Automakers set to meet demand

Automakers intend to boost capacities to meet robust demand in the domestic market. The sentiment came aloud at the 50th annual convention of the Society of Indian Automobile Manufacturers here on Thursday.

India’s largest carmaker Maruti Suzuki is preparing a project report to build a new factory in Haryana to produce an additional 250,000 cars alongside its two existing factories in the state.

“We are preparing a project report which is yet to be completed. We are yet to decide on the cost and timeline, although the standardized capacity is 250,000 cars,” chairman Maruti Suzuki India RC Bhargava said.

Maruti has been staring at production constraints this financial year and has already announced that it will invest Rs 1,700 crore in building a second manufacturing line at its existing plant in Manesar. However, the second line will be operational only by early 2012. On completion of the project, the total manufacturing capacity of the company will stand at 1.5 million units annually.

Maruti is facing intense competition from rivals as customers have to wait for 8-12 weeks to get their hands on its popular Swift, Ritz hatchbacks and Swift Dzire. Its market share dipped below 50 per cent in the passenger car market during the April-June quarter as the company itself said that it was losing 15-20,000 additional car sales per month due to capacity shortages.

Continued availability of cheap car loans, expanding economy and a flurry of new hatchbacks have boosted car sales, which grew by 35 per cent to 592,405 cars, between April and July this year.

Maruti Suzuki sold 384,181 cars in the April-July period, up 26 per cent from a year earlier. In 2009-10, sales of the carmaker rose 29 per cent to 1.02 million cars.

Toyota Kiroloskar too has expressed the desire to add capacity to meet demand. “We have a total production capacity of 73,000 units in a year at our Bangalore plant. Along with the commencement of production at our second factory next year, we would have a total production capacity of around 150,000 cars in India,” managing officer Toyota Motor Mitsuhiro Sonada said. Fortunner consumers who booked the vehicle at Toyota here in August would get their delivery by November-December this year.

Toyota Kirloskar Motor aims to sell 140,000 cars in 2011.

Two-wheelers

Iconic bike maker Royal Enfield too plans to build a new plant in Chennai that would be able to produce an additional 50-55,000 units by 2012. Touted as its best motorcycle, the 'Classic' has a waiting period of up to nine months. “We were producing 1,200 Classic motorcycles a month, but have increased that to 1,700 a month to bring down the waiting periods to 2-3 months as soon as possible,” chief operating officer Royal Enfield Venki Padmanabhan said. The company’s Chennai factory can produce 60-70,000 units per year.

Hero Honda Motors, the world’s largest two-wheeler maker, said it would decide a location for its fourth factory in one month. The new plant is meant for the company’s requirement in 2011. We aim to sell more than five million two-wheelers in 2010-11,” senior vice-president (marketing and sales) Hero Honda Motors Anil Dua said.

TVS Motor will pump in Rs 200 crore by April next year to increase its manufacturing capacity from 2.1 lakh units to 2.8 lakh units. The company expects to sell 1.8 million two-wheelers in the domestic market and 250,000 units in the overseas markets this financial year. It also expects to sell 50,000 three-wheelers. Two-wheeler sales at TVS Motor company rose 15 per cent to 1.52 million units in 2009-10.

Ford India also announced at the conference that it will launch eight new vehicles between now and 2015, a good part of which would be hatchbacks at its Chennai plant which has been upgraded to produce about 2 lakh units annually