12 May 2010

THOUGH THE PERSONALITY ORIENTED COLOURED CAR-WHY DO THEY PHASE OUT-why are cars world over loosing their designing

Though the global car makers are picturing the cars as per the tastes of the consumers, why are cars world over loosing their designing,-

The twin concerns of rising input costs and competitive intensity in the space took its toll on Ebitda margins (to net sales) for the quarter, which dipped 200 basis points sequentially to 13.5 per cent even as volumes grew 11 per cent. Net sales surged 12 per cent to Rs 9,119 crore (Rs 91.19 billion) during the period.

Material cost to net sales ratio rose to 77.9 per cent compared to 76.2 per cent in the December quarter, although about half of this was due to upgrades of vehicles to BS-IV emission norms, according to a Citibank research report

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".

It may be recalled Maruti Suzuki India managing director Shinzo Nakanishi had last year said after the completion of its announced investment of Rs. 9,000 crore by 2010, fresh investments would be made in non- production activities such as research and development and marketing initiatives. He had also stated last year, "Setting up stockyards in different parts of the country for finished products and spare parts at the regional level is high on the agenda so as to reduce our transportation time, cost and mainly delivery time to customers."

Business is all about expansion and in a growing economy like India, there is always increasing competition from rival firms like Honda,Hyundai,Nissan and Chevrolet

-         Honda Motor Company's Honda Siel Cars had their world premiere of the 2011 Honda 'New Small Concept Car' at Auto Expo 2010 in New Delhi, India this week. Honda's new small-class car looks like a rival to smart's fortwo and Toyota's IQ cars in its dimensions. Honda says that they will start selling a production variant of this New Small Concept car in India in 2011 and to other select world markets

Domestic sales of passenger cars in India has seen a growth of 39.5% in April 2010. Auto companies in the country sold 143 , 976 units in the month compared to 103 , 227 units sold in the same period last year.

The month saw sales of commercial vehicles grow 64.5% to 49 , 086 units..

Auto maker Volkswagen India has posted a record sales of 1489 units of its cars in April 2010. The new car Polo has performed quite well with sales of 1599 units since March when the company started selling the car. The company has confirmed booking of 7 , 300 units of the new Polo. The company also sold 226 units of its car New Beetle in the period of Jan-Apr 2010.

Luxury car maker Mercedes-Benz India has sold 321 units of its cars in April 2010 , a growth of 80% compared to the same period last year. Now the company has sold 1603 units of its cars in January - April 2010 , a growth 69% as compared to Jan- April 2009.

On the global situation, he said 14 million car owners had "vanished" due to the economic downturn.

Dodge, however, said India is fast becoming a strategic hub for the automobile industry and the company has plans to export vehicles from the Chennai facility to more than 100 countries.

"From the second half of 2010, Nissan Motor India would export vehicles to Europe and by the financial year 2011, 1,10,000 units of vehicle would be exported (to various countries) while it is expected to reach 1,60,000 in future", he said. For exporting its vehicles, the company had entered into a Memorandum of Understanding with the Ennore Port here early this year.

Elaborating about their other business activities, Dodge said that they had planned to launch a slew of new vehicles in the country

With the south ward trend in international markets and looming overcapacities, the immediate challenge for most of the automotive companies is to increase their global reach. With an extremely low penetration rate and a rising middle class with high disposable income, India becomes the favourite destination for global car companies to expand their global operations. And surely, the country has swiftly grown into becoming the hub for exporters of such cars too.

Pointing out that the compact car segment amounts to about 70 to 75 per cent of the total car sales in India, Maruti and Hyundai believe that small cars will fuel the automobile sector in the country in the coming years and say that besides India being a huge market, it is also a good base for exports. In the same line, other industry players also expressed their confidence on the potential of small cars in India.

When rest of the world was showing de-growth of 10 per cent to 50 per cent, Indian passenger vehicle market actually grew in 2008-09 and 2009-10. India is expected to retain a 12 per cent growth rate over the next 5-6 years and a 8 per cent  to 10 per cent growth rate post 2015.

Speaking of the potential, Maruti, while observing that only 8 out of every 1,000 people in India own a car in comparison to around 500 to 600 out of  every 1,000 people in advanced nations owning a car, said "with the penetration level so low and a lot of aspirants with enhanced disposable income India is a huge market; and 70 per cent of the overall car sales coming from small cars speaks itself for the potential this segment has."

Additionally, companies will have to target increased rural penetration to garner the volumes this segment promises.

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