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India’s luxury car market, till recently was dominated by just one player, Mercedes Benz and a few individual imports, registered a 50% growth last year, with the sale of 4,500 cars. That was the first effect of the entry of more players.

This year, they expect to sell between 6,000-7,000, with more players and more models. Of this number, the oldest player in the segment, Mercedes Benz, has revised its sales target for 08 to 3,000 cars. BMW’s target is 2,000 cars, leaving the balance for the others.

One reason for the higher sales is the aggressive dealer network that the car makers are rolling out. In Pune, for instance, from a situation a few months ago of just Mercedes Benz having a showroom, BMW and Audi have set up dealerships. And Volvo Cars, part of Ford’s Premier Automotive Group (PAG) has declared its intention of setting up dealerships in the country’s top 10 cities, including Pune.

Auto industry analysts claim Pune had a population of about 50 Audis, prior to the opening of the showroom, imported by individuals. Now that there is a dealer in the city, this number has risen dramatically, with at least another 25-30 cars with the four inter-linked circles to be seen on city roads.

Ditto for BMW, which opened a showroom in the city in December 07. While a BMW spokesperson said they do not give city-specific details, the visible effect is everywhere: open a dealership and see sales grow dramatically.

Auto analysts estimate that the western Maharashtra region, excluding Mumbai, which is served by the Pune dealer, could account for the sale of more than 250 Audis annually. And these are cars in the Rs. 42-73 lakh price bracket.

Audi, a Volkswagen group company expects to sell, in the first year, 500 units of just one product, its all-new A4 launched recently in Europe and set to debut in India by July, its managing director, Benoit Tiers, had said at the time of the dealership inauguration a month ago.

The BMW population in the city has also swelled: from just a few head turners, the number of cars with the white and blue twin propellers are becoming a fairly common sight. BMW, which has set a target of selling 2,000 cars this year, with an entry level price of Rs. 30 lakh, has increased assembly capacities at its Chennai plant, anticipating this growth across the country.

Mercedes Benz, which has been locally assembling cars in India for 13 years now, has also upped its annual sales target for 08: it is now 3,000 cars. Not including completely built units (CBUs), Dr Wilfried Aulbur, CEO and managing director, Mercedes Benz India, has stated recently.

There are two specific segments in the high priced car marekt which are growing: sports utility vehicles and the all-new coupe. Take Mitsubishi’s Pajero SFX, the new version of the all-time favourite SUV: it now has a waiting period of two-three weeks. And prospective buyers are depositing the full amount!

YVS Vijay Kumar, vice president and SBU head, Chennai Car plant, Hindustan Motors, said, “We may have to add a second shift at our Chennai plant since there is a waiting list for our premium SUVs. Last month, we had orders for 260 Pajeros and we could only deliver 200. Already, in the first week of April, we had an order book of 150 cars. No additional investment will be required since we already have the capacities installed: the plant is capable of making 24,000 cars annually while we are doing 6,000 now.”

For the moment, Hindustan Motors Mitsubishi Motors is betting on the premium SUV segment, where it has an 18% market share. “We are looking at growing this with the Outlander, which is coming in September,” Mr Vijay Kumar said.

The Audi Q 7, an SUV, is running neck to neck in popularoty with its sedan siblings, industry analysts claimed, with roughly half the bookings being for the SUV. While SUVs have been popularised by politicians, there is another segment which dealers expect will grow significantly: that of the coupe. Mercedes Benz, BMW, Audi and Volvo Cars all have offerings in this segment and each of them is eyeing growth.

The Audi TT, which has an existing population of about six in Pune, could double soon, is the belief of industry watchers, who believe the car maker could, on average, sell one coupe per month in the western Maharashtra region.
The BMW M3 coupe was a head turner at the Auto Expo in Delhi in January, with company officials saying that this set of wheels, priced just under Rs. 75 lakh, had already received a few orders.

Mercedes showed its four-door convertible, the CLK 350, and Volvo Cars’ C70 convertible coupe at the same event.

In 06, 3300 luxury cars were sold in India. This jumped to 4,500 in 07 and the expectation is that in the current year, the number could well touch 7,000. And officials working for the luxury car brands claim that the current economic slow down has not yet hit them: just look out for the March sales figures!

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U.S. consumers bought 227,143 Ford Motor Co. vehicles in March, down 14 percent from a year earlier.

Dearborn, Mich.-based Ford (NYSE: F) manufactures F-Series Super Duty trucks at Louisville’s Kentucky Truck Plant on Chamberlain Lane and Ford Explorer and Mercury Mountaineer sport utility vehicles at the Louisville Assembly Plant on Fern Valley Road.

Ford said sales to individual retail customers were 17 percent lower than a year ago, with essentially the entire decline concentrated among trucks and sport utility vehicles.

Sales to daily rental companies were down 13 percent from a year ago.

In March, Explorer sales fell 14.8 percent, to 10,969 from 12,876. F-Series sales fell 23.8 percent, to 54,465 from 71,481 a year earlier. Sales for the Mountaineer fell 23.3 percent, to 1,443 from 1,882.

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Tight credit and rising fuel prices are forcing consumers to think more soberly about their choices in the automotive marketplace.

Evidence of the trend is not just anecdotal. Light truck sales, for example, were down again in January, continuing a trend that started a year earlier. Light trucks include pickup trucks, vans, and sport-utility vehicles, models such as the BMW X3 and X5 sport-utility vehicles, whose collective U.S. sales fell 19.15 percent in January, down to 3,422 from 4,233 sold in January 2007.

Light trucks often consume more fuel than cars and easily can cost more than the average family sedan, characteristics that make them less attractive to buyers in the current market.

Even the Ford F-Series, long the best-selling pickup truck in the United States, is taking a hit with its sales falling 8.44 percent last month to 41,125, down from 44,919 sold in January 2007, according to the latest U.S. vehicle sales figures published by the Automotive News Data Center.

The growing consumer reluctance to jump into pickup trucks is blunting the aggressive, expensive truck marketing efforts of Asian manufacturers such as Toyota, which has been trying to haul away a big piece of the American truck market with its huge Tundra pickup.

Tundra sales nearly doubled in January to 12,073 from 6,321 sold in January 2007. But Toyota executives were not applauding, because the Tundra’s January 2008 sales performance was at least 6,000 trucks below what the company expected to sell for the month.

No one in the industry is predicting the demise of pickup trucks. In fact, more manufacturers, including at least one from India, are planning to join Toyota and Nissan in going after the U.S. pickup truck market. But all of those manufacturers are likely to find the U.S. landscape for pickup trucks and other light trucks considerably different from the one that existed five years ago, when gasoline was still cheap and easy-financing schemes were abundant.

A part of the difficulty confronting the industry was revealed earlier this month in San Francisco at a meeting of the American Financial Services Association, which preceded the 91st Annual Convention and Exposition of the National Automobile Dealers Association.

The money people said they were cutting off the spigot of subprime loans to car dealers and their customers, making it more difficult for many tradesmen, day laborers and others who depend on light trucks to buy them. Cutting off the subprime money also is eliminating many image light-truck buyers, consumers who buy pickup trucks and sport-utility vehicles more for style than work.

Tight credit plus high gasoline prices mean that more of those customers are beginning to switch to used vehicles, or to buy less expensive, more fuel-efficient new models.

That means the bad news for light trucks is turning into good news for little cars, long ignored in an America drunk on cheap gasoline. Again, January sales numbers from the Automotive News Data Center are indicative. Sales of small cars are rising across the board. Even the itty-bitty Kia Rio, not exactly an automotive heart-stopper by any measure, posted a 66.8 percent gain last month with sales of 2,709 cars. The Chevrolet Aveo, once the laughingstock of the Chevrolet line, has been remodeled and has found a new life in the U.S. automotive market. Its sales were up 40.2 percent last month. And small cars with panache, notably the Honda Fit, were going gangbusters. Honda Fit sales were up 120 percent in January, and they show no signs of abating.

For consumers who still hunger for more expensive, high-performance cars and trucks, but who don’t have the cash or financing to swing the deal, there is a shining glimmer of hope in all of the bad news. Auto repossession lots are overflowing with cars and trucks, including a number of luxury models, snatched from buyers who fell behind on their car loans.

Neither the banks nor the finance companies want to hold onto those repossessed vehicles. They want to get rid of them as quickly as possible, which means they are in a mood to deal. Industry estimates are that 1.6 million cars and trucks will wind up on repossession lots this year, a 10 percent increase over the number of cars and trucks sent to those lots in 2007.

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Smart Energy Solutions, Inc., developer and manufacturer of the innovative Battery Brain(TM) electronic controller for vehicle and marine batteries has developed and is launching a new high capacity Battery Brain(TM) for the truck and bus markets. The Company worked with several major truck and bus fleet maintenance managers to develop and test this product.

There are over 8,000,000 commercial trucks and buses in the United States with the top 10 truck fleets having over 350,000 vehicles. Battery failure is a major concern for all fleet managers and the new Heavy Duty Battery Brain(TM) product is available for 12-volt and 24-volt systems and will withstand starter battery current draws of up to 2,000 amps. Several major fleets in both the United States and Mexico through Company approved distributors have purchased our initial production run and placed orders for the new model currently in production.

“After extensive testing and customer input, Smart Energy Solutions is pleased to introduce this new model of Battery Brain(TM) for all vehicles that have high amperage draws, diesel engines and/or multi-battery configurations,” stated Pete Mateja, CEO of Smart Energy Solutions. “This new product can pay for itself in less than six months by reducing battery related service calls and delaying battery replacements due to deep cycling when batteries run down. Battery Brain(TM) can eliminate valuable lost time, and lost revenues, by reducing the number of vehicles stranded due to a dead battery. The product also provides a warning when batteries are reaching the end of their life cycle so that battery replacement can be scheduled. In addition, to encourage use of the new product, the Company has initiated a National Introduction/Installation Program available for major commercial fleets, motor carriers and bus companies.”

“The Heavy Duty Battery Brain(TM) is ideal for fleets including the beverage and courier markets where trucks are turned on and off frequently daily as well as the construction and logging markets where vehicles are known to stand idle for prolonged periods of time. In addition, the product is ideally suited for bus and RV motorhomes which may not be frequently used and have high electrical current draws and demands.”

Battery Brain(TM) is Smart Energy’s flagship technology that constantly monitors electrical discharge of the battery for nearly all kinds of vehicles including automobiles, SUVs/trucks, medium and heavy duty trucks, military, buses, RVs, boats, commercial vehicles and personal watercraft. Should Battery Brain(TM) detect that the battery is losing the required charge needed to start the vehicle’s engine, the device automatically disconnects the battery to preserve its starting power. In addition, Battery Brain(TM) offers a built- in anti-theft feature on some products and will extend the life of the battery.

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Ford Motor Co. is launching its new F-150 next year, but it can’t get to market soon enough.

Ford ended January with 32.5% of the sales in the full-size truck segment, down 1.2 percentage points compared with the same period a year earlier. That was the biggest decline among the competitors in the large truck category, which is one of the big profit centers for automakers. While the Ford F-Series has been the best-selling truck model for 31 years, the Chevrolet Silverado trailed the F-Series by just 5,000 trucks in January. Toyota Motor Corp.’s new Tundra picked up 4.8 percentage points of share in the month, for 9.5% of the market.

Coming up: Ford prepares to launch another round of buyouts of its hourly workers.
Couple win auto show wedding

Most people go to auto shows to pick out a car. One couple is going to the Chicago Auto Show to make a stronger commitment.

Chrysler chose Jackie Rohner and Blake Humphrey of Rock Island, Ill., from 63 entries to get married at the auto show. The couple — she’s a schoolteacher and he’s a firefighter — win a Dodge Journey, and Chrysler sprang for a wedding reception and, of course, a Journey cover band.

“If we have experienced and accomplished so many great things in less than a year of dating, we can’t wait to see what, together as a married couple, we can accomplish in a lifetime,” Rohner said in her entry letter.

Coming up: Chrysler readies launch of Dodge Journey crossover.
Site for motoring memories opens

Want to post a picture of that 1968 Camaro you drove in your younger days? Have a story about working at a General Motors plant?

GM has opened up its “Wiki” site at its GMNext Web site that allows the public to share stories about the first 100 years of the world’s largest automaker.

Users must register their e-mail on www.gmnext.com to make submissions, then click the Wiki tab at the top. From there, users can post a picture, write a submission or read other submissions.

GM said all submissions are moderated to assure they follow the rules listed on the Wiki, but accuracy is overseen by the user community and subject matter experts.

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The last time Ugur Sahin Design came up on our radar, it was for a beautiful modern Ferrari Dino rendering that had us hoping for a production version. Sahin has a come up with a new concept, this time based on a Chevrolet Corvette Z06. Unlike the Dino, Sahin is hoping to actually build this car with a production run of 100, Dubbed the Z03, this concept features full carbon fiber bodywork and design cues from the C3 Corvette and a Ferrari 599 GTB. Performance will be a focus as well, with 100 pounds shaved off the car’s overall weight, and three engine packages available from 500 to 750 horsepower. Further details will be available in March, and the delivery of a production car is optimistically set for the end of 2008.

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NISSAN MOTOR CO. (TSE:7201) will import and market its Murano sport utility vehicle in India, adding a third model to its lineup in that country, according to Carlos Tavares, a vice president at the automaker. Mr Tavares said that the move is part of a strategy to boost the brand image of Nissan in India before making a full-fledged entry into the market in early 2010.

* Nissan will begin local production of a subcompact in that year and determined that it was important to create a luxury brand image beforehand, Mr Tavares explained.

* Although no timing for the 2009 Nissan Murano’s introduction was given, Mr Tavares said that Nissan plans to have eight models on sale in India by 2012, including a commercial vehicle made by its joint venture with ASHOK LEYLAND LTD

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When Ypsilanti officials gave a 1950 fire truck to Bois Blanc Island more than 40 years ago, they never thought they would see it again.

But the Ford truck, which does not run, is back in Ypsilanti, ready to take its place in the city’s firefighting history.

The Ypsilanti City Council voted recently to transfer the title of the old truck to the Michigan Firehouse Museum in Ypsilanti for renovation. The museum wants to add the truck to its collection of about 50 fire trucks at 110 W. Cross St.

Museum curator Matt Lee said the plan is to renovate the 1950 Ford truck that was made in Lansing and is familiar to a lot of people in the city. There is no Ypsilanti fire truck at the museum, he said.

“The vehicle will end up in a happy home,” Lee said.

Fire Chief Jon Ichesco said the city used the truck for about 15 years and either gave it or sold it to the Bois Blanc Island Fire Department in the mid-1960s. The volunteer fire department there used it for several years and then parked it in the woods.

David Wheeler, who collects fire trucks as a hobby, said a retired Ypsilanti firefighter recognized the truck 10 years ago while hunting on the island and told him about it. So, Wheeler and his son traveled to the island and brought the truck back along with a 1952 Ford fire truck that belonged to Van Buren and Ypsilanti townships for possible parts.

Lee said the plan is to renovate the trucks and add them to the museum’s collection. He said the trucks were built by the John Bean Fire Apparatus Co. in Lansing, and finding parts for them should be easy because a lot of them were built during the 1950s.

The museum plans to work with Washtenaw Community College to restore the vehicles, Lee said. The college has an auto body program, and the museum hopes to save money on the renovation by having students do the work, Lee said.

The museum features 26 firefighting vehicles, including four fire trucks, two fire chief trucks, an 1886 hand pumper on loan from a private collector, hose carts, helmets and an assortment of bells that were once standard fixtures on the trucks. The museum also keeps another 30 trucks in storage, Lee said.

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Todays release of the Tata Nano heralds a new era of car production that could affect the automotive market as profoundly as Henry Fords Model T did almost a hundred years ago. Tata Motors new Peoples car, costs less than half the price of Chery Automobiles QQ3 and the Meruti 800, previously the two cheapest cars in the world.

The international automotive industry is now attempting to meet the challenge posed by Tata Motors by producing smaller, low cost cars of their own.

PriceWaterhouseCoopers has projected that over the next five years about half the growth in automobile sales will come from Russia, India, Brazil and China and most of the demand will be for small cars.

Last year Consultancy firm Ronald Berger estimated that global demand for small cars, costing less than $10,000 (£5,000) would grow by 30 per cent. Already there is considerable demand for small cars throughout Europe and Latin America where Volkswagens Gol, Renaults Clio and Nissans Tsuru sell extremely strongly.

But Rajan Tata, chairman of Tata Motors says that while the Nano will undoubtedly compete with other small cars, the Nano is actually the first car in a whole new area of the market.

The way I see it, this vehicle will cannibalise some of the lower-end car market and some of the higher-end motorcycle and scooter market. It will eat into both of those markets but it will also create a market of its own, said Mr Tata yesterday. It will expand the market by creating a niche that did not previously exist. It may well cannibalise some of the higher-end car market, but to a small extent, and probably only when people look to buy a second or third car.

Last year, most major manufacturers announced their intention to build low cost cars. Toyota, Volkswagen, Fiat and Peugeot are all intending to produce a car to rival Renaults Logan. The French automaker announced production of the Logan in 1999 after the buyout of Dacia the previous year. Building the car in Romania and Russia and stripping it of complex parts and luxuries, Renault managed to keep costs low and the result proved a huge hit. Now in an effort to produce cars that cost less than $5,000, the major manufacturers are placing pressure on parts suppliers to cut their costs and will rely on subsidiary companies to design and produce their bottom end vehicles.

General Motors aims to use its Korean subsidiary Daewoo to design a car that will retail at around $7,000. Chrysler has been producing cars with Chinese marquee Chery to tap into the burgeoning Chinese market. Toyota is also working on a low cost car which is expected to be launched in emerging markets such as India by next year. But with the Nano going on sale in India later this year with an initial production run of 250,000 units a year, Tata has a huge head start on its rivals in the race for smaller, cheaper cars.

The five cheapest cars in the world

1. Nano. Produced by Tata Motors in India. Price: $2,500 (£1,250)

2. QQ3. Produced by Chery Automobiles in China Price: $5,000 (£2,500)

3. M800. Produced by Suzuki-Maruti in India. Price: $5,200 (£2,600)

4. Merrie Star. Produced by Geely Automobiles in China. Price: $5,500 (£2,750)

5. S-RV mini SUV. Produced by Geely Automobiles in China. Price: $5,780 (£2,890)

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