Winners and losers in global market share: forecast

According to Global Insight, a leading American market intelligence specialist, these are the automakers that will grow the most in global market share over the next five years:

1. Tata (India): will grow 0.6 percent (current market share: 0.6 percent, 2013 forecast: 1.2 percent)
2. Chery (China): will grow 0.4 percent (0.6, 1.0 percent)
3. Renault (France): will grow 0.3 percent (3.1, 3.4 percent)

Other brands that will gain market share: Maruti (India), Nissan, BMW, Audi, Mitsubishi, Skoda and Wuling (China). All will increase 0.1 percent.

Brands that will stay the same: Honda, Mercedes-Benz, Dodge.

Carmakers that will lose global market share:

1. Ford: will lose 0.7 percent (current market share 7.1, 2013 forecast: 6.4 percent)
2. Peugeot: will lose 0.4 percent (2.9, 2.5 percent)
3. Daihatsu: will lose 0.3 percent (1.2, 0.9 percent)
4. Lada (Russia): will lose 0.2 percent (1.1, 0.9 percent)

Other automakers that will lose global market share: Toyota, Chevrolet, Volkswagen, Kia, Hyundai, Fiat, Suzuki, Mazda and Opel.

Tags: auto industry

Powered by Qumana

Toyota enters Nano Wars

India’s premier carmaker, Tata Motors, rocked the automotive world when they finally released their anticipated Nano, alternatively known as the "People’s Car", "One-Lakh Car" and "$2,500 Car".

Kudos to Tata for building up expectations over the past five years (they announced this project back in 2003) and then coming through on their promise.

The initial reply from other major manufacturers such as GM and Toyota was that the Nano could not be profitable (Tata says it is), and that the car could not meet safety and emissions standards (it currently does in lax India which is Tata’s first intended market).

Now both GM and Toyota are scrambling to reply with product.

Basically what What Tata did was signal their intention of dominating the entry-level segment in India, where a potentially huge emerging middle class looks to buy their first automobile.

Toyota has announced plans to begin building small cars in India, for the local and export markets. They will build a second plant to be ready by 2010, at a cost of $350 million dollars and with an output of 100,000 units per year,  through their joint-venture in Bangalore.

Toyota President Katsuaki Watanabe has been quoted by the Times of India as saying, "There is a huge market for low-cost/price vehicles," but at the same time has expressed concern about Toyota’s ability to maintain a high level of quality.

At the same time, GM is manufacturing a $3,500 mini-car in China.

Tags: Toyota, Toyota India, GM, GM India, Katsuaki Watanabe, Nano, People’s Car, One Lakh Car, automotive, auto industry, automotive industry, India, India auto industry

Powered by Qumana

Tata buys Jaguar, Land Rover for $2.3B

India’s Tata Motor will finalize, in June, the much-awaited purchase of Ford’s high-end  Jaguar and Land Rover operations for $2.3 billion dollars, pending regulatory approval.

Jaguar and Land Rover are part of Ford’s PAG, Prestige Auto Group, which bit by bit is being disbanded.

Ford will also commit to injecting $600 million into the Jaguar and Land Rover pension funds.

As Automotive News says,

"The sale of the two European brands culminates a key part of Ford’s ongoing restructuring program, which is expected to improve the company’s focus on its core Ford brand."

Tags: Ford, Tata, Tata Motors, Jaguar, Land Rover

Powered by Qumana

Nano: Tata’s $2500 People’s Car is here

One hundred years ago the original "People’s Car", Henry Ford’s Model T, rolled off the assembly line. Priced at one third the U.S. per capita income, the Model T had a very clear and world-changing goal: to make cars available to everyone.

Now, Indian powerhouse Tata Motors has released the Nano, this century’s People’s Car (also known in the media as the One Lakh Car). The Nano was recently unveiled at the Delhi Auto Show by the car’s originator, Tata CEO Ratan Tata. The Nano also costs roughly 1/3 the Indian per capita income.

The Nano will be built at Tata’s upcoming plant in West Bengal, India, with a capacity of 200,000 units (expandable to 350,000). Tata has a goal of selling 1 million cars a year and expand to other countries.

The Nano’s $2500 price tag makes it the cheapest car in the world. The next two are China’s Chery QQ ($4,781) and the also Indian Maruti Suzuki 800 ($4,994). And further down the list are the more established Chevrolet Aveo at $9900, cheapest in the U.S.; the Daihatsu Esse ($6000, Japan); and the Renault Dacia Logan ($12,000, Europe).

Ratan Tata says the Nano venture is profitable, something that several manufacturers were/are in doubt of.

The Nano is a five-door hatchback, has one long windshield wiper and only one side-view mirror. It’s powered by a patented two cylinder 623cc gasoline engine, has a top speed of 105 km/h (65 mph), and gets 54 miles per gallon or 4.4 liters/100 km.

It has limitations, of course: it lacks air conditioning, power steering, central locking, air bags and other basic security features. Though it complies with Indian emissions and safety regulations in India, it does not in the U.S., Europe and Japan. But for the Nano’s intended market, that doesn’t matter for now.

Potential setbacks for the Nano?

1. Higher cost: As global concern for the environment grows, India is expected to soon tighten their emissions regulations; this may have an impact on the Nano’s price.

2. Competition. Renault-Nissan (with Bajaj Auto), Toyota, Honda, Ford and Fiat have announced their intention of producing a comparable low-cost car. Tata has a big advantage in India thanks to their unbeatable reputation and local heritage. Also, Tata has done a great job building up expectations for the Nano, and public reaction has been very enthusiastic.

Read this related article at Wharton.

Tags: Tata, Tata Motors, Tata Nano, One Lakh Car, People’s Car, Ratan Tata, automotive, auto industry, automotive industry, India, India auto industry

Powered by Qumana

Tata acquisition of Jaguar, Land Rover imminent

Tata Motors and Ford have agreed on a purchase date for Jaguar and Land Rover, the two brands that until now were a part of Ford’s PAG: Premier Automotive Group.

Tata will make the official announcement on March 5 or 6, says Automotive News.

The transaction is said to be valued at $1.5 to 2 billion dollars. Both brands will continue to be built in England at least for the time being.

This follows talks between Tata and trade union leaders last week to finalize details. Major union spokespersons have said that all is well with India’s largest automaker, who is making a big move on the global front with this acquisition.

Tags: auto industry, Ford, Tata, Tata Motors, Land Rover, Jaguar

Powered by Qumana

Jaguar and Land Rover to India?

A while back Ford made known their intentions of selling their Jaguar and Land Rover brands, and it looks like things are coming to a close, according to the Sunday Times.

The winning bid looks likely to be from Indian powerhouse Tata Motors, for some $2 billion dollars, outbidding local rival Mahindra & Mahindra and private equity firm One Equity Partners.

Tags: Ford, Jaguar, Tata, Tata Motors, Land Rover, Mahindra & Mahindra, India, India auto industry, automotive, auto industry, automotive industry

Powered by Qumana

How Suzuki generates market

As India’s middle class continues to grow, the local car market is going the same way at a fast clip of 15 percent a year. Total sales are expected to jump from 1.3 million in 2006 to 2.1 million in 2010.

Maruti Suzuki is the reigning king of the auto industry in India, owning an amazing 55% of the market.

Not content with their absolute dominance of the Indian car market, they’ve come up with some innovative ideas to grow the market and thus expand their reach.

Here’s what Maruti noticed:

• Many first-time buyers don’t know how to drive
• Few women in India drive
• Buying decisions are made by the entire family
• Rural areas are mainly unattended by automakers

Here’s what Maruti is doing:

Focus on first-time buyers

35 percent of sales are to first-time buyers. For many of these, a car is an enormous acquisition, so Maruti has learned to treat all customers equal, whether they are buying a high or low-end vehicle.

But here’s the more interesting strategy: Maruti sponsors 18 driving schools throughout India, and plan to expand to fifty by March 2008.

Focus on women

More than half of trainees at the driver training schools are female. So Maruti has “lady instructors” to make them more comfortable. Jagdish Khattar, managing director of Maruti Suzuki, says:

"If the wife learns to drive, it won’t take long for her to persuade the gentleman to buy a car."

Focus on family

Maruti dealerships are equipped to accommodate buyers in large groups, for example with play areas for children.

Attack rural areas

Indian carmakers mainly focus on urban areas as that is where the money is.

But rural India is home to over 800 million people, with a lower cost of living, and where there are many dual-income families with more disposable income.

Maruti has unleashed salespeople to rural India to target various niches… teachers for example. Last year they visited 30,000 schools and sold 10,000 units.

Ongoing service

There are over 6 million Maruti owners throughout India. Maruti serves them through a huge network of 400 dealerships and 2,400 service shops in 1,100 cities.

They hold free tune-up and service camps that are attended by 450,000 owners a year.

And the end result of all of this?

Maruti not only leads all carmakers in India in sales, they are also ranked #1 by JD Power in customer satisfaction with dealer service (for the past seven years).

Learned of this here.

Tags: customer satisfaction, best practices, automotive, auto industry, automotive industry, India, India auto industry, Suzuki, Maruti, Suzuki Maruti

Powered by Qumana

India’s Tata wants Jaguar

Tata Group is interested in acquiring Jaguar and Land Rover.

Ford is the current owner of both prestige brands, which are part of their Premier Automotive Group (PAG) unit.

The PAG groups Aston Martin, Volvo, Jaguar and Land Rover. Aston Martin has already been sold for $848 million to an investor group, and Ford has shown interest in selling the other three.

Ratan Tata, CEO of Tata Group, says his company is “certainly interested” in acquiring Jaguar and Land Rover, which would help their efforts to gain scale as well as increase worldwide reach.

Ford is making no announcements before the end of the year. Alan, Mulally, Ford CEO, said a few days ago that the probability of selling both brands is higher that fifty percent.

Rumors say that Ford already has two firm suitors for Jaguar, both led by ex-Ford executives:

• Ripplewood Holdings, with Nick Scheele, ex-president 2001-2005
• One Equity Partners, with Jacques Nasser, ex-president 1999-2001

Tags: Premier Automotive Group, PAG, Aston Martin, Volvo, Jaguar, Land Rover, Ford, Tata, Tata Group, Ratan Tata, Alan Mulally, Nick Scheele, Jacques, Nasser, automotive, auto industry, automotive industry

Powered by Qumana

Air powered car

Indian powerhouse Tata Motors is leading the way with the first commercial car to be powered by compressed air, called the City Cat, which will supposedly begin production this year.

The City Cat is based on high performance compressed air technology developed by MDI.

According to Engadget,

"The City Cat runs on nothing but compressed air — which can be refueled at "air stations," and overnight using a built-in compressor — with a not too shabby top speed of 68 MPH (110 km/h) and a range of 125 miles (200 km).

The Air Car designers are working on a hybrid version that can compress air while it’s operating, potentially making cross-India journeys possible.

It’s not completely emissions free travel since the problem of the source of the electricity (usually acquired from fossil fuels) has yet to be solved."

Tags: Tata, Tata Motors, City Cat, alternative energy, air car, air powered car, sustainable energy, automotive, auto industry, automotive industry, India, India auto industry

Powered by Qumana

India auto industry update (Part 9): Toyota in India

As a provider of dealer management systems to automobile dealerships in several emerging markets, we closely follow what happens in the auto industry in key regions around the world. I thought it might be interesting to share some of that information.

In the world’s major markets, auto sales are slowing at the same time that competition increases, so global auto manufacturers are setting their sights on big emerging markets like the BRIC countries: China, Russia, Brazil and India.

This series briefly discusses the promising future of the automotive industry in India. We’ve already looked at what GM, VW, Honda, Ford, Renault-Nissan, Hyundai, reigning king Maruti Suzuki, and now we’ll look at world #1…

Toyota in India

Toyota is present in India since 1997 through a joint venture called Toyota Kirloskar Motor Private Limited, in which Toyota Motor owns 89% and local Kirloskar Group of India the remaining 11%.

Today Toyota has a four percent market share in India.

Toyota Kirloskar has a plant near Bangalore that can produce 45,000 units annually, and that is currently running at full capacity. The Corolla and Innova minivan are made there, for local consumption.

Recent news reports have talked about Toyota’s plans for a second plant, near their current one, to be built for some $400 million, but Toyota have replied that they have no concrete plans to do so.

Toyota offers the following models in India:

• Camry   
• Corolla
• Innova minivan
• Land Cruiser Prado

Toyota’s plans for a compact car in India

Small cars account for over 70 percent of the local car market, where Suzuki-controlled Maruti Udyog reign supreme with over 50% of the market.

But Toyota has not yet decided, or at least made public, their plan for a compact car in India. Recent reports in the news talk about a supposed small car project, saying it is central to Toyota’s goal of reaching a ten percent share of the local auto market by 2010.

For some time there were reports that Toyota would build a new plant with their subsidiary Daihatsu this year, to produce 100,000 compact cars annually, but that never happened.

Toyota has taken an interesting step that could be seen as a prequel to expansion into increased production in India.

Toyota recently opened the Toyota Technical Training Institute (TTTI), a technical training school for middle school graduates, in Bangalore.

This is a vocational training school with a three year curriculum that offers academic classes on engineering and practical training at Toyota’s plant. The training focuses on painting, welding, automobile assembly, and mechatronics.

This is Toyota’s first such school outside Japan.

Other stuff

Toyota and Isuzu Motors (5.9 percent owned by Toyota) have just announced an alliance in small diesel engines, and will start making diesel engines for the European market starting in 2012. Development and production will be mainly carried out by Isuzu.

         

Posts in this series:

• Part 1: Overview
• Part 2: GM in India
• Part 3: VW in India
• Part 4: Honda in India
• Part 4b: Honda in India, two-wheelers
• Part 5: Ford in India
• Part 6: Renault-Nissan in India
• Part 7: Maruti Suzuki in India
• Part 8: Hyundai in India
• Part 9: Toyota in India
• Part 10: Tata Motors in India

Tags: India, auto industry, automotive industry, India auto industry, Toyota, Toyota India, Camry, Prado, Corolla, Innova, Daihatsu, Isuzu, TTTI

Powered by Qumana