Dec. 4 – Volvo announced plans this month to launch its Eicher Pro Series trucks in India with its joint venture partner, Indian automaker Eicher Motors. Volvo points to the country’s enormous growth potential as the driving force for its expansion plans.
Production of the Pro Series will start this February in newly upgraded Indian manufacturing facilities. Over the past years, Volvo-Eicher Commercial Vehichles (VECV) have invested over Rs 1,800 crore (US$288.3 million) into expanding and modernizing production facilities in India, including a first-class engine factory, new assembly lines, a cab factory and cab painting workshop.
Recently, the auto industry has suffered slow growth due to a weak rupee, leading to decreased domestic demand and increased costs for imported parts. Despite this, VECV remains confident in future industry growth. Set to become the world’s third largest automotive market by 2016, India will surpass Japan, Germany and Brazil. Continue reading
Sept. 29 – Royal Enfield, the classic British motorbike brand snapped up by India’s Eicher Motors in 1994 following a long British decline and eventual bankruptcy, is set to launch its first new bike in the UK since the brand effectively left Britain.
Royal Enfield, which was purchased lock stock and barrel and relocated to Chennai, now dominates the premium bike sector in India’s market, selling about 113,000 bikes last year – 95 percent of those being larger than 350cc. Eicher is increasing production of the brand to 250,000 units in 2014 with eyes on a significant export sales – including back to Britain. The brand is profitable, making profits last year of some US$168 million as revenues increased 56 percent on 2011. Continue reading
Aug. 1 – Ford India has become the second auto-manufacturer after Hyundai to have their dedicated car parking yard at Chennai Port. With Ford making India its global manufacturing and export hub, this dedicated facility at the Chennai Port marks a significant step to provide access and further accelerate exports of Chennai-made Ford autos, including the all-new EcoSport, to 38 countries worldwide. Continue reading
Jul. 24 – American automotive manufacturer Ford have announced plans to make India a central platform for their global vehicle production. The companies so-called “Project B562” will see the company move production facilities to its plant at Sanand, Gujarat, and commence manufacturing of three different vehicles from 2014. These cars will include a small hatchback, a new regular hatchback (replacing the Figo) and a mid-sized sedan to replace the Fiesta model.
Ford’s Global CEO, Alan Mulally, has been noted as previously saying that auto sales were down in the United States and Europe. India is currently the world’s sixth largest auto market and is set to become the third largest by 2020. Continue reading
A combination of taxes and FDI polices will drive MNCs to invest in Indian factories
Jul. 23 – India is set to increase import duties on a number of luxury items, including automobiles, televisions, high-end mobile phones, tablets, laptops and exotic foods. As part of a series of strategic tax and FDI initiatives currently being implemented by Finance Minister Chidambaram, the increases are specifically targeted at imported consumer goods that add no manufacturing or FDI value to the country.
“The increases in these strategic items comes at a time when India is, for the first time, coordinating its FDI policy with tax policy,” says Chris Devonshire-Ellis, Managing Partner of Dezan Shira & Associates. “For example, while luxury tax is being imposed on smartphones and tablets, at the same time FDI restrictions in the telecommunications industry are being relaxed. The message is clear: manufacture these products in India for the domestic market or face being priced out through luxury tax. The same is true of autos and other sectors.”
India thus far has a patchy record of matching FDI policy with import duties. However this has now changed, and corporate policy as to accessing the Indian consumer market will have to change along with it. Continue reading
Mar. 19 – In a strategic move that underlines the dawning recognition of India’s growing wealth, the auto manufacturer Volvo, owned by Geely of China, is preparing a long term strategy for the Indian market which will concentrate on luxury cars.
In a statement to news agency PTI, Volvo Auto India MD Tomas Ernberg said the market for luxury cars in India has “the potential to grow fantastically”. He further stated that the company’s growth strategy was to focus on high net individuals.
Its sales last year of 812 luxury cars was an impressive 150 percent increase from 2011. The target for next year is 1100 cars, although the company predicts that they will overshoot this goal by some 300 cars. Continue reading
Feb. 20 – Motherson Sumi Systems, India’s largest auto parts manufacturer, is pursuing an aggressive expansion strategy and is looking to significantly increase its market share in China, Brazil and the United States. The company is already adding capacity to its China plants, which currently supply rear view mirrors, bumpers and body parts to Porsche and Volkswagen, and to its operations in Thailand, Brazil and Mexico. The company has a US$5 billion sales target for 2013.
“New volumes will come from developing countries,” said Motherson’s CEO, Pankaj Mital. Continue reading
Apr. 9 – India is the second fastest growing vehicle market in the world. The main reasons for this are its rising levels of disposable income and the country’s growing middle class. The passenger car density in India is still very low, 11 per 1,000 people, compared to 45 per 1,000 in China. However, while growth potential is plentiful, traffic congestion and pollution could crop up as problems in the future.
In 2011, fuel prices across India rose in response to the government’s raising of interest rates. Despite these unfavorable circumstances, and the fact that car sales fell in the second half of 2011, 2012 observers are optimistic about prospects for the local Indian vehicle market. Expectations are a rise in vehicle sales by 10 percent in 2012. Continue reading