Chicane News: June 2012

Honda motor cycles to open R&D center in October

Honda Motorcycle & Scooter India is expecting the technical centre and research and development wing at Manesar in Haryana to start in October. According to Mr Yadvinder Singh Guleria, operating head – Sales and Marketing, Vice-President of the company, the R&D centre will help reduce testing time for new models that are now sent to Japan and Thailand. Honda Motorcycle is a 100 per cent subsidiary of Japan’s Honda Motor Corp Ltd. The R&D centre will be run by Honda R&D India Private Ltd (HRID). Mr Guleria, however, did not reveal investment details of the new R&D set up. NEW CAPACITIES Honda Motorcycle is also expecting its third manufacturing unit at Narsapuram in Bangalore to be on stream by this year. The new unit will have a production capacity of 1.2 million units, Mr Guleria added. The company already has two units, one each in Manesar (Haryana) and Alwar (Rajasthan). The two units together have a production capacity of 2.8 million units. EXCITING MARKET Our Hyderabad Bureau reports: Talking to presspersons after the launch of the 110 cc mass-market bike Dream Yuga, Mr Makato Yoshii, Deputy Director, Sales, HMSI, said the Indian two-wheeler market is one of the most exciting in the world and expected to continue to witness growth over the next 10 years and beyond. With new launches suiting local requirements, Honda will play bigger role as it expands manufacturing capacity and distribution network. The volume segment accounts for 50 per cent of the country’s motorcycle sales and is crucial in garnering volumes. “We are constrained by our ability to sell as we have hit the full capacity. There is wait-list for delivery of some models. The new plant at Karnataka will allow us the flexibility to garner bigger share while also bringing down the wait-list,” he said. Keywords: Honda Motorcycle & Scooter India Pvt Ltd, Japan’s Honda Motor Corp Ltd, Operating Head (sales and marketing), Yadvinder Singh Guleria, Japan, Thailand, Research and Development (R&D)

From a tailspin to a wheely - M2W

M&M's two-wheeler sales were in reverse gear last year, but things are looking up with new launches Sales of Mahindra & Mahindra (M&M) two-wheelers slumped 13 per cent last year, pushing the company to the seventh spot in the list of India’s biggest two-wheeler makers. M&M treated it as a wake-up call, and things have improved quite a bit. Result: From the lows of around 6,200 units recorded in December last year, sales have increased to a monthly average of 9,500 units per month, thanks to the Duro DZ. Priced at Rs 45,845 (ex-showroom Maharashtra) the Duro is cheaper than its direct competitor Suzuki Access 125 priced at Rs 49,687 (ex-showroom, Mumbai). What ensured Duro DZ’s success is aggressive marketing. Two months ago, the company launched an aggressive nationwide marketing campaign that challenged prospective consumers to test ride its new scooter. If they settle for a rival product after the test ride, M&M promised to hand out Rs 500 in cash. Mahindra Two Wheelers claims only eight consumers returned to claim the money. It had feared at least 10,000 people would turn up for claims. The attention-grabbing scheme led to more footfalls in showrooms, pushing enquiries to an all time high. A brand new advertising campaign featuring actress Kareena Kapoor also helped. Viren Popli, senior vice president, strategy and market development, two-wheeler sector of M&M, says the bold campaign “brought in those customers who were unsure about us. In that period, we got 50,000-60,000 walk-ins every day against the usual 25,000-30,000”. The footfalls were significant for a brand which was virtually written off by most rival manufacturers and market watchers after the company withdrew its economy motorcycle due to faulty gearboxes. Encouraged, M&M has prepared a war chest of over Rs 100 crore to fuel its promotional activities for two-wheelers. Aggressive campaigns are alright, but the company realised it needed to ramp up its product portfolio quickly so that the interest is sustained. That’s the reason why it has lined up at least five launches this year. “We need to do this quickly and we will do it. We also completely restructured our marketing department and the research and development wing. We are also expanding our sales and service reach to be able to reach a larger audience”, adds Popli. With the launch of the new Rodeo RZ this week and gradual ramp- up in production, M&M hopes to double its scooter sales to over 18,000 a month by the end of the year. The company retails four automatic scoters in India priced at Rs 32,000-46,000. The Rodeo RZ is, however, priced higher at around Rs 50,000. Widening its presence in automatic scooters was a must saw as the segment sales of 2.56 million units last year — an increase of 25 per cent over the previous year. The growth was in fact double the motorcycle segment’s growth. Presently, Honda Motorcycle and Scooter India (HMSI) controls 48 per cent of the scooter market with only three models, followed by Chennai-based TVS Motors with 20 per cent share. However both companies do not offer products in the 125cc category where M&M products sell. Its’ not the scooter market alone where M&M is targeting growth. Before the end of the year, at least three M&M branded motorcycles will hit the market with one of them being a 300cc premium performance bike. The company is also bringing back the 106cc motorcycle Stallio later in the year, which was withdrawn from the market merely five months after it was launched in September 2010. Poor market response and negative publicity also contributed to the fall in Stallio’s popularity even though it had roped in actor Aamir Khan as brand ambassador. “We launched a product and we stopped production even though we could have fixed the problem on the spot. That’s because we didn’t want a quick-fix solution. We are now ready with the brand new product,” Popli says. Market watchers, however, are not so sure. However market watchers believe that it may not be that easy for M&M to make a dent in Hero and Honda's bastion. A Chennai-based auto analyst says Yamaha is coming up with its scooter range this year. Honda and Suzuki have just entered the 110cc motorcycle segment. With so much in competition, M&M has a real tough battle. Mahindra forayed into the two wheeler space after it bought the operating assets of the Firodia family-led Kinetic Motor Company in 2008, for Rs 110 crore. The assets included the manufacturing facility based in Madhya Pradesh, the two-wheeler models of the company and an R&D center in Pune. M&M has pinned a lot of hopes on the R&D centre, which the company claims is the third largest among two-wheeler companies, is working on several motorcycle and scooter concepts. The company also has kept the option open for products of SYM, its Taiwanese partner. “Once you build a strong R&D capability you can have a strong pipeline of products. There would be different kinds of products, refreshments and totally new products. A large chunk of our investments has gone into R&D”, adds Popli. M&M also is heavily banking on sales in rural areas where it already has a substantial presence, courtesy its tractor and utility vehicles. The company plans to ask its existing dealers to create separate space for two-wheelers. That’s a reach competitors would die for.

Enigma launches three electric scooters

Enigma Auto today launched three electric scooters in India, priced between Rs 28,500 and Rs 31,900 (on-road Delhi). The company is also planning to introduce electric three and four wheelers in the future. "With rising fuel prices, the demand for electric mobility solutions is rising day by day. We are expecting to sell 20,000 units of these three two-wheeler models in the first year," Enigma Auto Chief Executive Officer Arun Kumar Upadhyay told reporters here. The company is importing about 50 per cent of the component from Taiwan, he added. Upadhyay said the company is assembling the two-wheelers at a plant in Delhi that has an installed capacity of 100 units per day. "We are setting up a new plant at Bhiwadi in Rajasthan at an investment of Rs 30 crore. The plant will have an installed capacity to roll out 500 units every day," he added. Talking about new products, Enigma Auto Director Gulshan Batra said the company is conducting research work to develop three and four wheelers. "We are planning to launch the three-wheeler next year. The development of four-wheeler will take some time and we may launch it in the next 3-4 years," he added. The company currently has 18 dealers and is expanding it to 100 by the end of 2013.

M&M scouts for engine partner for 2 wheelers

Mahindra Two Wheelers is reported to be looking for an international partner for making engines for its two wheelers. The company on Wednesday signalled its plan to rope in a partner for two-wheeler engines and said it would make an announcement on the same soon. At present, the company is sourcing engines for its scooters from Taiwanese firm SYM. However, it is not known whether the company is looking for partner for motorcycle engines or for the entire two-wheeler portfolio. It is to be noted that the company has lined up three new motorcycle launches during the current financial year. “Our scooter engines are presently made through a licensing agreement with SYM of Taiwan, but these engines are upgraded in India by our own R&D capabilities. Going forward we will make an announcement for engines,” Viren Popli, senior VP – strategy and market development, Mahindra Two Wheelers said after launching its new 125cc scooter Rodeo Rz here. “Over the past 12 months, we have been working very hard and building a strong R&D capability in two-wheeler business. Today, we have about 160 engineers working at R&D for two-wheelers. Our R&D also has access to Mahindra Research Valley (MRV) in Chennai. While we work with MRV, we also have a separate R&D facility in Pune,” he added. However, he declined to elaborate on the proposed plan for two wheeler engines while stating that the association with SYM for scooter engines is a long standing one. Mahindra Two Wheelers has been aggressively expanding its product portfolio in the scooter segment and the present launch of Rodeo Rz, which will carry a price tag of Rs 50,710 (ex show room, Chennai), is aimed at strengthening its presence in the segment as also to boost its scooter sales. While it continues to examine market potential for further launches in the scooter segment, it is also eyeing motorcycle segment. It is proposing to roll out three motorcycles across segments during this year. The company had launched its first motorcycle 110 cc Stallio in 2010, but stopped production in early 2011 due to some problems. “Stallio will come back soon,” indicated Popli.

Honda story will continue on the back of innovations

After the Hero Honda split in 2010, Honda Motorcycle & Scooter India (HMSI), the wholly-owned subsidiary of Japan's Honda Motor Co, has flooded the two-wheeler market with a slew of launches. Last month, it entered the 110cc mass segment with the launch of Dream Yuga. For HMSI, the top priority is to build a mass brand that represents the aspirations of an average Indian. In an interview with Rohit Nautiyal of FE, Yadvinder Singh Guleria, vice president, sales and marketing, HMSI, discusses the company's new vision, the importance of right communication in brand building and its new markets. Edited excerpts: What’s the new Honda vision and how does the new corporate campaign reflect the company's new values? 2012 is undoubtedly a landmark year in the history of HMSI. For the first time, we have inherited brand Honda in its purest form for two-wheelers in India. The company's new direction was announced early this year at the Auto Expo followed by a slew of launches. Earlier we were not present in the 100-110 cc segment which accounts for almost 50% of two-wheelers sales in India. Recently we made our foray into this segment with the launch of Dream Yuga which will bring high volumes for us. We have zeroed on a three-pronged vision: create (product), communicate (advertising) and connect (distribution). Our global tag line 'Power of dreams' has been adopted as 'Sach kar denge sapne' for the Indian masses. The campaign attempts to capture how every Indian lives with a dream in his heart. And where there's a dream, there's a chase and that's where Honda finds a connect. Through our offerings, we provide mobility so people can fulfil their dreams. This July we will touch 1 crore customers in India and so we believe it's the right time to launch our campaign. Besides television, our new media plan will focus on digital, point of purchase and outdoor. Has there been any change in how you are perceived as a company and a brand since the Hero Honda split? Currently, our main focus area is to attain optimum manufacturing capacity at all our plants. Eventually, the product makes a huge difference and the Honda story will continue on the back of innovations. At the same time, customers evaluate you not only on the basis of technology but brand positioning as well. And Honda continues to score high on consumer trust. By roping in actor Akshay Kumar, Honda has taken the celebrity association route for the first time. What made you sign him? Akshay Kumar's story represents the endeavour of a common man chasing his dreams with passion and dedication. He has worked his way up to emerge as one of Bollywood's top actors. Considering how our company has been built on dreams, I could not think of a better name. What initiatives will be taken by HMSI to strengthen its distribution, especially in smaller cities and rural India? We closed the last financial year with 1500 touch points including our network of dealers, sub dealers, branches and authorised service centres. This year we will add another 500 and close 2012-13 with 2,000 touch points. Since we have a strong network in metros, most of these will come up in tier 2 and tier 3 towns. During the application screening process of our dealerships in small towns, it was interesting to see how young entrepreneurs were enthusiastic about associating themselves with Honda. Also, our touch points will now have a more contemporary look and feel to provide a better customer experience. While we have five regional offices, our new area of focus is to expand our zonal footprint. What investments are being made by HMSI in research and development (R&D)? It is important for us to launch new vehicles consistently and 'to create' is the one of the crucial parts of our three-pronged vision. In fact, some of the development stages of our R&D will be shifted from Japan and Thailand to our new technology centre in India. This will result in faster testing of the new vehicles which will bring down the time to market new models. While we cannot disclose investment figures, with our new technology centre, India will contribute a lot more to global Honda models. India will contribute a lot more to global Honda models.

Desi Hero - Suzuki Hayate ad

Campaign: Yun Hee Nahin Chalaate Brand: Hayate Company : Suzuki Motorcycle India Agency: RK Swamy BBDO The Campaign The film opens outside a police station where a constable comes running out shouting that a prisoner called Billa has escaped. Salman Khan, imitating his character Chulbul Pandey in his hit movie Dabangg, enters the scene and says that he will take his new Hayate motorcycle to catch the prisoner. Accompanied by the constable, Khan gives chase. While Billa jumps up and down all over the town, almost like a gymnast, our cool cop keeps a hawk-eye on his movements, coolly enjoying the ride on his new Suzuki Hayate. Finally as the prisoner runs up a ladder, Khan drives his motorcycle onto the ladder, and tips him over a wall. And that wall is that of the police station, and the prisoner finds himself again within the four walls of the police station. The ad ends with the constable offering sweets to Khan after he too purchases a Hayate. The final shot shows Khan grimacing as he realises that the constable is copying his style. Our Take The 100-110 cc motorcycle segment is a promising market with tremendous growth potential. Hayate, a mass segment motorcycle, priced Rs39,900 onwards with its 4-stroke, 112 cc engine, is targeted at emerging markets in small town clusters as well as semi-urban and rural peripheries. This is also the segment which swears by Khan’s macho image and identifies with his Chulbul Pandey character and his smart moves. The entire campaign has been thus conceptualised keeping in mind the target audience which resides in rural and semi-urban peripheries and adores Khan’s Dabangg avatar. Therefore, the idea of copying Khan’s Dabangg image is certainly appropriate. The campaign utilises Khan’s well-embedded imagery to build an instant connect with the audience. The catchy dialogues he mouths in the ad add to the imagery. The jingle is entertaining and goes well with the commercial. The campaign revolves around the tagline, “Suzuki Hayate, yun hi nahi chalate!” (Suzuki Hayate – there’s always a reason to ride it), which subtly brings out the various reasons to own this bike. However, the commercial focuses more on Khan and fails to highlight the features of the bike. At the same time, we should not forget that while Khan endorses a lot of brands none of the commercials have attempted to playwith Khan’s Dabangg style, which is embedded in the minds of his fans.

Bikes cold on premium models as fuel costs rise

Demand for premium models contracting; cheaper models account for 70% of total sales, say manufacturers Indian bikers are busy downtrading, as rising petrol prices encourage them to prefer cheaper models that sip fuel to the premium ones that are guzzlers. Lower income growth at a time when inflation is running at high levels has also driven this shift, analysts said. Senior officials at the two leading motorcycle manufacturers in India agree that buying patterns are changing. K. Srinivas, president, motorcycles, at Bajaj Auto Ltd, said the market for the premium segment and above has remained flat. “People are choosing either to buy the cheapest bikes or in the executive segment.” These two market segments account for more than 70% of total motorcycle sales in the country, he said, adding that the executive segment will be the fastest-expanding category. The compounded annual growth for sales of premium motorcycles has been 25% over the past three years, said Y.S. Guleria, vice-president, sales and marketing, Honda Motorcycles and Scooters India Pvt. Ltd, but he added that sales growth has been flat over the past few months even as the sales of 100cc bikes grew 15%. “The market in the 150cc to 180cc segment in the recent past has indeed been under pressure but as marketers we do not go by the short-term trends,” said Guleria. The three main categories in the motorcycle market are based on engine displacement: the entry-level machines with 100cc, the executive segment with 125cc and the premium ones with 150 cc and more. The dynamics of the premium segment are different from the other segments. Customers of bikes between 150cc and 250cc are typically in the 18-30 age group and include college students or fresh graduates taking up jobs. Bikes in this segment are bought for their styling and powerful engines. The premium segment is driven by new launches as people get fatigued by design and style. “Hence any new launch gives a spurt to the segment and carries on for some time,” Guleria said. As buyers downtrade, motorcycle demand is shifting toward the entry level and economy segments, Joseph George, analyst at brokerage IIFL Ltd, wrote in a 7 June report. “Two-wheeler dealers continue to see steady overall growth but they hinted at a marked shift towards fuel-efficient models,” he said. According to him, while the share of entry level bikes has increased to 21.1% in April 2012 from 17.5% a year ago, that of executive segment has contracted to 62.4% from 68%. Even the share of premium bikes has started contracting month-on-month—16.5% in April this year compared to 17.6% in March. “People are enquiring a lot more about fuel efficiency now than they were doing before. Therefore, companies that have fuel-efficient bikes will stand to gain,” India Infoline’s George said over the phone. He said Hero is in an advantageous position given higher fuel efficiency bikes. Bajaj has seen buyers downtrading from Discover to Platina. George doesn’t see sales in the premium bike market turning the corner till the overall economy improves or there is a cut in petrol prices. Ravi Sud, chief financial officer, Hero MotoCorp Ltd, agrees. “The petrol price hike will force more and more people to buy commuter segment motorcycles,” he told Mint on the sidelines of a recent press conference. “This is just because of the higher fuel efficiency. Companies with strong portfolio in this segment may take a hit also because the replacement demand has taken a hit.” He has also cut his industry growth estimate for two-wheelers from 10% to 8%. In the last fiscal, two-wheeler sales grew at 14.16% to sell 13.43 million units while the overall automobile industry grew at 12.24%. In a recent research report on the two-wheeler sector, analysts Subrata Ray and Jitin Makkar of ICRA Ltd noted that while the executive segment (bikes in the Rs. 40,000-50,000 price range) is expected to grow steadily, competition is likely to intensify following aggressive model refurbishment and new model launch plans of most manufacturers. They, however, maintained that premium bikes, albeit on a low base, are expected to have the fastest rate of growth over the medium term given the strong growth in purchasing power in the hands of middle-class urbanites, especially in the age group of 20-30 years. According to India Yamaha Motor Pvt. Ltd, another company with a strong portfolio of powerful bikes, the market saw people rapidly upgrading from the entry and executive segments to the premium segment in the last three years, but the trend has slowed in the last one year. But the company is optimistic and believes the downtrading will not last for long. “Someone who aspires for a performance bike will not compromise and settle for an entry level or executive bike,” said Roy Kurian, national business head at India Yamaha Motor. “He may just postpone the decision for a while due to negative sentiment.”

If petrol costs go up 10%, so should our mileage

Though the share of entry-level bikes (100-110cc) in India has come down to 50 per cent from the historical highs of 80 per cent a few years ago, it still sees sales of 6-6.5 million units every year. Honda Motorcycle and Scooter India (HMSI), the country’s third-biggest two-wheeler seller, is trying to penetrate this segment with the new Dream Yuga, a 110-cc bike aimed mostly at the rural market. Keita Muramatsu, president and chief executive officer of HMSI, is targeting market share to increase to nearly a fifth of the local market, riding high on the Yuga, priced at Rs 48,028 (ex-showroom, Mumbai). On the sidelines of the Dream Yuga’s launch in Mumbai today, he talked about the company’s future plans. Edited excerpts: Are you looking at developing more India-specific models like Dream Yuga? Honda Research and Develop-ment India (HRDI) is already located near Manesar, very close to our factory. We want to develop new bikes using Indian materials and technology. Already, the R&D (division) is using such materials. The Dream Yuga has nearly 100 per cent localisation; only some components are imported. With the R&D facility growing, do you think you can have a bike entirely developed in India? From the beginning, we have tried to develop a bike made from Indian materials, designed for Indian specifications. We have to check how we can make high quality, low-cost products like the Dream Yuga, which has high performance and high mileage. How are you expanding sales network? We are expanding our sales touch points to 2,000 this year from 1,500 last financial year. India is very vast and we would require more (sales points) in the future. The Dream Yuga is targeted at the rural market more than the urban market, because the Yuga returns the highest mileage in the Honda line-up world-wide. What is the split between motorcycles and scooters? The Activa scooter has strong demand, and is the largest seller in India. The split is about 50:50 now, but it could move slightly in favour of motorcycles with the launch of the Yuga. This could be 52:48 in favour of motorcycles. You had a market share of around 15 per cent last financial year. How much will that grow this year with the Yuga in the market? This financial year, we will have a total production capacity of 2.7 million. We could grow our market share to 17-18 per cent in the next 12 months. What is the target for this year in terms of sales? We have a target of selling 2.75 million units this year, of which the Dream Yuga will be 300,000 units. The two-wheeler industry is expected to grow at 12 per cent this year, but Honda has already grown by more than 50 per cent so far this year. What effect do you see on demand with the rise in petrol costs? The impact is felt on the four-wheeler segment more. In the two-wheeler segment, the customer may prolong his next buy, or change to a new motorcycle. But, if petrol costs go up by 10 per cent, then our mileage should also go up by 10 per cent. This is the challenge for Honda.

Honda launches Dream Yuga; eyes 18% market share this year

Japanese two-wheeler major Honda, which rolled out its second mass segment motorcycle Dream Yuga here today, said it is planning to take the bike to overseas markets towards year-end. "We plan to start (Dream Yuga) exports either from November or December this year," Honda Motorcycle & Scooter India (HMSI) president and chief executive Keita Muramatsu told reporters here today after the launch of the bike. The company will look at the neighbouring markets such as Sri Lanka and Nepal for the Yuga exports to begin with, he said. Priced at Rs 48,028 (ex-showroom, Mumbai), the Dream Yuga is powered by a 110-cc engine and comes in five colours and three variants. The company, which sold 21.07 lakh motorcycles and scooters last fiscal, is aiming to sell 27.5 lakh units this fiscal, HMSI sales and marketing vice-president YS Guleria said. "We are also looking at pushing up our market share by three notches from the present 15 per cent with the launch of the Dream Yuga," he added. Sounding optimistic on growth despite choppy economic conditions, which have impacted domestic car sales to a significant extent in the current fiscal, Guleria said, "We have seen 50 per cent growth in the first two months of this fiscal. So, now with the dream Yuga in our product profile, we are quite confident of achieving the target." The company has currently two manufacturing facilities, at Manaesar in Haryana and Alwar in Rajasthan, with a combined capacity of 2.8 million scooters and bikes per annum. Its third plant at Narsapuram in Karnataka with a 1.2 million capacity is expected to be up and running from the second half of the next year.

Bajaj Auto to step on the gas from October

Bajaj Auto will ramp up production of its Pulsar and Discover bikes over the next quarter before going flat out from October. “This is the period when we will see the big burst in volumes happening, and at a completely different performance level,” Mr Rajiv Bajaj, Managing Director, told Business Line. Despatches of the new Pulsar 200NS and Discover 125 ST (sports tourer) have just begun and the company expects the momentum to accelerate in the coming months. TARGETED PRODUCTION For the current fiscal, Bajaj Auto has targeted production of five million bikes and commercial vehicles from its three facilities. The Pulsar and Discover range, which includes the two new tech-loaded siblings, will account for a lion’s share of these numbers. Both bike brands have been a critical part of the brand-led growth strategy and played a key part in the Bajaj Auto revival story since 2009. They are now expected to take the story forward thanks to a “stronger tailwind” which was not quite present three years ago. “Our motto is simple: if it ain’t broken, don’t fix it. The Pulsar 200NS and Discover 125 ST are all-new bikes with the best in technology, but there will be no change in the brand strategy,” Mr Bajaj said. The Pulsar, though, remains the core of this business model. Launched in 2001, it has seen a host of different versions since right up to the present 200NS. It was the trailblazer in the sports segment where it continues to be the market leader. It was from the Pulsar that the Discover was born in 2004 as the commuter alternative. According to Mr Bajaj, the Pulsar is akin to “the sun in the Bajaj Auto galaxy” and the pivot to the overall strategy which now includes KTM. “The Discover is the commuting version and the best bet for those aspiring to own a Pulsar,” he said. Yet, it took a failure like the XCD to recognise the potential of the Discover and position it as the flagship brand in the commuter segment. From the days of 20,000 units per month, its numbers have grown six times as much. Going forward, the company believes Discover volumes can exceed 200,000 units each month over a period of time. According to Mr Bajaj, there will be no change from the focus on motorcycles even while the gearless scooter business is growing rapidly and attracting more participants in the process. “I don’t see anybody who competes the way we do. In the world of generalists, we are the specialists and intend to stay that way,” he said.

Hero Maestro: A winning combination

What does it take to become a maestro? Perfection, finesse, ability and mastery to win. When Hero MotoCorp (previously Hero Honda) rolled out the scooter, Pleasure, it was welldefined as a product positioned for women. A few years later, following the success of the Pleasure, Hero has managed to create something different: A scooter for men! Hero has introduced the ‘Maestro’, a scooter positioned for men. At first glance, it is clear that there are many masculine nuances about it. It looks bulky, muscular and has a heavy feel to it. A solid design, coupled with bold lines, make it a thing for men. As I approach it, its majesty takes over and yes, it truly looks majestic. On and on, there is something nice about the Maestro’s looks. The front has a typical scooter face, but it is broad and feels like the yesteryear scooter fronts. A unique feature is a black dome-like fixture with the company’s name pasted on it, above the headlight. The mirrors have a streak of the body colour, other than a standard black shade. The rear has a different appearance though, with the tail-lamp having indicators protruding outward at a sharp angle. On looking at the sides of the scooter, I notice the name MAESTRO boldly inscribed in steel, which complements its overall masculinity. Iam pleasantly surprised by the comfort the Maestro has to offer as I take my seat on the scooter, ready for a short spin. The seat position is perfect, making you feel high as you sit on it, with the posture and ergonomics being out of this world. Most impressive is the console I see in front of me. The smart ‘Digital Analog Combo Meter Console’ is a combination of a speedometer, precision trip meter, fuel gauge, odometer and also a ‘Service Due Indicator’ that lets one know of services due. All this is beautifully crafted and has a high-end touch. As I take off, the scooter is quick to respond to my handling. It just darts forward, and Iam thoroughly impressed by its acceleration. For a scooter with an air-cooled, 4-stroke single cylinder, 109cc engine, the Maestro just knows how to charge ahead. Its maximum power of 6.0 kW (8.2 Ps) @ 7500 rpm with a maximum torque of 9.10 Nm @ 5500 rpm does its best at going between traffic with ease. The road is a bad one, with puddles and ditches everywhere. It is here that the Maestro wins again. The ride through the bad road is a cake walk, and in places where the scooter cannot go through, it goes around well. The manoeuvrability is topclass, with the 1240 mm wheel base being of much help. As I encounter a bottleneck, I am still riding at a speed of around 70 kmph. The scooter’s Combined Breaking System (pressing of one break lever applies brakes on both wheels) comes to my rescue and I come to a comfortable halt. The entire ride this far has been fun, easy and fast. During turns too, the Maestro is effortless. Its smooth ride doesn’t give way. Even at slower parking speeds, I am specially awed by the Maestro’s resilience. There is minimal or no drag at all, and the ride is smooth sailing. One major observation I make here about the engine is that a rider can pull throttle at different speeds and the scooter almost flawlessly responds to it like music. Throughout the spin, I am made aware of the masculine leanings of the Maestro. The ride is heavy, but as a rider, you are in command. After a reasonably long ride, Ireturn to the place from where I began my journey. As Ipark the scooter, I am still blown away by its style. The underseat space is enough to keep ahelmet and other little relevant items. Available in six colours and with so many new features, the Maestro is available at a competitive price-point of Rs 47,500 (ex-showroom Bangalore). The Maestro is no doubt amaster in its own class and by producing it, Hero has kept up to its name.

Driven by change - TVS Apache RTR 2012 series

The Apache RTR has been given a facelift with visual upgrades that make the bike look more muscular, but the mechanicals in the bike have largely been left untouched. The Apache RTR bikes have been widely appreciated for being practical commuters, returning mileage figures of 38-40kpl, while managing to deliver sportsbike-like thrills and striking looks. Keeping the performance equations constant, TVS is clearly trying to get away by adding bits to its established brand of bikes – the RTR 160 and the RTR 180. Additions include a redesigned headlamp cluster featuring LED pilot lamps, a freshly designed 16-litre fuel tank with cowls which look slightly disproportionate, and a neatly visible cowl which covers the engine from below. The bikes also get a new set of alloy split footpegs (previous RTRs had combined units) and a tail cowl mounted on the rear fender. The upgrade also includes an impossible-to-miss new racy looking graphics job, which starts from the front fender and flows through the massive fuel tank cowls to the side panels. Since this is just a cosmetic upgrade, the engine and transmission on both bikes remain the same. The RTR 160 continues with its carburettor-fed, 159.7cc, air-cooled, four-stroke engine, still producing peak power of 15.2bhp and a peak torque of 1.32kgm. This Apache will come with a front disc brake and a rear drum brake, but a rear disc is a cost option. The bigger RTR 180 carries on with its acclaimed 177.4cc, air-cooled, four-stroke powerplant which generates an impressive 17.03bhp and a top torque figure of 1.56kgm. Besides proven performance, the updated Apaches will continue to offer comfortable rides and light handling. Mechanicals such as the front telescopic forks and rear gas shocks remain a constant. Braking is via a 270mm petal disc at the front for all bikes, and a 200mm petal disc at the rear for both RTR 180s and optionally on the RTR 160. Given TVS Motor’s respectful R&D capabilities, we believe that by doing just this much, it has missed out on the opportunity of taking the Apache RTR brand to greater heights. The merely beautified bikes will face the heat from attractively designed popular competitors. The TVS Apache RTR 160 will retail at Rs. 65,747 (ex-showroom, Mumbai) while the RTR 180 will be offered at Rs. 72,090 (ex-showroom, Mumbai), and Rs. 82,780 (ex-showroom, Mumbai) for the ABS version.

Brand fit - Anushka Sharma to endore TVS Scooty range

TVS Motor Company has signed on actor Anushka Sharma, as the brand ambassador for its TVS Scooty range. Scooty has been synonymous with style and innovation and Anushka seems to strengthen the brand's commitment to its young target audience and reinforces its positioning. Commenting on the development, H S Goindi, President Marketing, TVS Motor Company, says, “Anushka Sharma was an immediate choice. She is well known for being spunky with her distinctive style and is an icon for young girls in India. She is seen by young women as one who is living her goals of being vivacious, independent and successful.” For Anushka, the association with TVS Scooty dates back to 2005 when she had done a campaign for the brand. “It's almost like ‘homecoming' for me. As a young woman I know how important independence and mobility is to me. It is a breakthrough attitude and style statement that is relevant to today's young women,” says Anushka.

TVS to make vehicles energy efficient

Two-wheeler major TVS is planning to come out with a slew of technologies that can make its vehicles more cost efficient. Grappling with issues of fuel economy at an affordable price, TVS has incorporated engine and transmission efficiencies and energy conservation related technologies. This means, on an average, two-wheelers, which at present get a mileage of 40 km to a litre will see their mileage go up by about 20 per cent. The first set of vehicles will be beta tested in September this year and after the necessary alterations, it will go into production and hit the roads in December 2013. Talking to Business Line, Mr Vinay Harne, President-NPD, TVS, said: “With these technologies, we have hit the right mix of fuel economy, energy efficiency and high power for normal and hybrid vehicles.” Also, the company has incorporated hybrid technologies that will enable a two-wheeler to switch between petrol/diesel and electric power, powered by its intelligent controllers, according to TVS officials. Engine efficiency is an area increasingly focussed by automakers and TVS with its transmission efficiency technology that minimises losses in engine efficiency due to frequent change of gears is hoping to combat rising fuel prices that is impacting sales of two wheelers in India. The Indian two-wheeler industry recorded sales volumes of 13.4 million units, a growth of 8-9 per cent, according to ICRA. According to company officials, energy conservation technologies have been incorporated in its bikes and scooters that would reduce aero dynamic losses, wearing of tires due to road friction and fuel injection related issues.

Honda launches Dream Yuga

Japanese two-wheeler major Honda rolled out its second mass segment motorcycle Dream Yuga and said it is planning to take the bike to overseas markets towards the year-end. "We plan to start (Dream Yuga) exports either from November or December this year," Honda Motorcycle & Scooter India (HMSI) President and Chief Executive Keita Muramatsu told reporters here today after the launch of the bike. The company will look at the neighbouring markets such as Sri Lanka and Nepal for the Yuga exports to begin with, he said. Honda's entry-level 110cc motorcycle, the Dream Yuga is now available at the company's showrooms. Priced at Rs 48,028 (ex-showroom, Mumbai), the Dream Yuga is powered by a 110-cc engine and comes in five colours and three variants. The company, which sold 21.07 lakh motorcycles and scooters last fiscal, is aiming to sell 27.5 lakh units this fiscal, HMSI Sales and Marketing Vice-President Y S Guleria said. "We are also looking at pushing up our market share by three notches from the present 15 percent with the launch of the Dream Yuga," he added. Sounding optimistic on growth despite choppy economic conditions, which have impacted domestic car sales to a significant extent in the current fiscal, Guleria said, "We have seen 50 per cent growth in the first two months of this fiscal. So, now with the dream Yuga in our product profile, we are quite confident of achieving the target." The company has two manufacturing facilities, at Manaesar in Haryana and Alwar in Rajasthan, with a combined capacity of 2.8 million scooters and bikes per annum. Its third plant at Narsapuram in Karnataka with a 1.2 million capacity is expected to be up and running from the second half of the next year.

“Honda story will continue on the back of innovations”

Car sales growth slowest in May

Car sales in India grew at the slowest pace in seven months during May with industry body Society of Indian Automobile Manufacturers (SIAM), on Monday, reporting 2.78 per cent growth as high interest rates and petrol prices continue to hit the market. According to figures released by SIAM, domestic car sales in May stood at 1.63 lakh units as against 1.59 lakh units in the same month last year. “This is the slowest growth since October last when car sales witnessed a decline of 23.77 per cent,” SIAM Director-General Vishnu Mathur told reporters here. “The softening of interest rates, which was expected to happen, has not materialised and continues to be high. Moreover, the high prices of petrol have also affected sales and the overall sentiment in the market is negative,” he added. Increase in prices of vehicles following the excise duty hike in the budget had also had a major impact, Mr. Mathur said, adding that even diesel vehicles, which used to have a lot of demand, had tapered off. “In the premium and executive segments, which are generally considered to be not price sensitive, the demand for diesel vehicles has slowed down,” Mr. Mathur said. At such a time, he added, “If the government goes ahead and decides to tax diesel vehicles more, the overall demand will suffer all the more.'' In the passenger car segment, market leader Maruti Suzuki's sales dipped by 5.94 per cent to 72,309 units. However, rival Hyundai Motor India's sales increased by 3.03 per cent to 31,939 units. Tata Motors' car sales were up by 6.70 per cent at 17,371 units. In May, total sales of vehicles across categories registered an increase of 10.52 per cent at 15.13 lakh units as against 13.69 lakh units in the same month last year. Total two-wheeler sales last month increased by 11.40 per cent to 11.93 lakh units from 10.71 lakh units in May 2011. According to SIAM data, motorcycle sales grew by 7.24 per cent during the month to 8.88 lakh units from 8.28 lakh units in the same month last year. In this segment, market leader Hero MotoCorp posted 10.68 per cent jump in sales to 5.03 lakh units in May. However, rival Bajaj Auto's sales went down by 5.30 per cent to 2.07 lakh units during the month. Honda Motorcycle & Scooter India (HMSI) posted a 45.45 per cent increase in sales to 88,334 units, while TVS Motor moved 47,175 units, 14.47 per cent less than the corresponding month of the previous year. The scooter segment's overall sales grew by 34.40 per cent to 2.35 lakh units from 1.75 lakh units. HMSI's scooter sales grew by 65.47 per cent to 1.24 lakh units during the month, while Hero MotoCorp sold 36,312 units, up 24 per cent. TVS Motor's sales saw decline of 2.42 per cent during the month to 34,936 units. Commercial vehicles sales grew by 9.12 per cent to 62,025 units during May, from 56,841 units in the year-ago period, SIAM said. Medium and heavy commercial vehicle sales declined by 10.58 per cent to 22,227 units during the month from 24,858 units in May last year. According to SIAM, light commercial vehicle sales grew by 24.43 per cent to 39,798 units in May, 2012, from 31,983 units in May, 2011. In the three-wheeler category, sales fell by 3.32 per cent to 37,184 units from 35,988 units in the same month last year.

Bajaj Auto: An export play

Broad market volatility and a moderation in two-wheeler sales saw the Bajaj Auto stock lose steam in the last few months. The stock dropped about 17 per cent since it touched its one-year high of Rs 1,839 at end February 2012. This fall, however, presents investors with a long-term perspective an opportunity to buy the stock. The company's sizeable export revenues, its superior operating margins and market leadership position in mid-to-premium segment bikes make it one of the better picks among auto stocks. At the current market price of Rs 1527, it trades at a price to earnings ratio of about 13.5 times its estimated earnings for FY2013, at a discount to Hero Moto Corp (14.5 times). Exports help Having moved up a brisk 17 per cent (year-on-year) in the first half of FY12, volume growth in the domestic two-wheeler industry dropped to 11 per cent in the third and fourth quarters. This moderation has continued into the first two months of 2012-13 too. Besides, domestic three-wheeler volumes have taken a knock, with the expected release of permits in Karnataka, Delhi and Maharashtra being delayed. While petrol price hikes could shift a portion of the demand from cars to two-wheelers, slow economic growth and inflationary pressures imply that the moderation in domestic sales may continue for sometime. Despite this challenge on the domestic front, a few factors work in favour of Bajaj Auto. First, its export exposure. The company is the largest exporter of two and three-wheelers in the country, raking in a third of its revenues from exports, which grew 31 per cent in 2011-12.Exports generally bring in higher margins and, at a time when the rupee is depreciating, it will improve realisations further. That the emerging economies of Africa, Latin America and Asia are the company's biggest markets bodes well for Bajaj. They remain, in a way, shielded from the slowdown in developed economies. While motorcycle exports registered strong growth in April and May, three-wheeler exports took a beating, partly because of a rise in import duties on vehicles in Sri Lanka. The company expects exports to Sri Lanka to revive from July onwards. Premium bikes, launches to boost volumes A second factor favouring Bajaj is its focus on higher segment bikes. Unlike its peer Hero, which leads the market in the entry and executive segment bikes (75-125 cc), Bajaj has a stronger portfolio in the 125-250 cc category (Discover 150, Pulsar 135, 150, 180, 220, Avenger 220). It has a 50 per cent market share in this segment. This tilt in product mix towards the higher segment bikes favours the company at such times because these bikes are targeted at people with higher disposable incomes, and those less sensitive to inflation, price increases and interest rates. They bring in higher realisations as well. Even as Bajaj's volume growth in the 75-125cc segments remained, at best, flat in 2011-12, offtake in the higher segment grew by 14.5 per cent, pushing up overall growth. A continuation of growth in this segment coupled with launches such as the Discover 100, Discover 125 ST and Pulsar 200 NS should provide an impetus to volumes in FY13. A third strong point for Bajaj Auto lies in its operating margins. Unlike the rest of the auto industry, which records about 10-12 per cent operating margins, the company has consistently been able to maintain 19-20 per cent margins in the last two years. Bajaj Auto's ability to hold on to profit margins stems from its focus on mid-to-premium motorcycles, and a good hold on the three-wheelers market and exports, where it enjoys higher pricing power. It has been able to pass on a major portion of cost hikes through periodic price increases, the latest being in May 2012. Financials For the year ended March 2012, Bajaj Auto's net sales grew by 19 per cent to Rs 18,880 crore, while adjusted profits grew by 11.5 per cent to Rs 3104 crore. Operating margins came in at 19 per cent, slightly lower than 19.3 per cent last year.

YZF-R15 and CBR 250R triumph at India design mark awards.

The inaugural India Design Mark (I Mark) awards program was organised with the cooperation of the Japan Institute of Design Promotion, organisers of Japan's Good Design Award (G Mark). The same high standards as its Japanese equivalent were adopted for the submissions and judging of the first edition of the India Design Mark Awards. Of the 71 applicants, 31 were awarded the I Mark, and Honda CBR250R and the face-lifted Yamaha YZF-R15 were two among four products from three Japanbased companies to receive this coveted award. Affordable sports bikes first came India's way thanks to Honda, and the CBR250R has been a role model in making this a fun-onthe-run reality for bike enthusiasts in the country. The 250cc sports tourer is the only internationally sold bike in recent times that is also manufactured in India. On the other hand, the Asia-specific Yamaha YZF-R15 was the first of its kind in India when it was launched back in 2009, but always drew a little flak for its proportions. So when the refreshed Yamaha YZF-R15 was unleashed, it was an immediate hit with the sports bike aficionados thanks to its stunning looks. Keita Muramatsu, President & CEO, HMSI, said, "We at Honda are delighted to win the India Design Mark for CBR 250R. As the highest design recognition from Indian Government through I-mark, this only re-affirms customers' appreciation of Honda's dedicated efforts in field of designing products high on innovation and catapults India as a high quality global manufacturing base for the world." Equally delighted at the YZF-R15's success in the design competition, Hiroyuki Suzuki, CEO & MD, India Yamaha Motor said, "I am very pleased with this recognition that our flagship bike YZF-R15 has received. The bike which was introduced in 2008 has witnessed tremendous fan following and the upgraded version launched in 2011 only added more to an already great performing bike." The India Design Mark (I Mark) awards were presented to Honda and Yamaha for their respective winning motorcycles by the Indian Government through the Indian Design Council, an autonomous body under the Ministry of Commerce & Industry. It is a trustworthy indicator of excellence, which recognises exceptional innovation and assures Indian and global consumers of excellence in form, function, quality, innovation and sustainability.

Urban cowboy - Mahindra Rodeo RZ

What really is an update? In automotive terms it could mean anything from new graphic decals to a completely new engine – and that’s pretty much what manufacturers change on an existing model anyway. Not Mahindra though, because they seem like they’re taking in customer feedback and actually reacting to it! Now that itself is an impressive gesture from Mahindra 2 Wheelers and just as they did with the Duro DZ, it is now the Rodeo’s turn to get an upgrade. Of course, an upgrade also means getting that quintessential suffix and ‘RZ’ is what the Rodeo has earned for itself. The Rodeo RZ isn’t something that customers will appreciate immediately though and that’s because all the changes on it that matter are things that you can’t really notice at first glance. What buyers will make a first impression of though, are the new graphics and that 125cc badge on the front. The decals themselves are perfectly done – not overpowering and not too understated either. On a completely different extreme though is the inclusion of new colours exclusive to the Rodeo RZ. Now you can choose from this fabulous electric green that you see in our pictures, a pale orange, crisp purple (though our female readers will most definitely have a more specific description of that colour), and of course a black and a white option. What everyone will not quite notice immediately though are the two things that really improve the Rodeo with this RZ version. The old Mahindra Rodeo had one problem – ground clearance. The scooter was low and would scrape its underbody on even the slightest mutant of a speed breaker or even through some really bad potholes. The guys at Mahindra looked into this and with the RZ, the scooter now has 24mm more space under it to easily give obstacles the slip. But more importantly, it’s how this has been achieved that is truly critical. The easy option would have been to simply raise the suspension but then that would have meant an increment in the ride height as well and that spells bad news for the dynamics of any two-wheeler. The Rodeo traditionally has been a scooter that has handled extremely well on road and sacrificing that would have been disastrous. Also, raising the ride height by too much would mean inconveniencing the fairer sex and shorter riders. What has been done on the Rodeo RZ instead is that the engineers have taken a really good look at the underbody of the scooter and shifted all the bits that were mounted really low more into the body than under it. So the stand moves higher up as well as the rear suspension (or rather it’s mounting points, we think). The result is a sharp handling scoot that can clear anything that Indian roads throw at it. We even felt the suspension to be a tad stiffer in a good way. The other change that the Rodeo RZ brings in is increased storage capacity under the seat. The space has gone up to 22 litres which means there’s more room in there to dunk stuff along with your half-face helmet. Too bad it doesn’t fit a proper full-face helmet though. The boot is also illuminated by an LED lamp making things easier to find in that vast expanse. Apart from that, the Rodeo RZ carries over all of the previous model’s enticing features including a completely digital and colour-customisable instrument cluster that not only shows speed and engine rpm, but has a clock as well. Everytime you go over 60 km/h, the meter turns red to warn you of your speed but it’s not really too intrusive either – a nice safety feature that doesn’t seem irritatingly controlling. What is irritating, though extremely essential is the side-stand warning beep that just keeps going on and on like an alarm clock on a cozy winter morning – so if you want to spare yourself from going deaf or being hit on the head by those around you, make sure you get your side-stand off before you ride away! Then there’s the front fuel filler cap, a 4-in-1 anti-theft key and a mobile charging point in the front as well keeping things very convenient on the Rodeo RZ. The RZ retains its 125cc motor but now gets what Mahindra are calling a Dual Curve Digital Ignition system that helps the scooter put out a little more than 8PS and 9Nm while still giving an ARAI rated fuel efficiency of 59.38 kmpl. If anything, the Rodeo RZ feels even peppier and powerful than its predecessor and is an absolute joy to ride on when you have a pillion with you. Combine that power with the Rodeo RZ’s telescopic front suspension and agile handling and you get a scooter that is quite a delight in the city – Mahindra seems to have made a good product into an even better one! The launch for the Rodeo RZ isn’t too far away and expect it to be priced at around the Rs 48,000 mark – so looks like the Rodeo RZ is going to be super value-for-money as well!

Kickstart the '60s with vespa.

Neither was I raised in Europe, nor am I a 1960s’ child. And yet, like many other Indians, just say the name Vespa, and I instantly have images of pizza from Napoli, cappuccino from Milan or, indeed, Audrey Hepburn raising hell on the streets of Rome. There are few brands that manage to transcend the product and achieve cult status—the Vespa name is one of those few. Making a reappearance in India after decades, the Italian scooter, which is part of Piaggio’s two-wheeler portfolio, launched its first product a few weeks ago. I was keen to give it a go, and after several delays and broken promises, finally did get my hands on a beautiful little LX 125, dressed in buttercup yellow. What’s more, I even had a matching old-style, yellow helmet to go with it! Now at the outset I have to say that the cute retro look and the Vespa name lend this scooter a certain charm that no rival product in our market can match. But I was keen to set that brand allure and nostalgia aside, and also test the Vespa for what it is—a scooter. So I set off along the crowded and often challenging roads of the one city that can easily claim the crown of India’s two-wheeler (or more accurately, scooter) capital—Pune. I chose some rather crowded sections, some broken tarmac, and also went on to the city’s outskirts, to a few small ghat sections. The first thing I noticed was the stares I was getting. Part of that was probably because I seemed to be the only idiot in a helmet! But of course the scooter was getting its fair share of attention too. And then I noticed how despite its small overall size and its relatively small wheel-size, the Vespa was nimble and comfortable. The LX 125’s suspension, and therefore the ride quality, was better than I had expected it to be. That is indeed a good first impression. After having spent some time riding, I also felt the riding position itself was pretty comfortable—despite it being a fairly short scooter to begin with. The handling is also acceptable, though not the best in the class, and even though I felt the brakes could have been a bit sharper, overall I found myself rather enjoying the ride. I was also happy to see that besides the vintage badging, all the chrome and retro rear-view mirrors, the LX 125 has some neat features. There’s a hook embedded at the front of the seat which you can pull out to hang your shopping bags, and storage under the seat which is big enough to stow away that matching Vespa helmet I was talking about. So what’s the problem? you ask. The LX 125 is priced at Rs. 68,257, ex-showroom Delhi. Now compare that to other 125cc scooters in the market and you realize you will be spending around Rs. 20,000 more for the Vespa. So does that even begin to make sense? Well, if you think about it—it does. But only for some people. The people who will want to buy a Vespa won’t necessarily be seeking a commuter scooter in the first place. It’s like those who buy a Mini or a Beetle in the car space want “that” car, isn’t it? Granted, the LX 125 doesn’t have a cult following, but its cute retro look, and surprising capability will still earn it some fans. Piaggio could have priced it more competitively, but instead of selling more, the company seems to be looking at greater profitability. Will there be more Vespas? Yes, the company has promised other models in the future. So, the LX 125 is just the start of more to come—but we do hope that while we get similarly well-built scooters, they come at more affordable prices. And maybe more people then can feel a bit like Gregory Peck or Audrey Hepburn every time they ride off to work, or simply to get themselves a good cappuccino!

Styled for the next generation

A taller and lighter sibling to the Suzuki Access, the Swish 125 is a smart looking scooter with rounded mudguard and front apron endowed with smooth lines and flush-fit front indicators neatly set into the front apron. Above those is the modern looking headlamp which is bigger than the one on the Access. The rear-view mirrors look neat, while the instrument panel consisting of an analogue speedometer, fuel gauge and icons for the high-beam and indicators, is well laid out. The palm grips feel good; the switches are crisp and decent to operate, but the brake levers feel flimsy. Just like on the Access, Suzuki has provided a centralised ignition key slot with a safety shutter, and it is also where you open the under-seat compartment from. The Swish lacks a glove box though, and the solitary bag hook is placed inconveniently low and close to the floorboard. The wide seat is comfortable for both rider and passenger. The sleek side panels carry forward the posh look with new-age graphics and backward-flowing creases. The body panels are made of a composite material called ABS (Acrylonitrile Butadiene Styrene) which is used on the Access too. The Swish gets a wide aluminium grab bar and sharply styled brake light cluster which looks upmarket and sporty. The Swish 125 is powered by the smooth, 124cc, single-cylinder, four-stroke engine that also powers the Suzuki Access. It produces 8.58bhp at 7000rpm and 1kgm of peak torque at 5500rpm, and comes with a push-button starter as well as a kick lever. The gearless scooter pulls smoothly from low in its powerband and is quick enough for city use. As is expected from good automatic scooters, the Swish 125 does a great job of providing twist-and-go convenience. Like the Access, this scooter too is equipped with telescopic front forks and a single hydraulic shock absorber at the rear. The suspension offers a comfortable ride even on road undulations. The Swish's handlebar unpleasantly collides with the rider's knees when taking sharp turns, and this can be unsafe. Braking is via 120mm drums which do an effective job and the Swish rides on tube-equipped tyres and steel rims. The scooter comes with a spacious, 20-litre under-seat compartment. However, you have to pay Rs. 658 more for the optional pillion foot pegs, which are standard on an Access, and around Rs. 800 more to add a glove box in the front. The bike retails at Rs. 46,257 (ex-showroom, Delhi) and is available in a choice of five colours — blue, white, black, red and grey. The Swish 125 is an upmarket gearless scooter which should be popular amongst college-goers. However, underneath it all, Suzuki has simply made cosmetic changes to the Access to arrive at the Swish 125; their basic dimensions and specification are the same.

Car exports rise 34% on demand from non-European nations.

Passenger car exports from India increased 34.16% in May, riding on the back of robust overseas sales by Hyundai Motor, Nissan Motor and Toyota Kirloskar in non-European countries. According to figures released by Society of Indian Automobile Manufacturers (SIAM), India exported 45,036 cars in the last month compared to 33,570 units in the year-ago period. "Europe still continues to be a worry, but the growth that we have seen is mainly on account of new markets that the companies have developed," SIAM Director General Vishnu Mathur told PTI. In May, the country's largest exported Hyundai Motor India Ltd (HMIL) witnessed a growth of 42.16% at 23,659 units against 16,643 units in the same month last year. "On account of slackness in the domestic market in May, we took the opportunity to ramp up the back orders for the export market. We had higher sales of the Eon in Algeria, the i20 in South Africa and the i10 in South America, particularly in Mexico and Columbia," a spokesperson of HMIL said. However, rival and domestic market leader Maruti Suzuki India's overseas passenger car sales fell by 9.42% to 9,363 units from 10,337 units in May 2011, SIAM said. Car maker Nissan Motor India saw its exports from the country going up by over two-fold to 8,157 units last month from 3,937 units in the corresponding month last year. Toyota Kirloskar Motor, which started exports from April this year, sold 1,693 units in May in South Africa, SIAM said. Ford India's sales in overseas locations, however, dipped 15.81% to 1,693 units from 2,011 units in May 2011. Homegrown auto major Tata Motors' exports rose by 32.38% to 372 units from 281 units in the year-ago period. Exports of all categories of vehicles from India during May 2012 increased by 4.62% to 2,46,314 units from 2,35,429 units in the same month last year, SIAM said. The two-wheeler segment witnessed exports of 1,74,362 units in last month compared to 1,61,346 units in the year-ago month, up 8.07%, it added. The motorcycle segment's overseas sales went up by 5.16% to 1,63,446 units from 1,55,419 units in May 2011. SIAM said exports of scooters from India increased by 87.18% last month to 10,660 units from 5,695 units in the same month last year. However, exports of commercial vehicles decreased by 8.72% to 7,861 units in May 2012 from 8,612 units in the corresponding month last year, it added.

Harley vs Mercedes anyone?

A superbike versus a supercar. A two-wheeler versus a four-wheeler. Air in your face versus creature comforts. Such comparisons always excite motoring journalists. Even if it means comparing apples to oranges, so what? And why do it? Simply because for a somewhat similar performance and snob value, the price difference between a two and a four can be mammoth. A super four can cost as many as 10 times a super two. Oh! Two and a four reminds me of introducing our readers to our first contestant. It’s actually a four and a eight! Harley-Davidson Forty-Eight—customised at that, which was unveiled at the Auto Expo in Delhi earlier this year and is now on our roads—powered by the rowdy Evolution 1200cc V-Twin engine that churns out loads of torque (95nm@3500rpm) and the distinctive Harley engine feel (Harley, as a policy, doesn’t reveal engine power figures). Our second contestant is more a work of art and a fashion accessory than an automobile. It’s the convertible version of the Mercedes E-class series, called the E350 Cabriolet and powered by a 3498cc V6 engine producing a peak power of 272kw@6000rpm and a peak torque of 355nm@2400-5000rpm. Before I go any further, let’s get some facts straight. A four-wheeler, logically, is quicker, more powerful and handles better than a two-wheeler. Formula 1 cars do a lap much faster than MotoGP bikes. Mitsubishi Lancer Evolution will likely beat BMW F650RR in a rally. So physics favours four-wheelers. But these are controlled conditions. What happens if the test is done in circumstances that exploit a two-wheeler’s strengths—for instance, city roads and highways, where we most use our vehicles? Here I must also add that I am biased towards motorcycles. They are so much more fun to ride, keep you close to nature and are, arguably, as safe as a car. And compared to a car, they don’t pinch your pocket much. So economics sides with two-wheelers. Straight line ability Coming to the comparison test, since both the machines come from the lands of straight roads, what better way to gauge their character than by putting them into straight line race. First, the Forty-Eight. Getting on to the low solo saddle on the Forty-Eight is quite easy, what is not is controlling the clutch after you shift into the first gear. Such massive is the pull that the 260kg bike is pulled forward simply by releasing the clutch. Open the throttle and the bike literally ‘screams’ its way to a ton, with the bike’s Screaming Eagle twin-exhaust making everyone take note of the bike. But, surprisingly, the potato-potato beat is soothing to the rider as are the vibrations from the engine. The power delivery is uniform in all gears and every shift at the right rpm literally snaps your head back. The 0-100kmph time for the Forty-Eight is a little less than 7 seconds, thanks to its superior power-to-weight ratio. The E350 Cabriolet, on the other hand, takes you to a ton in creature comforts. No fiddling with gears and no controlling clutch (it’s an automatic, obviously), just press the floor-mounted accelerator, hold the steering wheel firmly and watch the scenery being fast-forwarded. The convertible has two driving modes: Economy (E) and Sport (S). While mode E provides smoother shifts and is fine for everyday driving, in mode S the engine revs higher, the gear shift is quicker, and acceleration time slightly better. The E350 Cabriolet goes from 0-100kmph in a little more than 7 seconds. So the round one goes to the Forty-Eight. Ride & handling Slightly slower though the Cabriolet was in the straight line race to a ton, its 272 horses show who’s the boss at speeds above 100. And here’s where physics comes to its help. The Cabriolet’s stability, aerodynamic stance and immense power inspire confidence at three-figure speeds and the driving fun begins all over again once you are above 3000rpm. The Forty-Eight, though, doesn’t lose steam even after 100, but the air pressure on your helmet visor goes so immense that it becomes hard for the Harley to catch up with the Merc. So the round two goes to the Cabriolet. Comfort Now on to long, relaxed drives. This, some might feel, is a no contest. Of course, the Cabriolet was designed for a quiet and smooth ride for four, who sometimes want to feel the gentle breeze over their heads. And it doesn’t disappoint. The cabin has almost all the luxury features you expect of a car this segment. The front seats have enormous legroom and the sitting position can be adjusted in a zillion different ways. There’s a control within reach for almost any function the car performs. But is this really an E-class? Not exactly. Though it wears the E badge, it is more compact and not as comfortable as the E-class. The Cabriolet lacks rigidity too, a fact reflected when you take it to bad, pot-holed roads, on which the drive becomes uncomfortable. But what is lacks in rigidity, it makes up for in exclusivity! Tell me how many four-seater convertibles we have in India? At least none at this price point. There’s the cheaper Mini Cooper Convertible and then the far more expensive Maserati Grancabrio. An altogether different kind of comfort is expected from the Forty-Eight, which it delivers in dollops. The potato-potato beat of the Harley and the vibes the engine sends to the body make you connect to the bike. The one down, four up gearshift takes some getting used to (you’ll hear a clunk every time you change gears) and the clutch is on the harder side. In fact, a weak left forearm means you’ll have to take a break every few kilometres of riding. Since both the Cabriolet and the Forty-Eight have their own definitions of comfort, to judge a clear winner would be injustice. But, again, and especially because of the fact that a long ride on the Forty-Eight starts pinching your back, round three again goes to the Cabriolet. Brand value Now coming to brand value, something all the high-end machines are associated with. Although both attract eyeballs, the Forty-Eight, in addition, attracts questions—it is helped by the fact that a bike rider is always more approachable as compared to a person cocooned in the comfort of a car. As a closed-roof, the Cabriolet doesn’t look much different from other Mercs, but once you open its soft-top, the car’s exclusivity comes to the fore. But, realistically, the number of people who actually use the convertible as a convertible is about the same as the percentage of SUV owners who go off-roading. So, the exclusivity is limited. Thus, round four goes to the Forty-Eight. Retailing at R76.58 lakh (ex-showroom, Delhi), the E350 Cabriolet is for a selected few who can compromise E-class comfort and rear-seat space to exclusivity, while the Forty-Eight (R8.65 lakh; Customised Forty-Eight at R10 lakh) provides for a true American riding experience at a somewhat affordable pricing point. Considering the fact that bikes generally offer better value for money in the world of wheels, the Harley would be our choice.

DSK launches Hyosung GT250R bike

DSK Motowheels, the newly formed automotive division of Pune-based DSK Group, on Wednesday launched the Hyosung GT250R at Rs 2.75 lakh (ex-showroom, Delhi), priced at a significant premium to its main competitor Honda CBR 250 (Rs 1.48 lakh). The launch is the first by the company after it took over the two-wheeler business operations of Pune-based Garware Motors last week for an undisclosed sum. The bike will be launched in showrooms in the next five days with deliveries starting in a month, said senior executives of the company. Korean bike maker S&T has been selling Hyosung branded bikes in India since the past year through 18 dealers established by former manufacturing and marketing partner Garware Motors. The company has three bikes on sale in India — GT650R, GT650N and ST7. Shirish Kulkarni, director, DSK Motorwheels, said, “Hyosung sold 600 bikes in India last year and this year we intend to sell 3,700 bikes in the remaining 10 months with about 3,000 units to be sold by the GT250R”. The company intends to develop a range of bikes from 125cc and above from scratch for the Indian market under the Hyosung brand. Two more models will be launched by it before the end of the year - GV650 and the GV250. By year end 40 dealerships will be opened pan India. The company is also talking to state governments for setting up a new engine and body manufacturing facility which would come up in the next 18 months. Till then the assembly facility at Wai, Maharashtra will be used. The company intends to raise the local content to 90 per cent once local manufacturing begins. This will bring down overall costs of the bike for instance the cost of GT250R will be brought down by half, stated Kulkarni.

Suzuki plans to launch 100cc scooter in FY13

Suzuki Motorcycle India is looking to expand its offering in the scooter segment and the company is contemplating launch of a scooter in the 100cc category. It is currently evaluating the market potential for the new product and hope to finalise its plans by this financial year. “In the scooter segment, there are products in 100cc category, some products are below the 100cc category and a few in the 125 cc segment. We are present in the 125 cc segment with our two products Access and Swish. We are now looking at the 100cc segment. We have done research and based on that we will take a call and make an announcement,“ Anand Thakur, national head-sales, Suzuki Motorcycle India told Financial Chronicle. “Since we have already established our presence in the 125cc, we don't want to leave any other opportunity available in the scooter segment,“ he said, adding, “the company will be able finalise its plans by during this financial year,“ he added. The proposed plan would be part of company's plan to launch six-seven new products across categories in motorcycle and scooter segments by next year. Suzuki had launched its second scooter Swish during February this year as its first product Access is almost more than four years in the country. The company claims about 15 per cent share in the scooter segment. According to Thakur, the Swish brand is part of the scooter family, but targets more towards the younger generation in the age category of 22-15 years while Access has been positioned for the consumers in the age group of above 25 years. “In terms of value proposition, Suzuki's scooter Access125 scores well over competition given that it is a higher powered, higher engine capacity scooter that also comes along with a penetrative price tag,“ according to an Icra report. “Since the target segment for both Access125 as well as Swish125 remain the same, the brands are more likely to cannibalise into each others' volumes rather than increase the addressable market for Suzuki,“ it added. While the motorcycle segment has been seeing some slow down in sales in the past few months, scooters continue to post record sales and the segment is expected to sustain strong growth rate, driven by the urban female population.

Government proposes to increase tax scrutiny reduce refunds

With slowing economic growth impacting tax revenue collections, the finance ministry is proposing to make good the shortfall by shifting its focus to companies operating in the still rapidly growing consumer economy and a closer scrutiny of the top 100 assessees to check for any tax evasion. Signalling this, finance secretary R.S. Gujral, who was addressing the annual income-tax (I-T) commissioners’ conference, also directed field staff to go slow on I-T refunds, which had aggregated a record Rs.95,278 crore in 2011-12. The move could potentially draw a sharp response from Indian industry. “Given the overall sentiment post the recent controversy around the general anti-avoidance rules and the retrospective amendments, the government’s move will be taken in a negative way. There could be an adverse impact on the markets as well,” said Soumya Kanti Ghosh, director (economics and research) at industry lobby group Federation of Indian Chambers of Commerce and Industry. The tax department should instead focus on bringing more assessees under the tax net, he said. “Monsoon appears to be weak so far, and if it does not improve, then the rural economy will collapse, which will have a direct impact on these sectors,” said Venu Srinivasan, chairman of TVS Motor Co. Ltd. “In that case, I really don’t know if the government will be able to do so (follow through on its plans).” The government is targeting to collect Rs.5.7 trillion in direct taxes this fiscal. But given the slowdown in manufacturing and economic growth, this target could be difficult to achieve. While the Index of Industrial Production contracted by 3.5% in March, fourth quarter gross domestic product (GDP) growth slowed to 5.3%. “Sectors which are expected to do well this year include consumer goods, software industry, two-wheeler industry, cement, infrastructure,” Gujral said. “Banks will see improvement in profitability and the steel industry will also see some improvement in demand. With crude prices stabilizing, OMCs (oil marketing companies) should also show a significant improvement in profitability. We should focus on sectors which are doing well and take a closer look at the tax collections from these sectors.” Direct tax refunds jumped 30% last year from Rs.74,000 crore in 2010-11. This fiscal, due to a sharp increase in online tax filings, the government was expecting a higher outgo on account of tax refunds. “Refunds during the year should not exceed those of last year. Refunds last year were at around Rs.95,000 crore. We should try to contain the refunds to less than Rs.95,000 crore,” Gujral said. The tax department has also been asked to re-examine the tax payments of the top 100 industrial assessees to see if there are any cases of evasion. “It is an extremely challenging time. Fiscal deficit last year was 5.8%. GDP growth has slipped sharply and current account deficit (on the balance of payments) is also close to 4%. There is a need to augment revenue collections significantly and simultaneously ensure that we spur growth,” Gujral said. “Given that the targeted (nominal) GDP growth is around 14% in nominal terms, a 15% growth in direct taxes is not unachievable and not difficult.” Last fiscal, the government managed to collect Rs.4.95 trillion in net direct taxes, compared with the budget estimate of Rs.5.32 trillion and the revised estimate of Rs.5 trillion, as corporate earnings were hit due to the prevailing economic scenario. Growth in gross corporate taxes was 11.52% at Rs.3.96 trillion and personal income tax was up 16.2% at Rs.1.93 trillion. But what hit tax revenue hard was that the two most important zones—Mumbai and Delhi—saw corporate tax collections growing at less than 3%. “With a growth of 6.5% and an inflation of around 7.5-8%, our collection of direct taxes should have been higher. The tax-GDP ratio should have also shown improvement,” Gujral said. “Last year, there were some sectors that were stressed, due to which tax collections dipped.” Gujral pointed out that most banks, OMCs, and steel, coal, power and capital goods companies saw a sharp fall in advance tax payments in 2011-12. Also speaking at the conference, finance minister Pranab Mukherjee said the tax target for the current fiscal was “modest” and achievable given that growth momentum is expected to pick up in the current fiscal and real GDP growth is expected to be above 7%. Experts were unimpressed by the measures being contemplated by the finance ministry. “Delaying refunds is just putting off the problem for another year. The interest piles up and the final outgo increases,” said B.M. Singh, a former chairman of the Central Board of Direct Taxes. “There is no provision in law which aids the government to deliberately delay refunds. It is more an administrative measure.”

Royal Enfield sees sales crossing 1 lakh this year

RIDING on robust demand, Royal Enfield Motors aims to end the current calendar year with landmark sales. The oldest two-wheeler firm, part of Eicher Motors, is racing towards crossing one lakh annual sales for the first time, while continuing its dealer expansion drive into smaller cities and towns. “We continue to have a great run in our motorcycle business where we have been able to boost our production by working very closely with our suppliers. In the first quarter, we sold 23,899 units, up 41 per cent over the first quarter of 2011. Monthly sales have moved now to 9,000-plus units,“ according to Siddhartha Lal, managing director and chief executive officer of Eicher Motors. Two wheeler sales have been seeing some decline in the past two months though a few emerging players continue their strong ride. Royal Enfield too, continues to see strong demand for its Bul lets. In the first two months of the April-June quarter, the company has sold about 17,400 units in the domestic market, posting a growth of about 49 per cent over the same period previous year. At this growth rate, the company is expected to see its annual sales crossing one lakh units for the first time in its history. In 2011, it sold 74,626 units, up 42 per cent over 2010 volumes. “Though we are not giving the numbers at this point, but our ambition is to exceed the one lakh target this year itself and that will bring us to a very good level next year when our new plant near Chennai comes on stream. Given the ramp up plans, we will be hitting volumes of 12,000-13,000 from the combined facilities (existing and upcoming) very soon,“ Lal added. The company has already commenced construction activities for the new plant at Oragadam near Chennai and it is expected to commence production by the end of first quarter of 2013.

TVS signs Anushka Sharma to endorse its Scooty range

The bollywood actor will be the face of all brand campaigns related to the TVS Scooty brand TVS Motor Company has signed on much feted Indian Actor, Anushka Sharma, as the brand ambassador for its TVS Scooty range. Anushka Sharma will be the face of all brand campaigns related to the TVS Scooty brand. TVS Scooty has been synonymous with style and innovation and is one of the most exciting two-wheeler brands for young women. This association with Anushka Sharma only strengthens the brands commitment to its youth target audience and reinforces its positioning. Commenting on the development, H S Goindi, President Marketing, TVS Motor Company said, “Anushka Sharma was an immediate choice for the TVS Scooty brand. She is well known for being spunky with her distinctive style and is an icon for young girls in India. She is seen by young women as one who is living her goals of being vivacious, independent and successful. We are confident that this association will further enhance the popular TVS Scooty Brand. ” For Anushka, the association with TVS Scooty dates back to 2005 when she had done a campaign for the brand. “It’s almost like ‘homecoming’ for me. As a young woman I know how important independence and mobility is to me. TVS Scooty has always understood young women of India and it feels great that I now have an opportunity to be a part of the rich legacy of a brand such as TVS Scooty. It is a breakthrough attitude and style statement that is relevant to today’s young women” Anushka says.

Scoot at sight / Mahindra Rodeo

When Mahindra bought over Kinetic Motors, the products that were carried over were three scooters — the Duro, Rodeo and Flyte — which were all powered by the same 125cc motor designed by Sym of Taiwan. Not too long ago, the metal-bodied Duro was at the receiving end of a few updates, most noteworthy being the doing away with of the old trailing link front suspension to make place for a more modern telescopic fork setup and improvements in the ground clearance, lower seat height, styling re-touches and better head lamps. The updated scooter was still called the Duro, but with a DZ suffix attached to its name. This time around, the plastic-bodied Rodeo has been tweaked. Although the engine, in essence, is the same 125cc 8 bhp motor, the re-christened Rodeo RZ now features what the company calls ‘Dual Curve Digital Ignition System’. What this system does is that it switches between two ignition maps depending on the engine revs, among other parameters, in order to deliver the spark at precisely the right time. This improves the performance characteristics as well as the fuel efficiency of the engine. Speaking of fuel efficiency, Mahindra claims that the Rodeo RZ returns 59 km to a litre under ARAI's test conditions. Another improvement is the Rodeo’s ground clearance, which now stands tall at 154 mm, compared to the 130 mm of its predecessor. This has been achieved by altering the design of the main stand when it is folded back into the retracted position. No wonder then, despite riding around with an average-sized pillion, the Rodeo didn’t ground even once over speed breakers. Wind back on the throttle and the 125cc motor springs to life, pushing you forward strongly till about 60 kmph. Beyond that, the engine's output begins to taper. But since this scoot is intended as a city runabout, that sort of speed is on the higher side of the spectrum within which the RZ will live most of its life. The best part of the Rodeo is the way it tackles bad roads. You don't need to think twice while speeding up towards a pothole. Yes, those forks really do make a huge difference to the Rodeo's ride quality. With scooters, there are two distinct camps — one for metal panels and the other for plastic ones. Metal panels hold up to scrapes and dings much better and are easy to repair. Simply get the dent whacked and a paint job later, it’s as good as new. On the flip side, metal panels are heavier and that could increase the scooter’s overall fuel consumption. Plastic panels come to the rescue with their light weight and the material's ability to be moulded into complex shapes that metal stamping cannot do. Modern plastics are extremely wear resistant but if you drop a plastic bodied scooter, you would probably need to replace a cracked panel or two. Though prices haven’t been revealed, Mahindra 2 Wheelers announced that the scooter will first be seen in showrooms down south in a few days, with the rest of India following shortly.

Auto policy: No U-turns, please.

Either levy a cess on diesel cars or increase the fuel price, but don't procrastinate. The proposed diesel tax levy has come back to haunt the automobile industry. Indications are that the Government is likely to go ahead despite stiff protests from carmakers. From their point of view, the better option is to increase diesel prices, except that this is not going to happen in a hurry. People are still smarting over the recent petrol price hike and any move to follow suit with diesel will be the last straw. The levy on diesel cars was expected to be announced in this year's Budget and the auto industry was pleasantly surprised when it did not happen. The Government also made it known that it was going to ‘bite the bullet' on subsidies which clearly conveyed that the era of cheap fuel pricing was coming to an end. No consistency! However, with the Petroleum Minister now reiterating that diesel prices will not be increased, the only way out is to discourage its use in cars. Will this work? Nobody really has a clue except that the think-tank in New Delhi believes it is the best way out of a severe crisis where fuel subsidies are hurting the economy badly. It is this dilly-dallying on policy issues that is raising the hackles of the auto sector. “There is just no consistency from the Government's end and it is getting increasingly difficult for us to plans our investments in India,” an exasperated CEO told me recently. His point was simple: either you levy a cess on diesel cars or increase the fuel price, but don't procrastinate! It is also no secret that these delays are a result of extensive lobbying by companies, ministries and industry associations. In the process, it only creates more chaos within the auto sector at a time when a long-term stable policy is the need of the hour. Far too often, carmakers have been caught unawares on abrupt policy changes which have wreaked havoc with their product plans. The small-car push For instance, when the Government decided that small cars would be levied a lower excise duty of 16 per cent, it left manufacturers of large cars unhappy since they had to cough up a heftier 24 per cent. Most of them realised that they had no option but to join the small-car parade. This meant complying with the 4-m-length rule and capping engine capacities at 1.2 litres for petrol and 1.5 litres in the case of diesel cars. Industry veterans believe that it was this abrupt change in duty structures that derailed Mahindra-Renault's Logan which was launched with much fanfare. The Logan was the best bet as an entry-level sedan but suffered because of the differential excise duty, veterans say. As the rechristened Verito in the custody of M&M, the sub-4-m avatar may just do the trick when it is launched during the course of this fiscal. Today, the excise duty for small cars is 12 per cent and twice as much for others which are over four m long. Those cars with engine capacities of over 1.5 litres are levied 27 per cent duty. It will be interesting to see how the Government works out the diesel levy in this maze. During the fuel crisis of 2008-09, the focus was on large gas guzzlers which were slapped with Rs 15,000-20,000 additional levy. Today, diesel compacts are being lapped up furiously with the result that old petrol-driven favourites such as Alto are losing out rapidly to siblings such as Swift. It is only fair that any move to tax diesel cars includes the entire range on offer in the market. Recast excise Perhaps, one option that can be explored is to recast the excise duty structure where the 12 per cent continues on small petrol cars while diesel will be levied a higher 16 per cent. For larger cars, the Government could reduce the duty on petrol versions to 20 per cent while the 24 per cent is confined to diesel. Alternatively, large petrol cars can be levied 24 per cent and diesels 27 per cent. It is imperative, though, that there is no change in this duty structure unless the impossible happens and diesel prices end up being nearly on par with petrol as is the case in the West. At present, the difference is a hefty Rs 30 a litre and the gap can only be bridged once a differential pricing system is in place for diesel in the auto sector. Ideally, cars should pay the market price for the fuel while the subsidy will extend to trucks, buses and the agriculture sector. When this happens, there will be no reason to continue with a two-tier excise-duty structure for petrol and diesel cars. In fact, this was the case till the early 1990s when diesel-driven multi-utility vehicles got away by paying a mere 15 per cent duty while petrol versions such as Maruti Gypsy coughed up nearly three times as much. There is no reason for the Government to revisit this phase which was marked by arbitrary policies and favouritism. The automobile industry has come a long way since then, with both Indian and multinational companies pulling out all stops in a competitive market. The Government should involve them more proactively on a host of issues, and the way forward should see a strong partnership forged between the two. It is also time to acknowledge that the days of cheap fuel are a thing of the past. Crude oil prices may have softened in recent days, but it is only a matter of time before they bounce back to the levels of over $100 a barrel. Car users need to understand that they are paying for a precious commodity, be it petrol or diesel, which cannot be subsidised forever. This is a better option than unavailability of these auto fuels which can have catastrophic consequences as seen in Chennai recently. Spare a thought for the oil companies which have to ensure fuel supplies across the country even while their losses are piling up by the hour. Others must share the pain in these difficult times, especially when they can afford to.

A fabulous feast for speed junkies.

The season opener of the Sidvin-MMSC national two-wheeler racing championship at Coimbatore had all the ingredients to make it a fabulous feast for speed junkies. The race stewards, marshals and medical staff were kept on their toes as the organisers conducted 23 entertaining races in 10 different categories over the weekend. The paddock was bursting at its seams with manufacturers flaunting their fleet of vehicles as the enthusiastic crowd made a beeline to check out the mean machines. Adding glamour quotient Leggy lasses, sporting skimpy skirts, walking up and down the pitlane may not be an unusual sight in motorsport. But for regulars at the national bike racing, the last weekend’s season opener was a pleasant surprise. Not to be left behind by their rich cousins — four-wheeler racing — bike manufacturers brought in a dozen umbrella girls to adorn the starting grid. The girls initially seemed like fish out of water, but they slowly started feeling at home. Private team boost The number of private teams in the fray has underlined the growth of the national championship. Three years ago, the team concept was almost non-existent as factory-supported TVS Racing remained the sole outfit. The entry of Chennai-based Moto-Rev India, Ten10 racing and Apex has changed the trend. The 2012 season has another four new entrants in Yellow Panthers, Performance, Thunderbolt and Sparks. The newly-introduced Group C 165cc CC Open (with restricted modifications) proved to be the most competitive category with 20 bikes vying for honours. The simmering rivalry among the private teams brought a smile to the organisers as it only signals a rosy future for the sport in the country. Second round to be postponed? As the Madras Motorsport Club-owned circuit in Irungattukottai is currently shut for refurbishment, the second round of the championship, slated to be held in the last weekend of this month, could be postponed. The MMSC track is undergoing a layout change to get a Grade 4 certificate from the FIA (International governing body). “Work on a new pit entry and flattening of kerbs is going on. The track is expected to be ready by end of July, before the third round,” said Amit Arora, GM of MMSC. Sarath shows new vigour Competing in the Italian championship has surely transformed Sarath Kumar. Representing Mahindra, the Chennai racer is performing impressively in the highly-competitive series and the exposure seems to have made a sea change in Sarath’s approach. “I think I have a new found vigour after the podium finish in the second round. Now, my thoughts are focussed entirely on riding as my manager Ramji Govindarajan is taking care of the sponsorship issues. So there is no extra pressure on me,” said Sarath, who was in Coimbatore to catch up with some of his friends at the national championship. New stars on the horizon By his own admission, K. Rajini, arguably the best rider in the country, is at the fag end of his career. Having won a dozen titles in domestic competitions, the polite racer has nothing left to prove in India. As the national championship is looking for a new star, three bikers — R. Deepak, Shyam Shankar and K. Jagan have thrown their hats into the ring. Deepak is versatile. He is currently the only Indian racing two-wheelers as well cars. Deepak has already proved to be a threat for Rajini in Superbikes with his second-place finish last year. Shyam has come a long way from a street racer to national champion. His performance in the one-make event last year fetched him a Honda-sponsored racing trip to Japan. In the last weekend’s event in Coimbatore, Shyam achieved a double in the Group C 165cc Open class with dominant victories. Jagan, a TVS protégé, is calm, but his on-track exploits speak volumes. The trio promise a lot, but can they dominate the nationals like Rajini did is anybody’s guess.

Auto makers bet gloom will lift

Three firms to invest more than Rs. 11,750 cr, joining other companies betting that economic growth will revive Amid the slowdown in the market and ambiguity over policy decisions, some Indian auto makers are betting that the gloom will lift in time for substantial investments in boosting capacity to pay off, joining other segments of corporate India that have a counter-intuitive, strongly optimistic outlook on the economy. At least three auto makers—Mahindra and Mahindra Ltd (M&M), Maruti Suzuki India Ltd and Hero MotoCorp Ltd—have announced plans for factories with a combined investment of more than Rs. 11,750 crore. They are not alone in bucking a trend recently reinforced by gross domestic product growth slowing to a nine-year low of 5.3% in the quarter ended March. On Thursday, Mukesh Ambani said Reliance Industries Ltd (RIL) will invest Rs. 1 trillion across its various businesses, anchoring itself firmly to expectations of a bright future growth cycle for India, amid global uncertainties. “India is poised to be one of the growth engines of the global economy over the next decade,” Ambani told RIL shareholders at the company’s annual general meeting. As with that company, the auto makers, too, have hurdles to overcome. Apart from the uncertainty associated with demand, companies will have to grapple with land acquisition issues, said analysts. Besides that, with the balance sheets of auto parts suppliers being under-capitalized, getting them on board to build capacities will be a challenge for auto makers. Pawan Goenka, president (automotive and farm equipment sectors) at M&M, explained the rationale behind investing in new capacities when demand is sluggish. WATCH VIDEO Mint’s Shally Seth Mohile says M&M, Maruti Suzuki and Hero MotoCorp have announced plans for factories with a combined investment of nearly 11,750 crore despite muted market growth Loading video... “In the auto sector, the investment cycle can never be matched with the boom cycle,” he said. “If we hadn’t invested during the downturn of 2008-09, we would have missed riding the wave when the demand returned.” While some companies may have excess capacity, that’s not a reason for others to keep from investing in new ones, Goenka said. M&M is India’s biggest maker of utility vehicles. Land acquisition is an obstacle that will be tough to resolve. “We have seen what happened in Singur,” said Tarandeep Ghai, principal at Boston Consulting Group, referring to Tata Motors Ltd having to give up plans to produce the Nano at the West Bengal site owing to protests over land acquisition. It’s becoming increasingly difficult to acquire land for new projects, he said. M&M’s Goenka agreed. “The process of acquisition sometimes takes from nine months to a year,” he said, given that auto companies need large parcels of land—as much as 500-700 acres. Goenka said states with land banks are better positioned to attract investments than those with none. Starting from the current fiscal year, M&M plans to invest a total of Rs. 5,000 crore in the next three years to expand existing capacity and to set up new factories. It makes sense for firms to expand capacities, with demand fundamentals such as growing per capita income and relatively low car penetration continuing to be favourable, said Mahantesh Sabarad, senior vice-president (equity research) at Fortune Equity Brokers (India) Ltd. However, the preparedness of suppliers to align their capacities with those of the auto makers could be a limitation. “Most of them (suppliers) are under-capitalized,” Sabarad said. Typically, an auto company builds a plant with the objective of it being able to serve a model for three stages of its life cycle. Very few suppliers are able to sustain beyond the first one, he said. Auto component makers, whose contribution to an automobile can be as high as 75%, are required to make a consolidated investment of $1.5-2 billion (Rs. 8,300-11,100 crore) every year to stay in step with the expansion plans of auto makers, said Arvind Kapur, chairman and managing director of Rico Auto Industries Ltd, and president of the Automotive Component Manufacturers Association. To be sure, auto firms are trying to ensure that challenges such as the over-leveraging of balance sheets at auto parts makers can be overcome. At its vendor meet in Bangkok last month, India’s biggest car maker Maruti Suzuki proposed that tier I suppliers help the smaller tier II and tier III suppliers with the sourcing of funds. The combined investment by all its suppliers needs to be doubled to ensure that Maruti Suzuki meets the target of selling two million units in 2015-16, according to one of the suppliers who attended the meet. Japan’s Yamaha Motor Co. Ltd will also set up its third and largest manufacturing facility in Asia on the outskirts of Chennai, investing Rs. 1,500 crore over five years. Other two-wheeler makers that have announced investment plans include Hero MotoCorp, which announced a total of Rs. 2,575 crore of investment on 4 June. Honda Motorcycle and Scooter India Pvt. Ltd said in January that it will investRs 1,000 crore in fiscal 2013. Passenger car makers aside from Maruti Suzuki are yet to announce expansion plans, owing to the ambiguity in various policy decisions, which is of a piece with the government’s inability to get its act together on pushing reform measures through largely because of resistance from coalition allies. Hyundai Motor India Ltd, for instance, hasn’t yet firmed up a proposal to set up a diesel plant because of uncertainty over the government’s fuel policy. A diesel subsidy, which makes petrol costlier at the pump, has boosted the proportion of diesel-run cars sold, but the government is said to be considering ways of closing the price gap. The government is veering toward imposing higher excise duty on diesel cars, Mint reported 7 June. Top executives of auto firms met senior finance ministry officials to lobby against the government’s plan to levy additional excise on diesel vehicles on Wednesday. Should the government go ahead with such a decision, “it could jeopardize plans of companies that have or plan to invest heavily in diesel engine technology”, Goenka of M&M said in Mumbai on Thursday. It’s also likely to have an impact on the 11-13% growth the industry has projected for the current fiscal, he said. According to Goenka, the additional duty will not solve the problem, but only kill demand. A better solution would be to increase the diesel price by Rs. 2-3 a litre and reduce the petrol price by Rs. 6-7. This will bring in higher revenue and bridge the price differential, he said. Volkswagen AG said on 17 May that it has put on hold a proposed Rs. 2,000 crore investment plan in India as a dispute over value-added tax refunds with the Maharashtra government hasn’t been resolved. “The normal investments required for usual operations of the company are going on, but the big plans for the future have been put on hold at the moment,” John Chacko, Volkswagen Group chief representative for India, told PTI.

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