CHENNAI: Industry should work in partnership with the government and make competitiveness happen, said Venu Srinivasan, chairman and managing director, TVS Motor Company Ltd., on Friday.
Speaking on the theme ‘Improving manufacturing competitiveness,' at the 174 {+t} {+h} Annual General Meeting of the Madras Chamber of Commerce and Industry (MCCI), he said the contribution of agriculture sector to GDP was declining and it was the manufacturing sector alone that could provide more jobs and growth. He said a one per cent growth in manufacturing could create jobs for 20 million to 30 million people, a growth other sectors were unable to provide. Productivity and flexibility were essential for India to maintain its cost advantage in global market and the resulting labour flexibility would lead to accelerated and inclusive growth.
In conclusion, Mr. Srinivasan said that India should have a sustainable development and green technologies, develop scale to target next billion customers, have leadership and innovation in new technologies and harness human resources for quality and productivity.
N. Murali, Senior Managing Director, Kasturi & Sons Ltd. and Rajeev Ranjan, Industry Secretary felicitated Mr. Srinivasan on being honoured with the Padma Shri.
Mr. Murali said that Mr. Srinivasan epitomised TVS group's value, trust, quality, integrity, business ethics and customer satisfaction. Mr. Srinivasan's passion for quality and commitment was well known. Mr. Srinivasan was not reluctant to dirty his hands on shop floor. Mr. Ranjan in his speech described Mr. Srinivasan as a versatile and multi-dimensional person whose contribution to industry and society was well known. He also said that the State government was willing to work with MCCI to further the cause of industrialisation.
N. Srinivasan, head of MCCI 175th year Celebrations Committee, said the Chamber would form a training centre for skill development near Oragadam; bring out a coffee table book on MCCI history and heritage; commission two major studies – infrastructure requirements and entrepreneurial eco system of the State; and open chapters in non-metro and in major cities in State.
Srinivasan K. Swamy, president, MCCI said that they would give full support to the State government to strengthen the cause of industrialisation in Tamil Nadu. T.T. Srinivasaraghavan, the president-elect, offered vote of thanks.
Bajaj to invest Rs 500 cr in Waluj 4-wheeler plant
Bajaj Auto will come up with its 4-wheeler plant at Waluj near Aurangabad instead of the present proposed location at Chakan.
Addressing shareholders at the annual general meeting on Thursday, Rajiv Bajaj, managing director Bajaj Auto, said, "In all probability we will shift the 4-wheeler plant to Waluj since we have enough land available there and have also reconstructed few of the existing buildings."
Bajaj had earlier said the company may look at an alternative location for its small car project since it has not been able to get the adequate land at Chakan.
Kevin D'sa, president (finance), at an analyst conference call, said the new 4-wheeler platform, which can also build 3-wheelers and the ultra-low-cost car, will come up with an investment of Rs 500 crore.
"The manufacturing cost will be over and above the Rs 500 crore and at a later stage the production can be shifted out of Waluj," D'sa said.
Refusing to divulge much details on the project, Bajaj said, "It is a confidential agreement between the 3 companies, however, we want to make a money making car. Capex would be under Rs 500 crore and hopefully we will be able to launch it by 2012."
The Waluj plant is supposed to be a dedicated site for manufacture of 3-wheelers and the small car. Bajaj already has a plant at Chakan manufacturing motorcycles. D'sa said due to intense competition from TVS in the 3-wheeler passenger carrier segment, there has been some loss of its 90% market share.
"The removal of permit in Tamil Nadu has opened up the market for us where the pent-up demand is around 35,000 units. In the next 3-4 months we will see significant sales happening in this region," he said.
Addressing shareholders at the annual general meeting on Thursday, Rajiv Bajaj, managing director Bajaj Auto, said, "In all probability we will shift the 4-wheeler plant to Waluj since we have enough land available there and have also reconstructed few of the existing buildings."
Bajaj had earlier said the company may look at an alternative location for its small car project since it has not been able to get the adequate land at Chakan.
Kevin D'sa, president (finance), at an analyst conference call, said the new 4-wheeler platform, which can also build 3-wheelers and the ultra-low-cost car, will come up with an investment of Rs 500 crore.
"The manufacturing cost will be over and above the Rs 500 crore and at a later stage the production can be shifted out of Waluj," D'sa said.
Refusing to divulge much details on the project, Bajaj said, "It is a confidential agreement between the 3 companies, however, we want to make a money making car. Capex would be under Rs 500 crore and hopefully we will be able to launch it by 2012."
The Waluj plant is supposed to be a dedicated site for manufacture of 3-wheelers and the small car. Bajaj already has a plant at Chakan manufacturing motorcycles. D'sa said due to intense competition from TVS in the 3-wheeler passenger carrier segment, there has been some loss of its 90% market share.
"The removal of permit in Tamil Nadu has opened up the market for us where the pent-up demand is around 35,000 units. In the next 3-4 months we will see significant sales happening in this region," he said.
Pulsar 135 facelifted
Bajaj’s Pulsar 135 LS (Light Sport) has been given a facelift. With the focus on improving its youth-oriented image, the new Pulsar 135 LS features a reworked, more up-market rear mud guard, that adds to the overall sporty look of the bike. The new version also showcases an all black engine and a half chain casing to the further enhances the looks of the Pulsar 135. In addition, an O-ring sealed chain has been added for lower maintenance issues in the long term.
With its chiseled lines, aggressive stance, sporty split seat, aluminium clip – on handle bars and a host of other features, the Pulsar 135 LS has been popular amongst youngsters seeking a stylish budget bike.
The new version of the Pulsar 135 LS has been priced at Rs 53, 000 (ex – showroom , Delhi).
With its chiseled lines, aggressive stance, sporty split seat, aluminium clip – on handle bars and a host of other features, the Pulsar 135 LS has been popular amongst youngsters seeking a stylish budget bike.
The new version of the Pulsar 135 LS has been priced at Rs 53, 000 (ex – showroom , Delhi).
Hero Cycles exits Hero Honda Motors
Hero Honda Motors Ltd, the country's largest manufactures of two wheelers, on monday informed the Bombay Stock Exchange (BSE) that the Indian promoter group of the company that comprises Hero Investments Pvt. Ltd and Hero Investments Pvt Ltd (HIPL), Bahadurchand Investment Pvt Ltd, and Hero Cycles Ltd have realigned their shareholding in the company. The Three firms collectively hold 26% of the paid up share capital of the company.
Under the movie, which follows a family arrangement announced by the group earlier this monthm, Hero Cycles has transferred its entire stake to HIPL Consequently, The Indian promoter group of the company now comprise HIPL Consequently, owned and controlled entirely by the Munjal family headed by Brijmohan Lall Munjall, chairman of Hero Honda Motors.
Under the movie, which follows a family arrangement announced by the group earlier this monthm, Hero Cycles has transferred its entire stake to HIPL Consequently, The Indian promoter group of the company now comprise HIPL Consequently, owned and controlled entirely by the Munjal family headed by Brijmohan Lall Munjall, chairman of Hero Honda Motors.
Munjals rejig stake in Hero Honda
New Delhi: Hero Honda — a joint venture between the Munjals and Japan’s Honda Motor — on Monday announced a realignment in the ownership of stake of its Indian promoters’ holding in the country’s largest twowheeler maker.
The Munjals and Honda hold a 26% stake each in Hero Honda and the rest is held by the public and financial institutions. Following a family settlement agreement of the Indian promoters, Brijmohan Munjal and his sons will now hold the stake as Indian promoters in the company.
In a filing to the Bombay Stock Exchange, Hero Honda said that in view of the family settlement agreement, the Indian promoters — Hero Investments (HIPL), Bahadur Chand Investment (BCIPL) and Hero Cycles — have realigned their shareholding in the company.
“In view of the same, Hero Cycles had transferred its holding in the company to HIPL. Consequently, the Indian promoter group of the company now comprises of HIPL and BCIPL, owned and controlled entirely by the Munjal family headed by Brijmohan Lall Munjal, chairman of the company,” it added.
The Munjals and Honda hold a 26% stake each in Hero Honda and the rest is held by the public and financial institutions. Following a family settlement agreement of the Indian promoters, Brijmohan Munjal and his sons will now hold the stake as Indian promoters in the company.
In a filing to the Bombay Stock Exchange, Hero Honda said that in view of the family settlement agreement, the Indian promoters — Hero Investments (HIPL), Bahadur Chand Investment (BCIPL) and Hero Cycles — have realigned their shareholding in the company.
“In view of the same, Hero Cycles had transferred its holding in the company to HIPL. Consequently, the Indian promoter group of the company now comprises of HIPL and BCIPL, owned and controlled entirely by the Munjal family headed by Brijmohan Lall Munjal, chairman of the company,” it added.
AutoCompanies headed for strong profit growth
Auto makers will likely shrug off the effect of higher expenses to register a surge in both revenue and profit when they announce earnings for the three months to 30 June, say analysts.
Auto companies will start reporting earnings on 21 July, when two-wheeler maker TVS Motor Co. Ltd announces its results for the first quarter of 2010-11.
A Mint survey of estimates from five domestic brokerages shows that most leading auto makers are set to post double-digit profit growth, reflecting the broader economy's health.
Truck maker Ashok Leyland Ltd and two- and three-wheeler maker Bajaj Auto Ltd are expected to lead the way in terms of growth in profit over the same period last year.
The brokerages polled are Angel Broking Pvt. Ltd, Prabhudas Lilladher Pvt. Ltd, Edelweiss Securities Ltd, Emkay Global Financial Services Ltd and Morgan Stanley.
The higher numbers are the result of a low base in the June quarter last fiscal, availability of low-cost credit and launch of new models of vehicles, especially in the passenger category.
Sales of passenger vehicles rose 32% to 554,000 units in the June quarter of the current fiscal, according to data from the Society of Indian Automobile Manufacturers.
Surjit Arora, auto sector analyst at Prabhudas Lilladher, said higher volumes are expected to lead to margin expansion because of better apportioning of fixed costs. "This is even as the raw material prices showed some signs of hardening from the previous quarter."
Most auto makers hiked prices by 3-4% in the June quarter to offset higher raw material prices. Ashok Leyland and Tata Motors Ltd are expected to report healthy earnings because of a revival in demand for commercial vehicles.
An average of the brokerages' estimates shows that Ashok Leyland, India's second largest truck and bus maker by volume, is expected to increase profit to Rs146.98 crore, an 1891% rise from a low base of Rs7.7 crore in the June quarter last fiscal.
The earnings of the Chennai-based firm were boosted by a 178% growth in truck and bus sales to 21,402 units.
Stand-alone revenue (excluding subsidiaries) at Tata Motors, the country's largest auto maker that also makes the world's cheapest Nano car, is expected to increase by more than two-thirds to Rs10,468 crore, while profits are expected to grow 70% to Rs374 crore.
Passenger car market leader Maruti Suzuki India Ltd is expected to continue its strong run despite the entry of newer compact cars from Ford, General Motors and Volkswagen.
With a 23% growth in unit sales to 242,887, analysts estimate the company's revenue will increase 29% to Rs8,263 crore, while profit is expected to increase 12% to Rs653 crore over the June quarter last year.
Revenue at Mahindra and Mahindra Ltd, which sells more than half the utility vehicles in India, is expected to increase 11% to Rs4,697 crore and profit to Rs438.18 crore, a 9.3% growth.
Analysts forecast profit at Bajaj Auto to jump 93% to Rs566.6 crore, while market leader Hero Honda Motors Ltd is expected to grow profit 14% to Rs573.68 crore.
However, in a 5 July report, analysts Deepak Jain and Chetan Vora of Edelweiss Research said Hero Honda has the potential to surprise on the higher side. Arora of Lilladher forecast that the September quarter may be even better, given that prices of metals such as steel and aluminium have fallen 10-12% since May.
Auto companies will start reporting earnings on 21 July, when two-wheeler maker TVS Motor Co. Ltd announces its results for the first quarter of 2010-11.
A Mint survey of estimates from five domestic brokerages shows that most leading auto makers are set to post double-digit profit growth, reflecting the broader economy's health.
Truck maker Ashok Leyland Ltd and two- and three-wheeler maker Bajaj Auto Ltd are expected to lead the way in terms of growth in profit over the same period last year.
The brokerages polled are Angel Broking Pvt. Ltd, Prabhudas Lilladher Pvt. Ltd, Edelweiss Securities Ltd, Emkay Global Financial Services Ltd and Morgan Stanley.
The higher numbers are the result of a low base in the June quarter last fiscal, availability of low-cost credit and launch of new models of vehicles, especially in the passenger category.
Sales of passenger vehicles rose 32% to 554,000 units in the June quarter of the current fiscal, according to data from the Society of Indian Automobile Manufacturers.
Surjit Arora, auto sector analyst at Prabhudas Lilladher, said higher volumes are expected to lead to margin expansion because of better apportioning of fixed costs. "This is even as the raw material prices showed some signs of hardening from the previous quarter."
Most auto makers hiked prices by 3-4% in the June quarter to offset higher raw material prices. Ashok Leyland and Tata Motors Ltd are expected to report healthy earnings because of a revival in demand for commercial vehicles.
An average of the brokerages' estimates shows that Ashok Leyland, India's second largest truck and bus maker by volume, is expected to increase profit to Rs146.98 crore, an 1891% rise from a low base of Rs7.7 crore in the June quarter last fiscal.
The earnings of the Chennai-based firm were boosted by a 178% growth in truck and bus sales to 21,402 units.
Stand-alone revenue (excluding subsidiaries) at Tata Motors, the country's largest auto maker that also makes the world's cheapest Nano car, is expected to increase by more than two-thirds to Rs10,468 crore, while profits are expected to grow 70% to Rs374 crore.
Passenger car market leader Maruti Suzuki India Ltd is expected to continue its strong run despite the entry of newer compact cars from Ford, General Motors and Volkswagen.
With a 23% growth in unit sales to 242,887, analysts estimate the company's revenue will increase 29% to Rs8,263 crore, while profit is expected to increase 12% to Rs653 crore over the June quarter last year.
Revenue at Mahindra and Mahindra Ltd, which sells more than half the utility vehicles in India, is expected to increase 11% to Rs4,697 crore and profit to Rs438.18 crore, a 9.3% growth.
Analysts forecast profit at Bajaj Auto to jump 93% to Rs566.6 crore, while market leader Hero Honda Motors Ltd is expected to grow profit 14% to Rs573.68 crore.
However, in a 5 July report, analysts Deepak Jain and Chetan Vora of Edelweiss Research said Hero Honda has the potential to surprise on the higher side. Arora of Lilladher forecast that the September quarter may be even better, given that prices of metals such as steel and aluminium have fallen 10-12% since May.
Mahindra to launch motorcycles soon
MAHINDRA & Mahindra plans to introduce its first motorcycles in India within the next few months as it challenges Hero Honda Motors in the world’s second-biggest two-wheeler market.
The company intends to add motorbikes ranging from low-cost entry models to premium products, Anoop Mathur, head of Mahindra’s two-wheeler business, said in an interview at the company’s Mumbai headquarters on Tuesday. He declined to elaborate further on the product plan.
The two-wheeler unit aims to break even next fiscal year and to become as large as Mahindra’s tractor and sport-utility vehicle businesses within seven years, Mathur said.
India’s largest maker of tractors and SUVs began making scooters in 2008 after buying Kinetic Motor to boost sales in a country where two-wheelers outsell cars about than five
to-one.
“It will be very difficult to break into this market as the existing players are so dominant,” said Vaishali Jajoo, a Mumbaibased Angel Broking analyst. “Mahindra will have to leverage their brand if they want to establish themselves in the twowheeler space.” Hero Honda, partowned by Honda Motor, and Bajaj Auto together control about two-thirds of India’s motorcycle market, the world’s biggest after China.
The company’s scooter sales more than quadrupled in the quarter ended June to 27,000, according to Society of Indian Automobile Manufacturers data. Industrywide sales of motorcycles and scooters rose 28 per cent to 2.7 million in the three months as rising incomes and economic expansion spurred demand.
“We’re looking to become a credible player in the two-wheeler space in India over the next few years,” Mathur said.
“There’s huge potential in the market.” Mahindra’s companywide revenue has increased at an average pace of 25 per cent over the past five years compared with 16 per cent for Hero Honda and 15 percent for Bajaj Auto, according to Bloomberg data. Mahindra's tractor business was its fastestgrowing segment over the past two years, expanding an average of 29 per cent, according to data compiled by Bloomberg. Cars, trucks and SUVs grow at a 14 per cent annual rate in the period.
Mahindra's motorcy cles will be designed by Engines Engineering, an Italian design company it acquired in 2008, Mathur said. The company would consider further acquisitions and collaborations to boost its two-wheeler business, he said. No deals are being actively worked on at present, he said.
Mahindra, which is considering a financial bid for Ssangyong Motor, the bankrupt South Korean sedan and SUVs manufacturer, more than doubled its net income to 20.9 billion rupees last fiscal year as vehicle sales surged.
Profit may gain to 21.8 billion in the current year according to an average forecast by 21 analysts compiled by Bloomberg.
The company may consider exporting motorcycles to markets including Latin America, Africa and South Asia once sales in India have begun, Mathur said.
Nationwide two-wheelers outsold passenger cars 2.7 million to 554,566 in India in the April-to-June quarter, according to data from the Siam.
The company intends to add motorbikes ranging from low-cost entry models to premium products, Anoop Mathur, head of Mahindra’s two-wheeler business, said in an interview at the company’s Mumbai headquarters on Tuesday. He declined to elaborate further on the product plan.
The two-wheeler unit aims to break even next fiscal year and to become as large as Mahindra’s tractor and sport-utility vehicle businesses within seven years, Mathur said.
India’s largest maker of tractors and SUVs began making scooters in 2008 after buying Kinetic Motor to boost sales in a country where two-wheelers outsell cars about than five
to-one.
“It will be very difficult to break into this market as the existing players are so dominant,” said Vaishali Jajoo, a Mumbaibased Angel Broking analyst. “Mahindra will have to leverage their brand if they want to establish themselves in the twowheeler space.” Hero Honda, partowned by Honda Motor, and Bajaj Auto together control about two-thirds of India’s motorcycle market, the world’s biggest after China.
The company’s scooter sales more than quadrupled in the quarter ended June to 27,000, according to Society of Indian Automobile Manufacturers data. Industrywide sales of motorcycles and scooters rose 28 per cent to 2.7 million in the three months as rising incomes and economic expansion spurred demand.
“We’re looking to become a credible player in the two-wheeler space in India over the next few years,” Mathur said.
“There’s huge potential in the market.” Mahindra’s companywide revenue has increased at an average pace of 25 per cent over the past five years compared with 16 per cent for Hero Honda and 15 percent for Bajaj Auto, according to Bloomberg data. Mahindra's tractor business was its fastestgrowing segment over the past two years, expanding an average of 29 per cent, according to data compiled by Bloomberg. Cars, trucks and SUVs grow at a 14 per cent annual rate in the period.
Mahindra's motorcy cles will be designed by Engines Engineering, an Italian design company it acquired in 2008, Mathur said. The company would consider further acquisitions and collaborations to boost its two-wheeler business, he said. No deals are being actively worked on at present, he said.
Mahindra, which is considering a financial bid for Ssangyong Motor, the bankrupt South Korean sedan and SUVs manufacturer, more than doubled its net income to 20.9 billion rupees last fiscal year as vehicle sales surged.
Profit may gain to 21.8 billion in the current year according to an average forecast by 21 analysts compiled by Bloomberg.
The company may consider exporting motorcycles to markets including Latin America, Africa and South Asia once sales in India have begun, Mathur said.
Nationwide two-wheelers outsold passenger cars 2.7 million to 554,566 in India in the April-to-June quarter, according to data from the Siam.
Mahindra arm eyes 10% in scooter mkt
Mumbai Mahindra2Wheelers, part of the $7.1 billion (around Rs 33,370 crore) Mahindra Group, plans to double its sales this fiscal. The company is targeting 10% market share in the scooter segment this fiscal, up from the current 6-8%.
The company offers three models of scooters — Flyte, Duro and Rodeo. These sold 70,000 units last year. It will soon be entering the motorcycles segment. The first model in this segment could be a 100 cc bike, say sources.
The company said it is working closely with the Reva Electric Car Company, in which M&M holds a majority stake, to leverage its expertise in the electric drive technology for its products.
“We are working on a number of new platforms, which will fructify in two-three years. We are working on alternative technology (electric and hybrid) and are greatly helped by the controlling stake in Reva as they are very strong in this field (electric technology),” said Anoop Mathur, president, Mahindra2Wheelers, and member of the management board, M&M.
He added, “We sold 70,000 units last year and expect to maintain this trend this year as well. We hope to more than double volumes this year.” Mathur did not divulge the number of new products the company plans to launch, but said that entry into motorcycles will help boost sales.
M&M acquired 80% stake in Kinetic Motor in July 2008 for Rs 110 crore. In September 2009, Mahindra Two Wheelers, the new company, launched Rodeo and Duro models and relaunched Flyte.
Till date, Mahindra has sold one lakh units of all the three models put together. The Flyte, Duro and Rodeo models sell 10,000 units a month.
The company offers three models of scooters — Flyte, Duro and Rodeo. These sold 70,000 units last year. It will soon be entering the motorcycles segment. The first model in this segment could be a 100 cc bike, say sources.
The company said it is working closely with the Reva Electric Car Company, in which M&M holds a majority stake, to leverage its expertise in the electric drive technology for its products.
“We are working on a number of new platforms, which will fructify in two-three years. We are working on alternative technology (electric and hybrid) and are greatly helped by the controlling stake in Reva as they are very strong in this field (electric technology),” said Anoop Mathur, president, Mahindra2Wheelers, and member of the management board, M&M.
He added, “We sold 70,000 units last year and expect to maintain this trend this year as well. We hope to more than double volumes this year.” Mathur did not divulge the number of new products the company plans to launch, but said that entry into motorcycles will help boost sales.
M&M acquired 80% stake in Kinetic Motor in July 2008 for Rs 110 crore. In September 2009, Mahindra Two Wheelers, the new company, launched Rodeo and Duro models and relaunched Flyte.
Till date, Mahindra has sold one lakh units of all the three models put together. The Flyte, Duro and Rodeo models sell 10,000 units a month.
Rahul Bajaj finally agrees to son Rajiv's 'magic of logic'
Press Trust of India, July 20, 2010
The Bajaj patriarch Rahul is finally veering around to dropping the family name as a brand for products saying son Rajiv is making the right moves.
Lauding Rajiv, who is the managing director of the firm while addressing shareholders in its annual report for 2009-10, Rahul said it pleased him that the company is leveraging its key brands to maximise profits.
"Your Managing Director often says that while products may generate market share, brands provide pricing power and create higher profits. I am increasingly tending to agree with him," the senior Bajaj wrote.
His comment is in contrast to the opinion he expressed earlier about the changes brought in by his son on the branding front.
Rajiv had said the 'Bajaj' name will be done away with from the motorcycles as the brand has been diluted, having presence from electricals to insurance to automobiles.
The junior Bajaj had said: "Bajaj is a bit like a zoo", while stressing that products like the Pulsar, Boxer, Discover have become brands by themselves, as a result of which the Bajaj brand has become "more like a garage".
The father, however, had ruled out dropping the 'Bajaj' brand, as opposed to an idea toyed by Rajiv, saying: "As of now the answer is no. But after 10 year, who knows? As of now the Bajaj name will be there."
The senior Bajaj was also quite vocal in expressing unhappiness when his eldest son decided to bring down curtains to the scooters, thus ending the saga of 'Humara Bajaj' in December last year.
"I feel bad, I feel hurt... I can't say harm the company and its shareholders by doing something you should not do... But I am still not convinced. He (Rajiv) has tried to explain it to me," Rahul had said.
However, Rajiv had reacted stating: "I care less for the solution from emotions, I believe more in the magic of logic."
Commenting on the company's financial performance in 2009-10, Rahul said: "Your company's performance has not been about 'buying' market shares through various pricing deals."
"Instead, it is about gaining share through better quality and branding – thus having the customer willing to pay higher prices for better value," he added. The company's net sales and other operating income last fiscal increased by 35 per cent to Rs 11,900 crore, while its net profit jumped 160 per cent at Rs 1,700 crore.
The Bajaj patriarch Rahul is finally veering around to dropping the family name as a brand for products saying son Rajiv is making the right moves.
Lauding Rajiv, who is the managing director of the firm while addressing shareholders in its annual report for 2009-10, Rahul said it pleased him that the company is leveraging its key brands to maximise profits.
"Your Managing Director often says that while products may generate market share, brands provide pricing power and create higher profits. I am increasingly tending to agree with him," the senior Bajaj wrote.
His comment is in contrast to the opinion he expressed earlier about the changes brought in by his son on the branding front.
Rajiv had said the 'Bajaj' name will be done away with from the motorcycles as the brand has been diluted, having presence from electricals to insurance to automobiles.
The junior Bajaj had said: "Bajaj is a bit like a zoo", while stressing that products like the Pulsar, Boxer, Discover have become brands by themselves, as a result of which the Bajaj brand has become "more like a garage".
The father, however, had ruled out dropping the 'Bajaj' brand, as opposed to an idea toyed by Rajiv, saying: "As of now the answer is no. But after 10 year, who knows? As of now the Bajaj name will be there."
The senior Bajaj was also quite vocal in expressing unhappiness when his eldest son decided to bring down curtains to the scooters, thus ending the saga of 'Humara Bajaj' in December last year.
"I feel bad, I feel hurt... I can't say harm the company and its shareholders by doing something you should not do... But I am still not convinced. He (Rajiv) has tried to explain it to me," Rahul had said.
However, Rajiv had reacted stating: "I care less for the solution from emotions, I believe more in the magic of logic."
Commenting on the company's financial performance in 2009-10, Rahul said: "Your company's performance has not been about 'buying' market shares through various pricing deals."
"Instead, it is about gaining share through better quality and branding – thus having the customer willing to pay higher prices for better value," he added. The company's net sales and other operating income last fiscal increased by 35 per cent to Rs 11,900 crore, while its net profit jumped 160 per cent at Rs 1,700 crore.
TVS launches Wego in Kerala
Kochi: TVS Wego, the first metal bodied scooter from the TVS Motor stable, expects to sell 15,000 units a month once it completes its all India roll out, top company official said here on Thursday.
TVS expects to sell 1500 units a month in the next eight months in Kerala, J Sreenivasan, General Manager (Sales), South, told reporters after launching the scooter in Kerala.
This would give TVS an addition of 20 percent market share from the present 15 percent in the scooter segment, he said.
At peak power, TVS Wego's 110 cc engine delivers 8 BHP @ 7500 rpm.
With this launch, TVS becomes the only company to have the widest range of scooters in India, including Scooty Teenz, the Sccoty Pep and the Scooty Streak.
TVS Wego will be available at Rs 43,984 ex-showroom in Kerala and would come Cappuccino Brown, Golden Beige, Silver, Black and Dark Blue colours.
TVS expects to sell 1500 units a month in the next eight months in Kerala, J Sreenivasan, General Manager (Sales), South, told reporters after launching the scooter in Kerala.
This would give TVS an addition of 20 percent market share from the present 15 percent in the scooter segment, he said.
At peak power, TVS Wego's 110 cc engine delivers 8 BHP @ 7500 rpm.
With this launch, TVS becomes the only company to have the widest range of scooters in India, including Scooty Teenz, the Sccoty Pep and the Scooty Streak.
TVS Wego will be available at Rs 43,984 ex-showroom in Kerala and would come Cappuccino Brown, Golden Beige, Silver, Black and Dark Blue colours.
Bajaj Auto plans CKD assembling at Indonesian plant
Bajaj Auto (BAL) is likely to switch to assembling completely knocked-down (CKD) parts of its motorcycles in its Indonesia plant in the second half of 2010-11. the company's Indonesia based subsidiary, PT Bajaj Auto Indonesia, assembles and markets Pulsars.
BAL's subsidiary has localised some of the assembly operations to bring down the customs duties. It is likely to continue to pursue the localisation of sub-assemblies in 2010-11.
Also, the product portfolio in Indonesia is expected to be expanded under the Pulsar brand with the Pulsar 135 LS. With the addition of Pulsar 135 LS to the model line up and with increased local sub-assembly operations, BAL is hoping that the Indonesia subsidiary will be able to reduce its losses this financial year.
BAL's subsidiary has localised some of the assembly operations to bring down the customs duties. It is likely to continue to pursue the localisation of sub-assemblies in 2010-11.
Also, the product portfolio in Indonesia is expected to be expanded under the Pulsar brand with the Pulsar 135 LS. With the addition of Pulsar 135 LS to the model line up and with increased local sub-assembly operations, BAL is hoping that the Indonesia subsidiary will be able to reduce its losses this financial year.
Bajaj Auto net zooms 100 pc, gives 1:1 bonus
The country’s second largest two-wheeler manufacturer Ltd Bajaj Auto Ltd reported a 100 per cent rise in net profit for the first quarter of 2010-11 at Rs 590 crore against Rs 293 crore in 2009-10. The company also announced one bonus share for each share held by existing shareholders.
The growth in profit was largely on account of the strong overall revival in sales that the company had witnessed during the quarter. Total income of the company grew 66.4 per cent to Rs 3,890 crore vis a vis Rs 2,338 crore during Q1 of 2009-10.
Bajaj’s motorcycle sales during the first three months grew by 71 per cent to 5.7 lakh units spurred by increase in demand for its two top brands Pulsar and Discover.
The company’s three-wheeler sales, which is considered to be more profitable also grew by 58 per cent to almost a lakh units during the period. Its exports also went up 82 per cent to 3.2 lakh units during the April-June period.
The growth in profit was largely on account of the strong overall revival in sales that the company had witnessed during the quarter. Total income of the company grew 66.4 per cent to Rs 3,890 crore vis a vis Rs 2,338 crore during Q1 of 2009-10.
Bajaj’s motorcycle sales during the first three months grew by 71 per cent to 5.7 lakh units spurred by increase in demand for its two top brands Pulsar and Discover.
The company’s three-wheeler sales, which is considered to be more profitable also grew by 58 per cent to almost a lakh units during the period. Its exports also went up 82 per cent to 3.2 lakh units during the April-June period.
TVS PAT jumps 123%, declares 1:1 bonus
Driven by volume growth and new launches and complemented by strong contributions from the existing portfolio, the country's third largest two-wheeler maker, TVS Motor Company, has reported a 40.9% growth in revenue and an 123% increase in profit after tax for the quarter ended June 30, 2010.
With the performance being encouraging, the board, which met on Wednesday, recommended issue of bonus equity shares to the shareholders in the ratio of 1:1 by capitalising equivalent amount standing to the credit of the general reserves of the company.
In a statement here, TVs said the company's revenues grew to Rs 1,392.96 crore for the quarter ended June 30, 2010, from Rs 988.70 crore in the year-ago period. The profit before tax during the quarter under review grew 151.8% at Rs 50.47 crore compared with Rs 20.04 crore in the comparable period of the previous fiscal. The profit after tax in the latest quarter grew 122.8% at Rs 40.38 crore from Rs 18.12 crore in the previous comparable quarter.
The board on Wednesday declared a second interim dividend of Re 0.50 (50%) per share, absorbing a sum of Rs 13.41 crore including dividend distribution tax for the year 2009-10. The total dividend, including the second interim dividend for the year ended March 31, 2010, will aggregate Rs 1.20 per share (120%). The board has not recommended any final dividend for the previous fiscal.
The total two-wheeler sales of the company grew by 31.4% in the first quarter of the current fiscal at 4.6 lakh units compared with 3.5 lakh units in the corresponding period of the previous year. Motorcycles sales grew by 31.5% at 2.04 lakh units from 1.55 lakh units in the quarter ended June 30, 2009. Scooters sales grew 41.6% at 96,000 units in the latest quarter.
With the performance being encouraging, the board, which met on Wednesday, recommended issue of bonus equity shares to the shareholders in the ratio of 1:1 by capitalising equivalent amount standing to the credit of the general reserves of the company.
In a statement here, TVs said the company's revenues grew to Rs 1,392.96 crore for the quarter ended June 30, 2010, from Rs 988.70 crore in the year-ago period. The profit before tax during the quarter under review grew 151.8% at Rs 50.47 crore compared with Rs 20.04 crore in the comparable period of the previous fiscal. The profit after tax in the latest quarter grew 122.8% at Rs 40.38 crore from Rs 18.12 crore in the previous comparable quarter.
The board on Wednesday declared a second interim dividend of Re 0.50 (50%) per share, absorbing a sum of Rs 13.41 crore including dividend distribution tax for the year 2009-10. The total dividend, including the second interim dividend for the year ended March 31, 2010, will aggregate Rs 1.20 per share (120%). The board has not recommended any final dividend for the previous fiscal.
The total two-wheeler sales of the company grew by 31.4% in the first quarter of the current fiscal at 4.6 lakh units compared with 3.5 lakh units in the corresponding period of the previous year. Motorcycles sales grew by 31.5% at 2.04 lakh units from 1.55 lakh units in the quarter ended June 30, 2009. Scooters sales grew 41.6% at 96,000 units in the latest quarter.
Auto sales and profit growth in June quarter may show less rise
The automobile industry is expected to do well in the year’s first quarter, ended June, but the growth in sales and profits may not be as good as in the previous four quarters, due to a higher base effect.
The results’ preview by eight broking firms estimated that seven auto makers are expected to post a 40-plus per cent growth in sales, operating profit and net profit in the first quarter. The rise in input costs is likely to affect profit margin by 50-100 basis points, say analyst from the eight broking houses.
In a nutshell, the scope for earnings surprises in the first quarter is limited, with company-specific performance likely to drive up the growth rate. Ashok Leyland is expected to be a big outperformer, while Tata Motors is geared up for higher growth in revenue and profit. Bajaj Auto and TVS Motors are expected to outperform the motorcycle leader, Hero Honda, with healthy growth in sales and profit. Maruti Suzuki and Mahindra & Mahindra are expected to show 25-30 per cent growth in sales and profit.
Demand strong
Demand is strong and continues to benefit from an improving job outlook and improvement in farm income and economic recovery. Auto analysts say the inventory level for cars and two-wheelers was considerably lower than the three to four weeks of last year. Operating margins are under pressure due to changes in emission norms and rising input costs, but the softening in metal prices has somewhat released pressure on margins. Commercial vehicles and tractor manufacturers are the most affected by the increase in tyre prices: they’ve been able to pass on the cost increase to consumers with some lag.
Two-wheeler companies have raised prices only from June 1 and, hence, margins would be under pressure. Hero Honda has been hit by the cost pressure and is expected to show a 80-100 basis-point decline in operating margins. Bajaj Auto is expected to show a 200 basis-point jump in margins on account of a better product mix. TVS Motors may show a modest 40-point jump. Car companies are mostly yet to raise prices, so their margins could decline. However, Maruti had announced price rises thrice, from January to April.
During the quarter ended June, original equipment manufacturers (OEMs) announced price rises to recover a portion of the increased input cost. Though the amount was not significant, the frequency was high in some cases. A major concern for the auto sector during the quarter has been the rising input cost pressure, mostly on account of higher commodity prices. Also, due to shortage of key components (like tyres), the pricing power has tilted towards the vendors. In addition, companies have incurred additional cost on upgrading vehicles to conform to new emission norms.
Margins to vary
Among auto majors, Tata Motors was expected to post a 60-plus per cent growth in its sales, on account of a 47 per cent rise in volume. Operating margin is expected to decline by around 125 basis points, on account of the product mix tilting towards the public vehicle segment. Ashok Leyland, on other hand, is expected to post 170 per cent growth in volumes, on account of a strong 228 per cent rise in the medium and heavy commercial vehicle segment. The average realisation is expected to be higher due to price rises. Operating margins are expected to increase by around 1,000 basis points due to the extremely weak corresponding quarter of the previous year.
Q1 PREVIEW: AUTO SECTOR
Rs crore SALES OPERATING PROFIT NET PROFIT
Maruti Suzuki is likely to be impacted by the adverse foreign currency movements, with the yen appreciating by eight per cent and the euro depreciating by six per cent during the quarter. The margins are expected to be flat year on year, while growth in net profit is expected to be modest, at around 15 per cent. Mahindra & Mahindra should show 25 per cent growth in sales and net profit, while operating margins are expected to decline marginally on account of steel contracts entered at higher prices.
Bajaj Auto is lined for another good quarter, with a 200-basis point increase in margins. Hero Honda has reported 10.3 per cent growth in volumes due to higher sales of new variants. Operating margins are expected to decline on account of higher raw material cost, mainly steel and rubber.
The results’ preview by eight broking firms estimated that seven auto makers are expected to post a 40-plus per cent growth in sales, operating profit and net profit in the first quarter. The rise in input costs is likely to affect profit margin by 50-100 basis points, say analyst from the eight broking houses.
In a nutshell, the scope for earnings surprises in the first quarter is limited, with company-specific performance likely to drive up the growth rate. Ashok Leyland is expected to be a big outperformer, while Tata Motors is geared up for higher growth in revenue and profit. Bajaj Auto and TVS Motors are expected to outperform the motorcycle leader, Hero Honda, with healthy growth in sales and profit. Maruti Suzuki and Mahindra & Mahindra are expected to show 25-30 per cent growth in sales and profit.
Demand strong
Demand is strong and continues to benefit from an improving job outlook and improvement in farm income and economic recovery. Auto analysts say the inventory level for cars and two-wheelers was considerably lower than the three to four weeks of last year. Operating margins are under pressure due to changes in emission norms and rising input costs, but the softening in metal prices has somewhat released pressure on margins. Commercial vehicles and tractor manufacturers are the most affected by the increase in tyre prices: they’ve been able to pass on the cost increase to consumers with some lag.
Two-wheeler companies have raised prices only from June 1 and, hence, margins would be under pressure. Hero Honda has been hit by the cost pressure and is expected to show a 80-100 basis-point decline in operating margins. Bajaj Auto is expected to show a 200 basis-point jump in margins on account of a better product mix. TVS Motors may show a modest 40-point jump. Car companies are mostly yet to raise prices, so their margins could decline. However, Maruti had announced price rises thrice, from January to April.
During the quarter ended June, original equipment manufacturers (OEMs) announced price rises to recover a portion of the increased input cost. Though the amount was not significant, the frequency was high in some cases. A major concern for the auto sector during the quarter has been the rising input cost pressure, mostly on account of higher commodity prices. Also, due to shortage of key components (like tyres), the pricing power has tilted towards the vendors. In addition, companies have incurred additional cost on upgrading vehicles to conform to new emission norms.
Margins to vary
Among auto majors, Tata Motors was expected to post a 60-plus per cent growth in its sales, on account of a 47 per cent rise in volume. Operating margin is expected to decline by around 125 basis points, on account of the product mix tilting towards the public vehicle segment. Ashok Leyland, on other hand, is expected to post 170 per cent growth in volumes, on account of a strong 228 per cent rise in the medium and heavy commercial vehicle segment. The average realisation is expected to be higher due to price rises. Operating margins are expected to increase by around 1,000 basis points due to the extremely weak corresponding quarter of the previous year.
Q1 PREVIEW: AUTO SECTOR
Rs crore SALES OPERATING PROFIT NET PROFIT
Maruti Suzuki is likely to be impacted by the adverse foreign currency movements, with the yen appreciating by eight per cent and the euro depreciating by six per cent during the quarter. The margins are expected to be flat year on year, while growth in net profit is expected to be modest, at around 15 per cent. Mahindra & Mahindra should show 25 per cent growth in sales and net profit, while operating margins are expected to decline marginally on account of steel contracts entered at higher prices.
Bajaj Auto is lined for another good quarter, with a 200-basis point increase in margins. Hero Honda has reported 10.3 per cent growth in volumes due to higher sales of new variants. Operating margins are expected to decline on account of higher raw material cost, mainly steel and rubber.
TVS Group raises stake in tyre subsidiary
Chennai: Taking a leaf out of the books of India Inc’s leading business houses— the Tatas and the Birlas — Chennai-based TVS Group is tightening its grip over group companies.
Not so long ago, the group signed a watershed deal with Japan's Suzuki Motors by buying them out from its flagship TVS Motor Ltd – then TVS Suzuki Ltd – for a song. The TVS Group is now consolidating its holdings in group companies with diversified interests.
The latest is the group’s move to increase its stake in TVS Srichakra, one of the leading two-wheeler and three-wheeler tyre maker from the Southern part of the country. TV Sundaram Iyengar and Sons Ltd, the holding company of the TVS group, has increased its stake in the two-wheeler and the three wheeler tyre maker by 2.3%.The stake of the parent company has gone up from 23.39% as in March 2010 to 25.69% in July 2010. The total promoters holding in the company has risen from 42% as on March 31, 2010 to well over 44.3%. The unlisted holding company lapped up shares of TVS Srichakra through the creeping acquisition route.
The promoters had bought the stake in TVS Srichakra from the open market in small tranches at different price levels.
Incidentally, TVS Srichakra is one of the companies in which the TVS group holds less than 45% stake.
The company stock closed on the National Stock Exchange (NSE) on Friday at Rs 273.90, down 1.92%. The stock, with a face value of Rs 10, has an yearly high of Rs 317.95 and an yearly low of Rs 72. The stock has seen a run up recently after the promoters started buying from the open market.
TVS Group, which has over 33 companies under its belt, had 10 companies listed on the stock exchanges. In most of the companies, the Group holds well over 40% stake.
Incorporated in 1982, TVS Srichakra makes over 11 lakh tyres year. This includes two-wheeler and three-wheeler tyres, industrial pneumatic tyres, farm and implement tyres, floatation tyres etc.
For the financial year 2010, the company clocked a turnover of Rs 700.74 crore and netted a profit of Rs Rs 29.81 crore.
Not so long ago, the group signed a watershed deal with Japan's Suzuki Motors by buying them out from its flagship TVS Motor Ltd – then TVS Suzuki Ltd – for a song. The TVS Group is now consolidating its holdings in group companies with diversified interests.
The latest is the group’s move to increase its stake in TVS Srichakra, one of the leading two-wheeler and three-wheeler tyre maker from the Southern part of the country. TV Sundaram Iyengar and Sons Ltd, the holding company of the TVS group, has increased its stake in the two-wheeler and the three wheeler tyre maker by 2.3%.The stake of the parent company has gone up from 23.39% as in March 2010 to 25.69% in July 2010. The total promoters holding in the company has risen from 42% as on March 31, 2010 to well over 44.3%. The unlisted holding company lapped up shares of TVS Srichakra through the creeping acquisition route.
The promoters had bought the stake in TVS Srichakra from the open market in small tranches at different price levels.
Incidentally, TVS Srichakra is one of the companies in which the TVS group holds less than 45% stake.
The company stock closed on the National Stock Exchange (NSE) on Friday at Rs 273.90, down 1.92%. The stock, with a face value of Rs 10, has an yearly high of Rs 317.95 and an yearly low of Rs 72. The stock has seen a run up recently after the promoters started buying from the open market.
TVS Group, which has over 33 companies under its belt, had 10 companies listed on the stock exchanges. In most of the companies, the Group holds well over 40% stake.
Incorporated in 1982, TVS Srichakra makes over 11 lakh tyres year. This includes two-wheeler and three-wheeler tyres, industrial pneumatic tyres, farm and implement tyres, floatation tyres etc.
For the financial year 2010, the company clocked a turnover of Rs 700.74 crore and netted a profit of Rs Rs 29.81 crore.
Hero Honda to launch bikes, add 500 dealers
Around nine models to be unveiled or refreshed this fiscal year
THE country's largest motorcycles manufacturer, Hero Honda Motors, said that it would add 500 dealers to its current 4,000 by the end of this financial year. The company will also introduce another six or seven models to its fleet of motorcycles this fiscal.
"As our sales are growing and going to more places, we are planning to add around 500 more dealerships across the country by the end of this fiscal. We have sold more than 4.2 lakh units in the month of June, and, continuously for the last five quarters we have been selling more than a million units. So as the number grows, we need to add dealers as well," senior vice-president, marketing and sales, Hero Honda Motors, Anil Dua said.
Declining to comment on investment, Dua said, "We announced to launch around nine models whether new or refreshed versions, and we have al ready launched two models in the last three months -Glamour and Glamour FI.
The rest would follow soon with some excitements before the festive seasons," he added.
The company, which has a capacity of 5.4 million units per year from all its three plants including Gurgaon, Dharuhera and Haridwar has also now decided to come up with a fourth facility very soon.
"We are still working on the land and area right now and may be in the next two months, we will be able to finalise it," Dua said.
Hero Honda holds around 55 per cent market share in the motorcycle market in India. Dua said the company would continue to be the leading motorcycles maker, and even with only one scooter -the Pleasure -it has around 50 per cent market share in the overall scooters market in India.
Mostly bought by women, the Pleasure has made a good impact because of the company's "all-women workshop".
"We have a special allwomen dealers, with 20 dealers in major 20 cities including Delhi, Mumbai, Hyderabad, Chennai, which take care of women customers. Such dealers, which have women-friendly ambience also help a lot to the company in gaining sales," Dua added.
The company sells around 25,000 units of the Pleasure every month.
THE country's largest motorcycles manufacturer, Hero Honda Motors, said that it would add 500 dealers to its current 4,000 by the end of this financial year. The company will also introduce another six or seven models to its fleet of motorcycles this fiscal.
"As our sales are growing and going to more places, we are planning to add around 500 more dealerships across the country by the end of this fiscal. We have sold more than 4.2 lakh units in the month of June, and, continuously for the last five quarters we have been selling more than a million units. So as the number grows, we need to add dealers as well," senior vice-president, marketing and sales, Hero Honda Motors, Anil Dua said.
Declining to comment on investment, Dua said, "We announced to launch around nine models whether new or refreshed versions, and we have al ready launched two models in the last three months -Glamour and Glamour FI.
The rest would follow soon with some excitements before the festive seasons," he added.
The company, which has a capacity of 5.4 million units per year from all its three plants including Gurgaon, Dharuhera and Haridwar has also now decided to come up with a fourth facility very soon.
"We are still working on the land and area right now and may be in the next two months, we will be able to finalise it," Dua said.
Hero Honda holds around 55 per cent market share in the motorcycle market in India. Dua said the company would continue to be the leading motorcycles maker, and even with only one scooter -the Pleasure -it has around 50 per cent market share in the overall scooters market in India.
Mostly bought by women, the Pleasure has made a good impact because of the company's "all-women workshop".
"We have a special allwomen dealers, with 20 dealers in major 20 cities including Delhi, Mumbai, Hyderabad, Chennai, which take care of women customers. Such dealers, which have women-friendly ambience also help a lot to the company in gaining sales," Dua added.
The company sells around 25,000 units of the Pleasure every month.
Bajaj Auto mulls bonus after 13 yrs
Bajaj Auto will consider a bonus issue at its board meeting on July 22, the first time in 13 years. Following the announcement, Bajaj Auto’s shares touched a high of Rs 2,525 on an intra-day basis on the BSE, after opening at Rs 2,415 Wednesday. No other details of the issue were announced.
According to information available on the official website, the last time Bajaj Auto Ltd (now known as Bajaj Holdings and Investments Ltd) had made an announcement of the sort was in October 1997, when it issued bonus shares in the ratio of 1:2. This will be the company’s ninth bonus issue since its inception. Five of the previous bonus issues have been in the ratio of 1:1, in 1994, 1991, 1988, 1984 and 1976. The highest ever was 1:5, issued in the 60s. Bajaj Auto will hold its AGM on the same day to obtain shareholders’ nod for the issue.
Bajaj Auto has already recommended a 400% dividend of Rs 40 per share for 2009-10, riding on its highest numbers in its history after it sold 2.85 million units in FY10. BAL's forecast for FY 11 is to touch four million sales, with one million coming from exports. The company ended year 2009-10 with a total income of Rs 12,043.4 crore and net profit of Rs 1,700 crore. Bajaj’s EPS in 2009-10 was at 117.70. Bajaj Auto has been outperforming the Sensex and the auto index since April 2009.
Recently, clarifying on plans to launch an ultra-low cost car with French giant Renault, the company said both can fulfil their “mutual objective” through a simple original equipment manufacturer arrangement.
According to information available on the official website, the last time Bajaj Auto Ltd (now known as Bajaj Holdings and Investments Ltd) had made an announcement of the sort was in October 1997, when it issued bonus shares in the ratio of 1:2. This will be the company’s ninth bonus issue since its inception. Five of the previous bonus issues have been in the ratio of 1:1, in 1994, 1991, 1988, 1984 and 1976. The highest ever was 1:5, issued in the 60s. Bajaj Auto will hold its AGM on the same day to obtain shareholders’ nod for the issue.
Bajaj Auto has already recommended a 400% dividend of Rs 40 per share for 2009-10, riding on its highest numbers in its history after it sold 2.85 million units in FY10. BAL's forecast for FY 11 is to touch four million sales, with one million coming from exports. The company ended year 2009-10 with a total income of Rs 12,043.4 crore and net profit of Rs 1,700 crore. Bajaj’s EPS in 2009-10 was at 117.70. Bajaj Auto has been outperforming the Sensex and the auto index since April 2009.
Recently, clarifying on plans to launch an ultra-low cost car with French giant Renault, the company said both can fulfil their “mutual objective” through a simple original equipment manufacturer arrangement.
All for girls
Last week, TVS Motor Company launched a new scooterette collection, Scooty Pep+ Babelicious, targeting college-going girls. The launch is supported by a TV campaign which will be aired for three months, till Diwali.
The campaign shows two new Scooty Pep+ vehicles pull up next to the driver’s side of a car. The girl on one Scooty checks out her reflection on the car’s dark window glass. As she moves closer to the window, the man inside the car immediately gives attention. The wife, sitting next to him, is not happy with what’s going on. The girl, unaware of what’s happening inside the car, continues to look at herself on the window pane, and gasps as she realises she’s forgotten her lipstick. She looks and smiles at her friend, who is riding a pink Scooty, and pulls out a lipstick tube, and checks if it’s matching the colour of her Scooty Pep+. As the girl flaunts her lipstick, the man inside the car enjoys the activity. Meanwhile, his wife pulls the window down. And, the girl on the Scooty Pep+ asks the man to pull the window up as she is not done with her make-up. The man rolls the window back, the signal turns green, and the girl rides off. The ad ends with the voice over: “Scooty Pep now in five bright, loud colours, do your own thing girl. Go Babelicious.”
TVS Motor India General Manager (marketing) & Head (scooters) S Srinivas says, “The new campaign explores how girls just love being girls. While all TVS Scooty ads show how guys are around and girls are on top of the world, this one is far more youthful. It’s about how teenage girls want to be the way they are — they want to flaunt feminism. It also carries home the message that guys can’t do what girls can!”
TVS rolled out the Scooty 16 years ago and has ever since followed a feminine brand positioning. Today, the company enjoys a 50 per cent share in the women’s scooter market and 22 per cent share in the overall scooter market.
The 40-second TVC is produced by Reel Company, and is directed by Anil Thomas, executive creative director, McCann Erickson (South). The brief for the campaign to McCann Erickson, says Srinivas, was to announce the launch of the Scooty Pep+ in new bright colours. Vishal Nicholas, strategic planner, McCann Erickson Bangalore, says, “McCann came up with the insight of ‘lovably immature’, which has been expressed as ‘go babelicious’ in the ad. As much as teenage girls want to grow up, there are phases when they want to revel. This is borne out by the popularity of characters such as Hello Kitty and Hannah Montana, bright-coloured bags and nail paints, even among women.”
The new Scooty Pep+ range competes primarily with Honda’s Acitva and Hero Honda’s Pleasure. In April, Hero Honda, which entered the scooterette category four years ago, launched the Pleasure special edition in India to celebrate the Women’s Day. TVS, however, says its buyer is different from that of Hero Honda’s Pleasure: “While the Pleasure is more about the modern woman, the TVS Scooty Pep+range targets college-going girls.”
The campaign shows two new Scooty Pep+ vehicles pull up next to the driver’s side of a car. The girl on one Scooty checks out her reflection on the car’s dark window glass. As she moves closer to the window, the man inside the car immediately gives attention. The wife, sitting next to him, is not happy with what’s going on. The girl, unaware of what’s happening inside the car, continues to look at herself on the window pane, and gasps as she realises she’s forgotten her lipstick. She looks and smiles at her friend, who is riding a pink Scooty, and pulls out a lipstick tube, and checks if it’s matching the colour of her Scooty Pep+. As the girl flaunts her lipstick, the man inside the car enjoys the activity. Meanwhile, his wife pulls the window down. And, the girl on the Scooty Pep+ asks the man to pull the window up as she is not done with her make-up. The man rolls the window back, the signal turns green, and the girl rides off. The ad ends with the voice over: “Scooty Pep now in five bright, loud colours, do your own thing girl. Go Babelicious.”
TVS Motor India General Manager (marketing) & Head (scooters) S Srinivas says, “The new campaign explores how girls just love being girls. While all TVS Scooty ads show how guys are around and girls are on top of the world, this one is far more youthful. It’s about how teenage girls want to be the way they are — they want to flaunt feminism. It also carries home the message that guys can’t do what girls can!”
TVS rolled out the Scooty 16 years ago and has ever since followed a feminine brand positioning. Today, the company enjoys a 50 per cent share in the women’s scooter market and 22 per cent share in the overall scooter market.
The 40-second TVC is produced by Reel Company, and is directed by Anil Thomas, executive creative director, McCann Erickson (South). The brief for the campaign to McCann Erickson, says Srinivas, was to announce the launch of the Scooty Pep+ in new bright colours. Vishal Nicholas, strategic planner, McCann Erickson Bangalore, says, “McCann came up with the insight of ‘lovably immature’, which has been expressed as ‘go babelicious’ in the ad. As much as teenage girls want to grow up, there are phases when they want to revel. This is borne out by the popularity of characters such as Hello Kitty and Hannah Montana, bright-coloured bags and nail paints, even among women.”
The new Scooty Pep+ range competes primarily with Honda’s Acitva and Hero Honda’s Pleasure. In April, Hero Honda, which entered the scooterette category four years ago, launched the Pleasure special edition in India to celebrate the Women’s Day. TVS, however, says its buyer is different from that of Hero Honda’s Pleasure: “While the Pleasure is more about the modern woman, the TVS Scooty Pep+range targets college-going girls.”
All for girls
Last week, TVS Motor Company launched a new scooterette collection, Scooty Pep+ Babelicious, targeting college-going girls. The launch is supported by a TV campaign which will be aired for three months, till Diwali.
The campaign shows two new Scooty Pep+ vehicles pull up next to the driver’s side of a car. The girl on one Scooty checks out her reflection on the car’s dark window glass. As she moves closer to the window, the man inside the car immediately gives attention. The wife, sitting next to him, is not happy with what’s going on. The girl, unaware of what’s happening inside the car, continues to look at herself on the window pane, and gasps as she realises she’s forgotten her lipstick. She looks and smiles at her friend, who is riding a pink Scooty, and pulls out a lipstick tube, and checks if it’s matching the colour of her Scooty Pep+. As the girl flaunts her lipstick, the man inside the car enjoys the activity. Meanwhile, his wife pulls the window down. And, the girl on the Scooty Pep+ asks the man to pull the window up as she is not done with her make-up. The man rolls the window back, the signal turns green, and the girl rides off. The ad ends with the voice over: “Scooty Pep now in five bright, loud colours, do your own thing girl. Go Babelicious.”
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TVS Motor India General Manager (marketing) & Head (scooters) S Srinivas says, “The new campaign explores how girls just love being girls. While all TVS Scooty ads show how guys are around and girls are on top of the world, this one is far more youthful. It’s about how teenage girls want to be the way they are — they want to flaunt feminism. It also carries home the message that guys can’t do what girls can!”
TVS rolled out the Scooty 16 years ago and has ever since followed a feminine brand positioning. Today, the company enjoys a 50 per cent share in the women’s scooter market and 22 per cent share in the overall scooter market.
The 40-second TVC is produced by Reel Company, and is directed by Anil Thomas, executive creative director, McCann Erickson (South). The brief for the campaign to McCann Erickson, says Srinivas, was to announce the launch of the Scooty Pep+ in new bright colours. Vishal Nicholas, strategic planner, McCann Erickson Bangalore, says, “McCann came up with the insight of ‘lovably immature’, which has been expressed as ‘go babelicious’ in the ad. As much as teenage girls want to grow up, there are phases when they want to revel. This is borne out by the popularity of characters such as Hello Kitty and Hannah Montana, bright-coloured bags and nail paints, even among women.”
The new Scooty Pep+ range competes primarily with Honda’s Acitva and Hero Honda’s Pleasure. In April, Hero Honda, which entered the scooterette category four years ago, launched the Pleasure special edition in India to celebrate the Women’s Day. TVS, however, says its buyer is different from that of Hero Honda’s Pleasure: “While the Pleasure is more about the modern woman, the TVS Scooty Pep+range targets college-going girls.”
The campaign shows two new Scooty Pep+ vehicles pull up next to the driver’s side of a car. The girl on one Scooty checks out her reflection on the car’s dark window glass. As she moves closer to the window, the man inside the car immediately gives attention. The wife, sitting next to him, is not happy with what’s going on. The girl, unaware of what’s happening inside the car, continues to look at herself on the window pane, and gasps as she realises she’s forgotten her lipstick. She looks and smiles at her friend, who is riding a pink Scooty, and pulls out a lipstick tube, and checks if it’s matching the colour of her Scooty Pep+. As the girl flaunts her lipstick, the man inside the car enjoys the activity. Meanwhile, his wife pulls the window down. And, the girl on the Scooty Pep+ asks the man to pull the window up as she is not done with her make-up. The man rolls the window back, the signal turns green, and the girl rides off. The ad ends with the voice over: “Scooty Pep now in five bright, loud colours, do your own thing girl. Go Babelicious.”
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TVS Motor India General Manager (marketing) & Head (scooters) S Srinivas says, “The new campaign explores how girls just love being girls. While all TVS Scooty ads show how guys are around and girls are on top of the world, this one is far more youthful. It’s about how teenage girls want to be the way they are — they want to flaunt feminism. It also carries home the message that guys can’t do what girls can!”
TVS rolled out the Scooty 16 years ago and has ever since followed a feminine brand positioning. Today, the company enjoys a 50 per cent share in the women’s scooter market and 22 per cent share in the overall scooter market.
The 40-second TVC is produced by Reel Company, and is directed by Anil Thomas, executive creative director, McCann Erickson (South). The brief for the campaign to McCann Erickson, says Srinivas, was to announce the launch of the Scooty Pep+ in new bright colours. Vishal Nicholas, strategic planner, McCann Erickson Bangalore, says, “McCann came up with the insight of ‘lovably immature’, which has been expressed as ‘go babelicious’ in the ad. As much as teenage girls want to grow up, there are phases when they want to revel. This is borne out by the popularity of characters such as Hello Kitty and Hannah Montana, bright-coloured bags and nail paints, even among women.”
The new Scooty Pep+ range competes primarily with Honda’s Acitva and Hero Honda’s Pleasure. In April, Hero Honda, which entered the scooterette category four years ago, launched the Pleasure special edition in India to celebrate the Women’s Day. TVS, however, says its buyer is different from that of Hero Honda’s Pleasure: “While the Pleasure is more about the modern woman, the TVS Scooty Pep+range targets college-going girls.”
Hero bets big on electric
New Delhi: Sensing the growing potential of electrically-powered vehicles, New Delhi-based Hero Electric, a wholly-owned electric two-wheeler subsidiary of the Munjals-promoted Hero Group, plans to use the electric platform to roll out three-wheelers and other speciality vehicles.
Managing director Naveen Munjal told FE that due to the rising awareness of electric vehicles, the company is exploring the feasibility of rolling out electric three-wheelers and other speciality vehicles since it has been one of the pioneers of the electric platform in the country. Munjal added any launch could take anywhere four-five years.
“For the electric two-wheeler segment, one of our main target audience are the youngsters...it gives us an opportunity to evolve as a primarily two-wheeler maker to much more in the future,” Munjal said. He added that though electrically powered vehicles had high growth potential owing to low maintenance costs, electric two-wheelers could be the main volume drivers due to practical viability.
The company is also scouting for business collaborations with other global electric two-wheeler makers to step up its exports to European and Latin American countries. “We have seen that globally, there is no single electric two-wheeler maker that has been able to create a niche...it gives a company like ours an opportunity to enter those markets,” he said.
Munjal, who is also president of the Society of Manufactures of Electric Vehicles said, that in current practice most electric batteries in India are a mix of lead acid, which makes the batteries heavier and bigger in size. He said that lithium electric batteries reduce the weight of the vehicle and is also one-third the size of lead acid batteries.
“The total life of these lithium batteries is more than three-times than the lead acid ones," he said. However, typically a lithium electric battery costs four-times more than a lead acid one.
Managing director Naveen Munjal told FE that due to the rising awareness of electric vehicles, the company is exploring the feasibility of rolling out electric three-wheelers and other speciality vehicles since it has been one of the pioneers of the electric platform in the country. Munjal added any launch could take anywhere four-five years.
“For the electric two-wheeler segment, one of our main target audience are the youngsters...it gives us an opportunity to evolve as a primarily two-wheeler maker to much more in the future,” Munjal said. He added that though electrically powered vehicles had high growth potential owing to low maintenance costs, electric two-wheelers could be the main volume drivers due to practical viability.
The company is also scouting for business collaborations with other global electric two-wheeler makers to step up its exports to European and Latin American countries. “We have seen that globally, there is no single electric two-wheeler maker that has been able to create a niche...it gives a company like ours an opportunity to enter those markets,” he said.
Munjal, who is also president of the Society of Manufactures of Electric Vehicles said, that in current practice most electric batteries in India are a mix of lead acid, which makes the batteries heavier and bigger in size. He said that lithium electric batteries reduce the weight of the vehicle and is also one-third the size of lead acid batteries.
“The total life of these lithium batteries is more than three-times than the lead acid ones," he said. However, typically a lithium electric battery costs four-times more than a lead acid one.
Yamaha aims for electric scooter dominance: Starting with the EC-03
Electric scooter set for Japanese market
15 July 2010 14:35 GMT / By Paul Lamkin
Yamaha has some bold aims when it comes to electronic transportation.
According to Motorcycle.com, the Japanese company aims to have three or four electronic scooters on the road by 2015 and then wants to be the leader in the field by 2020.
And it is kicking off its comeback into the electronic scooter market (remember the glow-in-the dark EC-02 in 2007?) with the Japanese launch of the EC-03.
The EC-03 will be classed as a 50cc scooter and is powered by a 50V lithium-ion Sanyo battery. It runs on the Yamaha Integrated Power Unit (YIPU), which has compactness at the forefront of its objectives.
It comes with a brushless DC motor, a control unit, planetary gear transmission and a drum brake all integrated within the 12-inch rear wheel.
The Yamaha EC-03 has an aluminium-alloy frame so it only weighs 56kg, which is 30 per cent less than a petrol-powered 50cc scooter.
It will cost you about £1820 (which is a bit cheaper than the Yogo) and it’s capable of travelling for 26.6 miles on a single 6-hour charge.
15 July 2010 14:35 GMT / By Paul Lamkin
Yamaha has some bold aims when it comes to electronic transportation.
According to Motorcycle.com, the Japanese company aims to have three or four electronic scooters on the road by 2015 and then wants to be the leader in the field by 2020.
And it is kicking off its comeback into the electronic scooter market (remember the glow-in-the dark EC-02 in 2007?) with the Japanese launch of the EC-03.
The EC-03 will be classed as a 50cc scooter and is powered by a 50V lithium-ion Sanyo battery. It runs on the Yamaha Integrated Power Unit (YIPU), which has compactness at the forefront of its objectives.
It comes with a brushless DC motor, a control unit, planetary gear transmission and a drum brake all integrated within the 12-inch rear wheel.
The Yamaha EC-03 has an aluminium-alloy frame so it only weighs 56kg, which is 30 per cent less than a petrol-powered 50cc scooter.
It will cost you about £1820 (which is a bit cheaper than the Yogo) and it’s capable of travelling for 26.6 miles on a single 6-hour charge.
Bajaj Discovers the ‘sporty commuter' segment
If Bajaj Auto is pleased with the good showing of the Discover, it goes beyond numbers alone.
From Mr Rajiv Bajaj's point of view, the Discover 150 has the potential to grow a relatively dormant product segment wedged between the more buoyant commuter and the sporty categories.
“My personal belief is that 20 per cent of the commuter category will quickly step up to the Discover 150, which could see it post numbers of 80,000 units a month by January next year,” the Managing Director of Bajaj Auto told Business Line.
Growth Drivers
To put this in perspective, the three big growth drivers of the commuter segment are Hero Honda's Splendor and Passion, and Bajaj Auto's Discover 100 with monthly sales of 400,000 motorcycles. All three have price tags in the Rs 40,000 (and slightly upwards) range.
The sporty segment, which is the 150cc-plus category and priced around Rs 60,000, does over 120,000 units a month. The Pulsar accounts for a lion's share of sales here.
It is the “in between” category of 125cc-150cc bikes, which just has not taken off over the years with average monthly numbers at just over 50,000 bikes with Honda Motorcycle & Scooter India's Shine being the segment mover.
Leader
Bajaj Auto is now confident that the Discover 150 will not only emerge the leader of this category but, in the process, will even change the dynamics of the commuter segment. The company believes that a 150cc bike at Rs 46,000, which offers over 60 km to a litre, has all the ingredients to appeal to the commuter category.
The Discover 150 was launched in May and monthly sales have touched 30,000 units. Its launch was initially confined to Andhra Pradesh, Uttar Pradesh, West Bengal and Delhi. Dealers in these four regions have been gung-ho on customer response and cited cases in some cities where the bike's sales have even overtaken that of its 100cc sibling's.
It is in this context that Bajaj Auto estimates sales of the Discover 100 and 150 to be evenly poised at 80,000 units each in the coming months. Some of these numbers are expected to be drawn from competitive models in the commuter segment.
The company refers to the Discover 150 as the sporty commuter bike that offers the best of both segments to the buyer.
Pulsar Platform
Interestingly, the objective was similar when the Discover 125 was first launched in 2004 from the viewpoint of offering customers a better alternative to the basic commuter bike. Sales were encouraging but there was no escaping the fact that it was more expensive and gave lower mileage than the average 100cc bike.
The Discover was born out of the Pulsar platform, which gave it a great front-end in terms of the brand, though there were issues at its back-end relating to costing and mileage. On the other hand, the Discover 150 emerged from the Discover 100 platform where these niggles were sorted out.
“We learnt that the brand had everything going for it but what needed to be set right was the costing and mileage. The Discover has shown that it is a strong, attractive proposition in the market,” Mr Bajaj said.
The physics of brands Give me a lever long enough and a fulcrum on which to place it and I shall move the world.” So said the Greek mathematician, Archimedes, centuries ago — words, which Mr Rajiv Bajaj reiterates, are relevant even today.
As he explains, the lever here refers to a strong brand while the fulcrum is the platform.
The world Archimedes referred to is today's modern market. “Alignment of the brand at the front-end with the platform at the back-end is termed strategy,” Mr Bajaj said.
The principle has been put to good use with the Discover and the market response has convinced the company that it is spot-on with its brand strategy, which has seen its market share double within a year.
From Mr Rajiv Bajaj's point of view, the Discover 150 has the potential to grow a relatively dormant product segment wedged between the more buoyant commuter and the sporty categories.
“My personal belief is that 20 per cent of the commuter category will quickly step up to the Discover 150, which could see it post numbers of 80,000 units a month by January next year,” the Managing Director of Bajaj Auto told Business Line.
Growth Drivers
To put this in perspective, the three big growth drivers of the commuter segment are Hero Honda's Splendor and Passion, and Bajaj Auto's Discover 100 with monthly sales of 400,000 motorcycles. All three have price tags in the Rs 40,000 (and slightly upwards) range.
The sporty segment, which is the 150cc-plus category and priced around Rs 60,000, does over 120,000 units a month. The Pulsar accounts for a lion's share of sales here.
It is the “in between” category of 125cc-150cc bikes, which just has not taken off over the years with average monthly numbers at just over 50,000 bikes with Honda Motorcycle & Scooter India's Shine being the segment mover.
Leader
Bajaj Auto is now confident that the Discover 150 will not only emerge the leader of this category but, in the process, will even change the dynamics of the commuter segment. The company believes that a 150cc bike at Rs 46,000, which offers over 60 km to a litre, has all the ingredients to appeal to the commuter category.
The Discover 150 was launched in May and monthly sales have touched 30,000 units. Its launch was initially confined to Andhra Pradesh, Uttar Pradesh, West Bengal and Delhi. Dealers in these four regions have been gung-ho on customer response and cited cases in some cities where the bike's sales have even overtaken that of its 100cc sibling's.
It is in this context that Bajaj Auto estimates sales of the Discover 100 and 150 to be evenly poised at 80,000 units each in the coming months. Some of these numbers are expected to be drawn from competitive models in the commuter segment.
The company refers to the Discover 150 as the sporty commuter bike that offers the best of both segments to the buyer.
Pulsar Platform
Interestingly, the objective was similar when the Discover 125 was first launched in 2004 from the viewpoint of offering customers a better alternative to the basic commuter bike. Sales were encouraging but there was no escaping the fact that it was more expensive and gave lower mileage than the average 100cc bike.
The Discover was born out of the Pulsar platform, which gave it a great front-end in terms of the brand, though there were issues at its back-end relating to costing and mileage. On the other hand, the Discover 150 emerged from the Discover 100 platform where these niggles were sorted out.
“We learnt that the brand had everything going for it but what needed to be set right was the costing and mileage. The Discover has shown that it is a strong, attractive proposition in the market,” Mr Bajaj said.
The physics of brands Give me a lever long enough and a fulcrum on which to place it and I shall move the world.” So said the Greek mathematician, Archimedes, centuries ago — words, which Mr Rajiv Bajaj reiterates, are relevant even today.
As he explains, the lever here refers to a strong brand while the fulcrum is the platform.
The world Archimedes referred to is today's modern market. “Alignment of the brand at the front-end with the platform at the back-end is termed strategy,” Mr Bajaj said.
The principle has been put to good use with the Discover and the market response has convinced the company that it is spot-on with its brand strategy, which has seen its market share double within a year.
Pulsar 135 LS gets a mild makeover
While we know Bajaj has a tendency to update their motorcycles at a pretty fast rate, this time they have managed to surprise us even more by giving the recently launched baby Pulsar a mild update.
Harley-Davidson, ICICI Bank tie up
Owning a Harley-Davidson might not be that hard now. At the Auto Expo on Thursday, Harley-Davidson India and ICICI Bank inked an MoU for a broad spectrum of banking services. Motorcycle enthusiasts will be able to avail themselves of ICICI Bank's financing options to buy Harley-Davidson products.
“The financing options will be for up to 85 per cent of the product value for five years at an interest rate of 11 per cent,” the Harley-Davidson India Managing Director, Mr Anoop Prakash, said.
“These options are comparable to those of premier car manufacturers,” he added. The 2010 XL883 Low Sportster model will be available at a starting EMI of Rs 12,845. Mr Prakash added, “We have also established a dealer financing relationship to ensure dealers can provide the full Harley-Davidson selection, experience and support to customers.”
Speaking while signing the MoU, Senior General Manager ICICI Bank, Mr Vijay Chandok, said, “We are committed to playing a catalysing role in the growth of the automobile sector in India and this partnership with Harley-Davidson is another step in this direction.”
Earlier this week at the Auto Expo, Harley-Davidson had announced the launch of 12 models for India. — Our Bureau
“The financing options will be for up to 85 per cent of the product value for five years at an interest rate of 11 per cent,” the Harley-Davidson India Managing Director, Mr Anoop Prakash, said.
“These options are comparable to those of premier car manufacturers,” he added. The 2010 XL883 Low Sportster model will be available at a starting EMI of Rs 12,845. Mr Prakash added, “We have also established a dealer financing relationship to ensure dealers can provide the full Harley-Davidson selection, experience and support to customers.”
Speaking while signing the MoU, Senior General Manager ICICI Bank, Mr Vijay Chandok, said, “We are committed to playing a catalysing role in the growth of the automobile sector in India and this partnership with Harley-Davidson is another step in this direction.”
Earlier this week at the Auto Expo, Harley-Davidson had announced the launch of 12 models for India. — Our Bureau
TVS targetting sale of 15,000 units a month all India
KOCHI: TVS Wego, the first metal bodied scooter from the TVS Motor stable, expects to to sell 15,000 units a month once it completes its all India
roll out, top company official said here today.
TVS expects to sell 1500 units a month in the next eight months in Kerala, J Sreenivasan, General Manager (Sales), South, told reporters after launching the scooter in Kerala. This would give TVS an addition of 20 per cent market share from the present 15 per cent in the scooter segment, he said.
At peak power, TVS Wego's 110 cc engine delivers 8 BHP @ 7500 rpm.
With this launch, TVS becomes the only company to have the widest range of scooters in India, including Scooty Teenz, the Sccoty Pep and the Scooty Streak.
TVS Wego will be available at Rs 43,984 ex-showroom in Kerala and would come Cappuccino Brown, Golden Beige, Silver, Black and Dark Blue colours.
roll out, top company official said here today.
TVS expects to sell 1500 units a month in the next eight months in Kerala, J Sreenivasan, General Manager (Sales), South, told reporters after launching the scooter in Kerala. This would give TVS an addition of 20 per cent market share from the present 15 per cent in the scooter segment, he said.
At peak power, TVS Wego's 110 cc engine delivers 8 BHP @ 7500 rpm.
With this launch, TVS becomes the only company to have the widest range of scooters in India, including Scooty Teenz, the Sccoty Pep and the Scooty Streak.
TVS Wego will be available at Rs 43,984 ex-showroom in Kerala and would come Cappuccino Brown, Golden Beige, Silver, Black and Dark Blue colours.
Venu Srinivasan to head NIFT
NEW DELHI: The Union Textiles Ministry has reconstituted the Board of Governors for the National Institute of Fashion Technology with Chairman of TVS Motor Venu Srinivasan as the Chairman of the panel. It has several prominent representatives of the textile industry as members.
The 15-member new board includes Sanjay Jayavardhanevelu of Lakshmi Machine Works, Coimbatore; Rajshree of Rajshree Spinning Mills, Coimbatore; and M. Ramaswamy of Warsaw International, Tirupur. The other prominent members in the new panel are: A. Sakthivel, Chairman, Federation of Indian Export Organisations; Dilip B. Jiwrajka, Managing Director of Alok Industries, Mumbai; and Prashant Agarwal, Managing Director of Bombay Rayon Fashions, Mumbai.
The board also includes N. K. Singh, Deepa Das Munsi, and Saroj Pandey, MPs, besides Premal Udani, Chairman, Apparel Export Promotion Council. Joint Secretaries of Textiles and Human Resource Development Ministries, Financial Advisor of the Textiles Ministry and NIFT Director General are also part of the new team.
Being a statutory body, appointment of the Chairman and non-official members of the Board of Governors has been approved by President Pratibha Patil in her capacity as the Visitor of the Institute.
NIFT at present has 13 centres, at New Delhi, Chennai, Bangalore, Hyderabad, Kannur, Mumbai, Kolkata, Raebareli, Gandhinagar, Bhopal, Kangra, Patna and Shillong.
Four more centres are coming up at Coimbatore, Jodhpur, Bhubaneswar and Srinagar.
The 15-member new board includes Sanjay Jayavardhanevelu of Lakshmi Machine Works, Coimbatore; Rajshree of Rajshree Spinning Mills, Coimbatore; and M. Ramaswamy of Warsaw International, Tirupur. The other prominent members in the new panel are: A. Sakthivel, Chairman, Federation of Indian Export Organisations; Dilip B. Jiwrajka, Managing Director of Alok Industries, Mumbai; and Prashant Agarwal, Managing Director of Bombay Rayon Fashions, Mumbai.
The board also includes N. K. Singh, Deepa Das Munsi, and Saroj Pandey, MPs, besides Premal Udani, Chairman, Apparel Export Promotion Council. Joint Secretaries of Textiles and Human Resource Development Ministries, Financial Advisor of the Textiles Ministry and NIFT Director General are also part of the new team.
Being a statutory body, appointment of the Chairman and non-official members of the Board of Governors has been approved by President Pratibha Patil in her capacity as the Visitor of the Institute.
NIFT at present has 13 centres, at New Delhi, Chennai, Bangalore, Hyderabad, Kannur, Mumbai, Kolkata, Raebareli, Gandhinagar, Bhopal, Kangra, Patna and Shillong.
Four more centres are coming up at Coimbatore, Jodhpur, Bhubaneswar and Srinagar.
TVS Motor says no plans to buy LML assets
TVS Motor Co Ltd, India's third largest two-wheeler maker, said on Tuesday it does not have any plans to buy the assets of LML Ltd.
LML shares, which were up 20 percent earlier in the day on reports TVS was looking to buy its assets, later pared gains to trade up 11.97 percent at 13 rupees.
LML in a separate statement also said the report of asset sale was incorrect.
LML shares, which were up 20 percent earlier in the day on reports TVS was looking to buy its assets, later pared gains to trade up 11.97 percent at 13 rupees.
LML in a separate statement also said the report of asset sale was incorrect.
Kinetic likely to re-start 2-wheeler ops in 2013
Iconic two-wheeler maker Kinetic Motor Company, which had brands like Kinetic Honda and Luna under its umbrella, could stage a comeback in 2013. The company is looking to re-enter the two-wheeler market with its own brands of products once the non-compete pact, it signed while entering into a joint venture (JV) with Mahindra & Mahindra (M&M), expires.
The Sullaja Firodia Motwani–led two-wheeler company, which had for years empowered young bike riders with gearless drive and auto-start, had stopped production of its popular two-wheeler brands following the JV with cars-to-commercial vehicle major Mahindra & Mahindra (M&M) in July 2008.
A top Kinetic official told FE on condition of anonymity that the non-compete agreement is only for a limited period of five years after which the company could re-enter the two-wheeler market with its Kinetic brand. The non-compete agreement is slated to expire in July 2013. M&M has 80% stake in the JV—Mahindra Kinetic Scooters & Motorcycles Ltd. According to the agreement, Kinetic Motor was given the option of selling the 20% stake in the next seven years.
In an interaction with FE on Thursday, Sulajja Firodia Motwani, managing director of Kinetic Motors, said in the next five years the company is going to focus on re-establishing its brand by targeting the customers directly.
However when asked about its plans to re-enter the two-wheeler market, Motwani said, “As of now we cannot enter the two-wheeler segment because of our JV with M&M.”
Kapil Arora, an analyst with Ernst & Young, said the two-wheeler segment is expected to grow in leaps and bounds in the coming years, especially with the potential of electric two-wheelers.
“Largely the electric two-wheeler segment has not penetrated the market yet ...it is going to grow even more in the future,” he said.
Another auto analyst said on conditions of anonymity that Kinetic has been looking to expand its brand and a re-entry into the two-wheeler market. He said though it would be the right choice for the company, lack of funds could be a constraint. “Kinetic has a strong brand recall but whether the company can mobilise enough funds will be the key (to the success of the its plan to re-enter the two-wheeler category,” he said.
Kinetic Motors is part of the $500 million Firodia Group of Companies. Apart from Kinetic Motors, the group also has an auto component business which goes by the name of Kinetic Engineering Ltd.
The Sullaja Firodia Motwani–led two-wheeler company, which had for years empowered young bike riders with gearless drive and auto-start, had stopped production of its popular two-wheeler brands following the JV with cars-to-commercial vehicle major Mahindra & Mahindra (M&M) in July 2008.
A top Kinetic official told FE on condition of anonymity that the non-compete agreement is only for a limited period of five years after which the company could re-enter the two-wheeler market with its Kinetic brand. The non-compete agreement is slated to expire in July 2013. M&M has 80% stake in the JV—Mahindra Kinetic Scooters & Motorcycles Ltd. According to the agreement, Kinetic Motor was given the option of selling the 20% stake in the next seven years.
In an interaction with FE on Thursday, Sulajja Firodia Motwani, managing director of Kinetic Motors, said in the next five years the company is going to focus on re-establishing its brand by targeting the customers directly.
However when asked about its plans to re-enter the two-wheeler market, Motwani said, “As of now we cannot enter the two-wheeler segment because of our JV with M&M.”
Kapil Arora, an analyst with Ernst & Young, said the two-wheeler segment is expected to grow in leaps and bounds in the coming years, especially with the potential of electric two-wheelers.
“Largely the electric two-wheeler segment has not penetrated the market yet ...it is going to grow even more in the future,” he said.
Another auto analyst said on conditions of anonymity that Kinetic has been looking to expand its brand and a re-entry into the two-wheeler market. He said though it would be the right choice for the company, lack of funds could be a constraint. “Kinetic has a strong brand recall but whether the company can mobilise enough funds will be the key (to the success of the its plan to re-enter the two-wheeler category,” he said.
Kinetic Motors is part of the $500 million Firodia Group of Companies. Apart from Kinetic Motors, the group also has an auto component business which goes by the name of Kinetic Engineering Ltd.
Auto sales jump 31%
Automobile sales in India grew by 31.42 per cent during June, benefiting from favourable macroeconomic conditions and new model launches across categories, including cars, two-wheelers and commercial vehicles.
According to the Society of Indian Automobile Manufacturers (Siam), total sales for all categories stood at 12,05,990 units against 9,17,645 units in the year-ago month, up 31.42 per cent.
Speaking to reporters, Siam president, Mr Pawan Goenka said the industry had benefited from a good overall macroeconomic environment in the first three months of the fiscal.
“Factors which we feared that will hamper growth didn't happen. Interest rates were favourable, and even when commodity prices were rising companies did not pass it on to consumers,” he said, adding the good economic growth had also had positive impact on consumer confidence.
Besides, there were eight new models and 11 facelifts during the first quarter of the fiscal that helped boost sales in June.
Siam said the domestic car sales stood at 1,41,184 units against 1,07,948 units in the same month last year, up 30.79 per cent.
Car market leader Maruti Suzuki's domestic sales grew by 12.61 per cent to 61,589 units in June, while rival Hyundai Motor India also registered 18.92 per cent rise at 27,366 units. Tata Motors' sales jumped 76.30 per cent to 24,209 units during the month.
Total two-wheeler sales in June stood at 9,33,101 units, up 31.99 per cent over 7,06,934 units in June 2009.
Motorcycle sales in India during June also went up by 29.98 per cent to 7,15,98 units from 5,50,830 units in the year-ago period.
The country's largest motorcycle maker Hero Honda registered a growth of 14.63 per cent in its sales at 3,91,716 units in June 2010.
Rival Bajaj Auto saw sales soaring by 69.38 per cent to 1,86,401 units, while Chennai-based TVS Motor Company posted a 39.77 per cent growth at 50,887 units in June.
Honda Motorcycle & Scooter India (HMSI) saw its bike sales soaring 56.86 per cent to 58,895 units.
In the scooter segment, total sales in June jumped 46.96 per cent to 1,64,567 units as against 1,11,980 units in the year-ago period, Siam said.
HMSI's scooter sales were up by 35.22 per cent at 78,561 units, while TVS Motor's scooter sales also grew by 42.53 per cent in June at 36,469 units. Hero Honda's scooter sales jumped by 53.40 per cent at 24,613 units in last month.
According to the Society of Indian Automobile Manufacturers (Siam), total sales for all categories stood at 12,05,990 units against 9,17,645 units in the year-ago month, up 31.42 per cent.
Speaking to reporters, Siam president, Mr Pawan Goenka said the industry had benefited from a good overall macroeconomic environment in the first three months of the fiscal.
“Factors which we feared that will hamper growth didn't happen. Interest rates were favourable, and even when commodity prices were rising companies did not pass it on to consumers,” he said, adding the good economic growth had also had positive impact on consumer confidence.
Besides, there were eight new models and 11 facelifts during the first quarter of the fiscal that helped boost sales in June.
Siam said the domestic car sales stood at 1,41,184 units against 1,07,948 units in the same month last year, up 30.79 per cent.
Car market leader Maruti Suzuki's domestic sales grew by 12.61 per cent to 61,589 units in June, while rival Hyundai Motor India also registered 18.92 per cent rise at 27,366 units. Tata Motors' sales jumped 76.30 per cent to 24,209 units during the month.
Total two-wheeler sales in June stood at 9,33,101 units, up 31.99 per cent over 7,06,934 units in June 2009.
Motorcycle sales in India during June also went up by 29.98 per cent to 7,15,98 units from 5,50,830 units in the year-ago period.
The country's largest motorcycle maker Hero Honda registered a growth of 14.63 per cent in its sales at 3,91,716 units in June 2010.
Rival Bajaj Auto saw sales soaring by 69.38 per cent to 1,86,401 units, while Chennai-based TVS Motor Company posted a 39.77 per cent growth at 50,887 units in June.
Honda Motorcycle & Scooter India (HMSI) saw its bike sales soaring 56.86 per cent to 58,895 units.
In the scooter segment, total sales in June jumped 46.96 per cent to 1,64,567 units as against 1,11,980 units in the year-ago period, Siam said.
HMSI's scooter sales were up by 35.22 per cent at 78,561 units, while TVS Motor's scooter sales also grew by 42.53 per cent in June at 36,469 units. Hero Honda's scooter sales jumped by 53.40 per cent at 24,613 units in last month.
TVS denies reports
A malicious report against TVs Group is being repeatedly telecast by Zee Business (News Channel), wherin it is alleged that TVS Group has links to LTTE and also been accused of huge financial irregularities. TVS Group hereby condemns the report as a deep rooted conspiracy to malign its reputation and denounces it as one that has been made without verification of the truth. The allegations made are blasohemous, scandalous and are not bonafide.
TVS Group is therefore taking defamtion action against Zee Business (News Channel) for continously airing the said malicious and unconfirmed report.
TVS Group is therefore taking defamtion action against Zee Business (News Channel) for continously airing the said malicious and unconfirmed report.
Harley-Davidson Cruises into India; opens first showroom in Hyderabad
Harley-Davidson India, the wholly-owned subsidiary of the US-based cruiser bike manufacturer, on Friday inaugurated its first showroom in the country here and plans to add four more by the end of the year.
The new showrooms in the pipeline include one at Chandigarh, followed by New Delhi both within two weeks, apart from Mumbai and Bangalore. With this launch, a cruiser bike lover can just walk into Harley-Davidson showroom and vroom out with his/her favourite bike.
The company has on display 12 models representing five families of cruiser bikes and believes that the market is up there to be tapped. No bike maker has come up with such a wide range of bikes. Interestingly, the profile of its bike lovers from the initial enquires shows that their age ranges from 25 to 65 years. It is all about passion and love for these bikes that drives Harley-Davidson buyers, Mr Anoop Prakash, Managing Director of Harley Davidson India, said. Addressing a press conference after the inauguration of the showroom by actor Jr. NTR, Mr Prakash said India is a strategic market for the $4-billion parent, which is known through generations for its cruisers. Therefore, we chose to enter India as a subsidiary rather than through a dealer.
The bikes range from Rs 7 lakh for 883 cc model and goes up to Rs 35 lakh for a 1,800 cc engine powered bike. In fact, buyers of the top end models would have the choice to customise their bikes with specific options.
The company plans to add quality service with a 20-year veteran from Harley's headquarters working in here. It is also expected to line up over 3,000 products as a part of merchandise which bike lovers could chose from.
In fact, it is also planning to bring its tried and tested Academy of Training useful for those taking to heavy biking.
The company executive refrained from any number crunching. He said that the markets in the US and Europe are getting gradually saturated and India is amongst few countries which has great potential for growth.
The new showrooms in the pipeline include one at Chandigarh, followed by New Delhi both within two weeks, apart from Mumbai and Bangalore. With this launch, a cruiser bike lover can just walk into Harley-Davidson showroom and vroom out with his/her favourite bike.
The company has on display 12 models representing five families of cruiser bikes and believes that the market is up there to be tapped. No bike maker has come up with such a wide range of bikes. Interestingly, the profile of its bike lovers from the initial enquires shows that their age ranges from 25 to 65 years. It is all about passion and love for these bikes that drives Harley-Davidson buyers, Mr Anoop Prakash, Managing Director of Harley Davidson India, said. Addressing a press conference after the inauguration of the showroom by actor Jr. NTR, Mr Prakash said India is a strategic market for the $4-billion parent, which is known through generations for its cruisers. Therefore, we chose to enter India as a subsidiary rather than through a dealer.
The bikes range from Rs 7 lakh for 883 cc model and goes up to Rs 35 lakh for a 1,800 cc engine powered bike. In fact, buyers of the top end models would have the choice to customise their bikes with specific options.
The company plans to add quality service with a 20-year veteran from Harley's headquarters working in here. It is also expected to line up over 3,000 products as a part of merchandise which bike lovers could chose from.
In fact, it is also planning to bring its tried and tested Academy of Training useful for those taking to heavy biking.
The company executive refrained from any number crunching. He said that the markets in the US and Europe are getting gradually saturated and India is amongst few countries which has great potential for growth.
Two-wheelers to be now sold with helmets
Two-wheeler manufacturers will now have to sell their vehicles bundled with a helmet as the Supreme Court on Wednesday upheld the Delhi High Court's earlier order.
Last year, the Delhi High Court had mandated compulsory purchase of helmet along with new two-wheelers. However, the Society of Indian Automobile Manufacturers (SIAM) had filed a Special Leave Petition (SLP) in the Supreme Court against the High Court order, arguing that the Motor Vehicles Act already stipulates the use of a helmet while riding a two-wheeler and the order amounts to changing the rule from “a helmet for a person” to “a helmet for a vehicle.”
The Supreme Court bench comprising Mr Justice G.S. Singhvi and Mr Justice A.K. Ganguly, however, said it was inclined to dismiss the SLP, after which the petitioner's lawyers told the court that they preferred to withdraw the plea instead.
Industry officials said that the new ruling will be a problem for customers buying their second two-wheeler. Those already owning a helmet will still be forced to buy a new one. Moreover, companies may also have to bear the cost of bundling the helmet with the two-wheeler, because the customer may not be willing to pay that much extra.
PTI adds: SIAM also raised questions over the High Court's direction to provide only those helmets conforming to the Bureau of Indian Standards.
“The High Court made a serious error in directing that all purchasers of two-wheelers have to purchase helmet only from the dealer.
Last year, the Delhi High Court had mandated compulsory purchase of helmet along with new two-wheelers. However, the Society of Indian Automobile Manufacturers (SIAM) had filed a Special Leave Petition (SLP) in the Supreme Court against the High Court order, arguing that the Motor Vehicles Act already stipulates the use of a helmet while riding a two-wheeler and the order amounts to changing the rule from “a helmet for a person” to “a helmet for a vehicle.”
The Supreme Court bench comprising Mr Justice G.S. Singhvi and Mr Justice A.K. Ganguly, however, said it was inclined to dismiss the SLP, after which the petitioner's lawyers told the court that they preferred to withdraw the plea instead.
Industry officials said that the new ruling will be a problem for customers buying their second two-wheeler. Those already owning a helmet will still be forced to buy a new one. Moreover, companies may also have to bear the cost of bundling the helmet with the two-wheeler, because the customer may not be willing to pay that much extra.
PTI adds: SIAM also raised questions over the High Court's direction to provide only those helmets conforming to the Bureau of Indian Standards.
“The High Court made a serious error in directing that all purchasers of two-wheelers have to purchase helmet only from the dealer.
Superbikes make inroads into rugged Indian terrain
Superbikes are riding high — high up in the mountains. One in every ten super-premium bikes that cost anywhere between Rs 10 lakh and Rs 60 lakh is sold to the highlanders in the north and north-eastern parts of the country, surprising the bikemakers themselves.
“Much to our astonishment, 10% of superbikes have been bought by highlanders in Dehradun and Guwahati,” says Atul Gupta, vice-president (marketing & sales) at Suzuki Motorcycles that makers the country’s highest-selling superbike, Hayabusa.
Superbikes are big performance, designer bikes with engine capacity of 1,000 cc and more.
All the six superbike firms—Yahama, Suzuki, Ducati, Harley Davidson, Honda and Kawasaki (launched by Bajaj Auto)—have been focusing on consumers in the metro cities.
While most of the demand comes from Mumbai-Pune, Bangalore and Delhi belt, increasing demand from the mountains have come as an unexpected boon for the bikemakers.
Bikemakers say an increase in disposable income is one of the key reasons for a rise in demand. Availability of on-the-spot services introduced for the niche segment has also propelled demand from the mountains, they add.
“We have special teams to service these bikes across the country. This has boosted the confidence of the consumer, and this has translated into better sales,” said Honda Motorcycle and Scooter India head (marketing & sales) NK Rattan.
Yamaha’s marketing & sales head Pankaj Dubey said the actual numbers coming from north-east mountain region is not as significant as the metros, but they are crucial.
“For this super-niche segment every unit sold makes a lot of difference to our sales strategy,” he said.
Mumbai, along with Pune, remains the biggest market accounting for around one in every three superbikes sold. This is followed by Delhi and Bangalore, accounting for around 20% of the overall sales.
Superbikes sales in India were restricted to few dozen units until Yamaha introduced its twin products—YZF R1 and MT01—in 2008. These were followed by the launch of Suzuki Intruder and Hayabusa, which is now the top seller (106 units sold till date).
While Suzuki has sold 210 superbikes, Yamaha and Honda have sold 158 and 70 bikes, respectively. Marketers expect the segment to grow to 1,000 units-a-year by 2011 from around 600 unit sold in 2009.
“Much to our astonishment, 10% of superbikes have been bought by highlanders in Dehradun and Guwahati,” says Atul Gupta, vice-president (marketing & sales) at Suzuki Motorcycles that makers the country’s highest-selling superbike, Hayabusa.
Superbikes are big performance, designer bikes with engine capacity of 1,000 cc and more.
All the six superbike firms—Yahama, Suzuki, Ducati, Harley Davidson, Honda and Kawasaki (launched by Bajaj Auto)—have been focusing on consumers in the metro cities.
While most of the demand comes from Mumbai-Pune, Bangalore and Delhi belt, increasing demand from the mountains have come as an unexpected boon for the bikemakers.
Bikemakers say an increase in disposable income is one of the key reasons for a rise in demand. Availability of on-the-spot services introduced for the niche segment has also propelled demand from the mountains, they add.
“We have special teams to service these bikes across the country. This has boosted the confidence of the consumer, and this has translated into better sales,” said Honda Motorcycle and Scooter India head (marketing & sales) NK Rattan.
Yamaha’s marketing & sales head Pankaj Dubey said the actual numbers coming from north-east mountain region is not as significant as the metros, but they are crucial.
“For this super-niche segment every unit sold makes a lot of difference to our sales strategy,” he said.
Mumbai, along with Pune, remains the biggest market accounting for around one in every three superbikes sold. This is followed by Delhi and Bangalore, accounting for around 20% of the overall sales.
Superbikes sales in India were restricted to few dozen units until Yamaha introduced its twin products—YZF R1 and MT01—in 2008. These were followed by the launch of Suzuki Intruder and Hayabusa, which is now the top seller (106 units sold till date).
While Suzuki has sold 210 superbikes, Yamaha and Honda have sold 158 and 70 bikes, respectively. Marketers expect the segment to grow to 1,000 units-a-year by 2011 from around 600 unit sold in 2009.
Auto companies navigate high costs, price hikes
With volumes continuing to grow at a robust pace and companies effecting price hikes on the back of a sustained demand, auto majors are likely to register 30-35 per cent growth in revenues and profits for the June quarter. The economic recovery and consequent robust demand has helped bring back pricing power to a sector that was struggling a year ago with dropping sales, rising inventory levels and low capacity utilisation. Almost all companies have been able to increase prices by three-five per cent in the June quarter. What has enabled this is the strong growth in volumes that companies registered over the last three months. While there are some concerns regarding higher raw material and fuel costs, some of the auto majors - like Maruti, Hero Honda and M&M - are expected to churn better numbers.
Robust June numbers
Listed auto majors carried their performance of 30 per cent volume growth recorded in the first two months of the quarter into June. This came despite the period being seasonally weak and auto companies facing production constraints. While part of the reason for the good performance was due to the low-base effect, the continuing strong economic recovery, growing rural demand and availability of credit seems to have played its part in ensuring higher numbers. Healthy exports, new product launches and rural demand saw the two-wheeler sector grow 33.5 per cent over the June 2009 quarter with listed two-wheeler makers recording their highest ever sales. What stands out, according to Pinc Research, is that scooter sales are growing at 45 per cent from the year-ago period and now contribute a significant 17 per cent of overall two-wheeler volumes. While passenger and utility vehicle makers also saw good growth rates, despite maintenance shutdowns, commercial vehicle manufacturers continue to benefit from the uptick in industrial activity.
Two-wheeler firms, Tata Motors shine
While most auto majors saw volumes go up 25-30 per cent over the year-ago quarter on a sequential basis, Maruti Suzuki and M&M experienced the sharpest drop of 14 per cent and four per cent, respectively, due to their annual plant maintenance shutdowns and component shortages. The stars of the June show were Tata Motors and two-wheeler makers. While Tata Motors saw medium and heavy commercial vehicle (M&HCV) grow by half to 15,000 units, its passenger vehicle sales were up 63 per cent on higher despatches of Nano from the Sanand plant, which has come onstream. Two-wheeler maker Bajaj Auto’s strong sales were helped by a 68 per cent growth rate in its motorcycle segment and rising exports. Its two key brands Pulsar and Discover, which account for 70 per cent of sales, continue to be the star performers. Despite a high base, Hero Honda had its fourth straight month of 400,000-plus sales due to strong motorcycle as well scooter (Pleasure) sales. TVS Motors saw a 37 per cent growth in despatches on the back of higher numbers for its recently launched Jive motorcycle and Wego scooter. M&M’s tractor sales, which are normally robust in June due to rural demand, fell 13.5 per cent due to capacity constraints. The management believes that demand continues to be robust for the farm equipment segment.
Future concerns
Analysts say the increase in interest rates, and subsequent rise equated monthly instalments, higher fuel costs, higher raw material cost and price increases may impact demand, though there are no signs of this happening as of now. While volumes are likely to be robust if monsoon is normal and industrial production continues to be strong, volume growth is likely to drop due to the high base-effect in the second half of the current financial year. The hike in raw material costs will, according to Sharekhan, lead to a marginal drop of 23 basis points in operating profit margins for companies in the June quarter vis-Ã -vis the year-ago period. The research firm believes a higher scale of operations, coupled with price hikes undertaken by the companies, will help cushion the impact. The sequential impact, however, will be over a percentage point, according to the firm. Given a 40 per cent growth in volumes, sales should grow upwards of 35 per cent for the auto companies in the quarter. Higher volumes will also reflect in the bottom line growth for most companies - in the region of 30 per cent. Among auto companies, most analysts are betting on Maruti Suzuki to do well on the back of high volumes, expected price increases in this quarter and launch of new variants. The stock is expected to return about 20 per cent from these levels.
Robust June numbers
Listed auto majors carried their performance of 30 per cent volume growth recorded in the first two months of the quarter into June. This came despite the period being seasonally weak and auto companies facing production constraints. While part of the reason for the good performance was due to the low-base effect, the continuing strong economic recovery, growing rural demand and availability of credit seems to have played its part in ensuring higher numbers. Healthy exports, new product launches and rural demand saw the two-wheeler sector grow 33.5 per cent over the June 2009 quarter with listed two-wheeler makers recording their highest ever sales. What stands out, according to Pinc Research, is that scooter sales are growing at 45 per cent from the year-ago period and now contribute a significant 17 per cent of overall two-wheeler volumes. While passenger and utility vehicle makers also saw good growth rates, despite maintenance shutdowns, commercial vehicle manufacturers continue to benefit from the uptick in industrial activity.
Two-wheeler firms, Tata Motors shine
While most auto majors saw volumes go up 25-30 per cent over the year-ago quarter on a sequential basis, Maruti Suzuki and M&M experienced the sharpest drop of 14 per cent and four per cent, respectively, due to their annual plant maintenance shutdowns and component shortages. The stars of the June show were Tata Motors and two-wheeler makers. While Tata Motors saw medium and heavy commercial vehicle (M&HCV) grow by half to 15,000 units, its passenger vehicle sales were up 63 per cent on higher despatches of Nano from the Sanand plant, which has come onstream. Two-wheeler maker Bajaj Auto’s strong sales were helped by a 68 per cent growth rate in its motorcycle segment and rising exports. Its two key brands Pulsar and Discover, which account for 70 per cent of sales, continue to be the star performers. Despite a high base, Hero Honda had its fourth straight month of 400,000-plus sales due to strong motorcycle as well scooter (Pleasure) sales. TVS Motors saw a 37 per cent growth in despatches on the back of higher numbers for its recently launched Jive motorcycle and Wego scooter. M&M’s tractor sales, which are normally robust in June due to rural demand, fell 13.5 per cent due to capacity constraints. The management believes that demand continues to be robust for the farm equipment segment.
Future concerns
Analysts say the increase in interest rates, and subsequent rise equated monthly instalments, higher fuel costs, higher raw material cost and price increases may impact demand, though there are no signs of this happening as of now. While volumes are likely to be robust if monsoon is normal and industrial production continues to be strong, volume growth is likely to drop due to the high base-effect in the second half of the current financial year. The hike in raw material costs will, according to Sharekhan, lead to a marginal drop of 23 basis points in operating profit margins for companies in the June quarter vis-Ã -vis the year-ago period. The research firm believes a higher scale of operations, coupled with price hikes undertaken by the companies, will help cushion the impact. The sequential impact, however, will be over a percentage point, according to the firm. Given a 40 per cent growth in volumes, sales should grow upwards of 35 per cent for the auto companies in the quarter. Higher volumes will also reflect in the bottom line growth for most companies - in the region of 30 per cent. Among auto companies, most analysts are betting on Maruti Suzuki to do well on the back of high volumes, expected price increases in this quarter and launch of new variants. The stock is expected to return about 20 per cent from these levels.
Electric tech to power M&M 2-wheelers & CVs
Following the takeover of Bangalore-based electric car company Reva Electric, utility major Mahindra & Mahindra (M&M) is going to use electric technology to power its two-wheelers and commercial vehicles. Pawan Goenka, president (automotive & farm equipment), M&M, told FE that the electric vehicles were gaining in popularity worldwide and in the next five years, the demand for such products would be globally much higher giving companies like M&M a big market to tap. “At some date, we are going to use the electronic technology of Reva for our two-wheelers,” he said. FE had reported on June 8 that the company is going to leverage its joint venture with Reva to power electric scooters owing to its vast potential. Goenka also said that the company is going to explore options to use the electric platform for some of its commercial vehicles as well at a later date. Currently, M&M has a range of commercial vehicles from Maxximo to Geo. “We are looking at using the electronic technology in our commercial platform,” Goenka said. The company in fact is also planning to launch a micro-hybrid version of its SUV Xylo. The newly-formed company, Mahindra Electric Car, is going to introduce two passenger car models in India in October-December 2011. Goenka added that the refurbished version of the Mahindra Logan is going to be launched in the next 15-16 months. “We would be re-positioning the car...over the last two months the sales of Logan has been above 500 which is a positive sign especially when it had gone down to around 300 at one point,” he told reporters. Undeterred by the law suit filed in the US by M&M’s exclusive distributor Global Vehicles leading to inordinate delay in launching the pick up truck, Goenka said that the company’s plans to launch its product is going as per the original schedule. “Can’t sat anything now...we are doing everything as per the original plan for launching the pick up truck in the US,” he said. Currently, the company is in the midst of preparing bids for acquiring the South Korean Ssangyong Motors. Goenka said the bid would be decided by July 20. Apart from M&M, Kolkata-based industrialist Pawan Ruia is also eying the company.
Bajaj's Discover looks to overtake Splendor
Bajaj Auto Ltd, the country's second largest motorcycle maker, is aiming to overtake market leader Hero Honda Motors Ltd's Splendor brand in the October quarter, a top official claimed. S. Sridhar, chief executive officer at Bajaj Auto, said its Discover brand will challenge the Splendor brand, which has been the market leader in the entry-level segment for 15 years. According to him, in the three months ended June, Hero Honda sold 167,231 units of all Splendor variants against 146,993 units in the corresponding period last fiscal, while Bajaj sold 100,977 units of its Discover brands, which include a 150cc variant, against 24,293 in the last fiscal. Sridhar said the company is encouraged by the response to the Discover, which was relaunched in July 2009 with a 100cc model--a 150cc variant was added in May--and expects it to become the leading brand by October this year, after the production capacity for the bikes reach 160,000 units per month from the current 150,000 units. A Hero Honda spokesman, however, declined to confirm those numbers, saying it was not a "like-to-like comparison". Besides, he said, the Splendor Plus alone has annual sales of at least a million units, a number that is higher when the NXG and Super Splendor variants are counted. The Splendor is also the world's largest selling motorcycle brand. Hero Honda does not disclose model specific sales "Splendor and Passion are the only million-plus unit two-wheeler brands in the country and continue to grow strongly," the spokesman said. Passion is an entry-level motorcycle from Hero Honda. An analyst who tracks the two companies, too, was sceptical that Bajaj could overtake the Splendor. Mahantesh Sabarad, a senior analyst at Fortune Equity Brokers Pvt. Ltd, said Bajaj's smaller distribution network could pose a challenge. "Hero Honda has deeper inroads in the rural and semi-urban pockets. While they (Bajaj), have a good product, they don't have that wide a reach," he said. However, Sridhar said the company has learnt its lessons from past mistakes, and that the Discover and its variants in the so-called commuter segment will now be the key volume generator. This segment, he said, accounts for 80% of bikes sold in the country. In the past, Bajaj's strategy of lower pricing failed to dent Hero Honda's market share, and subsequent offerings like XCD and Platina were also unsuccessful in drawing buyers. It also did not help that there was little brand familiarity. Sridhar said the company realised that packaging a bike with sporty features alone was not enough. The new strategy to attract customers, who look for familiarity as well as frugality, is paying off now, with the company increasing its share in the commuter segment to 30% in the June quarter, from 22% in year-ago period.
Bajaj expects overseas markets to bring in 70% of sales
Bajaj Auto, India’s secondlargest motorcycle maker, plans to win 70% sales from overseas markets, challenging Honda Motor in Latin America, Asia and Africa. “It will take us several years, but it only shows how much headroom there is for Bajaj even if we only focus on motorcycles,” managing director Rajiv Bajaj said Bajaj earned about 30% of sales overseas last year. The motorcycle-maker also aims to roughly triple global market share to 30%, either using partnerships with KTM Power Sports AG and Kawasaki Heavy Industries, or building new networks to win market share from Honda and Chinese rivals. Indian companies, including Bajaj Auto and Bharti Airtel are expanding in countries such as Indonesia, Brazil and Nigeria as economic growth boosts demand for products from motorcycles to m o b i l e services. “It will be easy for Bajaj to c o m p e t e with Chinese products in overseas markets,” said Umesh Karne, a Mumbai-based analyst at Brics Securities. “The challenge will be to compete with Honda, which has a bigger brand and wider distribution networks around the world.” Bajaj Auto, the best performing stock in the MSCI India Index this year, declined 1.2% to Rs 2,409.65 in Mumbai on Wednesday. Bajaj Auto, which sold a record 2.8 million vehicles in the year ended March 31, 2010 is targeting sales of five million by 2012, according to the company’s vision statement. The company makes Pulsar and Discover motorcycles as well as three-wheelers. Honda sold 9.63 million motorcycles last year, including sales at Hero Honda Motors, India’s largest motorcyclemaker. Honda owns 26% of Hero Honda.
Bearing the rural burden
Recently in Indore
For 30-year-old Mahendra Patel, the TVS Max 4R is the best thing to have happened in his life.
For over a month now, he has been using the bike to cart nearly 150 kg of vegetables from his farm to the Indore city market, some 40 km away. The huge load sits comfortably on the Max, and Mahendra is delighted that there are no issues on the speed and pick-up as a result. “The best part is that it is so easy to use the stand with such a heavy load,” he says.
Mahendra's neighbour in the village, Govind Patel, is equally euphoric. He proudly says that he has had the older Max for years and that it is still in good shape. However, the 4R is special because it helps him carry heavy loads from his farm to the Indore market with the least amount of fuss. “All my friends are keen to own one too and are just waiting for deliveries to happen,” he says.
Mahendra and Govind, along with Subhash Patidar and Bahadur Singh (who deliver milk in Indore) and Kailash (a flower trader) are among a select group of users who have been asked to use the Max 4R for over a month now. The idea was to check if it made a difference to their lives, especially in the context of the bikes they have used so far.
The response has been music to TVS Motor's ears because when it started on the Max 4R project 18 months ago, the objective was not to make just another bike. The company realised that farmers, traders, milkmen and other similar user categories in States such as Madhya Pradesh and Rajasthan were in need of a specific, durable motorcycle.
These people carry heavy loads across long distances everyday on rough roads. The bikes they currently use are not customised and the likes of Mahendra and Govind would have had to add a support in the form of a stick placed at the rear or side to balance the load.
TVS Motor's objective with the Max 4R was to fill this void and offer a bike that met their no-nonsense requirements. In came four shock absorbers to take heavy loads, a detachable rear seat to accommodate goods, big brakes, wheel and indicator guards to protect the bike and goods, an easy centre stand, long wheelbase and wider tyres.
Mr B.V. Sreedhar, Vice-President (Business on Wheels), says one of the key objectives of the exercise was social responsibility and a safer mode of travel for this category of riders who are India's lifeline.
The Max 4R was tested and certified for 200 kg of payload capacity. Scheduled to be launched in the coming days, it has been targeted at markets in North and Central India.
For 30-year-old Mahendra Patel, the TVS Max 4R is the best thing to have happened in his life.
For over a month now, he has been using the bike to cart nearly 150 kg of vegetables from his farm to the Indore city market, some 40 km away. The huge load sits comfortably on the Max, and Mahendra is delighted that there are no issues on the speed and pick-up as a result. “The best part is that it is so easy to use the stand with such a heavy load,” he says.
Mahendra's neighbour in the village, Govind Patel, is equally euphoric. He proudly says that he has had the older Max for years and that it is still in good shape. However, the 4R is special because it helps him carry heavy loads from his farm to the Indore market with the least amount of fuss. “All my friends are keen to own one too and are just waiting for deliveries to happen,” he says.
Mahendra and Govind, along with Subhash Patidar and Bahadur Singh (who deliver milk in Indore) and Kailash (a flower trader) are among a select group of users who have been asked to use the Max 4R for over a month now. The idea was to check if it made a difference to their lives, especially in the context of the bikes they have used so far.
The response has been music to TVS Motor's ears because when it started on the Max 4R project 18 months ago, the objective was not to make just another bike. The company realised that farmers, traders, milkmen and other similar user categories in States such as Madhya Pradesh and Rajasthan were in need of a specific, durable motorcycle.
These people carry heavy loads across long distances everyday on rough roads. The bikes they currently use are not customised and the likes of Mahendra and Govind would have had to add a support in the form of a stick placed at the rear or side to balance the load.
TVS Motor's objective with the Max 4R was to fill this void and offer a bike that met their no-nonsense requirements. In came four shock absorbers to take heavy loads, a detachable rear seat to accommodate goods, big brakes, wheel and indicator guards to protect the bike and goods, an easy centre stand, long wheelbase and wider tyres.
Mr B.V. Sreedhar, Vice-President (Business on Wheels), says one of the key objectives of the exercise was social responsibility and a safer mode of travel for this category of riders who are India's lifeline.
The Max 4R was tested and certified for 200 kg of payload capacity. Scheduled to be launched in the coming days, it has been targeted at markets in North and Central India.
Two-wheelers ride high in June
Growth in spending in rural areas on the back of a promising monsoon season has resulted in double-digit increase in sales of Hero Honda, TVS, Honda Motorcycles, Yamaha and Mahindra 2 Wheelers for the month of June.
India’s largest twowheeler maker, Hero Honda Motors, today reported sales of 426,454 units, a 16.6 per cent growth as compared to 365,734 units in the same month a year earlier.
Hero Honda, which makes the Splendour and Passion brands, is followed by Bajaj Auto. About half of Hero’s sales came from rural India. Says Anil Dua, senior vice president (marketing and sales), “The 16 per cent growth in June is very encouraging, coming as it does on the back of the high base of our sales last year.” Chennai-based TVS Motor Company posted an increase of 33 per cent in domestic sales of its twowheeler range, while also logging its highest-ever three-wheeler sales in a month.
The company, which also makes the Scooty brand of automatic scooters, sold 139,905 units of two-wheelers during the month as compared to 105,361 units sold in the same month a year earlier, a statement said.
Motorcycle sales recorded growth of 44 per cent during the month, of 66,452 units as against 46,048 units in the month last year. Sales of scooters grew by 42 per cent to 36,742 units, as compared to 25,945 units a year earlier. Three-wheeler sales increased to 3,003 units in the same month, as compared to just 810 units sold in the same month a year ago.
Honda Motorcycle and Scooter India (HMSI), leader in the automatic scooter segment, sold 146,073 units for the reporting month. HMSI recorded growth of 41.5 per cent for the month as compared to sales of 103,209 units for the same month a year earlier. Motorcycle sales were 66,334 units, a growth of 50 per cent, while sales of scooters grew by 35 per cent to 79,739 units.
Mahindra 2 Wheelers, the latest company to join the market, posted sales of 10,017 units in June, a growth of 329 per cent as against 2,333 units in the month last year.
The company has three automatic scooters, the Duro, Rodeo and Flyte. It would enter the high-volume motorcycle segment before the end of this year.
India Yamaha Motor, subsidiary of Yamaha Motor Corporation, recorded an 18 per cent rise in domestic sales of its motorcycle range to 21,157 units in June, compared to 17,878 units posted in the same month a year earlier.
India’s largest twowheeler maker, Hero Honda Motors, today reported sales of 426,454 units, a 16.6 per cent growth as compared to 365,734 units in the same month a year earlier.
Hero Honda, which makes the Splendour and Passion brands, is followed by Bajaj Auto. About half of Hero’s sales came from rural India. Says Anil Dua, senior vice president (marketing and sales), “The 16 per cent growth in June is very encouraging, coming as it does on the back of the high base of our sales last year.” Chennai-based TVS Motor Company posted an increase of 33 per cent in domestic sales of its twowheeler range, while also logging its highest-ever three-wheeler sales in a month.
The company, which also makes the Scooty brand of automatic scooters, sold 139,905 units of two-wheelers during the month as compared to 105,361 units sold in the same month a year earlier, a statement said.
Motorcycle sales recorded growth of 44 per cent during the month, of 66,452 units as against 46,048 units in the month last year. Sales of scooters grew by 42 per cent to 36,742 units, as compared to 25,945 units a year earlier. Three-wheeler sales increased to 3,003 units in the same month, as compared to just 810 units sold in the same month a year ago.
Honda Motorcycle and Scooter India (HMSI), leader in the automatic scooter segment, sold 146,073 units for the reporting month. HMSI recorded growth of 41.5 per cent for the month as compared to sales of 103,209 units for the same month a year earlier. Motorcycle sales were 66,334 units, a growth of 50 per cent, while sales of scooters grew by 35 per cent to 79,739 units.
Mahindra 2 Wheelers, the latest company to join the market, posted sales of 10,017 units in June, a growth of 329 per cent as against 2,333 units in the month last year.
The company has three automatic scooters, the Duro, Rodeo and Flyte. It would enter the high-volume motorcycle segment before the end of this year.
India Yamaha Motor, subsidiary of Yamaha Motor Corporation, recorded an 18 per cent rise in domestic sales of its motorcycle range to 21,157 units in June, compared to 17,878 units posted in the same month a year earlier.
Mahindra's two-wheeler sales jump four-fold in June
Mahindra & Mahindra today reported an over four-fold jump in its two-wheeler sales at 10,017 units in June.
The company had sold 2,333 units of scooters during the corresponding month last year, Mahindra & Mahindra said in a statement.
For April-June quarter, the company sold 27,063 units compared to 6,135 units, an over four-fold jump, it added.
"The popularity of our product continues to grow, with each one of them, catering to different consumer preferences and lifestyles," Mahindra & Mahindra Scooter Sector President Anoop Mathur said.
The company had sold 2,333 units of scooters during the corresponding month last year, Mahindra & Mahindra said in a statement.
For April-June quarter, the company sold 27,063 units compared to 6,135 units, an over four-fold jump, it added.
"The popularity of our product continues to grow, with each one of them, catering to different consumer preferences and lifestyles," Mahindra & Mahindra Scooter Sector President Anoop Mathur said.
Mahindra's two-wheeler sales jump four-fold in June
Mahindra & Mahindra today reported an over four-fold jump in its two-wheeler sales at 10,017 units in June.
The company had sold 2,333 units of scooters during the corresponding month last year, Mahindra & Mahindra said in a statement.
For April-June quarter, the company sold 27,063 units compared to 6,135 units, an over four-fold jump, it added.
"The popularity of our product continues to grow, with each one of them, catering to different consumer preferences and lifestyles," Mahindra & Mahindra Scooter Sector President Anoop Mathur said.
The company had sold 2,333 units of scooters during the corresponding month last year, Mahindra & Mahindra said in a statement.
For April-June quarter, the company sold 27,063 units compared to 6,135 units, an over four-fold jump, it added.
"The popularity of our product continues to grow, with each one of them, catering to different consumer preferences and lifestyles," Mahindra & Mahindra Scooter Sector President Anoop Mathur said.
Suzuki Motorcycle India sales jump 44% in June
Two-wheeler maker Suzuki Motorcycle India on Wednesday reported a 44.37% jump in sales to 17,876 units in June, on the back of good response to its new products. The company had sold 12,382 units in June 2009, Suzuki Motorcycle India said in a statement. "We will continue to keep up this growth momentum in coming months as well," Suzuki Motorcycle India VP (Sales and Marketing) Atul Gupta said.
Bajaj Auto bike sales jump 68%
The country's second largest two-wheeler maker Bajaj Auto reported 68.39 per cent jump in its motorcycle sales at 2,82,808 units in June.
The company had sold 1,67,945 units in June last year, Bajaj Auto Ltd (BAL) said in a statement.
BAL's exports went up 68.36 per cent to 1,14,024 units in June from 67,726 units in June, 2009.
The company reported a rise of 31.87 per cent in its three-wheeler sales during last month at 32,614 units as against 24,731 units during the same month last year.
Total vehicle sales of the company last month stood at 3,15,422 units compared to 1,93,202 units in the same period a year ago, a growth of 63.26 per cent, the statement said.
The company had sold 1,67,945 units in June last year, Bajaj Auto Ltd (BAL) said in a statement.
BAL's exports went up 68.36 per cent to 1,14,024 units in June from 67,726 units in June, 2009.
The company reported a rise of 31.87 per cent in its three-wheeler sales during last month at 32,614 units as against 24,731 units during the same month last year.
Total vehicle sales of the company last month stood at 3,15,422 units compared to 1,93,202 units in the same period a year ago, a growth of 63.26 per cent, the statement said.
Old Bullets turn dear after product revamp
IT’S NOT only wine. Even iron becomes valuable over time, especially if it rolls on two wheels and has ‘Royal Enfield’ stamped on the fuel tank. Thousands of biking aficionados across the country are discovering to their dismay that the world’s oldest motorcycle in production has become more expensive, not only in showrooms but also in the large unorganised pre-owned d o m e s t i c two-whee ler market.
S a m p l e this: Twe nty
showrooms but also in the large unorganised p re o w n e d domestic two-wheeler market.
Sample this: Twenty three-year-old media executive Abhimanyu Chakravorty wanted to buy his first Royal Enfield bike. After scouting for a few bikes in Karol Bagh, the capital’s dingy pre-owned automobile hub, he had to shell out Rs 40,000 for a 2001 Standard model.
“A few months ago, 10-yearold Royal Enfield bikes were selling for around Rs 15,000Rs 20,000, depending on the condition of the machine. But now, suddenly, prices have gone up by almost 100 per cent,” he says.
"A few months ago, 10-yearold Royal Enfield bikes were selling for around Rs 15,000 Rs 20,000, depending on the condition of the machine. But now, sud denly, prices have gone up by al most 100 per cent," he says. According to Royal Enfield dealers, this trend was noticed a few months ago when Chennai-based motorcycle manufacturer, Royal Enfield Motorcycles, started offering an advanced all-aluminium united constructed engine (UCE) on all its models, starting with the much talked about 500-cc Classic variant that it launched here last year. The company had invested around Rs 80 crore in developing the new engine and claimed that it offered the much-needed reliability and fuel efficiency that Royal Enfield motorcycles earlier lacked. But it came at a price.
The Classic was priced well over Rs 1.2 lakh and even the 350-cc Standard model, which earlier retailed for Rs 72,000 now comes for Rs 93,000 with the new UCE mill.
But hardcore Royal Enfield enthusiasts are not amused. Saurabh Deb, a Royal Enfield owner for nine years, feels that the new models lack the classic Royal Enfield charm. “The characteristic thump is
missing,” he points out.
Scores of Bullet owners that FC spoke to second Deb and argue that the cult value of Royal Enfield motorcycles lies in their niggling mechanical faults and the now discontinued long bore ironcast engine, which produced the distinguishing beats, akin to Harley-Davidson’s ‘potato-potato’.
So, it comes as no surprise that all existing Royal Enfield bikes in the preowned market with ironcast engines have unexpectedly become prized collectors’ items. Says Mohd Alam who has been selling only
Enfield motorcycles in the capital for the last 20 years: “The first thing that all Bullet buyers look at before purchasing a Royal Enfield bike is the sound, the characteristic thump. Iron-cast engines produce something that the new crop of bikes can only dream to emulate.
So, old bikes have suddenly become the toast of town and ‘real’ Bullet lovers will settle for nothing less.” It’s difficult to estimate the number of Royal Enfield motorcycles on the road now since the bike has been around for more than half a century. But, by the
look of it, there are enough “iron-willed” motorcycles to keep fans from taking a bullet (pun intended).
But the manufacturer of the world’s oldest motorcycle in production seems unfazed. National marketing head at Royal Enfield Motorcycles, Shaji Koshy, is optimistic about his company’s new move and feels that the new engine will help spread the company’s footprints across the globe.
Incidentally, Royal Enfield Motorcycles is the only Indian two-wheeler company in the country that exports its products to devel
oped markets while the rest of the breed is still trying to find a footing in the developing ones.
Says Koshy: “Last year we sold 60,000 bikes. We are investing another Rs 6070 crore to increase our production capacity to one lakh units in the next two years.
Latin American markets are next on our agenda.” It still remains to be seen whether ‘royal’ beats can replace salsa, but what the heck, it seems well worth a ride.
S a m p l e this: Twe nty
showrooms but also in the large unorganised p re o w n e d domestic two-wheeler market.
Sample this: Twenty three-year-old media executive Abhimanyu Chakravorty wanted to buy his first Royal Enfield bike. After scouting for a few bikes in Karol Bagh, the capital’s dingy pre-owned automobile hub, he had to shell out Rs 40,000 for a 2001 Standard model.
“A few months ago, 10-yearold Royal Enfield bikes were selling for around Rs 15,000Rs 20,000, depending on the condition of the machine. But now, suddenly, prices have gone up by almost 100 per cent,” he says.
"A few months ago, 10-yearold Royal Enfield bikes were selling for around Rs 15,000 Rs 20,000, depending on the condition of the machine. But now, sud denly, prices have gone up by al most 100 per cent," he says. According to Royal Enfield dealers, this trend was noticed a few months ago when Chennai-based motorcycle manufacturer, Royal Enfield Motorcycles, started offering an advanced all-aluminium united constructed engine (UCE) on all its models, starting with the much talked about 500-cc Classic variant that it launched here last year. The company had invested around Rs 80 crore in developing the new engine and claimed that it offered the much-needed reliability and fuel efficiency that Royal Enfield motorcycles earlier lacked. But it came at a price.
The Classic was priced well over Rs 1.2 lakh and even the 350-cc Standard model, which earlier retailed for Rs 72,000 now comes for Rs 93,000 with the new UCE mill.
But hardcore Royal Enfield enthusiasts are not amused. Saurabh Deb, a Royal Enfield owner for nine years, feels that the new models lack the classic Royal Enfield charm. “The characteristic thump is
missing,” he points out.
Scores of Bullet owners that FC spoke to second Deb and argue that the cult value of Royal Enfield motorcycles lies in their niggling mechanical faults and the now discontinued long bore ironcast engine, which produced the distinguishing beats, akin to Harley-Davidson’s ‘potato-potato’.
So, it comes as no surprise that all existing Royal Enfield bikes in the preowned market with ironcast engines have unexpectedly become prized collectors’ items. Says Mohd Alam who has been selling only
Enfield motorcycles in the capital for the last 20 years: “The first thing that all Bullet buyers look at before purchasing a Royal Enfield bike is the sound, the characteristic thump. Iron-cast engines produce something that the new crop of bikes can only dream to emulate.
So, old bikes have suddenly become the toast of town and ‘real’ Bullet lovers will settle for nothing less.” It’s difficult to estimate the number of Royal Enfield motorcycles on the road now since the bike has been around for more than half a century. But, by the
look of it, there are enough “iron-willed” motorcycles to keep fans from taking a bullet (pun intended).
But the manufacturer of the world’s oldest motorcycle in production seems unfazed. National marketing head at Royal Enfield Motorcycles, Shaji Koshy, is optimistic about his company’s new move and feels that the new engine will help spread the company’s footprints across the globe.
Incidentally, Royal Enfield Motorcycles is the only Indian two-wheeler company in the country that exports its products to devel
oped markets while the rest of the breed is still trying to find a footing in the developing ones.
Says Koshy: “Last year we sold 60,000 bikes. We are investing another Rs 6070 crore to increase our production capacity to one lakh units in the next two years.
Latin American markets are next on our agenda.” It still remains to be seen whether ‘royal’ beats can replace salsa, but what the heck, it seems well worth a ride.
Auto cos hike rates as input costs rise
A fourth round of increase in automobile prices since January is on with firms such as General Motors, Ashok Leyland and Bajaj increasing rates to offset pressure from rising input costs, mainly that of steel and tyres.
Others such as Maruti Suzuki, Tata Motors and Toyota Kirloskar are also evaluating options.
While Ashok Leyland on Tuesday said it will increase prices of the entire range of commercial vehicles by anything between Rs 20,000 and Rs 50,000 with immediate effect, Hero Honda and Bajaj Auto have already hiked their two wheelers prices by up to Rs 1 ,000.
Auto makers have already hiked their prices thrice this year —— first in January due to rise in input costs, second following a two per cent excise duty hike in the Union Budget and third after the introduction of the new emission norms.
“Raw material prices are increasing day—by—day and it is affecting us... Our margins are under pressure,” Maruti Suzuki India Managing Executive Officer (Marketing and Sales), Mr Mayank Pareek, told PTI.
He, however, said the company has not decided yet on increasing the prices of its products. “We are in the process of finalising our contracts with our suppliers and any decision on price increase will be taken after that,” Mr Pareek said.
General Motors Vice President, Mr P Balendran, said the company will hike the prices by up to 2 per cent from July 5.
“Prices of raw materials, mainly steel and rubber, have risen sharply since the second quarter of last year... We are forced to increase prices this time,” he added.
The company has planned to hike the prices between Rs 1,000 and Rs 15,000 for different models.
Steel prices have risen by as much as Rs 6,000 a tonne since January on account of rising demand and increase in iron ore and coking coal rates.
Likewise, tyre prices also increased in recent past due to rising natural rubber costs. Tyre manufacturers have hiked prices by about 10 per cent this year and indicated a further hike of up to 25 per cent in the rest of the year. - PTI
Others such as Maruti Suzuki, Tata Motors and Toyota Kirloskar are also evaluating options.
While Ashok Leyland on Tuesday said it will increase prices of the entire range of commercial vehicles by anything between Rs 20,000 and Rs 50,000 with immediate effect, Hero Honda and Bajaj Auto have already hiked their two wheelers prices by up to Rs 1 ,000.
Auto makers have already hiked their prices thrice this year —— first in January due to rise in input costs, second following a two per cent excise duty hike in the Union Budget and third after the introduction of the new emission norms.
“Raw material prices are increasing day—by—day and it is affecting us... Our margins are under pressure,” Maruti Suzuki India Managing Executive Officer (Marketing and Sales), Mr Mayank Pareek, told PTI.
He, however, said the company has not decided yet on increasing the prices of its products. “We are in the process of finalising our contracts with our suppliers and any decision on price increase will be taken after that,” Mr Pareek said.
General Motors Vice President, Mr P Balendran, said the company will hike the prices by up to 2 per cent from July 5.
“Prices of raw materials, mainly steel and rubber, have risen sharply since the second quarter of last year... We are forced to increase prices this time,” he added.
The company has planned to hike the prices between Rs 1,000 and Rs 15,000 for different models.
Steel prices have risen by as much as Rs 6,000 a tonne since January on account of rising demand and increase in iron ore and coking coal rates.
Likewise, tyre prices also increased in recent past due to rising natural rubber costs. Tyre manufacturers have hiked prices by about 10 per cent this year and indicated a further hike of up to 25 per cent in the rest of the year. - PTI
Kinetic group bets big on auto components biz
Iconic two-wheeler maker Kinetic Motor Company, which had brands like Kinetic Honda and Luna under its umbrella, could stage a comeback in 2013. The company is looking to re-enter the two-wheeler market with its own brands of products once the non-compete pact, it signed while entering into a joint venture (JV) with Mahindra & Mahindra (M&M), expires.
The Sullaja Firodia Motwani-led two-wheeler company, which had for years empowered young bike riders with gearless drive and auto-start, had stopped production of its popular two-wheeler brands following the JV with cars-to-commercial vehicle major Mahindra & Mahindra (M&M) in July 2008.
A top Kinetic official told FE on condition of anonymity that the non-compete agreement is only for a limited period of five years after which the company could re-enter the two-wheeler market with its Kinetic brand. The non-compete agreement is slated to expire in July 2013. M&M has 80% stake in the JV Mahindra Kinetic Scooters & Motorcycles Ltd. According to the agreement, Kinetic Motor was given the option of selling the 20% stake in the next seven years.
In an interaction with FE on Thursday, Sulajja Firodia Motwani, managing director of Kinetic Motors, said in the next five years the company is going to focus on re-establishing its brand by targeting the customers directly.
However when asked about its plans to re-enter the two-wheeler market, Motwani said, "As of now we cannot enter the two-wheeler segment because of our JV with M&M."
Kapil Arora, an analyst with Ernst & Young, said the two-wheeler segment is expected to grow in leaps and bounds in the coming years, especially with the potential of electric two-wheelers.
"Largely the electric two-wheeler segment has not penetrated the market yet ...it is going to grow even more in the future," he said.
Another auto analyst said on conditions of anonymity that Kinetic has been looking to expand its brand and a re-entry into the two-wheeler market. He said though it would be the right choice for the company, lack of funds could be a constraint. "Kinetic has a strong brand recall but whether the company can mobilise enough funds will be the key (to the success of the its plan to re-enter the two-wheeler category," he said.
Kinetic Motors is part of the $500 million Firodia Group of Companies. Apart from Kinetic Motors, the group also has an auto component business which goes by the name of Kinetic Engineering Ltd.
The Sullaja Firodia Motwani-led two-wheeler company, which had for years empowered young bike riders with gearless drive and auto-start, had stopped production of its popular two-wheeler brands following the JV with cars-to-commercial vehicle major Mahindra & Mahindra (M&M) in July 2008.
A top Kinetic official told FE on condition of anonymity that the non-compete agreement is only for a limited period of five years after which the company could re-enter the two-wheeler market with its Kinetic brand. The non-compete agreement is slated to expire in July 2013. M&M has 80% stake in the JV Mahindra Kinetic Scooters & Motorcycles Ltd. According to the agreement, Kinetic Motor was given the option of selling the 20% stake in the next seven years.
In an interaction with FE on Thursday, Sulajja Firodia Motwani, managing director of Kinetic Motors, said in the next five years the company is going to focus on re-establishing its brand by targeting the customers directly.
However when asked about its plans to re-enter the two-wheeler market, Motwani said, "As of now we cannot enter the two-wheeler segment because of our JV with M&M."
Kapil Arora, an analyst with Ernst & Young, said the two-wheeler segment is expected to grow in leaps and bounds in the coming years, especially with the potential of electric two-wheelers.
"Largely the electric two-wheeler segment has not penetrated the market yet ...it is going to grow even more in the future," he said.
Another auto analyst said on conditions of anonymity that Kinetic has been looking to expand its brand and a re-entry into the two-wheeler market. He said though it would be the right choice for the company, lack of funds could be a constraint. "Kinetic has a strong brand recall but whether the company can mobilise enough funds will be the key (to the success of the its plan to re-enter the two-wheeler category," he said.
Kinetic Motors is part of the $500 million Firodia Group of Companies. Apart from Kinetic Motors, the group also has an auto component business which goes by the name of Kinetic Engineering Ltd.
TVS to double scooter sales revenue in 2010-11
Tamil Nadu based TVS Motor is expecting to double its revenue from scooter sales in the current fiscal on the back of its newly launched vehicle ?Wego? and robust market growth, a company official said today.
?Our sales from scooter segment will reach Rs. 1,500 crore- Rs. 1,600 crore in the current fiscal because of our new offering Wego in the market and good growth happening in country?s scooter market,? Company?s General Manager (Marketing), S Srinivas told reporters here today.
This is twice of its revenue from scooter sales in 2009-2010, where it netted Rs. 800 crore from sales in its scooter range including Teenz, Pep and Streak.
TVS is now eyeing sales of 4.8 lakh units of scooters this fiscal against 3 lakh units sold last year.
?Our sales from scooter segment will reach Rs. 1,500 crore- Rs. 1,600 crore in the current fiscal because of our new offering Wego in the market and good growth happening in country?s scooter market,? Company?s General Manager (Marketing), S Srinivas told reporters here today.
This is twice of its revenue from scooter sales in 2009-2010, where it netted Rs. 800 crore from sales in its scooter range including Teenz, Pep and Streak.
TVS is now eyeing sales of 4.8 lakh units of scooters this fiscal against 3 lakh units sold last year.
TVS Motor’s sales up 36 % in June 2010
Motorcycles grow 44 %; Scooters grow 42 %; Domestic sales up 33 %; Exports up 66 % Highest Three Wheeler Sales recorded in June 2010
TVS Motor Company continued its upward trend with growth in sales for the month of June 2010 registering an increase of 36% over the same month of the previous year. Total two wheeler sales of the company grew from 115,448 units in June 2009 to 156,685 units in the current month. Cumulative two wheeler sales from April to June 2010 increased 31% with sales of 456,041 units in the current financial year as against 347,141 units in the comparable period of the previous year. Domestic two wheeler sales witnessed robust growth of 33%, increasing from 105,361 units in June 2009 to 139,905 units in June 2010. The company not only recorded growth across all segments of the two wheeler market but also logged highest ever sales of its three wheelers during the month.
Motorcycle sales of the company registered 44 % growth in June 2010 with sales of 66,452 units compared to 46,048 units in the same month of the previous year. Scooters sales continued to excel growing at 42 % with sales of 36,742 units in the month of June 2010 as against 25,945 units in June 2009.
Three wheeler sales crossed the three thousand mark for the first time with the company registering a voluminous growth of 3,003 units in June 2010 over 810 units in June 2009.
Exports contributed handsomely to sales growth in June 2010 posting an increase of 66% with sales of 16,780 two-wheelers against 10,087 units in June 2009.
TVS Motor Company continued its upward trend with growth in sales for the month of June 2010 registering an increase of 36% over the same month of the previous year. Total two wheeler sales of the company grew from 115,448 units in June 2009 to 156,685 units in the current month. Cumulative two wheeler sales from April to June 2010 increased 31% with sales of 456,041 units in the current financial year as against 347,141 units in the comparable period of the previous year. Domestic two wheeler sales witnessed robust growth of 33%, increasing from 105,361 units in June 2009 to 139,905 units in June 2010. The company not only recorded growth across all segments of the two wheeler market but also logged highest ever sales of its three wheelers during the month.
Motorcycle sales of the company registered 44 % growth in June 2010 with sales of 66,452 units compared to 46,048 units in the same month of the previous year. Scooters sales continued to excel growing at 42 % with sales of 36,742 units in the month of June 2010 as against 25,945 units in June 2009.
Three wheeler sales crossed the three thousand mark for the first time with the company registering a voluminous growth of 3,003 units in June 2010 over 810 units in June 2009.
Exports contributed handsomely to sales growth in June 2010 posting an increase of 66% with sales of 16,780 two-wheelers against 10,087 units in June 2009.