Delhi price of Rs 5.78 lakh, expects to introduce a diesel version of the same by the end of this fiscal year.

“While it’s true that after interest rates and petrol prices increased significantly the market for passenger cars as a whole is not growing any more in India, we fell that if the Sunny is successful as per our expectation, then the combination of the diesel version and exports to the Middle East and Africa should see us ramping up or production capacity in Tamil Nadu by making a decision on the second phase of investment,” Gilles Normand, corporate VP Africa, Middle East & India at Nissan said. According to him Nissan is using the Renault Nissan Automotive India alliance plant at Oragadam to the maximum capacity by using the spare capacity allocated to Renault too, for producing the Micra, which was in demand in the local markets.

“India has positively surprised us in many ways. For one we found that Indians are extremely good learners as was exemplified by the time taken to train the people working in our plant being significantly lower than what we had contemplated,” said Normand. He said Nissan found that staff in India learnt and retained learnings well. Nissan has also found Indian auto component suppliers to be quite cost and quality competitive globally. “We are quite excited about the opportunity to procure parts for the Renault-Nissan global alliance here,” he said.“The Indian customer too is extremely choosy and demanding and is not satisfied with a sub standard product. He wants the latest technology and is willing to pay only a reasonable price. This is extremely demanding from a manufacturing and development perspective and forces us to learn a certain sense of frugality, which is something Japan was known for decades ago and is unfamiliar territory for us now,” said Normand.

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Source:Financial Chronicle 21-9-11

A senior company executive said, “We had recalled around 8,000 City sedans last year to replace defective power window switches. Although no incident has been reported in India, we are extending the same exercise to the previously sold Honda City manufactured from 2005 to 2007.”Globally, HMC on Monday announced it would recall 936,000 units of the Jazz, City and CR-V models to fix faulty power window switches. The recall, however, does not impact the Honda Jazz and Honda CR-V sold in India. “HSCI is carrying out the part replacement as part of a global exercise by HMC to ensure stringent quality standards for its products,” the company said. The replacement will be carried out free of cost and the company will communicate directly with car owners.

The recall comes at a time when HSCI has been struggling to maintain sales in the country. Between April and July this financial year, the company sold a total of 12,526 units, a decline of 26 per cent as compared to the corresponding period last financial year.In January 2010, Honda had recalled 8,532 units of the second-generation City manufactured in 2007, owing to a defective power window switch, as part of a global initiative. It had also recalled the CR-V and the Accord in 2007.

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Source: BS 6-9-2011

Undeterred by rival criticism, Tata pursued his dream  — needless to say – of making affordable personal transportation available to millions. He didn’t leave anything to chance to make the success of world’s ultra-cheap car from India. Though production Nano had initial problems as Tata Motors was forced to shift the car plant from West Bengal to Gujarat, the company launched Nano, country’s smallest car,  in March 2009.
It was done through the booking route since it had only limited capacity and deliveries of the much-talked about small cars began in July 2009, as per a staggered calendar.

Initial troubles

As the intial booking response was huge, the company decided to initially sell the car only through booking list and free sales or open sales of Nano was introduced in a phased manner, to fine tune the marketing & sales infrastructure and the finance support.  “So, we began with one state in August, gradually adding three to four till December, by when we covered 12 states. In January 2011, we extended open sales to the rest of the country,” a Tata Motors spokesperson said.But then, like any ambitious project that has its share of (teething) problems, Nano too had its share. As a few cars caught fire for unclear reasons, it dampened the excitement of prospective buyers — albeit temporarily – and led to an all-time low sale of 509 units in the month of November 2010.

Another problem the company faced was booking related. The ‘pay-first, drive-later’ booking model adopted by it attracted a bunch of customers for whom the car wasn’t quite targeted for. Of the 2.06 lakh bookings the company got initially, a big chunk were urban buyers who were actually purchasing this as a second car. Many booked the car hoping to pocket a premium by selling the right.But as sales dipped, their initial excitement wore off and cancellation mounted. Also, the distribution strategy failed to bridge the last mile to the consumer segment that group chairman Ratan Tata built this car for. Lower income customers were apprehensive and hesitant to walk into large Tata Motors showrooms.

Reaching out

Not allowing the temporary setback to affect his enthusiasm, Ratan Tata (now 73) — who will retire in about two years’ time — charted out the path with a renewed vigour. He forged a  crack team from his trusted lieutenants at Tata Motors who reworked execution strategy and put in place a new and unconventional distribution system.All this helped Nano sales picking up fast and reach a peak of 10,000 units mark in April 2011. Sales started the upward journey from December 2010 (see chart). the  What’s more, a 10-member crack team headed by R Ramakrishnan , VP (commercial-passenger cars), and Girish Wagh, vice-president & head (small car project), are now monitoring the Nano’s progress, say top officials.

The company adopted a two-prong strategy for the Nano revival plan. First, Tata Motors set up 210 ‘F Class showrooms’, each only about 500 sq ft in size and stocking just one car in smaller towns, and hired 1,200 people to man them. Then, it tied up with value retailer Big Bazaar to gain traction among the 150 million footfalls the retailer gets every year.“There is a Nano parked in every Big Bazaar outlet and the touch and feel experience has accelerated decision-making, especially in smaller towns,” says Future Group Customer Strategy President Sandip Tarkas, who heads this initiative at Big Bazaar, which has 70 outlets in smaller cities and towns. This was in addition to the company’s 619 odd regular sales outlets.Of course, Tata Motors spokesman said, this is a continuing initiative and will be deepened, as is required. Besides, the company is exploring appointing full-fledged dealerships, only for the Tata Nano, in small towns.

The general approach of taking a vehicle closer to where the customer is a learning from the Tata Ace, which too since its launch has been made available through dedicated outlets, in addition to regular commercial vehicle showrooms.Now that Nano is on a growth path, the company expects first-time buyers to account for over 80 per cent of the sales of the small car in the coming months.   However, Tata Motors’ Vice President  R Ramakrishnan points out that 80 per cent of the bookings during the first round were from buyers who already owned a vehicle, while the remaining 20 per cent were from first-time buyers. He recently said: “The proportion is now shifting. Last month, over 50 per cent of our sales were reported from first-time buyers. We are expecting the numbers to increase by another 30 percentage points over the next few months.”

Loan facility

To make the car buying easy the company made financing arrangements with about 29 public sector banks, private banks, non-banking finance companies, cooperative banks.Customers can avail of options up to 90 per cent at easy rates. Over and above that, its  own captive finance arm, Tata Motors Finance, is clearing loan applications in just 48 hours to customers.

“Our teams are working with financiers at regional, state and even branch levels for smooth and effective functioning,” the spokesman said.  Thanks to these efforts sales of Nano have picked up in rural markets too. Even as Tata Motors’ focus on tier-II cities is seen as a correct strategy as they are natural markets for the Nano, says Abheek Singhi, partner & director of The Boston Consulting Group, yet he feels: “….but I think the vehicle would have to be more rugged for the rural market where the roads are bad and users are not well versed with good upkeeping of a car  .”

New assurance

To boost consumer confidence — especially after some Nanos catching fire on roads — Tata Motors had announced various schemes, including offering a free four-year/60,000-km extended warranty and a comprehensive maintenance contract for new buyers at Rs 99 a month. Volumes for the compact car have picked up since then.In sync with its avowed goal of converting scooters and mobike owners to upgrade in favour of Nano, the company has come out with ‘Mega loan cum exchange mela’ for existing two-wheeler owners. “…we are moving in the direction we had initially targeted.

Over one million 2-wheelers are sold in the country every month. We expect bike buyers to account for a rise in Nano sales,” Ramakrishnan said. Besides, depending upon the relevance of a scheme in a particular geography, we have schemes for exchanging a two-wheeler or a car.Other schemes have included a Tanishq gift voucher for Rs 5,000 for a woman buyer, an anniversary offer an accessory package (in January marking the unveiling of the Tata Nano in January 2008), free insurance (ran in March).

Industry sales

Even as the Nano registered its best sales ever in April, in macro terms the automotive industry itself saw a sharp deceleration. Industry sales in April grew only 13 per cent, after a 30 per cent growth recorded in FY11, as per the data released by Society of Indian Automobile Manufacturers (SIAM).However, smaller cars did much better than the more expensive and larger cars which grew much slower than the smaller ones.  Though the Nano bucked this trend, but it is still ranked only 14th in the best-sellers list, way behind the Maruti Suzuki Alto, Swift, Wagon R and even bigger cars like the Dzire.In that sense, Nano still has a long and difficult terrain ahead to steer.  Moreover, it will still have to work hard to maintain the  an image that its is as safe as any other car in the country.

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Source:Deccan Herald  18-5-2011

The luxury watch brand spends around 25 per cent of its annual marketing budget around car racing. Tag Heuer India at present contributes less than 5 per cent of the brand’s global turnover. (Although Tag Heuer’s global turnover is not available, parent firm LVMH did around Euro 19 million last year.) The brand generally spends 20 per cent of its turnover on marketing and advertising, but this year it has hiked the budget by almost 30 per cent.Talking about their communication plan around car racing, Manishi Sanwal, GM, LVMH Watch & Jewellery India, said, “Since car racing is a very metro city phenomenon in India, our media mix will essentially comprise outdoor, print, digital and on-ground advertising in Delhi, Mumbai and Bangalore. Most of our communication will be around the launch of 200 pieces ‘India limited edition’ watches priced at Rs 2 lakh each.”

Tag Heuer is one of the few international brands in the premium/luxury space that has a India specific communication plan and uses an India brand ambassador, Shah Rukh Khan. It is also among the very few brands in its space that spends around 25 per cent of its marketing budget on TV. “We will keep investing on TV advertising as we plan to increase our reach from 26 cities to 35 cities by next year. ”Globally, Tag Heuer’s association with motor racing has been longstanding. ‘Mastering speed for 150 years’ is the theme of its global celebrations in 2011 to mark its racing heritage.Sameer Gaur, MD and CEO of JPSI, said, “We are also talking to several auto and TV brands but haven’t finalised anything yet.”

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Source:Financial Chronicle 8/5/2011

Industry experts believe the Indian car market will double to 3 million by 2015. Maruti thinks it may reach a level of 4.5-4.6 million passenger vehicles by that time. Already, the domestic industry has grown by an average 13% over the last 5 years making it the fastest growing after China. So far this fiscal, car sales have surged by over 30% (April-Jan 2010-11), and even though a moderation is expected in 2012-13, the growth story is bound to stay. “There are enough indications of a moderation as conversions (of enquiries into actual sales) at our dealerships have dipped,” Pareek said. “But if one looks at the low levels of penetration of cars in India, the overall growth potential is still very big.”The dealer network augmentation is in tandem with Maruti’s expansion in its factories which would see its capacity go up from 1.2 million today to 1.7 million by 2013.
With only 11 cars per 1,000 people, India has one of the lowest levels of automobile ownership, but is projected to emerge the fourth-largest car market in the world by 2015, vaulting over all European nations.

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Source:HT 12/4/2011

According to Toyota deputy managing director Sandeep Singh, the average waiting period for the Fortuner was around six months. He said that the company did not want customers to wait, and have therefore closed bookings. He added that bookings would be restarted in June or July 2010.

It may be recalled that Toyota India launched the Fortuner in August 2009, and the much anticipated SUV has been a run away success for Toyota. The Fortuner was initially supposed to be launched in 2005, and Toyota took their own sweet time to bring it to India. And now that the Fortuner is here, they are finding it difficult to meet the demand. It is a situation many companies would love to be in!

The Toyota Fortuner has clocked over 6500 units so far in sales, and has become the best seller in its segment. After the launch of the Fortuner, sales of the Ford Endeavour and Honda CR-V were hit. To meet the high demand, the company had increased production to more than 950 vehicles per month from the initial 500 units per month. As of now the company has a backlog of orders for over 6,000 units.

TKM also clarified its stand on the so-called brake problem on the Fortuner, the Company said they are rectifying the brake problems on the vehicle based on customer feedback on a vehicle to vehicle basis as some of the owners, especially those who shift from sedans and other cars to the Toyota Fortuner, a four-wheel-drive SUV, may feel that the brakes feel a little different because the actual performance will be a different from what they may be used to. Toyota Kirloskar Motors have said that in order to improve customer satisfaction, the company was only modifying or improving the brakes, and therefore this was not a recall.

The Toyota Fortuner since its launched has sold very well in its segment and has become the segment leader. Its competitors in the market currently are the Ford Endvour, Chevrolet Captiva, Mitsubishi Outlander, Suzuki Grand Vitara and the Pajero  and the Nissan X-Trail and Honda CR-V.

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Source:www.dancewithshadows.com 30-4-2010

Neeraj Garg, Director, Volkswagen Passenger Cars, Volkswagen Group Sales India, says VW indeed had a very low brand recall in India. To correct that, Garg says, “the company opted for a continuous activity in the market because brand awareness always has a shelf life. We need to improve our brand awareness, we need to improve our reach. The fact that we have been successful in being different from others in the market is what is going to work for us”.VW is taking the “continuous activity” part quite seriously. Polo was the latest in a chain of six models ranging from compact cars to big sedans to giant sports utility vehicles launched in the last two years.

The company produces/assembles the Polo, Jetta and Passat in India while it imports the Phaeton, Touareg and Beetle. While Polo is manufactured in the company’s 110,000 units per year capacity Chakan plant, the Passat and Jetta are assembled at Skoda’s Aurangabad plant.And there’s more to come. VW is gearing up to launch a sedan in the mass market segment later this year. The new car in the mid-level category will compete against models such as Maruti’s SX4, Fiat’s Linea, Hyundai’s Verna and Ford’s Fiesta.

It is also working on a car that would replace Polo in the entry-level segment. VW hopes this will generate almost double the volumes compared to Polo, which will remain its flagship premium, yet volume generating car. All these initiatives are expected to increase the VW group’s share in India from the current 1 per cent to 10 per cent in the next five years.What makes VW’s gameplan in India all the more interesting is its decision in December last year to pick a significant minority stake in Suzuki. Though the details are sketchy, there has been intense speculation in industry circles that the tie-up will lead to joint development activities in India – a country where Maruti makes one in two cars sold.

With so much at stake in India, VW figured out that it needed to make a huge noise about its challenger status in India. So when it launched Touareg and the New Beetle Sedan late last year, VW did the most expensive print advertising campaign in India with a multi-crore roadblock campaign across all editions of India’s largest English daily, The Times of India. Roadblock refers to an advertiser paying a premium to black out all other advertisers.

Mumbaikars also saw other initiatives such as a giant banner in the sky displaying the new Beetle and the VW logo – a first such campaign for any automobile manufacturer.The company is now looking at more innovative ways for taking its brand forward in a tough market, which is controlled by only three manufacturers – Maruti Suzuki, Hyundai Motors and Tata Motors with combined sales of well over 1.4 million units (as of March 31, 2010).

Lutz Kothe, chief general manager, marketing and public relations, Volkswagen Group Sales India, says innovation is the way to go. “Our cars carry innovation and so our marketing campaign should also carry innovation. We had to do something which could make India talk about us. We had a significant double digit jump in sales after the campaign,” Kothe says.But will good cars and innovative campaigns be enough for a late entrant like VW to take on the established leaders in areas of technology, distribution and reach?

The jury is out on this. While many point to the uphill task that a late entrant like VW has in building its brand in India, VW executives are confident. “The loyalty factor for auto brands”, says Kothe, “is quite low in India compared to other markets. This means customers are looking for newer things in their cars. We do not see a situation where we have to pull customers, they are and will readily come to us”.Adds Garg: “The Indian car market is going to grow to three million units from 1.7 million units in another three to four years time. That gives enough opportunity to all players for expansion”.VW has also been building distribution. It presently has about 25 stand-alone dealers and intends to take it up to 40 in India as the company does not want to utilise the dealer resources of its sister brands for distribution. There will be gradual ramp-up in the number later with the next phase of expansion planned for areas outside the main cities.

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Source: Business Standard 29-4-2010

Speaking to journalists of The Hindu group of publications, Mr Ghosn said the alliance with Bajaj would come up with products “below and above” the Nano. When asked specifically if there would be a car produced priced below the Nano, he replied in the affirmative. “What we are doing is, we are moving from a tricycle to a car and trying to match the Nano price point in a different way,” he said.

Asked what he thought of the Nano, he said he had the car cut into “I don’t know how many pieces” and Renault- Nissan had analysed every single piece. “We’ve made analysis of the strengths and weaknesses and have taken the good ideas and implemented them in some of our cars,” Mr Ghosn said.

He pointed to an interview of the Tata group Chairman, Mr Ratan Tata, in which Mr Tata had said that when he announced the Nano project everybody but Mr Ghosn laughed at him. “I said this is very serious, we need to take a look at this and need to challenge this,” he recalled. Mr Ghosn stressed that Renault- Nissan unique multi-partner strategy for India was in deference to the fact that India was a sophisticated, difficult market where a newcomer had to learn a lot. He likened the strategy to a student having different teachers for different subjects.

The learnings, he said, would come in handy when Renault- Nissan would address the next wave of emerging markets. He said that in the emerging BRICs (Brazil, Russia, India, China) markets, the problem is one of how to move fast. But for the next wave of emerging markets, such as Indonesia, Iran and Nigeria, the issue would be one of getting the product right.

“The Indian market is going to be a key to other markets,” Mr Ghosn said, observing that some other markets are not developed because there are no (appropriate) cars.

“I think some of the cars in the `A minus’ segment, if we are able to adapt them to Indonesia, to Iran, to Iraq, to Nigeria, you are going to have a huge market. And these markets are still limited. It is not because there is no market, there is a market but there is no product. There is no product which is adequate to the capacity of people to buy a $2,500-3,000-3,500 cars. Because if the cheapest car you put on the market is $10,000 in Nigeria, there is no way Nigerian people are going to buy. If you bring a car at $3,000 in Nigeria, you are going to see a boom in Nigerian sales,” he said.

Describing the Tata Nano as “a very good first concept of what should be a popular car for the emerging markets,” Mr Ghosn said that learning from the Nano experience “is something that is very promising not only for India but for other emerging markets also.”

Source:Business Line 19/3/2010