Can Bajaj Auto stay away from scooters? Chairman Rahul Bajaj doesn’t think so.
Scooters: you either adore them or you abhor them. Either way, they are here to stay. But Bajaj Auto did not think so. In 2009-end, Managing Director Rajiv Bajaj announced that Bajaj was exiting the scooter business. In January 2010, they pulled the plug on the Kristal, their last offering in the segment.
In India, the scooter craze was given a shot in the arm more than two decades ago by the Kinetic Honda. Sales of geared scooters, mainly the Bajaj Chetak and the LML range, had dipped, then plateaued and then came the Kinetic Honda that started selling like hot cakes. It reigned supreme till the advent of another legend -- the Activa in 2001 -- which also happens to be a Honda, albeit with no connection to Kinetic.
What Honda saw was serious potential in the market and they put their ears to the ground. They realised that people still wanted the virtues of a scooter – ample space to load up the groceries and relatively good weather protection (when compared to a motorcycle) – but they also wanted added convenience. While the Honda Eterno’s sales hardly took off, the Activa’s numbers shot through the roof – proof that the new scooterist wanted the convenience of an automatic twist-and-go scoot and not the clutch/gear ritual of the older geared scooters.
Honda’s Activa has done so well that if you look into the second-hand market, it’s very difficult to come across a good specimen for sale. Even if you do sight one, most certainly it won’t be a steal. And if you decide to buy one brand new, there is a waiting period in excess of six months. Honda sold a total of 7,46,501 scooters in 2010-11 – 1,29,395 more units than the motorcycles they sold in the same year. Growth is a healthy 24 per cent over the last financial year.
N K Rattan, Operating Head - Sales and Marketing, Honda Motorcycles & Scooters India, says “We entered the market with scooters and it is the scooters that have driven our growth rapidly and brought us brand recognition. We have removed the dated image of scooters in the minds of people by updating them with technology and efficiency. Thus we have proved that scooters do not have to be lesser than motorcycles. We will continue catering to our scooter customers as we do to our motorcycle buyers. In fact, we will be launching a new scooter sometime this year.”
There are others who have since woken up and smelt the coffee. Hero Honda has the Pleasure, a scooter powered with the older Activa’s engine. Suzuki has the 125cc Access that initially took it’s time but is now selling in increasing numbers. The Wego is the latest addition to the three existing automatic scooterettes currently in the TVS line-up – the Scooty Streak, the Scooty Pep + and the Scooty Teenz. Let’s not forget the trio which marked the debut of Mahindra 2 Wheelers in the two-wheeler segment – Flyte, Rodeo and the Duro – which are selling in growing numbers.
With such a degree of activity in the segment, the absence of a two-wheeler giant like Bajaj Auto is all the more glaring. Especially given that their business was built on scooters. But early this year, Bajaj Auto Chairman Rahul Bajaj said that the firm might get into scooters once again, but the final decision would rest with Rajiv.
If Bajaj were to re-enter the segment, it certainly will not be with a jazzed-up Chetak, far from it. It will be a jump from the Kristal, Bajaj’s last short lived product in the twist-and-go scooter market. Expect it to have reliability and ruggedness engineered into it along with smart but conventional styling (Indian scooterists, it seems, aren’t into futuristic styling yet), acres of floorboard, underseat space and comfortable seating. Longevity is a must in this segment and hence, metal panels will be preferred.
As roads get more congested and fuel prices soar, people will resort to more practical and cheaper modes of transport. Scooters, with their versatility and ease of operation, offer all of that and more. Don’t be too surprised to see a brand new Bajaj scooter in your neighbourhood showroom some time soon.
MyTVS receives Kitara PE funding
TV Sundram Iyengar and Sons Ltd, he holding company of the Chennai-based TVS group, has turned its six-year-old automobile deal- ership and services arm MyTVS into a separate company called TVS Automo- bile Solutions Ltd (TVS ASL), with pri- vate equity (PE) investment from Oman-based Kitara Capital.
The move was taken to take the busi- ness to the next level and expand it across the country, the company said in a release. This is only the second time that a TVS Group company has gone in for PE funding, after TVS Logistics Services Ltd (TVS LSL) raised `100 crore from Goldman Sachs in 2008.
TVS ASL will continue to be a subsid- iary of TVS and Sons and also retain the brand name MyTVS. An investment of `120 crore has gone into the company at this stage, of which `78 crore has come from Kitara. “The equity share of Kitara in this has not yet been decided as there is convertibility in the year 2013-14. It will not go beyond 30%,“ said TVS ASL director R. Dinesh. “Their participation is long term, five-seven years. Whenever they prefer to exit, we will have right of refusal for their stake.“
The venture could be a significant one, KPMG executive director Naray- anan Ramaswamy.
“That sector is highly fragmented, and short of capital. This investment will give a big boost to it because TVS is placed very well to create an industry out of this market,“ he said. “TVS also seems to be opening up to the idea of outside investments. This is a good ven- ture to bring in PE because it is multi- faceted and their other businesses re- quire the group's reserves more.“
TVS ASL plans to invest `500 crore by 2014 to expand its presence all over the country, by way of partnerships, partic- ularly in west and north India. “We will be investing `250 crore and expect our partners to invest the other half,“ Di- nesh said. “We are in talks with four in- vestors in west India, with whom we'll invest `15 crore and hold majority stake in those joint ventures.“
MyTVS has already partnered with automobile manufacturers to train me- chanics and other technicians to work on cars of all brands, including the lux- ury segment. “With the high growth in the automotive market, there is large- scale capacity shortage for service and spare parts. So, our relationships with OEMs (original equipment manufactur- ers) is complementary and cooperative than competitive,“ MyTVS president Srivatchan said.
The company currently has 3,000 emergency service stations for automo- biles across India. Its All Car Service stations are available in 65 locations in the south, with 16 of these owned and 49 franchised. The present investment will ramp up this number to 80 owned and 180 franchised stations by 2014.
“We currently have 60 lakh customers and expect the company to become profitable by the end of this fiscal year,“ Dinesh said. “We are currently not look- ing for any other PE investment. It is just that the company grew faster than TVS and Sons' investment limits, and so went in for PE this time.“ By 2014, TVS ASL plans to open outlets in Sri Lanka and West Asia.
The move was taken to take the busi- ness to the next level and expand it across the country, the company said in a release. This is only the second time that a TVS Group company has gone in for PE funding, after TVS Logistics Services Ltd (TVS LSL) raised `100 crore from Goldman Sachs in 2008.
TVS ASL will continue to be a subsid- iary of TVS and Sons and also retain the brand name MyTVS. An investment of `120 crore has gone into the company at this stage, of which `78 crore has come from Kitara. “The equity share of Kitara in this has not yet been decided as there is convertibility in the year 2013-14. It will not go beyond 30%,“ said TVS ASL director R. Dinesh. “Their participation is long term, five-seven years. Whenever they prefer to exit, we will have right of refusal for their stake.“
The venture could be a significant one, KPMG executive director Naray- anan Ramaswamy.
“That sector is highly fragmented, and short of capital. This investment will give a big boost to it because TVS is placed very well to create an industry out of this market,“ he said. “TVS also seems to be opening up to the idea of outside investments. This is a good ven- ture to bring in PE because it is multi- faceted and their other businesses re- quire the group's reserves more.“
TVS ASL plans to invest `500 crore by 2014 to expand its presence all over the country, by way of partnerships, partic- ularly in west and north India. “We will be investing `250 crore and expect our partners to invest the other half,“ Di- nesh said. “We are in talks with four in- vestors in west India, with whom we'll invest `15 crore and hold majority stake in those joint ventures.“
MyTVS has already partnered with automobile manufacturers to train me- chanics and other technicians to work on cars of all brands, including the lux- ury segment. “With the high growth in the automotive market, there is large- scale capacity shortage for service and spare parts. So, our relationships with OEMs (original equipment manufactur- ers) is complementary and cooperative than competitive,“ MyTVS president Srivatchan said.
The company currently has 3,000 emergency service stations for automo- biles across India. Its All Car Service stations are available in 65 locations in the south, with 16 of these owned and 49 franchised. The present investment will ramp up this number to 80 owned and 180 franchised stations by 2014.
“We currently have 60 lakh customers and expect the company to become profitable by the end of this fiscal year,“ Dinesh said. “We are currently not look- ing for any other PE investment. It is just that the company grew faster than TVS and Sons' investment limits, and so went in for PE this time.“ By 2014, TVS ASL plans to open outlets in Sri Lanka and West Asia.
Govt seeks to sell 95% stake in Scooters India
The department of heavy industries (DHI) is expected to issue a notice seeking expression of interest for a 95% stake sale in Scooters India Ltd in the next two months, two people familiar with the development said.
The stake-sale plan marks a change of stance by DHI, which initially wanted to retain a majority holding while handing management control over to a private partner.
Praful Patel, who took over as heavy industries minister last month, has decided against the retention of any stake.
“He thinks giving full control to private partners will re- move various hassles and help the company in the process of revival,“ said a top DHI official.
In August 2010, Mint reported that the government was looking for a partner to revive the company that made a loss of `22.03 crore in the 2009-10 fiscal year.
“We are working on various modalities involved. We will send the draft proposal for review to the cabinet and ex- pect to come out with an expression of interest,“ said an- other DHI official. Both officials requested anonymity.
The ministry is also keen on the outright sale of sick public sector unit, HMT Bearings Ltd, a third DHI official said on condition of anonymity.
The government holds 97% of the Hyderabad-based company, which reported a loss of `15.31 crore in the last financial year.
Lucknow-based Scooters India has an annual capacity of 12,000 units per year. The company used to sell two- wheeler brands such as Vijai Super and Lambretta. It dis- continued two-wheeler production in 1997 and now man- ufactures only three wheelers.
The government was approached by firms such as Mahi- ndra and Mahindra Ltd and three-wheeler maker Atul Auto Ltd for a possible stake acquisition. Gujarat-based Atul Auto director Vijay Kedia reiterated last week that the three-wheeler maker would be interested in taking a ma- jority stake in the distressed firm.
The stake-sale plan marks a change of stance by DHI, which initially wanted to retain a majority holding while handing management control over to a private partner.
Praful Patel, who took over as heavy industries minister last month, has decided against the retention of any stake.
“He thinks giving full control to private partners will re- move various hassles and help the company in the process of revival,“ said a top DHI official.
In August 2010, Mint reported that the government was looking for a partner to revive the company that made a loss of `22.03 crore in the 2009-10 fiscal year.
“We are working on various modalities involved. We will send the draft proposal for review to the cabinet and ex- pect to come out with an expression of interest,“ said an- other DHI official. Both officials requested anonymity.
The ministry is also keen on the outright sale of sick public sector unit, HMT Bearings Ltd, a third DHI official said on condition of anonymity.
The government holds 97% of the Hyderabad-based company, which reported a loss of `15.31 crore in the last financial year.
Lucknow-based Scooters India has an annual capacity of 12,000 units per year. The company used to sell two- wheeler brands such as Vijai Super and Lambretta. It dis- continued two-wheeler production in 1997 and now man- ufactures only three wheelers.
The government was approached by firms such as Mahi- ndra and Mahindra Ltd and three-wheeler maker Atul Auto Ltd for a possible stake acquisition. Gujarat-based Atul Auto director Vijay Kedia reiterated last week that the three-wheeler maker would be interested in taking a ma- jority stake in the distressed firm.
M&M's TN plans close to finalisation
Mahindra & Mahindra plans to set up an automotive plant in Tamil Nadu for which the Government has allocated land and a structured package of incentives.
The automobile manufacturer has an investment plan totalling Rs 1,800 crore, including a test track facility, an automotive plant at Cheyyar, and an R&D centre near Chennai.
Dr Pawan Goenka, President, Automotive and Farm Equipment Sectors, Mahindra & Mahindra Ltd, said the State Government has allocated over 450 acres. The company will invest Rs 1,200 crore for a 200-acre test facility and 250-acre automotive plant, including a tractor manufacturing unit in this facility at Thiruvannamalai district. However, the plans for the automotive plant are yet to be finalised, he said.
The test facility will include a track to try out the products coming off the R&D centre and all of Mahindra's products being developed elsewhere, he said
R&D facility
The company has invested Rs 600 crore in an R&D facility that has been established at Mahindra World City, near Chinglepet about 50km from Chennai.
Among the proposed investments are plans by BMW to expand its assembling unit here. However, according to officials, the company has sought additional time to bring in the investments. They declined to share details of the company's plans.
Package for dozen projects
These were among a dozen projects envisaging a total investment of Rs 24,230 crore, for which the State Government sanctioned a structured package of incentive and letters of support today. Mr A.V. Dharmakrishnan, Executive Director – Finance, Madras Cements, said the company is adding 2 million tonnes in production capacity and a 60 MW thermal plant at Ariyalur at a cost of Rs 940 crore; and expanding cement grinding capacity at Salem and RR Nagar, where it is also putting up a 25 MW thermal power plant.
Of significance were investments planned in the Southern districts, for which Tamil Nadu has announced a special package of incentives.
Sundareshwarar Alloys' investment covering alloy and stainless steel plant, foundry, forging and agro machinery unit will be spread over Madurai, Sivagangai, Dindigul, Tirunelveli and Tiruchi districts.
Zynergy Enterprises, will invest Rs 2,500 crore in the first phase in solar energy project covering the entire gamut of raw materials to solar farms, said company officials.
The automobile manufacturer has an investment plan totalling Rs 1,800 crore, including a test track facility, an automotive plant at Cheyyar, and an R&D centre near Chennai.
Dr Pawan Goenka, President, Automotive and Farm Equipment Sectors, Mahindra & Mahindra Ltd, said the State Government has allocated over 450 acres. The company will invest Rs 1,200 crore for a 200-acre test facility and 250-acre automotive plant, including a tractor manufacturing unit in this facility at Thiruvannamalai district. However, the plans for the automotive plant are yet to be finalised, he said.
The test facility will include a track to try out the products coming off the R&D centre and all of Mahindra's products being developed elsewhere, he said
R&D facility
The company has invested Rs 600 crore in an R&D facility that has been established at Mahindra World City, near Chinglepet about 50km from Chennai.
Among the proposed investments are plans by BMW to expand its assembling unit here. However, according to officials, the company has sought additional time to bring in the investments. They declined to share details of the company's plans.
Package for dozen projects
These were among a dozen projects envisaging a total investment of Rs 24,230 crore, for which the State Government sanctioned a structured package of incentive and letters of support today. Mr A.V. Dharmakrishnan, Executive Director – Finance, Madras Cements, said the company is adding 2 million tonnes in production capacity and a 60 MW thermal plant at Ariyalur at a cost of Rs 940 crore; and expanding cement grinding capacity at Salem and RR Nagar, where it is also putting up a 25 MW thermal power plant.
Of significance were investments planned in the Southern districts, for which Tamil Nadu has announced a special package of incentives.
Sundareshwarar Alloys' investment covering alloy and stainless steel plant, foundry, forging and agro machinery unit will be spread over Madurai, Sivagangai, Dindigul, Tirunelveli and Tiruchi districts.
Zynergy Enterprises, will invest Rs 2,500 crore in the first phase in solar energy project covering the entire gamut of raw materials to solar farms, said company officials.
VENU SRINIVASAN asks for a Green Revolution for better agri prices
These are the areas I feel the Union Budget needs to address: 1) Fiscal consolidation of the economy .
2) Reforming the administrative price mechanism of petroleum products and fertilisers to prune subsidies.
3) The introduction of GST.
4) Increased spending on infrastructure through the development of ports and roads.
5) The government should signal easing of monetary policy as any tightening of money supply would stifle economic growth. This will affect the growth of revenue and reduce the room available for the government to undertake programmes for greater social justice.
6) Although this is not a part of the budget, the government should announce the new Green Revolution which would substantially improve agricultural productivity . This would ensure sufficient supply of agricultural products to contain the prices.
7) Retail in food products should be encouraged in order to improve logistics. This will give a great fillip to create supply chains for agricultural products.
(The writer is the chairman and managing director of TVS Motors)
2) Reforming the administrative price mechanism of petroleum products and fertilisers to prune subsidies.
3) The introduction of GST.
4) Increased spending on infrastructure through the development of ports and roads.
5) The government should signal easing of monetary policy as any tightening of money supply would stifle economic growth. This will affect the growth of revenue and reduce the room available for the government to undertake programmes for greater social justice.
6) Although this is not a part of the budget, the government should announce the new Green Revolution which would substantially improve agricultural productivity . This would ensure sufficient supply of agricultural products to contain the prices.
7) Retail in food products should be encouraged in order to improve logistics. This will give a great fillip to create supply chains for agricultural products.
(The writer is the chairman and managing director of TVS Motors)
M&M, Royal Enfield plant proposals get AP Govt nod
The State Investment Promotion Board of Andhra Pradesh has approved a bunch of investments proposals including one by automotive major Mahindra & Mahindra for its tractor plant near Zaheerabad, Hinduja Foundries in Medak district, and Royal Enfield plant at Tada on the State border, and seven cement plants.
An SIPB meeting chaired by the Chief Minister, Mr N.Kiran Kumar Reddy, cleared 25 proposals with a total investment outlay of Rs 25,672 crore and direct employment potential of 41,406 people in the State, according to a statement from the Chief Minister's Office.
According to the project proposals, these projects will be commissioned by the end of 2012.
Sector-wise breakup
Sector-wise break up of proposals shows that food and agriculture will have five units, automotive sector (three), cement (seven), steel and ferro alloys (5), chemical, glass, mineral sand, ceramic and tyre, one each among others.
The cement plant proposals include that of the KC, in Krishna district, Orient Cement, Adilabad; Ultratech Cement Industries, Ananthapur; Jaypee Cements, Krishna; and Dalmia Cement (Bharathi) Ltd, Kadapa. Other important proposals include that of AGI Glaspac at Nalgonda district, Sathavahana Ispat Ltd, Trimex Sands and SBQ Steels.
M&M teams are in negotiations with State officials for a tractor manufacturing unit with an installed capacity of about one lakh vehicles an annum, close to the capacity of theplant in Zaheerabad.
Eicher Motors' proposals for a manufacturing base in Andhra Pradesh have also been cleared. The company had earlier outlined their intention to locate the plant either in Tamil Nadu or Andhra Pradesh, to cater to growing market demand and also cut down on waiting period for its bikes.
An SIPB meeting chaired by the Chief Minister, Mr N.Kiran Kumar Reddy, cleared 25 proposals with a total investment outlay of Rs 25,672 crore and direct employment potential of 41,406 people in the State, according to a statement from the Chief Minister's Office.
According to the project proposals, these projects will be commissioned by the end of 2012.
Sector-wise breakup
Sector-wise break up of proposals shows that food and agriculture will have five units, automotive sector (three), cement (seven), steel and ferro alloys (5), chemical, glass, mineral sand, ceramic and tyre, one each among others.
The cement plant proposals include that of the KC, in Krishna district, Orient Cement, Adilabad; Ultratech Cement Industries, Ananthapur; Jaypee Cements, Krishna; and Dalmia Cement (Bharathi) Ltd, Kadapa. Other important proposals include that of AGI Glaspac at Nalgonda district, Sathavahana Ispat Ltd, Trimex Sands and SBQ Steels.
M&M teams are in negotiations with State officials for a tractor manufacturing unit with an installed capacity of about one lakh vehicles an annum, close to the capacity of theplant in Zaheerabad.
Eicher Motors' proposals for a manufacturing base in Andhra Pradesh have also been cleared. The company had earlier outlined their intention to locate the plant either in Tamil Nadu or Andhra Pradesh, to cater to growing market demand and also cut down on waiting period for its bikes.
Bajaj Launches 2011 Edition of Discover 100
Two-wheeler maker Bajaj Auto on Thursday launched its 2011edition of Discover 100,and said it has sold more than 40 lakh Discover motorcycles since its launch in 2004.The 2011 edition of Discover 100 will have new premium and innovative multi-colour decals in two options of gold green and red magenta.The key feature of this multi-colour decal is 'Auto Colour change',the company said in a statement here.It is a very innovative and premium feature introduced for the first time in the motorcycle industry and also possibly in the entire auto industry,it added.The new edition of the Discover 100 will also retain its world-class mileage,it said.The big milestone of 40 lakh unit sales has been achieved in a very quick time,essentially on the back of splendid performances by Discover 100 and Discover 150.
To celebrate this stupendous success Bajaj Auto is introducing the 2011 edition Discover 100,the statement said.We have recently appointed more than 130 additional dealers and I expect them to contribute towards the growth of Discover next year.So with a wider network and with the new product innovation,Discover should also keep growing, Bajaj Auto president (Motorcycles ),S Sridhar,said.
To celebrate this stupendous success Bajaj Auto is introducing the 2011 edition Discover 100,the statement said.We have recently appointed more than 130 additional dealers and I expect them to contribute towards the growth of Discover next year.So with a wider network and with the new product innovation,Discover should also keep growing, Bajaj Auto president (Motorcycles ),S Sridhar,said.
Hero Honda ties up with Muthoot Captial in Kochi
Hero Honda Motors Ltd (HHML) has tied up with Muthoot Capital Services Ltd (MCSL), a division of Muthoot Pappachan Group, a leading financial institution in the state, to offer instant ''Need Based Financial Service'' for its two wheeler customers.
The tie-up would enable HHML to penetrate deep by offering its products in the semi urban and rural markets using the services of Muthoot Pappachan Group's retail outlets and dedicated manpower at every HHML Dealer and Sub Dealer point, a release said here today.
Speaking on this occasion, Muthooot Capital Ceo R Manomohanan Services Limited said, ''two wheeler finance segment is picking up quite well despite the difficult market conditions and we are looking forward to becoming the leading player in this growing segment in this region.'' ''Hero Honda is a great brand and by joining hands with them, we are aiming at taking our services within the arm's reach of the customer, delivering value for money and making vehicle financing a hassle free and pleasant experience,'' he added.
The tie-up would enable HHML to penetrate deep by offering its products in the semi urban and rural markets using the services of Muthoot Pappachan Group's retail outlets and dedicated manpower at every HHML Dealer and Sub Dealer point, a release said here today.
Speaking on this occasion, Muthooot Capital Ceo R Manomohanan Services Limited said, ''two wheeler finance segment is picking up quite well despite the difficult market conditions and we are looking forward to becoming the leading player in this growing segment in this region.'' ''Hero Honda is a great brand and by joining hands with them, we are aiming at taking our services within the arm's reach of the customer, delivering value for money and making vehicle financing a hassle free and pleasant experience,'' he added.
PEs to buy 30% in HIPL for Rs 3,900 cr,to get 13% in 2-Wheeler Firm
Private equity firm Bain Capital and an investment arm of the Government of Singapore will buy a 30% stake in Hero Investment Private or HIPL,which owns 17% of Hero Honda Motors,for Rs 3,900 crore edging out other investors seeking a slice of the worlds second-largest twowheeler market.The transaction,once concluded,will give Bain Capital and the investment arm,GIC Singapore,an indirect holding of close to 13% in Indias largest two-wheeler company.
Munjals,the family that set up Hero Honda in a joint venture with Japanese auto major Honda Motor company 27 years ago,will buy out the foreign partners 26% stake at half the current market price.The Hero Group will have to pay about Rs 3,900 crore or around Rs 750 per share against the current price of Rs 1,490 per share.This will be funded by the investment from Bain and GIC.HIPL will buy Hondas 26%,raising its stake to just over 43%.The 30% stake in HIPL to be held by GIC and Bain will translate into an indirect equity stake of 12-13 % in Hero Honda.GIC and Bain were the highest bidders among six PE firms vying for a stake in HIPL,the investment arm of the Delhi and Ludhiana-based Munjals.Munjals have finalised the PE firms Bain Capital and GIC Singapore and are awaiting government approval to conclude the deal, said an official from a PE firm who participated in the bidding process.
The Indian promoters had invited bids from six PE firms Bain Capital,Carlyle,GIC Singapore,Kohlberg Kravis Roberts (KKR),TPG and Warburg Pincus.While Bain Capital and GIC Singapore agreed to buy at the current market price of around Rs 1,450 per share of Hero Honda,the other four bidders quoted the price between Rs 1,250-1,300, another official from a PE firm said.
Munjals,the family that set up Hero Honda in a joint venture with Japanese auto major Honda Motor company 27 years ago,will buy out the foreign partners 26% stake at half the current market price.The Hero Group will have to pay about Rs 3,900 crore or around Rs 750 per share against the current price of Rs 1,490 per share.This will be funded by the investment from Bain and GIC.HIPL will buy Hondas 26%,raising its stake to just over 43%.The 30% stake in HIPL to be held by GIC and Bain will translate into an indirect equity stake of 12-13 % in Hero Honda.GIC and Bain were the highest bidders among six PE firms vying for a stake in HIPL,the investment arm of the Delhi and Ludhiana-based Munjals.Munjals have finalised the PE firms Bain Capital and GIC Singapore and are awaiting government approval to conclude the deal, said an official from a PE firm who participated in the bidding process.
The Indian promoters had invited bids from six PE firms Bain Capital,Carlyle,GIC Singapore,Kohlberg Kravis Roberts (KKR),TPG and Warburg Pincus.While Bain Capital and GIC Singapore agreed to buy at the current market price of around Rs 1,450 per share of Hero Honda,the other four bidders quoted the price between Rs 1,250-1,300, another official from a PE firm said.
Hero groups FDI plan to go before cabinet
THE FIPB on Wednesday said it has referred three big foreign investment proposals from Reckitt Benckiser, Hero Investments and the GMR Group totalling Rs 9,720 crore to the Cabinet Committee on Economic Affairs (CCEA) for clearance.
In a meeting held on February 15, Foreign Investment Promotion Board (FIPB) recommended the proposals for consideration by the CCEA as the intended capital infusion exceeds Rs 1,200 crore in each case.
A proposal of Hero Investments (HIPL) for bringing in Rs 4,500 crore as induction of foreign equity in investing company has been deferred for clearance by the CCEA. HIPL is one of the main shareholders of the country's largest two-wheeler maker Hero Honda. It holds 17.33 per cent stake in the company as on December 31, 2010.
In December last year, the promoters of HIPL, the BM Munjal family, had agreed to buy out the entire 26 per cent stake of Japan's Honda in Hero Honda for an undisclosed sum. It is understood that the Munjals are looking to raise funds to finance the buyout through stake sale in HIPL to private equity and other foreign funds.
In another proposal, global FMCG giant Reckitt Benckiser had proposed to bring in Rs 3,300 crore to fund the acquisition of Ahmedabad-based Paras Pharmaceuticals. In December 2010, the UK-based firm had agreed to fully acquire the Indian entity for Rs 3,260 crore. Reckitt Benckiser will make downstream investment through its subsidiary Reckitt Benckiser.
Besides, GMR Airports Holding, which has already got approval for an infusion of Rs 960 crore through issue shares, has sought permission for a further Rs 960 crore for future investments, growth plans of the Delhi and Hyderabad airports and other ancillary activities.
In a meeting held on February 15, Foreign Investment Promotion Board (FIPB) recommended the proposals for consideration by the CCEA as the intended capital infusion exceeds Rs 1,200 crore in each case.
A proposal of Hero Investments (HIPL) for bringing in Rs 4,500 crore as induction of foreign equity in investing company has been deferred for clearance by the CCEA. HIPL is one of the main shareholders of the country's largest two-wheeler maker Hero Honda. It holds 17.33 per cent stake in the company as on December 31, 2010.
In December last year, the promoters of HIPL, the BM Munjal family, had agreed to buy out the entire 26 per cent stake of Japan's Honda in Hero Honda for an undisclosed sum. It is understood that the Munjals are looking to raise funds to finance the buyout through stake sale in HIPL to private equity and other foreign funds.
In another proposal, global FMCG giant Reckitt Benckiser had proposed to bring in Rs 3,300 crore to fund the acquisition of Ahmedabad-based Paras Pharmaceuticals. In December 2010, the UK-based firm had agreed to fully acquire the Indian entity for Rs 3,260 crore. Reckitt Benckiser will make downstream investment through its subsidiary Reckitt Benckiser.
Besides, GMR Airports Holding, which has already got approval for an infusion of Rs 960 crore through issue shares, has sought permission for a further Rs 960 crore for future investments, growth plans of the Delhi and Hyderabad airports and other ancillary activities.
India inc slams making CSR spend mandatory
Attempts by corporate affairs minister Murli Deora to make corporate social responsibility (CSR) spending mandatory in the new Companies Bill has come in for sharp criticism. While accepting the significance of CSR activities, leading members of India Inc said that any attempt to make it mandatory would be a “retrograde” step.
Rahul Bajaj, chairman of Bajaj Auto and an industrialist vocal on policy issues, said that since corporate houses were already engaged in various CSR initiatives, there was no case for making it mandatory. “I have spoken to Murli Deora (corporate affairs minister) on the issue. Since CSR spending is a question of conscience, there is no case for making it mandatory,” Bajaj said.
He also dismissed the government’s view that the industry was divided on the matter. “No responsible industrialist can ask for making it mandatory,” he said. Bajaj also said that since there was no acceptable definition for CSR, the move is not in the right direction.
Agrees Tata Communications chairman Subodh Bhargava when he says that since CSR spending was entirely a corporate entity’s personal choice, no legislation was needed. Bhargava said that if the government finally decides to make the clause mandatory, then it could also lead to manipulation. “If a company’s intent is not to invest in CSR, then no law in land could change that,” he said.
Maruti Suzuki chairman RC Bhargava said that distribution of net profit should be decided by shareholders and not the government. He questioned the government’s ability to monitor how companies were spending on CSR and what constitutes CSR. “The issue really is on the practical side of making the proposal mandatory. Today, the government wants to pass a law on how companies should distribute profits. Tomorrow, it may be on something else. How does the story end?”
On Thursday, corporate affairs minister Deora had said that he was “personally” in favour of making it mandatory for companies to set aside 2% of their net profits on CSR activities.
His deputy in the ministry RPN Singh had also said that the government was trying to reach a consensus on the issue.
Moser Baer chairman Deepak Puri said that while he was a supporter of CSR, any move to make the proposal mandatory would be counterproductive. “Within Moser Baer, the board of directors have approved CSR investments of up to 1%. While CSR is a necessity, it should not be thrust upon companies. That’s not right,” Puri said.
Senior corporate lawyer Lalit Bhasin termed the government’s proposal as a retrograde step. He argued that industry was within its rights to oppose the move. “There has to be a legal basis for implementing such a move. Let the proposal be voluntary; otherwise, companies can misuse it by finding a way around the law,” Bhasin said.
An industry leader who did not wish to be named said that the government's stand on the issue would take India back to the licence raj. “The government should not dictate how companies are going to plan out their expenditure. If the proposal does become law, then it would be unfortunate,” he said. The issue first came to light when the parliamentary standing committee on finance headed by senior BJP leader Yashwant Sinha proposed mandatory implementation of CSR spending. The committee argued that companies which have a net worth of Rs 500 crore or more, or turnover of Rs 1,000 crore should set aside 2% of their average net profits for the last three financial years for CSR. Sinha told FE that the proposal had the support of the ministry of corporate affairs as well. “Every company must spend 2% of their profits on CSR. We are trying to employ social responsibility for the corporate sector. If voluntary action has not worked, then it has to become mandatory,” he said.
Rahul Bajaj, chairman of Bajaj Auto and an industrialist vocal on policy issues, said that since corporate houses were already engaged in various CSR initiatives, there was no case for making it mandatory. “I have spoken to Murli Deora (corporate affairs minister) on the issue. Since CSR spending is a question of conscience, there is no case for making it mandatory,” Bajaj said.
He also dismissed the government’s view that the industry was divided on the matter. “No responsible industrialist can ask for making it mandatory,” he said. Bajaj also said that since there was no acceptable definition for CSR, the move is not in the right direction.
Agrees Tata Communications chairman Subodh Bhargava when he says that since CSR spending was entirely a corporate entity’s personal choice, no legislation was needed. Bhargava said that if the government finally decides to make the clause mandatory, then it could also lead to manipulation. “If a company’s intent is not to invest in CSR, then no law in land could change that,” he said.
Maruti Suzuki chairman RC Bhargava said that distribution of net profit should be decided by shareholders and not the government. He questioned the government’s ability to monitor how companies were spending on CSR and what constitutes CSR. “The issue really is on the practical side of making the proposal mandatory. Today, the government wants to pass a law on how companies should distribute profits. Tomorrow, it may be on something else. How does the story end?”
On Thursday, corporate affairs minister Deora had said that he was “personally” in favour of making it mandatory for companies to set aside 2% of their net profits on CSR activities.
His deputy in the ministry RPN Singh had also said that the government was trying to reach a consensus on the issue.
Moser Baer chairman Deepak Puri said that while he was a supporter of CSR, any move to make the proposal mandatory would be counterproductive. “Within Moser Baer, the board of directors have approved CSR investments of up to 1%. While CSR is a necessity, it should not be thrust upon companies. That’s not right,” Puri said.
Senior corporate lawyer Lalit Bhasin termed the government’s proposal as a retrograde step. He argued that industry was within its rights to oppose the move. “There has to be a legal basis for implementing such a move. Let the proposal be voluntary; otherwise, companies can misuse it by finding a way around the law,” Bhasin said.
An industry leader who did not wish to be named said that the government's stand on the issue would take India back to the licence raj. “The government should not dictate how companies are going to plan out their expenditure. If the proposal does become law, then it would be unfortunate,” he said. The issue first came to light when the parliamentary standing committee on finance headed by senior BJP leader Yashwant Sinha proposed mandatory implementation of CSR spending. The committee argued that companies which have a net worth of Rs 500 crore or more, or turnover of Rs 1,000 crore should set aside 2% of their average net profits for the last three financial years for CSR. Sinha told FE that the proposal had the support of the ministry of corporate affairs as well. “Every company must spend 2% of their profits on CSR. We are trying to employ social responsibility for the corporate sector. If voluntary action has not worked, then it has to become mandatory,” he said.
Cabinet to review mission plan for electric and hybrid vehicles
The government is expected to announce a national mission plan for electric and hybrid vehicles during the budget session of Parliament as it seeks to promote their use and reduce the dependence on fossil fuels.
The department of heavy in- dustries has sent the proposal to cabinet after obtaining ap- proval from all ministries con- cerned, said Ambuj Sharma, joint secretary, department of heavy industries (DHI). “We expect to get the clearance in this session.“
Under the proposal, the gov- ernment will set up a minister- level national council for elec- tric vehicles headed by heavy industries minister Praful Pa- tel. There will be a secretary level board to ensure unifor- mity of regulations across all states.
India currently lacks an in- frastructure that can support electric vehicles, given the na- tion's power shortage and the inability to provide assured supplies.
The policy is aimed at re- moving hurdles such as the need to obtain the consent of all concerned ministries for various measures, said a DHI official on condition of ano- nymity. Setting up a charging station, for instance, requires the approval of the roads and power ministries among oth- ers, he said.
“The idea is to have a strong political will to implement a uniform tax structure and in- frastructure plans across the country,“ the official said. “We want to see at least eight lakh EVs (electric vehicles) on Indi- an roads by 2015. We will in- troduce it as a pilot project in some of the major cities.“
DHI had circulated a draft notice last year among minis- tries such as power, finance, road transport, new and re- newable energy and urban de- velopment.
Tax incentives may be used to promote the vehicles, Shar- ma said. “There are plans to set up R&D (research and de- velopment) centres and charg- ing points,“ he said.
In November, the ministry of new and renewable energy of- fered incentives to electric ve- hicle makers in the current and the next fiscal years to boost sales of the vehicles.
Delhi provides the highest incentive with a rebate on val- ue added tax amounting to a 29.5% reduction in price.
Unless prices can be brought on par with conventional vehi- cles, there isn't going to be any significant impact on sales, said Jatin Chawla, auto analyst with Mumbai-based brokerage firm India Infoline Ltd.
The ex-factory price of elec- tric two-wheelers ranges from `26,000 to `43,000, while elec- tric cars made by Mahindra Reva Electric Vehicles Pvt. Ltd, India's only maker of such ve- hicles, start at `3.5 lakh.
Around 85,000 electric vehi- cles were sold in the country in 2009-10, according to lobby group the Society of Manufac- turers of Electric Vehicles.
Sharma said overseas manu- facturers want to enter the In- dian market once a basic infra- structure is created here.
The department of heavy in- dustries has sent the proposal to cabinet after obtaining ap- proval from all ministries con- cerned, said Ambuj Sharma, joint secretary, department of heavy industries (DHI). “We expect to get the clearance in this session.“
Under the proposal, the gov- ernment will set up a minister- level national council for elec- tric vehicles headed by heavy industries minister Praful Pa- tel. There will be a secretary level board to ensure unifor- mity of regulations across all states.
India currently lacks an in- frastructure that can support electric vehicles, given the na- tion's power shortage and the inability to provide assured supplies.
The policy is aimed at re- moving hurdles such as the need to obtain the consent of all concerned ministries for various measures, said a DHI official on condition of ano- nymity. Setting up a charging station, for instance, requires the approval of the roads and power ministries among oth- ers, he said.
“The idea is to have a strong political will to implement a uniform tax structure and in- frastructure plans across the country,“ the official said. “We want to see at least eight lakh EVs (electric vehicles) on Indi- an roads by 2015. We will in- troduce it as a pilot project in some of the major cities.“
DHI had circulated a draft notice last year among minis- tries such as power, finance, road transport, new and re- newable energy and urban de- velopment.
Tax incentives may be used to promote the vehicles, Shar- ma said. “There are plans to set up R&D (research and de- velopment) centres and charg- ing points,“ he said.
In November, the ministry of new and renewable energy of- fered incentives to electric ve- hicle makers in the current and the next fiscal years to boost sales of the vehicles.
Delhi provides the highest incentive with a rebate on val- ue added tax amounting to a 29.5% reduction in price.
Unless prices can be brought on par with conventional vehi- cles, there isn't going to be any significant impact on sales, said Jatin Chawla, auto analyst with Mumbai-based brokerage firm India Infoline Ltd.
The ex-factory price of elec- tric two-wheelers ranges from `26,000 to `43,000, while elec- tric cars made by Mahindra Reva Electric Vehicles Pvt. Ltd, India's only maker of such ve- hicles, start at `3.5 lakh.
Around 85,000 electric vehi- cles were sold in the country in 2009-10, according to lobby group the Society of Manufac- turers of Electric Vehicles.
Sharma said overseas manu- facturers want to enter the In- dian market once a basic infra- structure is created here.
Stallio output plunges as Mahindra replaces parts
Mahindra & Mahindra (M&M) chose not to make public a recall of its solo motorcycle model, Stallio. The company has been replacing clutch and gear levers in the 110-cc bike since it went on sale in October last year. The Rs 49,900 Stallio marked the conglomerate’s entry into the motorcycle market.
Mahindra Two Wheelers, the company's two-wheeler division, has sold 5,135 Stallio motorcycles between its launch and January, according to Siam (Society of Indian Automobile Manufacturers) data. It, however, remains unclear how many of the sold motorcycles were affected by the faulty parts.
Mahindra is a new entrant to the motorcycle business and is thus taking time to build up a smoother supply chain management, according to industry experts.
The faulty parts have been replaced in most of the Stallios while the new ones are free of the problem, five dealers confirmed. Production of the motorcycle, however, has been decelerating since October owing to scarcity of these parts and will continue for the next four months. Stallio’s production stood at 3,350 units in October but fell to 421 in January, according to Siam.
“When we launched the Stallio, the response was very positive and we had significant demand. However, today we are faced with certain supply chain related constraints of some critical components. This is a short-term phenomenon and will be sorted out latest by June 2011. Once this situation is resolved, one will see a lot more Stallios on the roads,” Mahindra Two Wheelers said in an email response.
As a result, Mahindra & Mahindra may have delayed the launch of the 300 cc Mojo, priced at Rs 175,000, which was unveiled in September and was to start selling by February.
Mahindra Two Wheelers also sells four scooter models — Rodeo, Duro, Flyte and Kine. Sales of the automotive company more than doubled to 138,461 units between April and January this year.
“I don’t think this (the recall) would affect Mahindra & Mahindra’s brand image in the two-wheeler space. It is selling 15,000 scooters monthly, which is very good for a new player,” auto analyst at Prabhudas Liladher Surjit Arora said.
“We are in constant communication with our valued customers and are aware that certain parts of the motor cycle require some fine-tuning and adjustment. As a responsible customer-centric automotive company, we are proactively addressing this to ensure customer satisfaction,” the response added.
Mahindra & Mahindra entered the scooter market with a majority stake in Kinetic Motor in 2008.
Mahindra Two Wheelers, the company's two-wheeler division, has sold 5,135 Stallio motorcycles between its launch and January, according to Siam (Society of Indian Automobile Manufacturers) data. It, however, remains unclear how many of the sold motorcycles were affected by the faulty parts.
Mahindra is a new entrant to the motorcycle business and is thus taking time to build up a smoother supply chain management, according to industry experts.
The faulty parts have been replaced in most of the Stallios while the new ones are free of the problem, five dealers confirmed. Production of the motorcycle, however, has been decelerating since October owing to scarcity of these parts and will continue for the next four months. Stallio’s production stood at 3,350 units in October but fell to 421 in January, according to Siam.
“When we launched the Stallio, the response was very positive and we had significant demand. However, today we are faced with certain supply chain related constraints of some critical components. This is a short-term phenomenon and will be sorted out latest by June 2011. Once this situation is resolved, one will see a lot more Stallios on the roads,” Mahindra Two Wheelers said in an email response.
As a result, Mahindra & Mahindra may have delayed the launch of the 300 cc Mojo, priced at Rs 175,000, which was unveiled in September and was to start selling by February.
Mahindra Two Wheelers also sells four scooter models — Rodeo, Duro, Flyte and Kine. Sales of the automotive company more than doubled to 138,461 units between April and January this year.
“I don’t think this (the recall) would affect Mahindra & Mahindra’s brand image in the two-wheeler space. It is selling 15,000 scooters monthly, which is very good for a new player,” auto analyst at Prabhudas Liladher Surjit Arora said.
“We are in constant communication with our valued customers and are aware that certain parts of the motor cycle require some fine-tuning and adjustment. As a responsible customer-centric automotive company, we are proactively addressing this to ensure customer satisfaction,” the response added.
Mahindra & Mahindra entered the scooter market with a majority stake in Kinetic Motor in 2008.
Honda plans rival to Hero Honda in 100cc segment
Honda Motor Co. Ltd plans to enter the biggest segment of the Indian motorcycle market by introducing a 100cc model as it severs ties with the nation’s largest two-wheeler maker.
“Huge demand is expected in future for basic means of transportation,” Shinji Aoyama, chief executive officer of Honda Motorcycle and Scooter India Pvt. Ltd, said in an interview on Thursday at the unit’s factory near New Delhi. He declined to provide a timeframe for the model’s launch.
The world’s biggest motorcycle maker will also open a new India plant this year and may boost capacity further as the sale of its 26% stake in Hero Honda Motors Ltd lets the firm widen its product range, Aoyama said.
Tokyo-based Honda will have to overcome Hero Honda’s brand awareness and sales reach to win customers, said Mayur Milak, an Alchemy Share and Stock Brokers Ltd analyst.
“It won’t be a cakewalk,” said Mumbai-based Milak, who rates New Delhi-based Hero Honda buy. “Being in the 100cc category is all about the sales network and Hero Honda is unmatchable at this point.”
Hero Honda had 4,500 outlets in India, according to its report for the year ended March 31. Honda has 800 India outlets and plans to add 200 more annually, Aoyama said.
Hero Honda fell 2.2%, the most in more than a week, to Rs.1,464.9 at close of trading on Friday in Mumbai.
“Huge demand is expected in future for basic means of transportation,” Shinji Aoyama, chief executive officer of Honda Motorcycle and Scooter India Pvt. Ltd, said in an interview on Thursday at the unit’s factory near New Delhi. He declined to provide a timeframe for the model’s launch.
The world’s biggest motorcycle maker will also open a new India plant this year and may boost capacity further as the sale of its 26% stake in Hero Honda Motors Ltd lets the firm widen its product range, Aoyama said.
Tokyo-based Honda will have to overcome Hero Honda’s brand awareness and sales reach to win customers, said Mayur Milak, an Alchemy Share and Stock Brokers Ltd analyst.
“It won’t be a cakewalk,” said Mumbai-based Milak, who rates New Delhi-based Hero Honda buy. “Being in the 100cc category is all about the sales network and Hero Honda is unmatchable at this point.”
Hero Honda had 4,500 outlets in India, according to its report for the year ended March 31. Honda has 800 India outlets and plans to add 200 more annually, Aoyama said.
Hero Honda fell 2.2%, the most in more than a week, to Rs.1,464.9 at close of trading on Friday in Mumbai.
Balance on wheels, TVS Wego
With around 13 years experience in advertising, Raghu Bhat and Manish Bhatt, founder-directors of Scarecrow Communications Ltd, have worked on brands such as Wonderbra, Cadbury and Vaseline.
Campaign
The new campaign for TVS Wego by BBH India emphasizes the scooter’s body-balance feature. The advertisement features two couples riding TVS Wego scooters. The girls riding pillion compete with each other, showing off their balancing skills.
What did you think of the ad?
Imagery issues: The use of stunts isn’t new so the onus is on execution.
Imagery issues: The use of stunts isn’t new so the onus is on execution.
This category has seen somewhat similar, though not identical, imagery in the past. Bajaj had guys playing chess on the back seat, a few years ago. Pulsar showed extreme stunts while advertising bikes. The use of stunts as a creative device to portray two-wheeler benefits is not, therefore, very new. This places a huge onus on the execution to create an impact.
There is a lot of layering in the storyline—the contest between two women and the earthy music track dripping with lust, all of which are attention grabbers. While the man is shown riding the scooter, the woman is shown as the major beneficiary of the body-balance feature. Again, this is a smart way to position it as a unisex scooter as well as a vehicle for couples.
Does this ad work? Especially in such a crowded category?
This falls into the genre of advertising called vivid demonstration. The convincing power of a demonstration depends on how closely it resembles reality (the most effective demonstrations are those you see in front of your eyes). One of the ways to achieve the “illusion of reality” is to strip away all the elements that make it look like an “ad”. Like the desi soundtrack, for instance. The flip side is, doing this might make the ad appear “bland”. This is where an important question needs to be asked. What response does the ad seek to achieve? Enjoyability? Or believability? The other point relates to the risks of showing extremes in the demonstration. The use of hyperbole, or stunts in this case, may not evoke a high level of consumer empathy. It could also compel the consumer to ask fundamental questions such as, does Wego really offer great body balance? Or are these guys professional stunt men and women?
What must one keep in mind while working on such a category?
Scooters are constantly reinventing themselves in the Indian urbanscape. Scooter brands need to be innovative and imbue themselves with fresh meaning to be continually relevant. For a new scooter brand like Wego, it’s important to be seen as a viable second vehicle in a household that already has a car or a bike.In other words, it’s not only the primary vehicle for a woman but also a secondary vehicle for the man who can ride it for short distances. The brand needs to build bridges into the hearts of both men and women. Therefore, the communication needs to go beyond mere functional executions. The seeds of romance that are clearly visible in this ad need to be nurtured and given full expression.
Campaign
The new campaign for TVS Wego by BBH India emphasizes the scooter’s body-balance feature. The advertisement features two couples riding TVS Wego scooters. The girls riding pillion compete with each other, showing off their balancing skills.
What did you think of the ad?
Imagery issues: The use of stunts isn’t new so the onus is on execution.
Imagery issues: The use of stunts isn’t new so the onus is on execution.
This category has seen somewhat similar, though not identical, imagery in the past. Bajaj had guys playing chess on the back seat, a few years ago. Pulsar showed extreme stunts while advertising bikes. The use of stunts as a creative device to portray two-wheeler benefits is not, therefore, very new. This places a huge onus on the execution to create an impact.
There is a lot of layering in the storyline—the contest between two women and the earthy music track dripping with lust, all of which are attention grabbers. While the man is shown riding the scooter, the woman is shown as the major beneficiary of the body-balance feature. Again, this is a smart way to position it as a unisex scooter as well as a vehicle for couples.
Does this ad work? Especially in such a crowded category?
This falls into the genre of advertising called vivid demonstration. The convincing power of a demonstration depends on how closely it resembles reality (the most effective demonstrations are those you see in front of your eyes). One of the ways to achieve the “illusion of reality” is to strip away all the elements that make it look like an “ad”. Like the desi soundtrack, for instance. The flip side is, doing this might make the ad appear “bland”. This is where an important question needs to be asked. What response does the ad seek to achieve? Enjoyability? Or believability? The other point relates to the risks of showing extremes in the demonstration. The use of hyperbole, or stunts in this case, may not evoke a high level of consumer empathy. It could also compel the consumer to ask fundamental questions such as, does Wego really offer great body balance? Or are these guys professional stunt men and women?
What must one keep in mind while working on such a category?
Scooters are constantly reinventing themselves in the Indian urbanscape. Scooter brands need to be innovative and imbue themselves with fresh meaning to be continually relevant. For a new scooter brand like Wego, it’s important to be seen as a viable second vehicle in a household that already has a car or a bike.In other words, it’s not only the primary vehicle for a woman but also a secondary vehicle for the man who can ride it for short distances. The brand needs to build bridges into the hearts of both men and women. Therefore, the communication needs to go beyond mere functional executions. The seeds of romance that are clearly visible in this ad need to be nurtured and given full expression.
Deora bats for mandatory CSR, rotation of auditors
Meets industry leaders for consensus on the companies bill
Corporate affairs minister Murli Deora will pilot the new companies bill in the budget session starting next week. The ministry has proposed mandatory 2 per cent corporate social responsibility (CSR), mandatory auditors rotation and other corporate governance norms. Deora met top industry people to hammer out consensus on other pending issues relating to companies bill on Thursday.
Speaking on the occasion, Deora said ministry is in no mood to relent over the mandatory 2 per cent CSR issue.
But there were some suggestions made by the industry sector in this regard, which the ministry would try to incorporate in the new draft.“I certainly feel that there should be a mandatory CSR across the sector and while being the petroleum I had also worked in this regard and had made 2 per cent CSR a mandatory in the sector,” Deora said.
Majority of the industry has endorsed the ministry’s opinion on CSR. “Some industry people have their apprehensions in this regard, which the ministry will sort out soon,” Deora said.
“We are ready with the bill only last bit of tweaking to incorporate some new industry suggestions on some of the important issues remain. We are trying to get everyone on board for making two per cent on CSR mandatory,” said union minister of state for corporate affairs, RPN Singh after an interactive session with corporate sector.
Some of the major issues, which remained contentious during the discussion, the minister said, included: mandating 2 per cent corporate social responsibility (CSR), rotation of auditors, international financial reporting standards (IFRS), voting rights for independent directors and direct tax.
“There are around ten issues, which remain unsettled, we have heard the industry suggestions and now we have 2-3 days to re-look in all the issues before the final draft is out for the cabinet approval,” Singh added.
However reacting strongly on mandatory CSR, chairman corporate affairs committee of Ficci, chairman Xpro India Sidharth Birla, said that the CSR practice should be pushed but making it a mandatory norm might not work the way it looks.
“Companies may find ways to shy away with such mandatory norms, which would at the end make the whole purpose futile,” Birla Said.
While talking to Financial Chronicle, group general council and company secretary at Bharti Vijaya Sampath said the companies should be allowed to voluntarily continue the practice of CSR as undertaken by the industrial sector.
“For transparency in the efforts the companies can come out with their annual spending data on various social projects at the end of each financial year,” Sampath added.
The Parliamentary standing committee on finance, which examined the companies bill, 2009, had recommended a 2 per cent mandatory corporate social responsiblity on profits during the preceding three years for CSR spending or disclose to the shareholders why the same has not been met.
Corporate affairs minister Murli Deora will pilot the new companies bill in the budget session starting next week. The ministry has proposed mandatory 2 per cent corporate social responsibility (CSR), mandatory auditors rotation and other corporate governance norms. Deora met top industry people to hammer out consensus on other pending issues relating to companies bill on Thursday.
Speaking on the occasion, Deora said ministry is in no mood to relent over the mandatory 2 per cent CSR issue.
But there were some suggestions made by the industry sector in this regard, which the ministry would try to incorporate in the new draft.“I certainly feel that there should be a mandatory CSR across the sector and while being the petroleum I had also worked in this regard and had made 2 per cent CSR a mandatory in the sector,” Deora said.
Majority of the industry has endorsed the ministry’s opinion on CSR. “Some industry people have their apprehensions in this regard, which the ministry will sort out soon,” Deora said.
“We are ready with the bill only last bit of tweaking to incorporate some new industry suggestions on some of the important issues remain. We are trying to get everyone on board for making two per cent on CSR mandatory,” said union minister of state for corporate affairs, RPN Singh after an interactive session with corporate sector.
Some of the major issues, which remained contentious during the discussion, the minister said, included: mandating 2 per cent corporate social responsibility (CSR), rotation of auditors, international financial reporting standards (IFRS), voting rights for independent directors and direct tax.
“There are around ten issues, which remain unsettled, we have heard the industry suggestions and now we have 2-3 days to re-look in all the issues before the final draft is out for the cabinet approval,” Singh added.
However reacting strongly on mandatory CSR, chairman corporate affairs committee of Ficci, chairman Xpro India Sidharth Birla, said that the CSR practice should be pushed but making it a mandatory norm might not work the way it looks.
“Companies may find ways to shy away with such mandatory norms, which would at the end make the whole purpose futile,” Birla Said.
While talking to Financial Chronicle, group general council and company secretary at Bharti Vijaya Sampath said the companies should be allowed to voluntarily continue the practice of CSR as undertaken by the industrial sector.
“For transparency in the efforts the companies can come out with their annual spending data on various social projects at the end of each financial year,” Sampath added.
The Parliamentary standing committee on finance, which examined the companies bill, 2009, had recommended a 2 per cent mandatory corporate social responsiblity on profits during the preceding three years for CSR spending or disclose to the shareholders why the same has not been met.
Victory's cruiser to burn the tire on Indian roads
Victory Motorcycles, the US-based bike manufacturing company, will enter the premium market with its cruisers next year.
The company manufactures luxury touring bikes, classic-styled motorcycles and powerful inter-state cruisers, among several others.
Victory has been drawn towards India following the vibrant success of its competitor, Harley Davidson, which has sold an average of more than two units from its line-up of 12 models every three days this calendar year.
Market sources said Victory is close to completing its market analysis in India and will introduce models that would best suit the country. The company is keen to participate in next year’s biennial Auto Expo held in New Delhi to showcase its products.
A formal launch by the company will be announced by the second half of next year. To test market response, the company will start importing the bikes initially before setting up an assembly plant to cut costs.
Harley Davidson has managed to bring down its entry point price to Rs 5.5 lakh from more than Rs 7.5 lakh after it built an assembly plant in Bawal, Haryana — the third plant in the world after the US and Brazil. It has also started accepting bookings for the SuperLow and Iron 883, produced from the plant in Haryana. Victory’s motorcycle range in the US are priced between $12,499 (Rs 5.68 lakh) and $27,994 (Rs 12.73 lakh).
Victory, whose parent company is Polaris Industries, is also aggressively looking to recruit people for its India team, said an industry source. “The company is very aggressive at bringing its products to India, as the market is looking at a sustained long-term growth in life style vehicles like cruisers.”
Polaris has interests in designing, manufacturing and distributing a variety of products like the all-terrain vehicles, snowmobiles, motorcycles, parts and accessories. The company has operations in France, Australia, New Zealand, Britain, Scandinavia, Germany and Spain.
To discourage imports and encourage local manufacturing activity, the Indian government has kept the import duties high, which effectively doubles the price of a model when it lands in showrooms.
A local assembly operation will bring down costs by a minimum of 30 per cent and can go up on the basis of the level of localisation or components which are sourced locally. A completely knocked down operation means parts will be brought to India and assembled here.
Therefore, global two-wheeler giants like Kawasaki, KTM Power Sports AG, Honda Motor Company, Harley Davidson and Suzuki Motor Corporation, to name a few, are in the process or have already set up assembly units in India.
The performance and luxury biking segment, expected to touch the 2,000 units per year mark, has recently seen added competition with Italy’s Ducati and Aprilia and Taiwan’s Hyosung opening shop here. More companies such as Germany’s BMW and UK’s Triumph are waiting in the wings to launch their products.
The company manufactures luxury touring bikes, classic-styled motorcycles and powerful inter-state cruisers, among several others.
Victory has been drawn towards India following the vibrant success of its competitor, Harley Davidson, which has sold an average of more than two units from its line-up of 12 models every three days this calendar year.
Market sources said Victory is close to completing its market analysis in India and will introduce models that would best suit the country. The company is keen to participate in next year’s biennial Auto Expo held in New Delhi to showcase its products.
A formal launch by the company will be announced by the second half of next year. To test market response, the company will start importing the bikes initially before setting up an assembly plant to cut costs.
Harley Davidson has managed to bring down its entry point price to Rs 5.5 lakh from more than Rs 7.5 lakh after it built an assembly plant in Bawal, Haryana — the third plant in the world after the US and Brazil. It has also started accepting bookings for the SuperLow and Iron 883, produced from the plant in Haryana. Victory’s motorcycle range in the US are priced between $12,499 (Rs 5.68 lakh) and $27,994 (Rs 12.73 lakh).
Victory, whose parent company is Polaris Industries, is also aggressively looking to recruit people for its India team, said an industry source. “The company is very aggressive at bringing its products to India, as the market is looking at a sustained long-term growth in life style vehicles like cruisers.”
Polaris has interests in designing, manufacturing and distributing a variety of products like the all-terrain vehicles, snowmobiles, motorcycles, parts and accessories. The company has operations in France, Australia, New Zealand, Britain, Scandinavia, Germany and Spain.
To discourage imports and encourage local manufacturing activity, the Indian government has kept the import duties high, which effectively doubles the price of a model when it lands in showrooms.
A local assembly operation will bring down costs by a minimum of 30 per cent and can go up on the basis of the level of localisation or components which are sourced locally. A completely knocked down operation means parts will be brought to India and assembled here.
Therefore, global two-wheeler giants like Kawasaki, KTM Power Sports AG, Honda Motor Company, Harley Davidson and Suzuki Motor Corporation, to name a few, are in the process or have already set up assembly units in India.
The performance and luxury biking segment, expected to touch the 2,000 units per year mark, has recently seen added competition with Italy’s Ducati and Aprilia and Taiwan’s Hyosung opening shop here. More companies such as Germany’s BMW and UK’s Triumph are waiting in the wings to launch their products.
Maruti, Hero Honda rein in runaway costs
High commodity costs are driving car and bike companies up the wall as they scramble to increase efficiencies while weighing raising prices.Maruti and Hero Honda,leaders of the car and bike segments respectively,said input costs were hitting margins,prompting them to go for urgent counter measures.Both the companies that face pressure despite recent price hikes witnessed a near 20% drop in year-on-year net profit in the last quarter.The pressure is very serious.All commodities are going up,including steel,copper,rubber and plastic products, said S Maitra,managing executive officer (supply chain),at Maruti Suzuki.Maitra said that Maruti had gone on an overdrive with a series of measures aimed at mitigating some of the effects of the costly inputs.
The company has been pursuing programmes with its 250-odd suppliers and inside its own plants.One key programme is wuda,a Japanese term for wastage,which is used to ensure lean manufacturing.The idea is to make ourselves lean,so that wastages come down, Maitra said.
Maruti is also pursuing the gemba programme as part of which it handholds suppliers to make them more efficient.Every two months,we take a bunch of suppliers,around seven-eight and teach them about lean manufacturing processes.Then we pick up four to five efficiency projects within their factories to improve overall output.
The company has also been working on yield improvement.We look at reducing wastages so that less amount of raw material is required for making a component. It had a programme called 1 component 1 gram wherein everyone,including suppliers,was expected to reduce the weight of the component by at least one gram.
Hero Honda has also been facing similar input pressures.Ravi Sud,CFO,said that the issue was acute,prompting the company to even consider passing on the higher costs by way of another price hike.Steel,rubber,all are going high.Steel prices are up by 20-25 % since January and the issue is serious as it is leading to compression of margins.
Sud said efficiency enhancement programmes were constantly on to ease the pressure.However,they are not enough,leaving us with only a couple of options.Either we continue to absorb the increases and take a knock on margins.Or,we pass on the increase in the market,fully or partially.
The company had last raised prices in December and Sud said a similar measure cannot be ruled out.We are reviewing the situation and a call has to be taken soon.
The company has been pursuing programmes with its 250-odd suppliers and inside its own plants.One key programme is wuda,a Japanese term for wastage,which is used to ensure lean manufacturing.The idea is to make ourselves lean,so that wastages come down, Maitra said.
Maruti is also pursuing the gemba programme as part of which it handholds suppliers to make them more efficient.Every two months,we take a bunch of suppliers,around seven-eight and teach them about lean manufacturing processes.Then we pick up four to five efficiency projects within their factories to improve overall output.
The company has also been working on yield improvement.We look at reducing wastages so that less amount of raw material is required for making a component. It had a programme called 1 component 1 gram wherein everyone,including suppliers,was expected to reduce the weight of the component by at least one gram.
Hero Honda has also been facing similar input pressures.Ravi Sud,CFO,said that the issue was acute,prompting the company to even consider passing on the higher costs by way of another price hike.Steel,rubber,all are going high.Steel prices are up by 20-25 % since January and the issue is serious as it is leading to compression of margins.
Sud said efficiency enhancement programmes were constantly on to ease the pressure.However,they are not enough,leaving us with only a couple of options.Either we continue to absorb the increases and take a knock on margins.Or,we pass on the increase in the market,fully or partially.
The company had last raised prices in December and Sud said a similar measure cannot be ruled out.We are reviewing the situation and a call has to be taken soon.
Electric vehicle sales charge up on Mnistry's largesse
Electric vehicle sales have seen a sharp spurt in the last few months, because of a drastic drop in model prices on the back of a generous Government subsidy.
Mahindra Reva, the only electric manufacturer in the country, said sales of its ‘REVAi' have jumped three-fold in the last two months. Meanwhile, another industry official said that sales of electric scooters have also gone up 30 per cent.
The strong growth in the nascent EV industry has been spurred by the massive sop announced by the Ministry of New and Renewable Energy in November last year. At a total project cost of Rs 95 crore, it has provided for 20 per cent subsidy on the factory price of EVs up to a maximum of Rs 1 lakh for cars and Rs 5,000 for electric two-wheelers. Companies are, however, required to have 30 per cent local content.
Mr R. Chandramouli, COO, Mahindra Reva Electric Vehicles, told Business Line that the subsidy has led to a drop in prices by Rs 75,000 of the REVAi to Rs 3.5 lakh.
“We have seen a three-fold jump in our 50 units a month sales after the subsidy was announced. Sales have increased across all regions where we have an outlet such as Delhi, Bangalore, Pune, Jaipur, Hyderabad and Kerala. We were earlier selling 600 units a year, but now expect to sell 3,000 units in 2011-12,” he said, adding that the company has asked the Government to increase the annual subsidy cap from 700 units to 3,000 units.
Mahindra Reva is also rapidly expanding its sales network. Before it bought out the Reva business, the company had only two points of sale but by March aims to have 30 showrooms and a total of 100 by 2011-end, Mr Chandramouli said.
Hero Electric
Hero Electric, the largest electric two-wheeler maker, has also seen a sharp sales spike in January and most of this month. “We have seen a 30 per cent increase in sales year-on-year. We have a 38 per cent share of the electric two-wheeler market and hope to maintain this pace through the year,” said Mr Sohinder Gill, CEO, Hero Electric and Director (Corporate Affairs) of the Society of Manufacturers of Electric Vehicles.
In 2010, 85,000 electric two-wheelers were sold, of which 65,000 units are accounted for by the organised players.
Mahindra Reva, the only electric manufacturer in the country, said sales of its ‘REVAi' have jumped three-fold in the last two months. Meanwhile, another industry official said that sales of electric scooters have also gone up 30 per cent.
The strong growth in the nascent EV industry has been spurred by the massive sop announced by the Ministry of New and Renewable Energy in November last year. At a total project cost of Rs 95 crore, it has provided for 20 per cent subsidy on the factory price of EVs up to a maximum of Rs 1 lakh for cars and Rs 5,000 for electric two-wheelers. Companies are, however, required to have 30 per cent local content.
Mr R. Chandramouli, COO, Mahindra Reva Electric Vehicles, told Business Line that the subsidy has led to a drop in prices by Rs 75,000 of the REVAi to Rs 3.5 lakh.
“We have seen a three-fold jump in our 50 units a month sales after the subsidy was announced. Sales have increased across all regions where we have an outlet such as Delhi, Bangalore, Pune, Jaipur, Hyderabad and Kerala. We were earlier selling 600 units a year, but now expect to sell 3,000 units in 2011-12,” he said, adding that the company has asked the Government to increase the annual subsidy cap from 700 units to 3,000 units.
Mahindra Reva is also rapidly expanding its sales network. Before it bought out the Reva business, the company had only two points of sale but by March aims to have 30 showrooms and a total of 100 by 2011-end, Mr Chandramouli said.
Hero Electric
Hero Electric, the largest electric two-wheeler maker, has also seen a sharp sales spike in January and most of this month. “We have seen a 30 per cent increase in sales year-on-year. We have a 38 per cent share of the electric two-wheeler market and hope to maintain this pace through the year,” said Mr Sohinder Gill, CEO, Hero Electric and Director (Corporate Affairs) of the Society of Manufacturers of Electric Vehicles.
In 2010, 85,000 electric two-wheelers were sold, of which 65,000 units are accounted for by the organised players.
High on the SuperLow
The SuperLow is assembled in India, is relatively affordable and is as sleek as any Harley.
Harley-Davidson has begun assembling and selling its sleek SuperLow in India. A relatively affordable price tag makes this an entry-level Harley, but does that make it any less of a Harley?
As the name suggests, the SuperLow sits low slung with macho, stretched proportions nicely balancing on neat alloy rims and low profile radials. There are acres of chrome, with several alloy parts including splayed-out telescopic forks machined to a smart dull shine. A short front mudguard adds style, as does a smart, circular, 55/60 watt headlight capped by a nifty shield. The speedometer console is simple, a bold, single body unit that goes well with cruiser character. The handlebar, which holds beautifully finished mirrors, curves back to its rider. The SuperLow has superb palm grips, a pair of solid-feeling, smoothly machined alloy levers and switches that are in typical Harley format. An elongated, teardrop-shaped, 17-litre fuel tank — with a staid and out-of-place-looking tank cap — leads into a smartly contoured rider saddle, behind which looms the substantial rear mudguard, onto which are mounted the bike's tail-light and number plate. Harley needs to address the fact that the SuperLow sells without a pillion seat or footrests, and you have to shell out Rs. 10,647 to add these essential bits to your bike.
The massive exposed V-twin engine is the Superlow's major draw, sitting just 100mm off the floor, with glinting chrome shrouds and handsome twin silencers snaking out from each cylinder. Even its Harley trademark toothed belt drive system looks a treat. The SuperLow feels robust enough to last a generation or two.
The SuperLow's four-stroke, 883cc engine looks purposeful, sitting beneath in painstakingly finished, V-twin format. It is air cooled, with pushrod-actuated valves, and cruiser-suited long-stroke cylinder dimensions of 76.2mm x 96.8mm. You get electronic, sequential port fuel injection (ESPFI) and a compression ratio of 8.9:1.
The clutch is superbly-weighted, actuating smoothly with a positive feel. The five-speed gearbox shifts in a one-down-four-up pattern, and feels true-blue Harley. While the gears shift with a mechanical feel, quick shifts are not very encouraging but precise when properly timed without false neutrals to play spoilsport.
At home in India
The SuperLow has all the ingredients to excel in India, its short, nicely-spaced ratios allowing the approximately 50bhp motorcycle to easily gobble through its wide, torque-loaded (7.1kgm at 3750rpm) and hiccup-free power band, and enabling the heavy bike to feel quite at home around town. You sometimes search for and miss a sixth cog when cruising at close to 125kph in top gear, but the SuperLow still carries adequate punch in reserve at this speed. Top speed is in the region of 150kph, although you never need to pull the SuperLow this hard. The big Harley is best enjoyed lazily rumbling along at sedate rpm. Short-shifting the gears feels natural on this motorcycle, and you don't have to downshift to pass traffic even when belting along at speeds north of 100kph.
Throaty exhaust
Its pair of flowing silencers bark out a throaty, deep exhaust rumble and you could even ramp things up by fitting on a set of Screamin' Eagle exhaust pipes as seen on the bike here, available from a starting price of approximately Rs .22,000, to have your motorcycle hammering out a more vociferous note.
The SuperLow is stable, quick and light to manoeuvre, thanks to Harley having got steering and suspension geometry perfectly sorted, plus having centered so much of the machine's 251kg close to the ground. You get tremendous grip from the tubeless, low-profile radial tyres, helping the bike corner as though clamped on rails. The SuperLow remains a well-behaved motorcycle, so long as you remember this is a cruiser that does carry some handling limitations.
Ride quality is firm, only bordering on the harsh when riding on really poor road surfaces. Overall, the bike delivers a reassuring feel at high speed on good roads. You get used to the low ground clearance, and you may ease the problem by climbing speedbreakers at a slight angle, instead of charging straight into them. The SuperLow is equipped with powerful brakes — a dual-piston single disc brake up front and single piston disc brake at the rear.
Don't expect excellent numbers on the fuel economy front. The heavy 883cc motorcycle returns between 15kpl to 20kpl at best.
At Rs. 5,50,000, the Superlow is affordable since Harley has started assembling the Superlow at its spanking new assembly plant at Bawan, Haryana. You can even choose to pay via monthly instalments as low as Rs. 10,165 if you consider a 60-month loan, making the SuperLow a whole lot of bike for your money.
Harley-Davidson has begun assembling and selling its sleek SuperLow in India. A relatively affordable price tag makes this an entry-level Harley, but does that make it any less of a Harley?
As the name suggests, the SuperLow sits low slung with macho, stretched proportions nicely balancing on neat alloy rims and low profile radials. There are acres of chrome, with several alloy parts including splayed-out telescopic forks machined to a smart dull shine. A short front mudguard adds style, as does a smart, circular, 55/60 watt headlight capped by a nifty shield. The speedometer console is simple, a bold, single body unit that goes well with cruiser character. The handlebar, which holds beautifully finished mirrors, curves back to its rider. The SuperLow has superb palm grips, a pair of solid-feeling, smoothly machined alloy levers and switches that are in typical Harley format. An elongated, teardrop-shaped, 17-litre fuel tank — with a staid and out-of-place-looking tank cap — leads into a smartly contoured rider saddle, behind which looms the substantial rear mudguard, onto which are mounted the bike's tail-light and number plate. Harley needs to address the fact that the SuperLow sells without a pillion seat or footrests, and you have to shell out Rs. 10,647 to add these essential bits to your bike.
The massive exposed V-twin engine is the Superlow's major draw, sitting just 100mm off the floor, with glinting chrome shrouds and handsome twin silencers snaking out from each cylinder. Even its Harley trademark toothed belt drive system looks a treat. The SuperLow feels robust enough to last a generation or two.
The SuperLow's four-stroke, 883cc engine looks purposeful, sitting beneath in painstakingly finished, V-twin format. It is air cooled, with pushrod-actuated valves, and cruiser-suited long-stroke cylinder dimensions of 76.2mm x 96.8mm. You get electronic, sequential port fuel injection (ESPFI) and a compression ratio of 8.9:1.
The clutch is superbly-weighted, actuating smoothly with a positive feel. The five-speed gearbox shifts in a one-down-four-up pattern, and feels true-blue Harley. While the gears shift with a mechanical feel, quick shifts are not very encouraging but precise when properly timed without false neutrals to play spoilsport.
At home in India
The SuperLow has all the ingredients to excel in India, its short, nicely-spaced ratios allowing the approximately 50bhp motorcycle to easily gobble through its wide, torque-loaded (7.1kgm at 3750rpm) and hiccup-free power band, and enabling the heavy bike to feel quite at home around town. You sometimes search for and miss a sixth cog when cruising at close to 125kph in top gear, but the SuperLow still carries adequate punch in reserve at this speed. Top speed is in the region of 150kph, although you never need to pull the SuperLow this hard. The big Harley is best enjoyed lazily rumbling along at sedate rpm. Short-shifting the gears feels natural on this motorcycle, and you don't have to downshift to pass traffic even when belting along at speeds north of 100kph.
Throaty exhaust
Its pair of flowing silencers bark out a throaty, deep exhaust rumble and you could even ramp things up by fitting on a set of Screamin' Eagle exhaust pipes as seen on the bike here, available from a starting price of approximately Rs .22,000, to have your motorcycle hammering out a more vociferous note.
The SuperLow is stable, quick and light to manoeuvre, thanks to Harley having got steering and suspension geometry perfectly sorted, plus having centered so much of the machine's 251kg close to the ground. You get tremendous grip from the tubeless, low-profile radial tyres, helping the bike corner as though clamped on rails. The SuperLow remains a well-behaved motorcycle, so long as you remember this is a cruiser that does carry some handling limitations.
Ride quality is firm, only bordering on the harsh when riding on really poor road surfaces. Overall, the bike delivers a reassuring feel at high speed on good roads. You get used to the low ground clearance, and you may ease the problem by climbing speedbreakers at a slight angle, instead of charging straight into them. The SuperLow is equipped with powerful brakes — a dual-piston single disc brake up front and single piston disc brake at the rear.
Don't expect excellent numbers on the fuel economy front. The heavy 883cc motorcycle returns between 15kpl to 20kpl at best.
At Rs. 5,50,000, the Superlow is affordable since Harley has started assembling the Superlow at its spanking new assembly plant at Bawan, Haryana. You can even choose to pay via monthly instalments as low as Rs. 10,165 if you consider a 60-month loan, making the SuperLow a whole lot of bike for your money.
A sleek speedster
Whether Suzuki Motorcycles India will bring the 250 cc GSW250 to India, or not (Suzuki hasn't confirmed it as yet, the rumours were started by bikers), the Indian bikers will soon have one more option to chose from in the 250-300 cc segment.
The segment so far, had only two models: Ninja 250R, sold in India by Bajaj Auto and the recently launched Mahindra Mojo, a 300 cc sportbike will soon see a new entrant in the Honda has already begun taking orders for the CBR 250R and is expected to cost anywhere between `1.5 lakhs to `1.7 lakhs.
The 2011 CBR 250R, unveiled at the Hong Kong Motor Show in November 2010, bears a close resemblance to the heavy duty VFR1200F, and is powered by a 249 cc liquid-cooled single cylinder four-stroke engine offering a top speed of 160 kph.
The CBR250R will be available in two different variants, with the high-end one being offered with Antilock Brake System, a first in this segment.
With Honda already received booking orders of 1,800, experts expect the CBR25R to be a popular choice, because of its pricing which is almost half the Ninja 250R. The Mojo, however, could prove to be a tough contender for the baby Ceeber.
The segment so far, had only two models: Ninja 250R, sold in India by Bajaj Auto and the recently launched Mahindra Mojo, a 300 cc sportbike will soon see a new entrant in the Honda has already begun taking orders for the CBR 250R and is expected to cost anywhere between `1.5 lakhs to `1.7 lakhs.
The 2011 CBR 250R, unveiled at the Hong Kong Motor Show in November 2010, bears a close resemblance to the heavy duty VFR1200F, and is powered by a 249 cc liquid-cooled single cylinder four-stroke engine offering a top speed of 160 kph.
The CBR250R will be available in two different variants, with the high-end one being offered with Antilock Brake System, a first in this segment.
With Honda already received booking orders of 1,800, experts expect the CBR25R to be a popular choice, because of its pricing which is almost half the Ninja 250R. The Mojo, however, could prove to be a tough contender for the baby Ceeber.
Santosh Begins 2011 In style,Sealing National Dirt Racing Title At Favourite Coimbatore Leg
Chennai: CS Santosh has begun the new year with a bang.The Team TVS rider from Bangalore,who is the reigning National Supercross champion,left his rivals literally in the dirt as he began 2011 by lifting the 250cc Open Class title at the Rolon-FMSCI National Dirt Racing Championship in Coimbatore on Sunday.
However,unlike last years Supercross championship,Santosh had stiff competition from his teammate HK Pradeep in the Dirt series with just a few points separating them in the standings going into the final round on Sunday.The previous three rounds of the championship were held in Chandigarh,Kolhapur and Hyderabad in January and both the TVS riders had everything to fight for in the final at the custommade track near CODISSIA Complex in Coimbatore.
With the crown up for grabs,Santosh had a clear game-plan and went full throttle right from the start in both the races,maintaining a healthy lead till the chequered flag,hardly troubled by the challengers or by the newly-laid surface which was very tricky because of loose sand and pebbles.
The whole stage was newly laid.So it had pebbles which were getting stuck between the studs of our tyres.It was very challenging but it was fun and its a great feeling to win at one of my favourite legs, said Santhosh,who has won four of the five races he has taken part in Coimbatore.The city has always been a happy hunting ground for me and the fans here know the sport and their support drives me on, he added.
The National Supercross champ is very excited about the coming year after the successful start.To win the first series I entered this year gives you a lot of confidence, said the 27-year-old.
And this year,Santosh needs all the confidence and support he can get as he is planning to compete full time in the Asian Supercross circuit.Yes,that is the plan basically.I would love to race the entire season.The first race is in March.And I believe I can be a real contender there.And this year I have asked help from FMSCI (National Motorsport Federation) and they have promised me full support.So I am confident about the year ahead, he added.Final Points Standings: Group A (Upto 250cc Open Class): CS Santhosh (132 pts); 2.HK.Pradeep (120); 3.KP Aravind (73).
However,unlike last years Supercross championship,Santosh had stiff competition from his teammate HK Pradeep in the Dirt series with just a few points separating them in the standings going into the final round on Sunday.The previous three rounds of the championship were held in Chandigarh,Kolhapur and Hyderabad in January and both the TVS riders had everything to fight for in the final at the custommade track near CODISSIA Complex in Coimbatore.
With the crown up for grabs,Santosh had a clear game-plan and went full throttle right from the start in both the races,maintaining a healthy lead till the chequered flag,hardly troubled by the challengers or by the newly-laid surface which was very tricky because of loose sand and pebbles.
The whole stage was newly laid.So it had pebbles which were getting stuck between the studs of our tyres.It was very challenging but it was fun and its a great feeling to win at one of my favourite legs, said Santhosh,who has won four of the five races he has taken part in Coimbatore.The city has always been a happy hunting ground for me and the fans here know the sport and their support drives me on, he added.
The National Supercross champ is very excited about the coming year after the successful start.To win the first series I entered this year gives you a lot of confidence, said the 27-year-old.
And this year,Santosh needs all the confidence and support he can get as he is planning to compete full time in the Asian Supercross circuit.Yes,that is the plan basically.I would love to race the entire season.The first race is in March.And I believe I can be a real contender there.And this year I have asked help from FMSCI (National Motorsport Federation) and they have promised me full support.So I am confident about the year ahead, he added.Final Points Standings: Group A (Upto 250cc Open Class): CS Santhosh (132 pts); 2.HK.Pradeep (120); 3.KP Aravind (73).
Garware likely to vroom into bike segment
The motorcycle segment may see competition heat up with Pune-based Garware Motors initiating talks with Korean automobile manufacturer S&T Motors to launch entry-level products in the country.
Garware Motors Managing Director Diya Garware Ibanez said, “We have access to products across S&T portfolio. We may look at launching products in the 250 cc and 125 cc segment to boost volumes in future.” She, however, clarified that the products are not being considered for introduction in the course of this year. According to data available with Society of Indian Automobile Manufacturers (SIAM), the motorcycle segment in the country grew by 24 per cent to 7.4 million between April 2010 and January 2011.
Of this, around 28 per cent sales were registered in the 125-250 cc segment and a marginal 0.59 per cent in over the 250 cc mark. Bajaj Auto currently dominates the category accounting for nearly half the sales in the 125-250 cc segment, followed by Honda Motorcycle and Scooter India (HMSI) and Hero Honda.
S&T, which manufactures the Hyosung range of two-wheelers, entered into an agreement with Garware in October last year to launch high-end sports bike GT650R and cruiser ST7 in India in April 2011. The motorcycles will be assembled at Garware’s plant at Wai, Maharashtra.
While the sports bike will be priced below Rs 5.5 lakh, the cruiser is expected to come for around Rs 6 lakh. “We expect to sell around 2000 units in the first year of operations. We are yet to take orders but have already received enquiries from over 300 customers,” said Ibanez. In the course of the year, a naked version of the sportsbike would be introduced in the Indian market.
Garware, at present, would import the bikes as completely knocked down units (CKD) from Korea. Once the volumes become larger, on the back of introduction of low-priced models, the company would set up a manufacturing unit at its existing facility in Maharashtra. Starting April, 8-10 bikes per day would be manufactured at the plant and production could be scaled up according to demand.
The company has firmed up plans to open 10 dealerships in Gurgaon, Delhi, Jaipur, Chandigarh, Ahmedabad, Pune, Mumbai, Bangalore, Goa and Chennai this year. Sales centres would next come up in tier-II and tier-III cities like Trivandrum, Cochin, Indore and Dimapur.
Hyosung had earlier entered into a partnership with Kinetic Motors in India to sell bikes such as the Comet 250cc, Aquila and GF 125.
The partnership, however, did not last long and Kinetic exited the two-wheeler business when it sold off its assets to Mahindra in 2008.
Garware Motors Managing Director Diya Garware Ibanez said, “We have access to products across S&T portfolio. We may look at launching products in the 250 cc and 125 cc segment to boost volumes in future.” She, however, clarified that the products are not being considered for introduction in the course of this year. According to data available with Society of Indian Automobile Manufacturers (SIAM), the motorcycle segment in the country grew by 24 per cent to 7.4 million between April 2010 and January 2011.
Of this, around 28 per cent sales were registered in the 125-250 cc segment and a marginal 0.59 per cent in over the 250 cc mark. Bajaj Auto currently dominates the category accounting for nearly half the sales in the 125-250 cc segment, followed by Honda Motorcycle and Scooter India (HMSI) and Hero Honda.
S&T, which manufactures the Hyosung range of two-wheelers, entered into an agreement with Garware in October last year to launch high-end sports bike GT650R and cruiser ST7 in India in April 2011. The motorcycles will be assembled at Garware’s plant at Wai, Maharashtra.
While the sports bike will be priced below Rs 5.5 lakh, the cruiser is expected to come for around Rs 6 lakh. “We expect to sell around 2000 units in the first year of operations. We are yet to take orders but have already received enquiries from over 300 customers,” said Ibanez. In the course of the year, a naked version of the sportsbike would be introduced in the Indian market.
Garware, at present, would import the bikes as completely knocked down units (CKD) from Korea. Once the volumes become larger, on the back of introduction of low-priced models, the company would set up a manufacturing unit at its existing facility in Maharashtra. Starting April, 8-10 bikes per day would be manufactured at the plant and production could be scaled up according to demand.
The company has firmed up plans to open 10 dealerships in Gurgaon, Delhi, Jaipur, Chandigarh, Ahmedabad, Pune, Mumbai, Bangalore, Goa and Chennai this year. Sales centres would next come up in tier-II and tier-III cities like Trivandrum, Cochin, Indore and Dimapur.
Hyosung had earlier entered into a partnership with Kinetic Motors in India to sell bikes such as the Comet 250cc, Aquila and GF 125.
The partnership, however, did not last long and Kinetic exited the two-wheeler business when it sold off its assets to Mahindra in 2008.
Hero plans to bring light, carbon fibre bikes to India
Hero Cycles, part of the Hero group, is planning to bring a premium range of carbon fibre bikes to India.
"Thecarbonfibreisusually used in the A380 and will be broughtfromItaly .Thisispart of the plan to offer new products and will be the first-of-itskind in the country ," Pankaj Munjal, managing director of Hero Cycles, said.
These bikes will cost Rs 40,000 and onwards, he said. At present, there is no segment thatcaterstopremiumbikesin thecountry ."Weaimtocreatea new segment in India. Carbon fibre bikes are lightweight and sturdy ," he said.
The company makes 18,500 cycles everyday and offers bikes in the range from RS 2,000 to Rs 15,000. There is scope to take this to 21,000 cycles on a daily basis, he said.
The market is growing at a rate of 11-12%. "At present, the market stands at 11 million cycles annually, of which our company enjoys a 50% share," he said. Munjal was in Pune to promote the Pune edition of the Hero Cycles India Cyclothon, slated to be held on February 27. The cyclothon, , inwhich5,500participantsare expected to participate, aims to reinforce a cycling momentum in the city .
"Thecarbonfibreisusually used in the A380 and will be broughtfromItaly .Thisispart of the plan to offer new products and will be the first-of-itskind in the country ," Pankaj Munjal, managing director of Hero Cycles, said.
These bikes will cost Rs 40,000 and onwards, he said. At present, there is no segment thatcaterstopremiumbikesin thecountry ."Weaimtocreatea new segment in India. Carbon fibre bikes are lightweight and sturdy ," he said.
The company makes 18,500 cycles everyday and offers bikes in the range from RS 2,000 to Rs 15,000. There is scope to take this to 21,000 cycles on a daily basis, he said.
The market is growing at a rate of 11-12%. "At present, the market stands at 11 million cycles annually, of which our company enjoys a 50% share," he said. Munjal was in Pune to promote the Pune edition of the Hero Cycles India Cyclothon, slated to be held on February 27. The cyclothon, , inwhich5,500participantsare expected to participate, aims to reinforce a cycling momentum in the city .
Royal Enfield explores museum option at new plant
For now it is only a dream but the Royal Enfield museum may well become a reality with the commissioning of its second facility in the South.
"The new plant will be a living museum and the idea is for visitors to see old bikes and audio visuals with the action of the assembly line wrapped around all this. Chennai is a place where there is a lot of history and the Royal Enfield museum could be a great option for its residents," Dr Venki Padmanabhan, Chief Executive Officer of Royal Enfield, told Business Line.
The museum would be modelled on the lines of Mercedes or BMW which, like Enfield, have a rich legacy. It is the brainchild of Mr Siddhartha Lal, Managing Director and CEO of Eicher Motors, though, by the end of the day, financial pragmatism will decide its commissioning.
"At one level, we are a motorcycle company and at the other a lifestyle company and, therein, lies the real strength of the brand. The museum will let you into the sights and sounds of World War 2, old bikes, and then to the present where you watch a motorcycle being assembled through a window," Dr Padmanabhan said.
Celebration of riding lifestyle
Royal Enfield still has not decided on the location of the second plant though reports doing the rounds suggest that it could be a toss up between Chennai and Tada on the Tamil Nadu-Andhra Pradesh border.
While the museum is one part of the branding exercise, the company is now flirting with the option of extending this idea to specific spots in the country. The 'Royal Enfield Destination' is meant for those enthusiastic bikers who are heading on a Bullet to Goa or Manali. Instead of the routine hotel, they land up here with other travellers from, say, Kerala and Rajasthan.
"This becomes the place for bonding where enthusiasts trade stories while their bikes are taken care of and readied for the journey ahead. This is the Royal Enfield World where there are people to help organise trips, maintain bikes etc. It is a celebration of the lifestyle of riding," Dr Padmanabhan said.
The key here is to make the trip 'tangible' and 'create the rider's world'. As he put it, it has to be authentic and tasteful without any kitsch. Interestingly, Royal Enfield has found from research that its customers are a finicky lot "who would like to see you around and set up the party but don't want you in it". The message is clear: "Set up the bubble for me and let's enjoy our stuff."
According to Dr Padmanabhan, the Royal Enfield brand is largely about word-of-mouth, the madness of the engine beat and about creating as many avenues as possible for people to experience it. "It is not just the motorcycle but the community of likeminded people. They are articulate, demanding and part of an active social network community," he said.
"The new plant will be a living museum and the idea is for visitors to see old bikes and audio visuals with the action of the assembly line wrapped around all this. Chennai is a place where there is a lot of history and the Royal Enfield museum could be a great option for its residents," Dr Venki Padmanabhan, Chief Executive Officer of Royal Enfield, told Business Line.
The museum would be modelled on the lines of Mercedes or BMW which, like Enfield, have a rich legacy. It is the brainchild of Mr Siddhartha Lal, Managing Director and CEO of Eicher Motors, though, by the end of the day, financial pragmatism will decide its commissioning.
"At one level, we are a motorcycle company and at the other a lifestyle company and, therein, lies the real strength of the brand. The museum will let you into the sights and sounds of World War 2, old bikes, and then to the present where you watch a motorcycle being assembled through a window," Dr Padmanabhan said.
Celebration of riding lifestyle
Royal Enfield still has not decided on the location of the second plant though reports doing the rounds suggest that it could be a toss up between Chennai and Tada on the Tamil Nadu-Andhra Pradesh border.
While the museum is one part of the branding exercise, the company is now flirting with the option of extending this idea to specific spots in the country. The 'Royal Enfield Destination' is meant for those enthusiastic bikers who are heading on a Bullet to Goa or Manali. Instead of the routine hotel, they land up here with other travellers from, say, Kerala and Rajasthan.
"This becomes the place for bonding where enthusiasts trade stories while their bikes are taken care of and readied for the journey ahead. This is the Royal Enfield World where there are people to help organise trips, maintain bikes etc. It is a celebration of the lifestyle of riding," Dr Padmanabhan said.
The key here is to make the trip 'tangible' and 'create the rider's world'. As he put it, it has to be authentic and tasteful without any kitsch. Interestingly, Royal Enfield has found from research that its customers are a finicky lot "who would like to see you around and set up the party but don't want you in it". The message is clear: "Set up the bubble for me and let's enjoy our stuff."
According to Dr Padmanabhan, the Royal Enfield brand is largely about word-of-mouth, the madness of the engine beat and about creating as many avenues as possible for people to experience it. "It is not just the motorcycle but the community of likeminded people. They are articulate, demanding and part of an active social network community," he said.
Indian Bank ties up with TVS for vehicle finance
Public sector lender Indian Bank today said it has entered into an agreement with TVS Motor Company for financing the company's vehicles.
"The MoU will help to bring three wheeler drivers into structured banking and enhance Bank's collateral free lending," Indian Bank Chairman T M Bhasin told reporters here.
Through this tie-up with TVS Motor Company, the Bank's loan book by March 2011 would increase to Rs 10 crore and its expected to be touch Rs 75 crore during the next financial year.
"Besides Indian Bank we are having tie-up with other public sector undertaking bank .. But this will highly benefit the borrower as they (Indian Bank) offers them to pay about 15 per cent on the on-road price of the vehicle which is comparatively lower.." TVS Motor Company Vice-President (Sales and Service) Three Wheeler division K Srinivasan said.
Currently, the service available in all the 1,828 branches all over India of these 776 branches are in Tamil Nadu. TVS Motor Company also has about 22 dealers with 300 service station in the State, he added.
"The MoU will help to bring three wheeler drivers into structured banking and enhance Bank's collateral free lending," Indian Bank Chairman T M Bhasin told reporters here.
Through this tie-up with TVS Motor Company, the Bank's loan book by March 2011 would increase to Rs 10 crore and its expected to be touch Rs 75 crore during the next financial year.
"Besides Indian Bank we are having tie-up with other public sector undertaking bank .. But this will highly benefit the borrower as they (Indian Bank) offers them to pay about 15 per cent on the on-road price of the vehicle which is comparatively lower.." TVS Motor Company Vice-President (Sales and Service) Three Wheeler division K Srinivasan said.
Currently, the service available in all the 1,828 branches all over India of these 776 branches are in Tamil Nadu. TVS Motor Company also has about 22 dealers with 300 service station in the State, he added.
Car, bike players work on new branding plans
As the Indian car and bike market grows in scale, a host of companies are reworking their branding strategies to reflect the changing times and market dynamics. Companies ranging from the homegrown diversified Mahindra group to two-wheeler giant Hero Honda to foreign car makers such as Renault, Fiat and General Motors, all are chalking out new brand strategies to redefine their identities and approaches to the market. The ultimate aim of course being increased market shares.
Mahindra, which has emerged as a diversified business house from a utility vehicle and tractor maker, is investing Rs 120 crore over the next three years for new branding initiatives. The $7.1-billion group, which spans from auto to IT, financial services and aerospace, has taken a new brand position—Rise.
"Rise", says Mahindra, represents a new chapter in the history of the 65-year-old business group and seeks to communicate its new face. "Rise isn't just a word, it is a rallying cry which enables people to unify around shared ideas, values, principles, a way of life or a common goal. It is a call to see opportunities where others can't and to set an example for the world. For Mahindra, "Rise" means achieving world-class standards in everything we do, setting new benchmarks of excellence and conquering tough global markets," Mahindra vice-chairman Anand Mahindra said. Another company working on a new brand strategy is Fiat. The Italian company, a laggard in the Indian market, is going for an image makeover to revive fortunes. Fiat will open exclusive company-owned brand stores or "image points" in major cities like Delhi, Mumbai, Pune, Chennai and Bangalore, where it will display the company's range of cars along with merchandise, accessories and authentic Italian coffee. "We want customers to experience what the Fiat brand stands for as we feel that the focus at the Tata-Fiat joint dealerships now is more on selling cars than on brand promotion," Fiat India MD Rajeev Kapoor said.
Fiat is recreating the model it has developed in several countries to highlight brands. Globally, it has several image points to showcase brands like Fiat, Lancia, Alfa Romeo and Maserati. That's not all. General Motors is also working on a similar brand exercise by carrying out a series of campaigns to mark the 100 years of its Chevy brand, the mainstay for the company in India.
"We have planned a number of activities around Chevy. The intent is to communicate that this brand has its own rich heritage. Also, the idea is to talk about future technologies like the electric car Chevy Volt and other battery-electric vehicles," said Sumit Sawhney, GM's sales and marketing head.
But the biggest branding challenge is faced by Hero Honda, the country's largest two-wheeler maker, and Renault, the French car major that had a bad start in India with the Mahindras.
Hero Honda, now controlled by the Munjal family after Japanese Honda moved out of the JV, has to work on all-new branding as it has to shed the crucial "Honda" tag from its name from 2014. Similarly, Renault also has an equally daunting task. The French company, that had a bad brand experience when it launched its no-frills Logan sedan in partnership with the Mahindras, is now gearing up to launch vehicles in India as a solo business after its split with the Mahindras. "Branding remains a key challenge for us, as experience with the Logan might not be good. However, we are working aggressively and are confident that Renault will be established as a progressive and futuristic brand," a senior company official said.
Mahindra, which has emerged as a diversified business house from a utility vehicle and tractor maker, is investing Rs 120 crore over the next three years for new branding initiatives. The $7.1-billion group, which spans from auto to IT, financial services and aerospace, has taken a new brand position—Rise.
"Rise", says Mahindra, represents a new chapter in the history of the 65-year-old business group and seeks to communicate its new face. "Rise isn't just a word, it is a rallying cry which enables people to unify around shared ideas, values, principles, a way of life or a common goal. It is a call to see opportunities where others can't and to set an example for the world. For Mahindra, "Rise" means achieving world-class standards in everything we do, setting new benchmarks of excellence and conquering tough global markets," Mahindra vice-chairman Anand Mahindra said. Another company working on a new brand strategy is Fiat. The Italian company, a laggard in the Indian market, is going for an image makeover to revive fortunes. Fiat will open exclusive company-owned brand stores or "image points" in major cities like Delhi, Mumbai, Pune, Chennai and Bangalore, where it will display the company's range of cars along with merchandise, accessories and authentic Italian coffee. "We want customers to experience what the Fiat brand stands for as we feel that the focus at the Tata-Fiat joint dealerships now is more on selling cars than on brand promotion," Fiat India MD Rajeev Kapoor said.
Fiat is recreating the model it has developed in several countries to highlight brands. Globally, it has several image points to showcase brands like Fiat, Lancia, Alfa Romeo and Maserati. That's not all. General Motors is also working on a similar brand exercise by carrying out a series of campaigns to mark the 100 years of its Chevy brand, the mainstay for the company in India.
"We have planned a number of activities around Chevy. The intent is to communicate that this brand has its own rich heritage. Also, the idea is to talk about future technologies like the electric car Chevy Volt and other battery-electric vehicles," said Sumit Sawhney, GM's sales and marketing head.
But the biggest branding challenge is faced by Hero Honda, the country's largest two-wheeler maker, and Renault, the French car major that had a bad start in India with the Mahindras.
Hero Honda, now controlled by the Munjal family after Japanese Honda moved out of the JV, has to work on all-new branding as it has to shed the crucial "Honda" tag from its name from 2014. Similarly, Renault also has an equally daunting task. The French company, that had a bad brand experience when it launched its no-frills Logan sedan in partnership with the Mahindras, is now gearing up to launch vehicles in India as a solo business after its split with the Mahindras. "Branding remains a key challenge for us, as experience with the Logan might not be good. However, we are working aggressively and are confident that Renault will be established as a progressive and futuristic brand," a senior company official said.
Hero Motors sells 17.6% in Munjal Kiriu
Auto components-maker Hero Motors said it has sold a 17.6 per cent stake in Munjal Kiriu Industries, a joint venture with Japan's Kiriu Corp, to the co-promoter, thus becoming a minority shareholder.
"The parent companies changed its capital structure – HML (Hero Motors Ltd) will be reducing stake from 66.60 per cent to 49 per cent," Hero Motors said in a statement.
The domestic firm, however, did not elaborate on the financial details of the transaction.
Meanwhile, Kiriu, which is an affiliate of the diversified Sumitomo Corporation, will strengthen its shareholding following the acquisition of stake from HML to become a majority partner in Munjal Kiriu, it added.
"To lead Munjal Kiriu Industries (MKI) toward more sustainable growth and financial stability, two partners have determined to make MKI a consolidated affiliate of Kiriu by changing the percentage of shareholding from the previous 33.4 per cent to 51 per cent," Hero Motors said.
The company furthersaid HML Managing Director Pankaj Munjal has been elevated to Chairman of MKI.
"The new management team will be functional enough to gear up improving overall levels of quality, cost competitiveness and delivery indicators with Kiriu's initiative and Hero's support," Kiriu Corporation President and Representative Director Junichi Hashiguchi said.
MKI also plans to invest Rs 160 crore over the next two years to expand its existing capacity.
"MKI will install another new casting line in the current Manesar plant by the latter half of 2012 to ramp up production in response to the rapidly increasing demand of the Indian automotive industry," the statement said. It, however, did not share other details on its current capacity and how much capacity will be added following the expansion programme
"The parent companies changed its capital structure – HML (Hero Motors Ltd) will be reducing stake from 66.60 per cent to 49 per cent," Hero Motors said in a statement.
The domestic firm, however, did not elaborate on the financial details of the transaction.
Meanwhile, Kiriu, which is an affiliate of the diversified Sumitomo Corporation, will strengthen its shareholding following the acquisition of stake from HML to become a majority partner in Munjal Kiriu, it added.
"To lead Munjal Kiriu Industries (MKI) toward more sustainable growth and financial stability, two partners have determined to make MKI a consolidated affiliate of Kiriu by changing the percentage of shareholding from the previous 33.4 per cent to 51 per cent," Hero Motors said.
The company furthersaid HML Managing Director Pankaj Munjal has been elevated to Chairman of MKI.
"The new management team will be functional enough to gear up improving overall levels of quality, cost competitiveness and delivery indicators with Kiriu's initiative and Hero's support," Kiriu Corporation President and Representative Director Junichi Hashiguchi said.
MKI also plans to invest Rs 160 crore over the next two years to expand its existing capacity.
"MKI will install another new casting line in the current Manesar plant by the latter half of 2012 to ramp up production in response to the rapidly increasing demand of the Indian automotive industry," the statement said. It, however, did not share other details on its current capacity and how much capacity will be added following the expansion programme
Ambush marketing may be norm at WC
THE ICC may take a tough stand against ambush marketing during the upcoming World Cup, but the rivals of the sponsors of the tournament are not shying away from using cricketers to promote their brands during the mega event.
Firms such as Sony, TVS, Adidas and Aircel which are rivals to ICC sponsors LG, Hero Honda, Reebok and Reliance Communication respectively have charted plans to launch extensive campaigns featuring Indian cricketers, including MS Dhoni and Sachin Tendulkar, during the Cup. "Nobody is stopping us from doing anything. MS Dhoni is our brand ambassador and we do plan to come out with campaigns during the World Cup, though we have not finalised the plan yet," said HS Goindi, president mar keting, TVS Motor. Similarly, sportswear brand Adidas will also launch its campaign in the next 2-3 weeks that will be used not only during the World Cup but also the IPL.
The campaign has a line-up of names like Tendulkar and Virender Sehwag.
Experts say, the plan of these rival brands to use cricketers may not violate ICC's norms. Ambush marketing is a strategy wherein advertisers try to gain mileage out of an event without paying any sponsorship fee. For instance, cricketers were used by Pepsi with its `There's nothing official about it' campaign during the Wills World Cup in 1996 held in India, Pakistan, Sri Lanka much to the ire of rival Coca Cola, which was the official sponsor.
ICC CEO Haroon Lorgat has said that ICC is taking all necessary steps to protect the rights of its commercial partners and has deployed resources to keep a check on ambush marketing. ICC has over 10 partners for the World Cup that's being played in the subcontinent from Feb 19 to April 2.
LG's rival electronics maker, Sony India that has roped in Dhoni as the new brand ambassador plans to spend Rs 100 crore on its new campaign that will run during the event. Sources say, telecom firm Aircel, which is endorsed by Dhoni, is also launching a new cam paign soon. A senior executive of a multinational that will soon use cricketers in its ads, said on the condition of anonymity, "The ICC clauses are not very stringent.
The rules are quite flexible."
Experts say, the ICC cannot stop any corporate from promoting its brand during the event and can only restrict the cricketers from indulging in ambush marketing. Even the managers of the cricketers endorsing the brands are of the view that ICC does not stop anyone from appearing in an ad if it does not breach ICC rules on ambush marketing. "ICC guidelines say that a player can also endorse the brands of rival companies. The only thing they cannot do is to use the World Cup logo and other things, or wear a team jersey while appearing in those ads," Rhiti Sports founder Arun Pandey said.
The firm manages endorsements for Dhoni. Nothing unofficial about it Sony, TVS, Adidas and Aircel which are rivals to ICC sponsors LG, Hero Honda, Reebok have campaigns lined up with Dhoni, Tendulkar and Sehwag during the Cup Even the managers of cricketers endorsing brands feel that ICC does not stop anyone from appearing in an ad if it doesn't breach ICC rules on ambush marketing
Firms such as Sony, TVS, Adidas and Aircel which are rivals to ICC sponsors LG, Hero Honda, Reebok and Reliance Communication respectively have charted plans to launch extensive campaigns featuring Indian cricketers, including MS Dhoni and Sachin Tendulkar, during the Cup. "Nobody is stopping us from doing anything. MS Dhoni is our brand ambassador and we do plan to come out with campaigns during the World Cup, though we have not finalised the plan yet," said HS Goindi, president mar keting, TVS Motor. Similarly, sportswear brand Adidas will also launch its campaign in the next 2-3 weeks that will be used not only during the World Cup but also the IPL.
The campaign has a line-up of names like Tendulkar and Virender Sehwag.
Experts say, the plan of these rival brands to use cricketers may not violate ICC's norms. Ambush marketing is a strategy wherein advertisers try to gain mileage out of an event without paying any sponsorship fee. For instance, cricketers were used by Pepsi with its `There's nothing official about it' campaign during the Wills World Cup in 1996 held in India, Pakistan, Sri Lanka much to the ire of rival Coca Cola, which was the official sponsor.
ICC CEO Haroon Lorgat has said that ICC is taking all necessary steps to protect the rights of its commercial partners and has deployed resources to keep a check on ambush marketing. ICC has over 10 partners for the World Cup that's being played in the subcontinent from Feb 19 to April 2.
LG's rival electronics maker, Sony India that has roped in Dhoni as the new brand ambassador plans to spend Rs 100 crore on its new campaign that will run during the event. Sources say, telecom firm Aircel, which is endorsed by Dhoni, is also launching a new cam paign soon. A senior executive of a multinational that will soon use cricketers in its ads, said on the condition of anonymity, "The ICC clauses are not very stringent.
The rules are quite flexible."
Experts say, the ICC cannot stop any corporate from promoting its brand during the event and can only restrict the cricketers from indulging in ambush marketing. Even the managers of the cricketers endorsing the brands are of the view that ICC does not stop anyone from appearing in an ad if it does not breach ICC rules on ambush marketing. "ICC guidelines say that a player can also endorse the brands of rival companies. The only thing they cannot do is to use the World Cup logo and other things, or wear a team jersey while appearing in those ads," Rhiti Sports founder Arun Pandey said.
The firm manages endorsements for Dhoni. Nothing unofficial about it Sony, TVS, Adidas and Aircel which are rivals to ICC sponsors LG, Hero Honda, Reebok have campaigns lined up with Dhoni, Tendulkar and Sehwag during the Cup Even the managers of cricketers endorsing brands feel that ICC does not stop anyone from appearing in an ad if it doesn't breach ICC rules on ambush marketing
Hero Honda to Form JVs with parts makers
Hero Honda has chalked out a new business strategy to take on competition in the highly competitive two-wheeler market once its split with Japan’s Honda Motor Company is complete in 2014.
The Munjals-owned Hero group, which is going to acquire Honda’s 26% stake in the company, has decided to form 4-5 small JVs with certain auto ancillary players. For instance, it is in talks with Austria’s AVL, and UK’s Ricardo for a transmission JV. Similarly, with Italy’s Cosmo and Engine Engineers, the company is exploring JVs for body contouring and power train respectively. Once formalised, these JVs would function as Hero’s subsidiaries.
Sources said this would form part of the Hero group's strategy to meet its immediate technology needs once its pact with Honda expires. A decision to this effect was taken at the company’s board meeting in January, where it was unanimously agreed that the company could only fast track introduction of new models in the market if it partners with auto ancillaries.
An email query sent to Hero Honda did not elicit any response. Following Honda’s exit, analysts have maintained that the Hero group would have to quickly identify a technology partner to be able to upgrade its emission norms to Bharat Stage 4, which would become mandatory for two-wheeler manufacturers by 2015.
According to the understanding between Honda Motor and Hero, the latter has the option of sourcing technology from Honda Motor even after 2014 but in that case it will have to pay royalty on that. The Hero group is therefore trying to build a technology base of its own through partnership with certain firms so that it does not have to go for the option of sourcing the same from Honda.
Meanwhile, the Hero group is expected to complete the re-branding exercise of the company by the end of the current year. It is finalising its export market strategy as it is eyeing new markets like Africa and Latin America. It is also looking at Passion and Splendor as the models for the export markets initially. The Hero group is also revisiting its corporate strategy. While the company has lined up plans for exports under a new brand name, it is also looking at entering new product segments. As part of this strategy, Hero would first enter the three-wheeler segment and later launch small four-wheeled commercial vehicles. This would bring Hero in direct competition with Bajaj Auto.
The Munjals-owned Hero group, which is going to acquire Honda’s 26% stake in the company, has decided to form 4-5 small JVs with certain auto ancillary players. For instance, it is in talks with Austria’s AVL, and UK’s Ricardo for a transmission JV. Similarly, with Italy’s Cosmo and Engine Engineers, the company is exploring JVs for body contouring and power train respectively. Once formalised, these JVs would function as Hero’s subsidiaries.
Sources said this would form part of the Hero group's strategy to meet its immediate technology needs once its pact with Honda expires. A decision to this effect was taken at the company’s board meeting in January, where it was unanimously agreed that the company could only fast track introduction of new models in the market if it partners with auto ancillaries.
An email query sent to Hero Honda did not elicit any response. Following Honda’s exit, analysts have maintained that the Hero group would have to quickly identify a technology partner to be able to upgrade its emission norms to Bharat Stage 4, which would become mandatory for two-wheeler manufacturers by 2015.
According to the understanding between Honda Motor and Hero, the latter has the option of sourcing technology from Honda Motor even after 2014 but in that case it will have to pay royalty on that. The Hero group is therefore trying to build a technology base of its own through partnership with certain firms so that it does not have to go for the option of sourcing the same from Honda.
Meanwhile, the Hero group is expected to complete the re-branding exercise of the company by the end of the current year. It is finalising its export market strategy as it is eyeing new markets like Africa and Latin America. It is also looking at Passion and Splendor as the models for the export markets initially. The Hero group is also revisiting its corporate strategy. While the company has lined up plans for exports under a new brand name, it is also looking at entering new product segments. As part of this strategy, Hero would first enter the three-wheeler segment and later launch small four-wheeled commercial vehicles. This would bring Hero in direct competition with Bajaj Auto.
Honda to hike prices
Scooters and bikes will cost Rs 700-900 more from February 21, due to rising raw material prices, reports Rupesh Subhash Janve HONDA Motorcycle & Scooter India (HMSI), the wholly-owned subsidiary of Japan's Honda Motor Company, plans to hike the prices of its scooter and motorcycle models by Rs 700-900 from February 21, mainly on account of rising raw material prices.
"We plan to increase prices by Rs 700-900 from February 21 due to rising raw material prices," Naresh Kumar Rattan, operating head sales & marketing, HMSI, told Financial Chronicle.
Rattan said that they did not hike prices when other industry players did so during the DecemberJanuary period. HMSI decided to absorb the higher costs as it was not able to meet the domestic demand. "But now, with enough advance notice to customers, we will be increasing prices," he said.
Competitors like Hero Honda, Bajaj Auto and TVS Motor had hiked prices of their two-wheelers by Rs 500-1,500 for the second time between November 2010 and January 2011. Earlier, in the June July period last year, the two-wheeler makers had hiked prices by Rs 500 1,000 across models. HMSI had hiked prices of scooters by Rs 540 and motorcycles by Rs 250-400 in October 2010.
During first 10-months of this financial year, HMSI has sold over 13.63 lakh scooters and motorcycles, including exports, against overall sales of 14.42 lakh two-wheelers in 2009-10.
Sooter models Activa, Aviator and Dio constitute to around 55 per cent of HMSI's sales. The company has 12 per cent market share in the domestic twowheeler market.
Owing to capacity constraints there were long waiting periods ranging from four to six months for models like Activa among scooters and Unicorn and Shine among motorcycles.
Recently, the company expanded its annual production capacity at its Manesar plant, near Gurgaon, from 1.25 million units to 1.65 million units to cater to the rising demand for Activa, Unicorn, Shine and 110cc CB Twister motorcycles.
Meanwhile, HMSI is planning to start production of motorcycles and scooters at its second plant in Tapukara in Rajasthan by July-August this year, against the earlier plan of September-October 2011.
"To serve the waiting customers we will start production at the second plant from July or August," Rattan said. The plant, which is being set up at an investment of Rs 500 crore, has an annual production capacity of 6 lakh units.
"We plan to increase prices by Rs 700-900 from February 21 due to rising raw material prices," Naresh Kumar Rattan, operating head sales & marketing, HMSI, told Financial Chronicle.
Rattan said that they did not hike prices when other industry players did so during the DecemberJanuary period. HMSI decided to absorb the higher costs as it was not able to meet the domestic demand. "But now, with enough advance notice to customers, we will be increasing prices," he said.
Competitors like Hero Honda, Bajaj Auto and TVS Motor had hiked prices of their two-wheelers by Rs 500-1,500 for the second time between November 2010 and January 2011. Earlier, in the June July period last year, the two-wheeler makers had hiked prices by Rs 500 1,000 across models. HMSI had hiked prices of scooters by Rs 540 and motorcycles by Rs 250-400 in October 2010.
During first 10-months of this financial year, HMSI has sold over 13.63 lakh scooters and motorcycles, including exports, against overall sales of 14.42 lakh two-wheelers in 2009-10.
Sooter models Activa, Aviator and Dio constitute to around 55 per cent of HMSI's sales. The company has 12 per cent market share in the domestic twowheeler market.
Owing to capacity constraints there were long waiting periods ranging from four to six months for models like Activa among scooters and Unicorn and Shine among motorcycles.
Recently, the company expanded its annual production capacity at its Manesar plant, near Gurgaon, from 1.25 million units to 1.65 million units to cater to the rising demand for Activa, Unicorn, Shine and 110cc CB Twister motorcycles.
Meanwhile, HMSI is planning to start production of motorcycles and scooters at its second plant in Tapukara in Rajasthan by July-August this year, against the earlier plan of September-October 2011.
"To serve the waiting customers we will start production at the second plant from July or August," Rattan said. The plant, which is being set up at an investment of Rs 500 crore, has an annual production capacity of 6 lakh units.
The Bajajs want children to carry on common ownership
The Bajajs will be exceptions to the view that family businesses break up beyond the third generation, Niraj Bajaj, a spokesperson for the family, said in an interview. Edited excerpts:
Why do business families separate ownership and control of businesses?
A wide variety of reasons may lead to separations. It could be personal aspirations to grow or gain greater control; sometimes a person could seek more freedom than one normally gets in a joint family; sometimes wives play a key role; and sometimes a person could feel the extended family isn’t doing justice to him. Even a clash of egos could lead to a split.
It’s normally a combination of these factors that leads to separations—it’s impossible to pinpoint which of these were at play in our case. When one of the brothers wanted to separate business interests, we were unhappy but there was no alternative to agreeing. I believe there is so much wealth in business families that money is not one of the major reasons for separation.
Did it hurt?
It was painful for all of us—the entire family—even for Shishir Bajaj, who asked for the separation. It eventually happened very amicably, and we continue to have good relations. Our emotional bonds are still strong; time, I believe, is a great healer.
How much autonomy do members in your extended family have in running businesses?
There are clearly defined responsibilities for each of us. For instance, I have been looking after the family’s treasury and have been the common wealth manager for each one in the extended family for the last 15 years or so. But while we are doing our jobs pretty much independently, we work under a family oversight. This handholding is a source of great support, but to enjoy it, you need to appreciate other’s viewpoints as well—you cannot say ‘I don’t care for anybody’s advice’ and take decisions entirely on your own.
So does this mean that you have to get all decisions vetted by the elders in the family?
No, it’s only key decisions that we discuss among ourselves. Among the men, there are four brothers in our generation and three in the next generation—my son is still very young. So, essentially, we have to build a consensus among seven persons.
At times there are disagreements—it’s healthy for different people in a joint family to have different views—but almost always we manage to reach a consensus. It happens because we trust each other a great deal.
Only if a consensus does not emerge on an issue, the head of the family, or Rahul Bajaj, decides, but I cannot immediately recall a situation where he had to use his overriding power to enforce a decision. The hallmark of a good leader is his ability to guide people to a consensus—he should avoid using his overriding powers. We have had great leadership in the family even before: from my grandfather Jamnalal Bajaj (to) my uncle Kamalnayan Bajaj and my father Ramakrishna Bajaj.
So, in your mind, leadership is the key to keeping families together?
Yes, of course. Also important are constant communication within the family and transparency in dealings. You have to constantly demonstrate the advantages of staying together.
So what’s the way going forward?
Our well-wishers told us that the best thing to do is to separate our business interests and ownership voluntarily while the going was good and there was no bitterness in personal relations—that’s the conventional wisdom. But we decided not to follow their advice.
If four people in our generation could do business together, why couldn’t four more in the next generation stay together, we asked ourselves. People told us that most family businesses haven’t stayed together beyond the third generation, but I am confident we will be exceptions.
We control our businesses mainly through a web of closely held investment companies such as Bajaj Sevashram (Pvt. Ltd), Jamnalal Sons (Pvt. Ltd), Baroda Industries (Pvt. Ltd), Bachhraj and Co. (Pvt. Ltd). We also own shares in personal names. It’s a very tax-efficient way of holding our shares in the listed companies. It’s been there for decades.
Even when carving out a portion for our brother, we decided not to disentangle the cross-holdings in the investment companies. Instead, we bought out his shares in the listed companies controlled by us, and sold our shares in the companies that went to him and his family. We don’t want to disentangle the cross-holdings in the investment companies because we want to make sure that separating isn’t easy for our children.
Why do business families separate ownership and control of businesses?
A wide variety of reasons may lead to separations. It could be personal aspirations to grow or gain greater control; sometimes a person could seek more freedom than one normally gets in a joint family; sometimes wives play a key role; and sometimes a person could feel the extended family isn’t doing justice to him. Even a clash of egos could lead to a split.
It’s normally a combination of these factors that leads to separations—it’s impossible to pinpoint which of these were at play in our case. When one of the brothers wanted to separate business interests, we were unhappy but there was no alternative to agreeing. I believe there is so much wealth in business families that money is not one of the major reasons for separation.
Did it hurt?
It was painful for all of us—the entire family—even for Shishir Bajaj, who asked for the separation. It eventually happened very amicably, and we continue to have good relations. Our emotional bonds are still strong; time, I believe, is a great healer.
How much autonomy do members in your extended family have in running businesses?
There are clearly defined responsibilities for each of us. For instance, I have been looking after the family’s treasury and have been the common wealth manager for each one in the extended family for the last 15 years or so. But while we are doing our jobs pretty much independently, we work under a family oversight. This handholding is a source of great support, but to enjoy it, you need to appreciate other’s viewpoints as well—you cannot say ‘I don’t care for anybody’s advice’ and take decisions entirely on your own.
So does this mean that you have to get all decisions vetted by the elders in the family?
No, it’s only key decisions that we discuss among ourselves. Among the men, there are four brothers in our generation and three in the next generation—my son is still very young. So, essentially, we have to build a consensus among seven persons.
At times there are disagreements—it’s healthy for different people in a joint family to have different views—but almost always we manage to reach a consensus. It happens because we trust each other a great deal.
Only if a consensus does not emerge on an issue, the head of the family, or Rahul Bajaj, decides, but I cannot immediately recall a situation where he had to use his overriding power to enforce a decision. The hallmark of a good leader is his ability to guide people to a consensus—he should avoid using his overriding powers. We have had great leadership in the family even before: from my grandfather Jamnalal Bajaj (to) my uncle Kamalnayan Bajaj and my father Ramakrishna Bajaj.
So, in your mind, leadership is the key to keeping families together?
Yes, of course. Also important are constant communication within the family and transparency in dealings. You have to constantly demonstrate the advantages of staying together.
So what’s the way going forward?
Our well-wishers told us that the best thing to do is to separate our business interests and ownership voluntarily while the going was good and there was no bitterness in personal relations—that’s the conventional wisdom. But we decided not to follow their advice.
If four people in our generation could do business together, why couldn’t four more in the next generation stay together, we asked ourselves. People told us that most family businesses haven’t stayed together beyond the third generation, but I am confident we will be exceptions.
We control our businesses mainly through a web of closely held investment companies such as Bajaj Sevashram (Pvt. Ltd), Jamnalal Sons (Pvt. Ltd), Baroda Industries (Pvt. Ltd), Bachhraj and Co. (Pvt. Ltd). We also own shares in personal names. It’s a very tax-efficient way of holding our shares in the listed companies. It’s been there for decades.
Even when carving out a portion for our brother, we decided not to disentangle the cross-holdings in the investment companies. Instead, we bought out his shares in the listed companies controlled by us, and sold our shares in the companies that went to him and his family. We don’t want to disentangle the cross-holdings in the investment companies because we want to make sure that separating isn’t easy for our children.
Mahindra culture curry has biz flavour
Anand Mahindra loves Muddy Waters - the nickname given to McKinley Morganfield, considered the father of modern Chicago blues.
But his personal passion had nothing to do with the Mahindra Group's blues fest in Mumbai last week.
"In business, personal passion should not be an indulgence, but a promise of excellence," said Mahindra, the vice-chairman & managing director of India's leading farm equipment-to-software group.
The Mahindra cultural calendar is crammed with events that have nothing to do with the adjectives usually attributed to the group: Durability, strength or resilience.
It is collaborating with Sundance Institute, the Mecca of independent filmmakers, to award screenplay writers, as well as organising the Mahindra Sanatkada Lucknow Festival and Kabir Festival.
Blame it all on movement marketing, Mahindra's strategic mantra. In a post-meltdown world where trust is at a premium, corporations are realising that their association with consumers has to move far beyond a product or service offering.
"Companies need to convince consumers that they are worthy members of their community," explained Mahindra. And that's at the core of this new drive. It also dovetails with the group's new global brand positioning: 'Rise'.
Rise is a rallying cry. The group wants a global community built around it - a community that loves films and listens to the blues. And a business can grow on the foundations of such strong bonds with potential or existing consumers, believes Mahindra.
His message is loud and clear: "We want to enrich your lives, we 'Rise' with you and also help you to 'Rise'."
There are still flagship events or associations that have a direct link to utility vehicle or two-wheeler brands. Mahindra Great Escape and the Engines Engineering MotoGP team make obvious business sense. But they are in-your-face product hardsell.
While participation in such events will continue, the focus now is to go beyond them and create a wider ecosystem.
"We won't do vanilla sponsorship of events any more. Each of our programmes or events has to have a strategic quotient," added a Mahindra Group executive, who did not wish to be identified.
What the group has figured out is that even culture can influence sales. So, it's no coincidence that the Lucknow festival, which aims to help revive local craftsmanship and the legendary Lucknowi tehzeeb, is the political and cultural capital of Uttar Pradesh - and a key market.
Mahindra Excellence in Theatre Awards, now in its sixth year, is striving to popularise theatre as an art form on a national scale.
"It's aspirational for theatre groups to get that kind of recognition," said the company official.
But his personal passion had nothing to do with the Mahindra Group's blues fest in Mumbai last week.
"In business, personal passion should not be an indulgence, but a promise of excellence," said Mahindra, the vice-chairman & managing director of India's leading farm equipment-to-software group.
The Mahindra cultural calendar is crammed with events that have nothing to do with the adjectives usually attributed to the group: Durability, strength or resilience.
It is collaborating with Sundance Institute, the Mecca of independent filmmakers, to award screenplay writers, as well as organising the Mahindra Sanatkada Lucknow Festival and Kabir Festival.
Blame it all on movement marketing, Mahindra's strategic mantra. In a post-meltdown world where trust is at a premium, corporations are realising that their association with consumers has to move far beyond a product or service offering.
"Companies need to convince consumers that they are worthy members of their community," explained Mahindra. And that's at the core of this new drive. It also dovetails with the group's new global brand positioning: 'Rise'.
Rise is a rallying cry. The group wants a global community built around it - a community that loves films and listens to the blues. And a business can grow on the foundations of such strong bonds with potential or existing consumers, believes Mahindra.
His message is loud and clear: "We want to enrich your lives, we 'Rise' with you and also help you to 'Rise'."
There are still flagship events or associations that have a direct link to utility vehicle or two-wheeler brands. Mahindra Great Escape and the Engines Engineering MotoGP team make obvious business sense. But they are in-your-face product hardsell.
While participation in such events will continue, the focus now is to go beyond them and create a wider ecosystem.
"We won't do vanilla sponsorship of events any more. Each of our programmes or events has to have a strategic quotient," added a Mahindra Group executive, who did not wish to be identified.
What the group has figured out is that even culture can influence sales. So, it's no coincidence that the Lucknow festival, which aims to help revive local craftsmanship and the legendary Lucknowi tehzeeb, is the political and cultural capital of Uttar Pradesh - and a key market.
Mahindra Excellence in Theatre Awards, now in its sixth year, is striving to popularise theatre as an art form on a national scale.
"It's aspirational for theatre groups to get that kind of recognition," said the company official.
Garware to bring Korea's Hyosung premium bikes
After the entry of Ducati and Harley-Davidson, another premium bike brand is set to hit the Indian roads shortly. Pune-based Garware Motors, which has tied-up with Korea’s S&T Motors, has finalised plans to launch two Hyosung high-end bikes in India by April or May. The company intends to unveil two products — GT650R and ST7 — from the 2011 line-up of the Hyosung motorcycle brand.
“As we are targeting the 650cc to 750cc segment, we have to obtain the homologation certificate from ARAI (Automotive Research Association of India). We have completed almost all tests and only the engine test is on. We hope to complete this shortly and commence bookings from the last week of March,” said Diya Garware Ibanez, managing director of Garware Motors.
“The two bikes, GT650R and ST7, will be on sale from the last week of April or by the first week of May this year. While GT650R is a sports bike and will be priced in the sub-Rs 5 lakh category, ST7 will be positioned in the cruise segment and be priced below Rs 6 lakh,” she disclosed.
The company said that the 650-700c segment is an untapped one and had a huge potential. While there is an Indian brand in the 250cc segment, global brands like Harley-Davidson are in the 800 cc and above segment. “We would like to fill the gap between the two segments as it offers strong growth opportunities,” Ibanez said.
Garware Motors, a subsidiary of elastic rubber tapes maker and exporter, Garware Bestretch, will be the sole partner for assembling, marketing and selling Hyosung bikes in India. The bikes will be imported as CKD and assembled at Garware Motors’ new plant at Wai in Maharashtra. The plant will initially have a capacity to assemble 8-10 bikes a day.
The company is targeting sales of about 2,000 units in the first year and it is in the process of setting up an exclusive dealer network in major cities. It intends to have at least five to ten dealer outlets at the time of launch.
Ibanez informed that the company is setting up after-sales support infrastructure and services like spare parts stocking, engine assembly and mobile service set-up, among others.
The company will be targeting a range of mediums for gaining brand visibility. While internet will be used as a strong medium, it is also looking at biking events and displays at malls besides hoardings and regular advertising.
“As we are targeting the 650cc to 750cc segment, we have to obtain the homologation certificate from ARAI (Automotive Research Association of India). We have completed almost all tests and only the engine test is on. We hope to complete this shortly and commence bookings from the last week of March,” said Diya Garware Ibanez, managing director of Garware Motors.
“The two bikes, GT650R and ST7, will be on sale from the last week of April or by the first week of May this year. While GT650R is a sports bike and will be priced in the sub-Rs 5 lakh category, ST7 will be positioned in the cruise segment and be priced below Rs 6 lakh,” she disclosed.
The company said that the 650-700c segment is an untapped one and had a huge potential. While there is an Indian brand in the 250cc segment, global brands like Harley-Davidson are in the 800 cc and above segment. “We would like to fill the gap between the two segments as it offers strong growth opportunities,” Ibanez said.
Garware Motors, a subsidiary of elastic rubber tapes maker and exporter, Garware Bestretch, will be the sole partner for assembling, marketing and selling Hyosung bikes in India. The bikes will be imported as CKD and assembled at Garware Motors’ new plant at Wai in Maharashtra. The plant will initially have a capacity to assemble 8-10 bikes a day.
The company is targeting sales of about 2,000 units in the first year and it is in the process of setting up an exclusive dealer network in major cities. It intends to have at least five to ten dealer outlets at the time of launch.
Ibanez informed that the company is setting up after-sales support infrastructure and services like spare parts stocking, engine assembly and mobile service set-up, among others.
The company will be targeting a range of mediums for gaining brand visibility. While internet will be used as a strong medium, it is also looking at biking events and displays at malls besides hoardings and regular advertising.
Splendour & Passion to be simply Hero
THE Hero Group will remove the Honda brand name from its flagship products Splendor and Passion by June this year as its owners,the Munjals,want to carve out an independent identity at the earliest.
The Honda name will disappear from brands that are owned by Hero.Four best-selling motorcycles Splendor,Passion,Glamour and Hunk belong to this category,senior Hero Honda officials said in a conference call with analysts on February 5.The rebranding will start from April,the officials said in the call.Splendor,a motorcycle fired by a 100cc engine,is the worlds most popular,with sales of around a million for the year ended 31 March,2010.Passion sells almost as much.
As stated in the recent past,the transition process is going to be smooth and gradual.Work is in progress with regard to new brand identity and related matters,which will be announced at an appropriate time.At this stage,we are not in a position to discuss the specifics, a Hero Honda spokesperson said.
CBZ and CD,two 150cc motorcycles where Honda owns the brands,will not be part of this exercise.
In all,Hero Honda sold 4.6 million motorcycles for the fiscal year ended 31 March,2010,of which Splendor and Passion accounted for over 45%.CBZ and CD,the bikes whose brand rights belong to Honda,account for over 30%.Of the two,CD is by far the more popular.Hero Honda has said it expects to sell over 5 million this fiscal.In December last year,the Hero group and Honda announced they were parting ways after a 26-year partnership.They will sign the final agreement for the share sale before the end of the current financial year.
Though the Munjal-controlled Hero group has recently signed a licensing agreement allowing it to use Hondas technology till 2014,the rebranding is being expedited to gain a foothold in international markets where it was not allowed to enter due to the joint venture agreement,analysts say.
Hero Honda is in the process of setting up distribution channels in growing international markets such as Latin America,South East Asia and Africa.Under the technology agreement,Hero Honda cannot use the Honda brand name if they make any changes in the existing products.Hero is also entitled to see new Honda models till June 2017.The new models,produced using Hondas technology,will carry a higher royalty rate than the current 2.7%,said a recent recent research report on Hero Honda by JP Morgan.
The countrys second biggest twowheeler maker Bajaj Auto has remodeled itself as a garage of independent brands,by distancing itself from the parent brand Bajaj and focusing on just four motorcycle brands Boxer,Discover,Pulsar and KTM.
The Honda name will disappear from brands that are owned by Hero.Four best-selling motorcycles Splendor,Passion,Glamour and Hunk belong to this category,senior Hero Honda officials said in a conference call with analysts on February 5.The rebranding will start from April,the officials said in the call.Splendor,a motorcycle fired by a 100cc engine,is the worlds most popular,with sales of around a million for the year ended 31 March,2010.Passion sells almost as much.
As stated in the recent past,the transition process is going to be smooth and gradual.Work is in progress with regard to new brand identity and related matters,which will be announced at an appropriate time.At this stage,we are not in a position to discuss the specifics, a Hero Honda spokesperson said.
CBZ and CD,two 150cc motorcycles where Honda owns the brands,will not be part of this exercise.
In all,Hero Honda sold 4.6 million motorcycles for the fiscal year ended 31 March,2010,of which Splendor and Passion accounted for over 45%.CBZ and CD,the bikes whose brand rights belong to Honda,account for over 30%.Of the two,CD is by far the more popular.Hero Honda has said it expects to sell over 5 million this fiscal.In December last year,the Hero group and Honda announced they were parting ways after a 26-year partnership.They will sign the final agreement for the share sale before the end of the current financial year.
Though the Munjal-controlled Hero group has recently signed a licensing agreement allowing it to use Hondas technology till 2014,the rebranding is being expedited to gain a foothold in international markets where it was not allowed to enter due to the joint venture agreement,analysts say.
Hero Honda is in the process of setting up distribution channels in growing international markets such as Latin America,South East Asia and Africa.Under the technology agreement,Hero Honda cannot use the Honda brand name if they make any changes in the existing products.Hero is also entitled to see new Honda models till June 2017.The new models,produced using Hondas technology,will carry a higher royalty rate than the current 2.7%,said a recent recent research report on Hero Honda by JP Morgan.
The countrys second biggest twowheeler maker Bajaj Auto has remodeled itself as a garage of independent brands,by distancing itself from the parent brand Bajaj and focusing on just four motorcycle brands Boxer,Discover,Pulsar and KTM.
Hamara Bajaj may be back in two years
KOLKATA: The iconic 'Hamara Bajaj' scooter that shaped the personal travel segment in the 1970s when oil crisis drove cars off roads in favour of low-cost and fuel-efficient two-wheelers, may be back in a new avatar in two years.
Bajaj Auto chairman Rahul Bajaj, who adored the famous Vespa scooters made by Piaggio of Italy and in 1960, at the age of 22, became the Indian licensee for the make, believes it is time for the company to re-enter the segment that it exited a couple of years ago. Back then, the scooter market had hit its lowest ebb and Rahul's son Rajiv, who had taken over reigns of Bajaj Auto, believed the company needed to concentrate on motorcycles and autorickshaws to regain market share.
Of course, unlike the geared scooters Chetak, Super and Classic that Bajaj made earlier, the new range will be gearless. Speaking to TOI, Rahul Bajaj said Bajaj Auto should make a scooter in two years or so as the segment had revived and now boasted of sales of 2 million units in 2010. "It makes sense to make scooters now. The company can develop a model in two years that sells 20,000-30,000 units a month and captures 20% market share. Of course, Rajiv has to take a final call as he is the boss now," Bajaj said.
Though he had reported of having differences with son Rajiv when the latter insisted on exiting the scooter business with which Bajaj had a strong emotional connect, the senior Bajaj insisted that Rajiv had never said the company would never make scooters again. "In 2009, when Rajiv decided to stop manufacturing scooters, the company was selling around 200 units a month of the 100-cc gearless Kristal. Bajaj was not doing too well in the motorcycle segment either. Since then, Rajiv has turned the motorcycle business around. He has done an outstanding job," Bajaj said.
On whether the four years lost in the scooter business would affect the development of a new scooter, Bajaj said the company knew the business inside out. "True, companies like Honda, TVS, Suzuki, Mahindra have become established players but it will not be difficult for Bajaj to re-enter the segment and become a significant player," Bajaj said. He further said the company would regain market share in light goods carrier business with the introduction of a 1 tonne four wheeler in mid-2012. "Over the last few years, we have faced competition in the three-wheeler business and lost market share. The new vehicle will chart the revival in this segment," he said.
However, Bajaj made it clear that it did not make sense for the company to enter the passenger car market at this moment. "This year, we are going to sell 4 million two wheeler-three wheelers together. So why should we focus only to sell 20,000 units of a car. It doesn't make sense. Unless we can sell about 200,000 units per year, it will not be feasible," he said, adding that the company would be the original equipment supplier of the ultra-low cost car for Renault-Nissan that is expected to debut in India in the third quarter of 2012
Bajaj Auto chairman Rahul Bajaj, who adored the famous Vespa scooters made by Piaggio of Italy and in 1960, at the age of 22, became the Indian licensee for the make, believes it is time for the company to re-enter the segment that it exited a couple of years ago. Back then, the scooter market had hit its lowest ebb and Rahul's son Rajiv, who had taken over reigns of Bajaj Auto, believed the company needed to concentrate on motorcycles and autorickshaws to regain market share.
Of course, unlike the geared scooters Chetak, Super and Classic that Bajaj made earlier, the new range will be gearless. Speaking to TOI, Rahul Bajaj said Bajaj Auto should make a scooter in two years or so as the segment had revived and now boasted of sales of 2 million units in 2010. "It makes sense to make scooters now. The company can develop a model in two years that sells 20,000-30,000 units a month and captures 20% market share. Of course, Rajiv has to take a final call as he is the boss now," Bajaj said.
Though he had reported of having differences with son Rajiv when the latter insisted on exiting the scooter business with which Bajaj had a strong emotional connect, the senior Bajaj insisted that Rajiv had never said the company would never make scooters again. "In 2009, when Rajiv decided to stop manufacturing scooters, the company was selling around 200 units a month of the 100-cc gearless Kristal. Bajaj was not doing too well in the motorcycle segment either. Since then, Rajiv has turned the motorcycle business around. He has done an outstanding job," Bajaj said.
On whether the four years lost in the scooter business would affect the development of a new scooter, Bajaj said the company knew the business inside out. "True, companies like Honda, TVS, Suzuki, Mahindra have become established players but it will not be difficult for Bajaj to re-enter the segment and become a significant player," Bajaj said. He further said the company would regain market share in light goods carrier business with the introduction of a 1 tonne four wheeler in mid-2012. "Over the last few years, we have faced competition in the three-wheeler business and lost market share. The new vehicle will chart the revival in this segment," he said.
However, Bajaj made it clear that it did not make sense for the company to enter the passenger car market at this moment. "This year, we are going to sell 4 million two wheeler-three wheelers together. So why should we focus only to sell 20,000 units of a car. It doesn't make sense. Unless we can sell about 200,000 units per year, it will not be feasible," he said, adding that the company would be the original equipment supplier of the ultra-low cost car for Renault-Nissan that is expected to debut in India in the third quarter of 2012
We will not enter into alliances for our current products
The low cost model in Indian automotive industry is here to stay. However, low cost should not be tantamount to cheap products. Chairman of TVS Motor, Venu Srinivasan, who was also CII president in 2009-10 in an exclusive interview with FE’s Ronojoy Banerjee, talks about the split between TVS and Japan’s Suzuki Motors in 2001 and what it took to make the company the third largest two-wheeler maker in the country.
India is being increasingly seen as a low cost destination. What is the potential for low cost automobiles products in the country?
Low cost is fine till the time it is not a cheap product. At TVS Motor, we look to introduce bikes that are low on cost yet provides style that a consumer would aspire to. A low cost product has to be a wholesome product meeting every consumer need.
The split between TVS-Suzuki was one of the mosthigh profile separations in the country’s automotive history. What were the basic issues?
It was a case of two partners wanting to do different things. Hence, we had to go separate ways but the split was very amicable and the two companies still have a lot of respect for each other.
What were the main challenges for TVS post the split?
There are two main issues that arise from a break-up of a joint-venture: brand and product development capabilities. These issues had to be looked at. From developing products ourselves to setting up the entire ecosystem once again. But our relations with the suppliers continued to be strong, which was a big support.
Following this experience will TVS look at forging similar alliances in the future?
I can say that we will not enter into alliances for developing the current range of products because we already have the capabilities and the technology for thepurpose. However, if we want to enter new product segments then we might look at partnerships.
How do you see the succession debate panning out across family owned businesses. That is whether to bring a professional from outside to lead the company or groom somebody within the family to take up that position?
If a family member is able then the debate does not arise hence I don't see any contradiction in the two arguments. You find today in various such companies we have a combination of the two.
Ahead of the Budget, which are some of the key challenges for the economy?
The high inflation is obviously a concern but raising interest rates is not the solution. We must not overuse the tool. We should keep in mind that global commodity prices are rising, on top of that the various schemes announced by the government including NREGA is raising the disposable incomes
India is being increasingly seen as a low cost destination. What is the potential for low cost automobiles products in the country?
Low cost is fine till the time it is not a cheap product. At TVS Motor, we look to introduce bikes that are low on cost yet provides style that a consumer would aspire to. A low cost product has to be a wholesome product meeting every consumer need.
The split between TVS-Suzuki was one of the mosthigh profile separations in the country’s automotive history. What were the basic issues?
It was a case of two partners wanting to do different things. Hence, we had to go separate ways but the split was very amicable and the two companies still have a lot of respect for each other.
What were the main challenges for TVS post the split?
There are two main issues that arise from a break-up of a joint-venture: brand and product development capabilities. These issues had to be looked at. From developing products ourselves to setting up the entire ecosystem once again. But our relations with the suppliers continued to be strong, which was a big support.
Following this experience will TVS look at forging similar alliances in the future?
I can say that we will not enter into alliances for developing the current range of products because we already have the capabilities and the technology for thepurpose. However, if we want to enter new product segments then we might look at partnerships.
How do you see the succession debate panning out across family owned businesses. That is whether to bring a professional from outside to lead the company or groom somebody within the family to take up that position?
If a family member is able then the debate does not arise hence I don't see any contradiction in the two arguments. You find today in various such companies we have a combination of the two.
Ahead of the Budget, which are some of the key challenges for the economy?
The high inflation is obviously a concern but raising interest rates is not the solution. We must not overuse the tool. We should keep in mind that global commodity prices are rising, on top of that the various schemes announced by the government including NREGA is raising the disposable incomes
Venu’s son to join Sundaram Clayton board
After Wipro and HCL Technologies, where the promoters have inducted their wards into the company management, it’s the turn of TVS Motor. Chairman Venu Srinivasan plans to induct his only son, 22-year-old Sudarshan Venu on the board of Sundaram Clayton, which is the holding company of TVS Motor.
Effectively, this means putting in place a succession plan once Srinivasan retires. Six months back Srinivasan had inducted his daughter Lakshmi Venu on board of Sundaram Clayton.
Sudarshan has studied mechanical engineering from Wharton School in the University of Pennsylvania and is currently pursuing his masters in business administration from the University of Warwick. Though Srinivasan did not give a time period as to when Sudarshan would join the board, he said that various methods were being adopted by him to familiarise his children to the various aspects of doing business in India.
Srinivasan told FE that the company would maintain a hybrid federal structure under which family members on board of the company would make critical decisions supported by a team of professionals from outside. “Essentially, there are broadly three ways in which family businesses are managed — a unified structure where there is unitary in operations, a hybrid family structure and separation,” he said. He ruled out any inherent contradiction in the evolving succession debate in family owned businesses of whether to bring a qualified professional from outside or groom an able individual from within the family.
“If a family member is able then the debate does not arise hence I don't see any contradiction in the two arguments,” Srinivasan said.
“They (Lakshmi and Sudarshan) are interacting with business leaders, academics, friends and colleagues who have been associated with the business for years,” he said. In fact, it was under Srinivasan's presidentship at CII that the industry chamber had mooted the idea of setting up family forums in home grown companies.
Unlike the Munjals promoted Hero Group, which has a well defined family structure expanding into various businesses from motorcycles to real estate, Chennai-based TVS Group has a loose federation of companies from automobiles to information technology. The group was started by TV Sundaram Iyengar way back in 1911 and had its origins in the rural transport service. Today, the $5 billion group has over 30 companies
Effectively, this means putting in place a succession plan once Srinivasan retires. Six months back Srinivasan had inducted his daughter Lakshmi Venu on board of Sundaram Clayton.
Sudarshan has studied mechanical engineering from Wharton School in the University of Pennsylvania and is currently pursuing his masters in business administration from the University of Warwick. Though Srinivasan did not give a time period as to when Sudarshan would join the board, he said that various methods were being adopted by him to familiarise his children to the various aspects of doing business in India.
Srinivasan told FE that the company would maintain a hybrid federal structure under which family members on board of the company would make critical decisions supported by a team of professionals from outside. “Essentially, there are broadly three ways in which family businesses are managed — a unified structure where there is unitary in operations, a hybrid family structure and separation,” he said. He ruled out any inherent contradiction in the evolving succession debate in family owned businesses of whether to bring a qualified professional from outside or groom an able individual from within the family.
“If a family member is able then the debate does not arise hence I don't see any contradiction in the two arguments,” Srinivasan said.
“They (Lakshmi and Sudarshan) are interacting with business leaders, academics, friends and colleagues who have been associated with the business for years,” he said. In fact, it was under Srinivasan's presidentship at CII that the industry chamber had mooted the idea of setting up family forums in home grown companies.
Unlike the Munjals promoted Hero Group, which has a well defined family structure expanding into various businesses from motorcycles to real estate, Chennai-based TVS Group has a loose federation of companies from automobiles to information technology. The group was started by TV Sundaram Iyengar way back in 1911 and had its origins in the rural transport service. Today, the $5 billion group has over 30 companies
Despite record car sales, auto numbers show in Jan
Auto sales growth in January this year slowed down to 19 per cent after rising 31 per cent in calendar 2010 because of the low base effect of 2009 going away and rising input costs and interest rates leading to higher prices.
According to the Society of Indian Automotive Manufacturers (SIAM), car sales in the month hit a new record at 1.84 lakh units, though the growth was lower at 26 per cent over the 36 per cent rise seen in the same month last year. The growth in passenger car sales has been attributed to growing income levels and new launches, besides the deferment of some purchases from December as buyers usually prefer 2011 registration.
“The rate of growth has come down and it is a cause for worry. The moderation will continue for the next few months. With an added increase in input costs and interest rates, we are expecting this to be a challenging year. We expect total growth in 2010-11 to come down to 25 per cent,” said Mr Sugato Sen, Senior Director, SIAM.
Industry experts added that expectations of a rise in excise duty in the Budget 2011-12 may also push up sales in February.
Sales in the passenger vehicle segment, which includes cars, utility vehicles and multi-purpose vehicles rose 25 per cent. Car market leader Maruti Suzuki's sales rose 26 per cent (86,285 units), while rivals Hyundai and Tata Motors recorded two per cent (30,301 units) and 13 per cent (25,750 units) higher sales.
In the last two months, carmakers such as General Motors, Maruti Suzuki, Hyundai Motor India and Volkswagen have raised vehicle prices by up to three per cent due to rising input costs. Meanwhile, State Bank of India raised its interest rates on car loans from nine to 11 per cent, while HDFC increased car loan rates to 11-13 per cent.
2-wheelers ride high
Two-wheeler sales also rose 17 per cent, with motorcycle sales rising 15 per cent to 7.47 lakh units and scooters 30 per cent (to 1.80 lakh units). Market leader Hero Honda saw a growth of 16 per cent (4.23 lakh units), while Bajaj Auto's sales rose seven per cent (1.92 lakh units).
Commercial vehicle sales rose 13 per cent, though the Medium and Heavy Commercial Vehicles (M&HCV) only saw 7 per cent (27,713 units) higher sales. Light commercial vehicle sales rose 18 per cent to 33,040 units. “There has been a very low growth in the M&HCV segment, mainly because state transport corporations have not taken delivery of passenger buses under the JNNURM scheme. Payments are not forthcoming and about Rs 1,000 crore is stuck in such deals. This problem started last November and we are told that the Ministry of Urban Development has not released the funds,” said Mr Sen.
Exports rose 28 per cent, largely buoyed by the two-wheeler segment. Passenger vehicle exports continued to be in the grey, at minus 15 per cent in the month, largely on the back of poor European demand.
According to the Society of Indian Automotive Manufacturers (SIAM), car sales in the month hit a new record at 1.84 lakh units, though the growth was lower at 26 per cent over the 36 per cent rise seen in the same month last year. The growth in passenger car sales has been attributed to growing income levels and new launches, besides the deferment of some purchases from December as buyers usually prefer 2011 registration.
“The rate of growth has come down and it is a cause for worry. The moderation will continue for the next few months. With an added increase in input costs and interest rates, we are expecting this to be a challenging year. We expect total growth in 2010-11 to come down to 25 per cent,” said Mr Sugato Sen, Senior Director, SIAM.
Industry experts added that expectations of a rise in excise duty in the Budget 2011-12 may also push up sales in February.
Sales in the passenger vehicle segment, which includes cars, utility vehicles and multi-purpose vehicles rose 25 per cent. Car market leader Maruti Suzuki's sales rose 26 per cent (86,285 units), while rivals Hyundai and Tata Motors recorded two per cent (30,301 units) and 13 per cent (25,750 units) higher sales.
In the last two months, carmakers such as General Motors, Maruti Suzuki, Hyundai Motor India and Volkswagen have raised vehicle prices by up to three per cent due to rising input costs. Meanwhile, State Bank of India raised its interest rates on car loans from nine to 11 per cent, while HDFC increased car loan rates to 11-13 per cent.
2-wheelers ride high
Two-wheeler sales also rose 17 per cent, with motorcycle sales rising 15 per cent to 7.47 lakh units and scooters 30 per cent (to 1.80 lakh units). Market leader Hero Honda saw a growth of 16 per cent (4.23 lakh units), while Bajaj Auto's sales rose seven per cent (1.92 lakh units).
Commercial vehicle sales rose 13 per cent, though the Medium and Heavy Commercial Vehicles (M&HCV) only saw 7 per cent (27,713 units) higher sales. Light commercial vehicle sales rose 18 per cent to 33,040 units. “There has been a very low growth in the M&HCV segment, mainly because state transport corporations have not taken delivery of passenger buses under the JNNURM scheme. Payments are not forthcoming and about Rs 1,000 crore is stuck in such deals. This problem started last November and we are told that the Ministry of Urban Development has not released the funds,” said Mr Sen.
Exports rose 28 per cent, largely buoyed by the two-wheeler segment. Passenger vehicle exports continued to be in the grey, at minus 15 per cent in the month, largely on the back of poor European demand.
Honda to launch India-specific models post Hero Honda exit
NEW DELHI: With its exit plan from Hero Honda being finalised, Japan's Honda Motor Co is gearing up to launch India specific two-wheeler models as it prepares for the solo ride here.
The company's wholly-owned subsidiary, Honda Motorcycle and Scooter India (HMSI), will also expand its dealer base and strengthen vendor network to rapidly expand presence in the country. It will start selling 250cc sports bike CBR250R in India from April, priced at Rs 1.5 lakh onwards.
"Our current and future endeavors will be directed to meet all kinds of customer requirements, including introduction of new and unique India-specific models," an HMSI spokesperson told PTI.
The company, however, did not elaborate on the India specific models and the time-frame for their launch.
Currently, HMSI sells both scooters, such as Activa and Dio, and motorcycles, including Stunner, Shine, Twister and Unicorn in India.
When asked about plans for network expansion in the wake of Honda's exit from Hero Honda, the HMSI official said: "We are concentrating to meet the current demand and also focusing to expand dealer base, strengthen vendor network and increase quality manpower to service greater customer base."
At present HMSI has a sales network of 790 outlets (398 dealers and 392 branches) and 389 authorised service centres.
On January 24, Honda Motor Co and the Hero Group had executed a final binding licensing agreement paving way for the Japanese auto major's exit from the 26-year-old joint venture -- Hero Honda. Under the deal, Honda will sell its 26 per cent stake in Hero Honda to the Hero Group, although it will continue to supply technology for sometime.
In order to expand presence in the high-end bikes segment, HMSI will start selling 250cc road-sports bike CBR250R from April priced Rs 1.5 lakh onwards.
"Bookings for CBR250R, our global 250cc road-sports motorcycle have opened from January 1, 2011. Customer interest for this motorcycle is overwhelming and within a month we have received 1,800 confirmed bookings," the official said.
On the overall sales front, the company is looking for 26 per cent growth in 2010-11.
"HMSI plans to sell 1.6 million units in FY 2010-11 and grow 26 per cent over the 1.27 million units sold during FY 2009-10," the official said.
The company's wholly-owned subsidiary, Honda Motorcycle and Scooter India (HMSI), will also expand its dealer base and strengthen vendor network to rapidly expand presence in the country. It will start selling 250cc sports bike CBR250R in India from April, priced at Rs 1.5 lakh onwards.
"Our current and future endeavors will be directed to meet all kinds of customer requirements, including introduction of new and unique India-specific models," an HMSI spokesperson told PTI.
The company, however, did not elaborate on the India specific models and the time-frame for their launch.
Currently, HMSI sells both scooters, such as Activa and Dio, and motorcycles, including Stunner, Shine, Twister and Unicorn in India.
When asked about plans for network expansion in the wake of Honda's exit from Hero Honda, the HMSI official said: "We are concentrating to meet the current demand and also focusing to expand dealer base, strengthen vendor network and increase quality manpower to service greater customer base."
At present HMSI has a sales network of 790 outlets (398 dealers and 392 branches) and 389 authorised service centres.
On January 24, Honda Motor Co and the Hero Group had executed a final binding licensing agreement paving way for the Japanese auto major's exit from the 26-year-old joint venture -- Hero Honda. Under the deal, Honda will sell its 26 per cent stake in Hero Honda to the Hero Group, although it will continue to supply technology for sometime.
In order to expand presence in the high-end bikes segment, HMSI will start selling 250cc road-sports bike CBR250R from April priced Rs 1.5 lakh onwards.
"Bookings for CBR250R, our global 250cc road-sports motorcycle have opened from January 1, 2011. Customer interest for this motorcycle is overwhelming and within a month we have received 1,800 confirmed bookings," the official said.
On the overall sales front, the company is looking for 26 per cent growth in 2010-11.
"HMSI plans to sell 1.6 million units in FY 2010-11 and grow 26 per cent over the 1.27 million units sold during FY 2009-10," the official said.