Fitch Ratings augur well for auto industry in 2010 with 10-12 per cent growth

Fitch Ratings Indian Auto Sector Outlook 2010 report just released augurs well for the Indian auto industry - an overall growth in sales of 10 -12 per cent during 2010; Passenger Vehicle (PV) volumes a 12-14 per cent and Commercial Vehicles (CV) a 5-6 per cent growth. This would however, lead to sharp increase in capex plans, offseting the positive impact on credit profiles of higher volumes and lower inventories. The trend should fall in line with the improvement in the domestic economic environment and improved availability of credit. Against domestic sales, exports would remain an area of concern— due to the slowdown in global automotive markets and the expiry of scrappage incentives for replacing older vehicles (as were offered for PVs in 2009). PV sales began to improve from June 2009, and CVs from October 2009. The PV rebound has been supported by an improving liquidity scenario and restoration of consumer confidence; modest growth in industrial production, together with the government stimulus, has brought about stability in CV sales, though at lower levels than for PVs.

 

CVs segment has seen cyclical patterns, typically a period of two to three years of high growth which is then followed with a similar downward cycle — to which the CV manufacturers were exposed during 2008 and most of 2009. Improving industrial production and economic growth rates, coupled with a reversal of more than two years of downtrend, are likely to spur a positive track for CV manufacturers in 2010. Domestic CV sales grew by 22.3per cent during April-December 2009 compared with the comparable period in 2008, building on the recovery in demand beginning Q409. However, growth trends have distinctly varied within the CV segment — depending on the tonnage capacity and end use, as light commercial vehicles (LCVs) have been able to maintain their ground while medium and heavy commercial vehicles (M&HCVs) continued to face pressure due to the decline in industrial output. The M&HCV segment is now stabilising with the higher industrial production, while the LCV segment is showing a more rapid recovery.

 

Fitch expects the full year 2010 numbers to reveal moderate growth in the range of 5- 6 per cent for domestic sales, with the first few months being driven by regulatory guidelines pertaining to fiscal benefits and less stringent emission norms.

 

The agency believes that the polarisation in the CV market should continue, with higher growth rates for the lower and heavier ends of the spectrum. This is also evident from the capacity addition plans of original equipment manufacturers (OEMs), wherein most of the capacity is being added in the LCV segment (less than 1.5 tonne gross vehicle weight) by Tata Motors Limited and Mahindra & Mahindra Limited. The heavy range of trucks is receiving investment essentially from new entrants such as Daimler AG ('BBB+'/Negative), the Nissan Motor Co. Ltd. ('BBB'/Negative)‐Renault SA ('BB'/Negative)‐Ashok Leyland Ltd. ('AA‐(ind)'/Negative) JV, and the Mahindra & Mahindra‐International Truck & Engine Corporation (ITEC) JV. Export volumes should remain under pressure, as significant international capacity is lying unutilised. There was an easing in late-2009 in the decline of freight volumes, and higher fuel and financing costs, which contributed to the weak sales of CV manufacturers during 2009 as a whole.

 

Combined with government's stimulus to revive the domestic CV industry through the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), this has added to the order-book position of CV manufacturers — since a significant portion of the cost involved in replacement of the older fleet of state transport undertakings (STUs) is borne by central government. Many of these orders are likely to be executed over the next couple of months up to March 2010, for the manufacturers to avail themselves of the fiscal benefits. The accelerated depreciation benefit offered for CV purchases during early 2009 expired in September 2009, although volumes continued to show positive yoy growth due to the low base effect. The switchover to new emission norms from April 2010 should support demand during Q1 of 2010, as operators pre-empt their purchases to save on higher costs brought about by the tighter emission norms. However, the recovery in the overall economic environment should drive CV growth prospects in the long term.

 

PV sales, which clearly suffered amid the global liquidity and credit crisis during Q4 of 2008, started posting growth from H2/2009 after reeling under pressure for about a year. The recovery in demand for domestic PVs, propelled by new model launches, discount offerings by OEMs, and easy and cheaper consumer finance, has come earlier than anticipated by Fitch.

 

Furthermore, monetary incentives offered by governments in international markets helped the cause of Indian PV manufacturers, as their product portfolio comprised smaller, fuel-efficient vehicles entitled to such incentives. As a result, exports from India increased significantly by 28.8 per cent Y-o-Y during April-November 2009, benefitting small car manufacturers such as Maruti Suzuki India and Hyundai Motors India. The termination of these monetary incentives in international markets is likely to affect export volumes, which constituted about 19 per cent of total sales volumes for Indian manufacturers during April-November 2009.

 

The easy credit availability and affordable cost of consumer finance could continue to have a positive impact on domestic car volumes during 2010, with accelerated purchases during the first few months in anticipation of the new emission norms from April 2010 — and the consequent increase in vehicle prices. This demand advancement, along with the higher vehicle prices as a result of tighter emission and safety norms from April 2010, could put pressure on short-term volume growth after April 2010. There could also be issues with regard to availability of fuel to meet the new emission norms from the oil companies, which could also impact sales.

 

Domestic PV sales registered a 21.2per cent growth during April-November 2009 compared with the same period the previous year. Most growth was brought about by the compact, or "A2" segment as defined by Society of Indian Automobile Manufacturers, as many new models were launched. The utility vehicles segment has also started showing signs of growth due to a reduction in excise duty, and demand emanating from semi-urban and rural markets.

Given the favourable demographic profile and economic growth prospects, many OEMs have announced the launch of smaller, affordable and fuel-efficient vehicles over the next 12 months. Many global OEMs with a limited presence in the compact car segment are planning to tap the segment in collaboration with established small car manufacturers, through their global tie-ups such as the Volkswagen Group ('BBB+'/Stable)-Suzuki combine and the General Motors Shanghai Automotive Industry Corporation (SAIC) venture. As a result, the compact car segment — currently dominated by Maruti Suzuki India, Hyundai Motor India and Tata Motors —shall become increasingly fragmented. Thus, the growing volumes in the compact car segment, which contributed more than 58per cent of total domestic volumes in April-November 2009, shall largely guide the growth in the domestic PV segment. Overall, the agency expects the PV segment to grow by between 12 -14per cent through 2010.

 

The lengthening of the working capital cycle due to inventory pile-up and limited credit availability, which forced production cuts across the board in 2009, has started to return to earlier levels. This has partly been aided by the off-take of inventory over time with the alleviation of the tight liquidity situation. Despite the shortening of the working capital cycle from 2009's levels, the leverage of OEMs is likely to remain high over the medium term — owing to restoration of their capex plans.

 

A large number of OEMs which had deferred their capex plans in the wake of the difficult operating environment in early 2009, have resumed the capital spending — for ramping up capacity, for developing new products/adapting existing ones to local requirements, or for compliance with new emission and safety norms. Many global OEMs which had hitherto been carrying out assembly operations are setting up production units to cater to the domestic and global demand.

 

The existing players have also announced plans for capacity addition, in order to maintain their market share in the wake of competition. As a result, the next two years to 2012 could bring a further 0.9 million PV units (accounting for about 35per cent-40per cent of current capacity) and 0.6 million CV units (estimated to be around 80per cent of current capacity, with significant additions in the LCV segment).

 

Together with OEMs focusing on localising certain key components in a bid to reduce costs, these developments could result in significant capex over the next two years.

 

Fitch notes that the big-ticket capex plans of the OEMs are likely to mean significant negative free cash flow (FCF), as operating cash flows should be limited owing to margin pressures and rising competitive intensity. Since much of this negative FCF is likely to be funded from borrowings, Fitch expects financial leverage for OEMs to remain high over the medium term.

 

India's demographic profile — with a large, growing middle class and low vehicle penetration — has attracted many global OEMs which plan to use the country as a regional production base. In the PV segment, many of these players are introducing products specifically designed for the local Indian market. This is reflected in the number of new launches from existing (as well as new) entrants in the PV segment scheduled for 2010. The CV segment is also witnessing increased competition from global OEMs targeting India to capitalise on the country's economic growth.

 

Many international OEMs are coming in either independently or in collaboration with existing players — with the objective of reducing time to market and to take advantage of an established distribution network. The Indian auto sector is likely to witness significant competition by 2012 when most of the new capacity comes on stream. This is in turn likely to result in under-utilisation of capacity in the medium term, on account of the demand/supply mismatch.

The number of new players, as well as the higher number of new product launches from existing players, is likely to increase competitive intensity over the medium term. Coupled with pressure on utilisation levels, this could lead to increased price competition and consequently margin pressures, as multiple players attempt to gain market share.

 

CII’s Budget recommendation to government seeks higher depreciation rate for ec-friendly vehicles

In view of the global initiatives on Climate Change and Sustainability, for the first time, CII has made specific recommendations for the Union Budget which is aimed at the issue of environment – the most important from the point of view of the auto industry is that people should be encouraged to use environment-friendly petrol private cars with low emissions and high-fuel efficiencies thus allowing a higher rate of depreciation being offered to buyers of environment-friendly petrol private cars.

 

Since the installation of energy efficient technologies often involves signification costs, therefore in addition to the accelerated depreciation, which is provided currently, a tax credit should be provided equal to 150% of expenditure incurred on cost and installation of energy saving technologies.  Second, for promoting installation of energy conservation/improvement technologies in the real estate sector, which has the potential to generate sizeable gain for environment, tax deduction should be given to individuals for undertaking such investment in the house/property they are living in and also to builders who invest in these technologies while constructing green buildings.

 

Third, it has been observed that tax deduction has always stimulated individuals to save or invest more. Therefore, CII has recommended that tax incentives should be given to an individual for investing in companies engaged in generation of renewable energy or such other businesses resulting in water efficiency, carbon emission reduction, etc., that would result in higher cash flow to these industries. The benefits could be given by way of tax deduction or reduced rate of capital gain on transfer of shares in these companies; tax free bonds, which may be issued by these companies; etc.

 

Fourth, the benefits of tax holiday under section 80IA of the ITA could be extended to undertakings engaged in the manufacture of advanced energy efficient products, manufacturers of equipments used in solar, wind, and other environment friendly resources.

 

Fifth, water being in short supply, there is need for measures which would ensure efficient use. CII has therefore, recommended that tax credits may be given to encourage water users to invest in (1) the construction of impoundments to use available surface water, thereby reducing their dependence on ground water; (2) the conversion from ground water use to surface water use; and (3) land leveling to reduce agricultural irrigation water use.  These may include an income tax deduction of 50% of the project cost incurred in the construction, installation or restoration of impoundment; income tax credit of 10% of the project cost maybe given for the conversion from ground water use to surface water use; and for agricultural land leveling projects that conserve irrigation water, an income tax deduction of 10% of the project cost may be provided.

 

 

 

 

Skoda India planning to launch its small car in next 3-4 years

A small car that which would be positioned below super-hatch Fabia would be launched by Skoda Auto India in the next few years. Priced around Rs. 4-5 lakh it will also have a high degree of localisation and would be available in petrol and diesel variants. Though the company has refused to divulge any details, it has been learnt that the Czech carmaker would prefer to manufacture the car at its existing Aurangabad unit, where they have developed a vendor base in the vicinity. 

Following the footsteps of other global automakers like Hyundai, Maruti Suzuki etc the Czech carmaker is believed to be rolling out the compact car to be built on a completely new platform at the company's headquarters in the Czech Republic.The new small car will be launched in the next 3-5 years," Skoda Auto India board member-sales and marketing Thomas Kuehl told reporters in New Delhi recently.
 

According to sources privy with the news, the VW board has decided to roll out two small cars - one from the VW stable and another from Skoda - over the next 24-30 months. The technology for the cars have been finalised and now product development is underway. 

An extremely buoyant Reinhard Fleger, Member of the Board, Sales and Marketing, Skoda Auto, stated, "The Indian automobile industry continues to be among the most promising car industries across the globe and it shall continue to grow in the coming year backed by an estimated GDP growth of about 7 per cent. Skoda has a share of around 25% in the mid size segment where we have operated since the last 9 years. We have aggressive plans for the Indian market and aim to emerge as a major player in the Indian automotive industry's growth story. "  

Honda SIEL small car to begin exports with Bangladesh, Sri Lanka, Nepal & Bhutan

On the sidelines of unveiling the concept version of its first small car at the Auto Expo, India's leading premium carmaker, Honda Siel Cars India also shared its launch strategy for the benfit of the media. The export model would begin its outward journey first by being exported to neighbouring countries like Nepal, Sri Lanka, Bhutan, Bangladesh, etc. The reason fro doing so is that the small car has ben created keeping the local Indian sub continent condition sin mind and hecne its logical to first try out those markets which conform to those conditions. Slated to hit the domestic market by 2011 it will be priced below Rs. 5 lakh and will have nearly 80 per cent local content. The model, which had been entirely developed in Japan, will be manufactured at Honda's Greater Noida facility from next year. Honda has another plant in Rajasthan which produces body panels and engine components. This could well be home to the small car should there be a need for added capacity, as revealed by a senior representative of Honda Siel. Designed specifically for the Indian market, it will also be introduced in Thailand at a later point of time.

Speaking to the reporters at the Auto Expo recently, Jnaneshwar Sen, vice-president (marketing), said, "Though it's still on the drawing board, the company is eager to export it to the neighbouring countries like Sri Lanka, Bhutan, Nepal, Bangladesh, etc." He also stated, "The small car's launch is very much on schedule and the product is under development and should hit the roads in the next 2-3 years. "The first phase of our second plant project at Tapukara in Rajasthan is fully operational. It is only the second phase of the project, which is the Assembly unit, which has been postponed. Once the company achieves 100 per cent capacity utilisation at the Noida plant we will look at the second phase of the Rajasthan project", he said adding right now, the capacity utilisation ratio at the Noida plant is at 60 per cent and with Jazz it is expected to go up in the near future.

Elaborating further on the small car, Sen said that the company has studied the needs of a small car owner in the country for last two years before arriving at the arodynamic design shown at the Auto Expo. So much so, that the company has analysed how a typical Indian saree-clad woman gets in and out of a small car. For this, ladies draped in sarees were flown from India to Honda's global design centre in Japan. Likewise, the company has also started studying Indian customers' behaviour and usage patterns — weekend trend, shopping habits — to design stylish cars with modern looks and pack them with ergonomics features, as told by Sen to reporters. 

In order to keep costs low, Honda would also focus on localisation which means India could end up being a key sourcing base for supply of parts to other countries where the car will be launched. Indications are that Brazil, Russia and parts of Europe could be on the radar.

Honda Siel Cars India Director (Marketing) Tatsuya Natsume told reporters during the 10th Auto Expo in New Delhi, ""Our new small car, to be launched in 2011, will have a rate of around 80 per cent in localisation of components and we expect the small car to be as popular as the City and are all geared up to meet the demand once it is launched. We will also increase the use of local components in our other models as well," he added.
Media reports suggest that the company is looking at buying steel and electrical components from Indian suppliers for the car to be cost competitive, as revealed by Honda Motor Co executive vice-president and representative director Koichi Kondo while unveiling the concept of new small car. It is to be mentioned that Honda currently buys steel from Tata Steel and now they are in talks with other leading Indian steel makers for possible supplies.
"Local procurement of components is needed more now than before to make our small car cost competitive. We are looking to buy steel from Indian suppliers and also other components," Kondo said. He added, "It (the small car) should be less than Rs. 5 lakh to be competitive in the market," he said.

"Electrical components are something that we are still relying on imports for. We are talking to our Indian suppliers if they can make it for us," Honda Siel Cars India (HSCI) President and CEO Masahiro Takedagawa said.

BMW India to assemble crossover X1 at Chennai by 2010-end

On the sidelines of showcasing its range of models at the recently concluded 2010 Auto Expo, BMW India had informed that it will begin assembling its X1crossover compact SUV in India by the end of this year. The company would be bringing the model in a CKD format and assembling it at its Chennai plant..

Speaking on the occasion, Peter Kronschnabl, president, BMW India said, "The CKD production of the BMW X1 is a key milestone in BMW Group's India strategy. The BMW X1 opens up a new luxury segment in the compact Sports Activity / Sports Utility Vehicle class, demonstrating once again the company's fine sense for pioneering automotive trends. The BMW X1 is a modern vehicle that represents new interpretation of sheer driving pleasure and, like no other vehicle, a spontaneous lifestyle. It convincingly perpetuates the success story of BMW in India."

The BMW X1 comes with all the features so typical of a BMW X model and at the same time offers a new interpretation of BMW Sheer Driving Pleasure. The youngest member in the wide range of BMW X models stands for versatile sportiness and supreme agility, with looks characterised by self confident elegance and modern style. Young and sporting in design, the interior combines superior variability with equally superior flexibility. The BMW X1 is the perfect vehicle for customers focusing on areas such as leisure activities and lifestyle in their choice of car. It immediately awakens one feeling: the enthusiasm for driving.

Meanwhile, PTI has reported that  the German luxury car-maker will be ramping up its network pan-India and penetrate Tier II cities like Coimbatore, Jaipur, Ludhiana, Bhubhaneshwar and Lucknow, among others, a top company official said here. Currently, the company has 12 dealers in 10 cities and plans to add 10 more in Tier II cities by the end of 2010. It expects each dealer from Tier II locations to contribute about 30-40 cars per year.

Sales of premium super hatch Honda Jazz dips further in December 2009

India's leading premium carmaker, Honda Siel Cars India's premium super hatchback Honda Jazz sales have been dwindling since its June launch last year. Since then the company has managed to sell just 6,247 units and for the month of December the number seems to further plummeted from 2,032 to 269 units. In comparison to other small cars Jazz comes across simply with an unattractive price tag and also with a tag of close to rs 7 lakh and above on road, customers have found the new Honda City worth considering.

Jnaneswar Sen, marketing vice-president of Honda Siel Cars India, maintained, "From the time we launched Jazz, we have seen City volumes go up. We have observed that when customers walk into dealerships with the intention to purchase Jazz, they land up buying City. So either way we are gaining. However, during December, the sales of Jazz were very less as it was the last month. We are pretty confident that we can keep its volumes intact." He concluded by saying, "The Honda City continues to be the company's bread and butter, having sold 24,690 cars between June and December."

At the launch, Masahiro Takedagawa, president and chief executive of Honda Siel, had said the company would be more than happy if the Jazz could equal half the volumes of Honda's bestseller in India, the City.

According to an advertisement professional," The reason why Jazz is not selling like hot cakes is that its price tag- Rs. 6.98 lakh ex-showroom Delhi- is prohibitively expensive. At this price, prospective car buyers can easily buy a sedan which has an aspirational value. Moreover, middle class buyers are more concerned about quantity (price) than quality. However, the professional maintained, "If Honda slashes the price, maybe the Jazz will sell more."

Auto component manufacturers to participate in Germany’s AMI and AMITECH Fair

With India becoming major hub for sourcing of auto components by global automobile makers , major Indian auto component companies are expected to further provide a push to this opportunity by taking part in the forthcoming automobile, autocomponent parts and technology parallel show Auto Mobil International (AMI) and AMITEC to open on April 10-18, 2010 in Leipzig, Germany. 

AMI Fair which is considered as one of the most important events  in Germany for the automobile and autocomponent industry includes automobile manufacturers, autocomponent and car electronic product  suppliers both from Germany and other countries. These companies showcase  their parts, components, modules and technologies as well as innovations for the automobile industry in Germany and Eastern and Central Europe.

Major automobile manufacturers including BMW, SKODA, Renault and 600 other exhibitors are expected to show case their new products . Management at the fair expects around 300,000 visitors to be present for the 20th edition of the Auto Mobil International (AMI) this year. The focus is upon the presentation of over 40 brands and their current models, together with over 100 world, European and German premieres. The AMITEC - trade fair for vehicle parts, workshops and services will also be taking place from 10 to 14 April 2010. Also taking place parallel to the AMI is the AMICOM, a new in-car audio, infotainment and navigation fair.
 
Another major highlight of the AMI fair will be the AMICOM, specialist trade fair for entertainment, communication and navigation technology in motor vehicles premieres from 10 to 14 April. Parallel to the AMI and AMITEC visitors can inform themselves about the entire range of in-car electronic products on one 15,000 square metre site. Around 100 exhibitors are expected at the maiden event.

According to Dr Ditrich Kebschull, Chiarman, Indo German Export Promotion Foundation (IGEPF) which represents  AMI in India "The Indian industry is fast waking upas far as Leipzig Auto Fairs are concerned realisng that East and Central Europe is the hub for automobiles now instead of tradition Frankfurt, USA ,Switzerland and Great Britain, which are considered markets of yesteryears" .

World premiere of the new E-Class Cabriolet at Detroit Auto Show

Positive signals underline the Mercedes-Benz presence at the 2010 North American International Auto Show. The highlight of the opening day today was the debut of the new E-Class Cabriolet, which is celebrating its world premiere in Detroit. The four-seater, year-round cabriolet completes the successful E-Class family and presents a world first in the shape of the AIRCAP® wind deflector, which considerably reduces air turbulence when the top is down. One further "eye-catcher" on the Mercedes stand is an automobile sculpture that uses a stunning approach to communicate the notion of the car as a new art form, and offers a glimpse of the future Mercedes design language. The stars of Detroit also include the new Mercedes-Benz SLS AMG, as well as the ML 450 HYBRID and the globally successful S400 HYBRID, which set benchmarks for efficiency in their segments and demonstrate the brand's expertise in hybrid technology.

"The new E-Class Cabriolet offers unique driving pleasure for four people and I am certain that it will further strengthen our successful E-Class family, plus deliver even more emotional momentum to the brand," said Dr. Dieter Zetsche, Chairman  of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars at the Mercedes-Benz press conference. "It is our stated objective to continue to expand the leading position held by Mercedes-Benz in the luxury segment – with new, stunning models and intelligent solutions for sustainable mobility that we have in the pipeline and will bring to market in quick succession."

The success of this course is confirmed through positive sales development worldwide – in the last quarter of 2009, Mercedes-Benz was the fastest growing premium brand in the world and also the strongest German premium brand in the U.S. In December, Mercedes-Benz reported an increase of 8.2 percent compared with the same month the previous year, with sales of 20,000 vehicles making it the best monthly performance of 2009.

Toyota Fortuner poduction capacity to increase by 5 per cent to 1,000 units shortly

Toyota Fortuner poduction capacity to increase by 5 per cent to 1,000 units shortly

After witnessing the record bookings of its its newly launched sports utility vehicle Fortuner, Toyota Kirloskar Motor Corp plans to increase the output of the vehicle by around 5 per cent to 1,000 units from 950 units currently. The Indian arm of the Japanese automaker had initially planned a production of 500 units a month of the aforesaid vehicle (available in only diesel variant), but later began hiking its production on a continuous basis. It is to be mentioned that TKM is currently assembling Fortuner at its existing plant at Bidadi by bringing it in a CKD format from its parent company's Samut Prakan plant in Thailand. With a 30-35 per cent local content, it is available at Rs. 18.9 lakh (ex-showroom Delhi) in India. The Indian arm of the Japanese car giant has booked garnered 6,500 units of the SUV till date and is looking to deliver them by by July or August this year, as revealed by a senior official to PTI.

"Fortuner is doing very good and we had to modify our plan for increasing production. We will increase it to 800 units every month by January next year," Toyota Kirloskar Motor (TKM) deputy managing director (sales and marketing) Sandeep Singh told PTI, adding that the company had earlier planned to increase output of the SUV to 600 units every month by January next year, he added. "We are further increasing the capacity of Fortuner to 1,000 units from next month keeping in mind the growing demand for this product in the country."

The company raised the assembling capacity of SUV at its Bangalore plant in phased manner from 500 units per month initially to 950 units at present. "In view of growing demand for Fortuner, we first increased the capacity from 500 units to 750 units then to 800 and now the current capacity stands at 950 units per month," he told PTI exclusively. "TKM had earlier closed the bookings for Fortuner for couple of months last year due to capacity constraint. But it has again started booking orders for the SUV from January this year," Singh said.

It may be recalled that Toyota Kirloskar Motor Pvt. Ltd. (TKM), on 24th August'09, has announced the launch of the Toyota 'Fortuner', in the country. The internationally acclaimed urban SUV, which offers an unmatched combination of power and luxury supported by cutting-edge technology, was unveiled in New Delhi. Available with 5 speed manual transmission, the 'Fortuner' not only offers unshakeable sturdiness with high ground clearance, long wheelbase, full-time 4WD and excellent drivability on all terrains, but is also loaded with comfort features like Climate Control AC, Optitron meter, Multi-information display, steering control switches, Space-up type 3rd row seats and leather interiors.

Maruti Suzuki to maintain 2009-10 export numbers of 1.30 lakh units in 2010-11 also

On the sidelines of launching its Eeco model in Kochi, Maruti Suzuki has also indicated that it was looking forward to maintain export of its different models at 1.30 lakh units in the next fiscal, which is the same as in the ongoing one. However, it's much higher than 72,000 units exported during FY 2008-109.

 

In a separate media report, Maruti Suzuki has also revealed that it is looking to enhance its export base by entering into markets in the Middle East, South America, West Asia and Australia. "We are currently exporting our cars to the European countries but now we will start exploring new markets such as Africa, South America, the Middle East and Australia to boost our exports," a senior official told reporters in Chandigarh recently.

"We will try to export the same numbers in 2010-11 as there is a scrappage incentive scheme in Europe, which will end this year. So we will try to maintain the same export figures as of this fiscal," Maruti Suzuki General Manager (sales support) Amitava Roy told reporters

Meanwhile, Maruti Suzuki is betting big on its Eeco model and has claimed that it's a perfect choice for people who are looking to upgrade from Omni, its bestselling microvan till date . The company has invested Rs.60 crore (Rs. 600 million) to design and develop the five-door Eeco from its Gurgaon plant in Haryana specifically for the Indian market, with over 90 per cent localisation.  India's largest passenger carmaker is looking We have to roll out 40,000 Eeco units in the first full year of operations (2010-11).

"We have seen demand for Eeco growing since its launch last week from users of Omni and new customers looking for a family car, with more space, more leg-room and greater comfort," said C.V Raman, Maruti's chief general manager for engineering research, design and development. "The demand for swapping an Omni van with Eeco is an encouraging sign for us to pitch for more bookings," Raman said, adding, "About 30 per cent of Omni customers have been exchanging their old vans with newer versions during the last two decades. We see this trend continuing with the launch of Eeco."  

Incidentally, Business Standard has reported that with the upgraded versions of its current range of models, it will be a herculean task for Maruti Suzuki to control the escalation in prices of commodities seen over the past couple of months. The business daily also claims that with the sudden surge in the prices of essential inputs like steel, aluminum, copper and rubber, among several other commodities, it will quite impossible for Maruti to  offer the soon-to-be-launched refreshed Alto in a lower rate.