The Indian Car Promise

India is no China when it comes to cars, but then again, it's almost time for the $2,000 Nano.

What's the potential car market in India? Many of us were tied to the past. We thought of India, and we saw sacred cows, elephants, jammed streets, slums, beggars and millions of people dressed like Gunga Din. Then we saw Slumdog Millionaire, and we saw skyscrapers and luxury homes and cars. So what's the story? Is India another China when it comes to cars?

In fact, the car market in India is still largely a promise. Car sales have grown, yes, but they are still a fraction of China's vigorous market. This year's sales may push past 1.6 million cars and light commercial trucks. That's double the 800,000 of 2002--but it still isn't that many. And Western companies are extremely small in India, unlike in China, which might be the world's No. 1 vehicle manufacturer this year.

To make this clear, look at four-month sales through April: 649,000 cars and light trucks in India compared with 3.7 million in China. And China's sales are still climbing, while India is flat. Mind you, flat isn't bad this year, unless compared with China.

Who sells there? A Suzuki ( SZKMF.PK - news - people ) partnership called Marudi Suzuki is the dominant player, with 43% of the market. Next is the Korean Hyundai Group with 14%. But our big players are minor actors in India. Honda ( HMC - news - people ) accounted for only 22,000 car sales in the first quarter, General Motors' ( GMGMQ.PK - news - people ) Chevrolet (also from Korea) 19,000, Toyota ( TM - news - people ) 13,000 and Ford Motor ( F - news - people ) 10,000.

Check the first four months' car production. These production figures come from J.D. Power, which does a thorough job of collecting numbers from India and China.
http://www.forbes.com/2009/06/30/flint-india-cars-business-autos-backseat-driver.html

Can India really afford cheap cars?

The news that GM India is poised to launch a 'two-lakh' car took me back to an incident in Lucknow in March
last year.

I had almost tripped over a scooter lying on its side in the dust, its front wheel still spinning. Moments before it had been carrying a family of four, plus chicken. Now, they were all on the ground, except the chicken which had run away.

You can't travel long on India's crowded roads without stumbling on a crash of some sort. This Lucknow family just lost a chicken. About 90,000 people lose their lives on the roads every year — and only 5% of them are in cars.

Hence, of course, the appeal of the one-lakh Nano, and of GM's slightly pricier competitor, promising as they do to put relatively safe motoring within reach of tens of millions of ordinary families.

Less appealing, of course, is the projected surge in pollution. If these cars sell in anything like the numbers their manufacturers hope, they will catapult India into the premier league of carbon emitters — casting doubt on the country's new-found commitment to tackle global warming.

Once the climate cost is factored in, there's no such thing as a cheap car. India is acutely vulnerable to climate chaos, and some of the very same people who'll benefit from the Nano will also lose out as wild weather wreaks havoc on the country's agriculture.

Does safer, smoother travel for middle-income Indian families have to come at the price of the planet? Do we always have to choose between protecting the environment and lifting people out of poverty? Not a bit of it. There's growing evidence that smart innovation can make life sweeter as well as more sustainable. Forward-looking think tanks like Malini Mehra's Centre for Social Markets, or Forum for the Future in the UK, argue that the best hope to win public support in the fight against climate change is to focus on this 'opportunity agenda'.

So, how could this apply to the Nano? Petrol-powered, it's a great social revolution, yes — but an electric Nano could be all of that and an environmental one, too. It would be ideally suited to the sort of short, urban hops that will constitute the vast majority of its use, so its limited range wouldn't be a problem. It could be recharged by solar power while its owner is at work or even out in the fields. Standing idle, the Nano's battery could trickle power into the grid — helping to smooth out the network's notorious instability.

And the innovation doesn't have to stop there. You might not be able to afford an electric Nano — but why own something that you don't use every day? So what about a state-sponsored Tata Zero Carbon Car Club, of the sort springing up across European neighbourhoods, giving people the benefits of using a vehicle when they need it, without the hassle and cost of owning one when they don't? It could help cut congestion, too: all the evidence suggests that car club members drive less than private car owners — because they don't feel they have to justify their hefty investment in their vehicle by using it in preference to the bus or metro.

But surely all this simply wouldn't be affordable? Well, not necessarily — not if the government grasped the nettle of subsidy reductions on the one hand, and carbon trading on the other.

The government spends billions of dollars a year on fuel subsidies — effectively making pollution cheap. If some of that went instead to developing 21st century clean transport — both personal and mass transit — it could bring dividends. After all, as the age of cheap 'easy' oil stutters to a close, investing heavily in fossil-fuelled infrastructure now is about as visionary as sinking your fortune into sailing ships 100 years or so back.

The dawn of a worldwide carbon market really can't come too soon for India. With its per capita emissions a fraction of those of the West — and even China — the country could expect to earn billions from selling carbon credits. That could be another source of revenue for cleantech R&D — and another source of opportunity for Indian business, as it fights to compete in a low-carbon global economy.

It all calls for fresh, not to say courageous, thinking — always a rarity in politics. But the Nano might help here, albeit in unintended ways. If a swarm of the one lakh miracles slows the pace of the capital's traffic from sluggish to stationary, it might convince even the most sceptical minister that there has, surely, to be a better way.
http://timesofindia.indiatimes.com/All-That-Matters/Can-India-really-afford-cheap-cars/articleshow/4653456.cms

'Indian customers are smart buyers’

Honda Siel Cars India president and CEO Masahiro Takedagawa has been managing activities of the Honda group in India and Asia Oceania region for the past three-and-a-half years. Mr Takedagawa outlines Honda’s plans for India and the launch of the premium small car, Jazz. Excerpts:
What technology do you plan to bring with the Jazz?

First of all, Jazz is a sister car of the City that was very well received in the Indian market. The platform of the cars is almost same. However, driveability of Jazz will be different. It will be very sporty. In terms of utility, it offers plenty of legroom and cargo space.

There has been much experimentation with the styling of the Jazz. Will there be many variants of the car?

There will be only one variant initially. It is a different car and will set new standards for the hatchback segment. It’s a shift from our policy for the City and the Civic. Of course, there will be many options for colours. This is to minimise the level of stocks which dealers or suppliers have to keep for several variants.

What is the progress on the diesel version of the City and the Jazz for the Asian market?

We have around 400 engineers, who are free from F-1 activities to develop small diesel engine, power train as well as next generation hybrid engines. As already announced, a small diesel engine project has been kicked off. We are working on different engine sizes and development could take 2-3 years.

What would be your strategy to ensure stable demand for the Jazz?

The market has changed due to the economic slowdown and the depreciation of the rupee. We are achieving above 70% of localisation. The components used in the Jazz are same as in the City. However, the Jazz will benefit from the lower excise duty allowed on small cars. Jazz will give the best fuel efficiency in that segment. We will target those customers who appreciate the drive. Indian customers are smart buyers and they appreciate the value given by Honda.
http://economictimes.indiatimes.com/Interview/Masahiro-Takedagawa-President--CEO-Honda-Siel-Cars-India/articleshow/4586653.cms

Hyundai adds to its alternate fuel range

Launches Accent LPG variant with unlimited 2 Year Warranty offer
21 May 2009 , New Delhi : Hyundai Motor India Ltd., the country’s largest passenger car exporter and the second largest car manufacturer, as part of its initiative to promote eco-friendly and non-polluting means of transport, today launched its LPG variant of the very popular Accent. The LPG, bi-fuel variant will be priced at Rs 533,900 which is Rs 34,900 more than the existing petrol model and it is fitted with an engine immobilizer as a standard fitment for added security.

The new LPG version of Accent, named as Accent eco (eco is synonymous with environmentally friendly and economy) comes with a factory fitted LPG kit approved and certified by the Department of Explosives (DOE) and Automotive research Authority of India (ARAI), the country’s premier automobile testing and certifying authority.

Powered by the 1.5 litre engine which is mated to a 5 speed, manual Transmission, the Accent eco offers its customers a unique combination of safe and reliable performance with an unmatched fuel economy. With separate Petrol (45 Litre) and LPG (27.2 litre) fuel tanks, the customers has an option to choose from both LPG and petrol driving mode. The LPG tank in the Accent eco has a special ‘Toroidal’ design that allows intelligent use of space and makes for a larger luggage room available to the customer.

Announcing the launch, HMIL, Managing Director, H S Lheem, said, “The Accent has always been a very strong product in its segment. Earlier we had introduced it with a CNG kit and our customers found it to be a really attractive proposition, as it has all one can look for in this class of cars. The LPG version will only add to the appeal of Accent, as it will not only be cheaper to run and maintain but also eco friendly. At our end, we have ensured that Accent LPG meets all the safety standards as our customers need to be assured of the safety and reliability of our products that we offer to them.”

The factory-fitted LPG kit in the Accent eco enjoys a full 2 year manufacturer warranty benefits thus ensuring enhanced peace of mind for the customers. Accent eco also boasts of the lowest greenhouse gas emission as it emits lower CO2, as compared to the petrol version of the car, hence making it extremely environmentally friendly.

Other highlights of the Accent eco includes reduced engine maintenance, longer life of spark plug and engine, less frequent change of engine oil, safe and reliable. In addition to that, the car offers ample luggage space, smart and ergonomic design and efficient performance. Hyundai in keeping to its high safety standards ensures that the car goes through LPG leakage detection test thrice before it is delivered to customers and has a special filler cap inside the LPG lining to prevent wear and tear of the parts. HMIL offers the Santro in CNG and LPG variants and now the Accent LPG adds to its range of offerings in the alternative fuel cars. The Accent CNG was launched in June, 2008.

About HMIL
Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of Hyundai Motor Company, South Korea and is the second largest car manufacturer and the largest passenger car exporter from India. HMIL presently markets 33 variants of passenger cars across segments. The Santro in the B segment, the Getz Prime, i10 and the Premium hatchback i20 in the B+ segment, the Accent and the Verna in the C segment, the Sonata in the E segment and the Tucson in the SUV segment.

Hyundai Motor India, continuing its tradition of being the fastest growing passenger car manufacturer, registering total sales of 489,328 vehicles in the calendar year (CY) 2008, an increase of 49.6 percent over CY 2007. In the domestic market it clocked a growth of 22.4 percent as compared to 2007 with 245,397 units, while overseas sales grew by 92.5 percent, with exports of 243,931 units.

HMIL`s fully integrated state-of-the-art manufacturing plant near Chennai boasts of the most advanced production, quality and testing capabilities in the country. In continuation of its commitment to provide the Indian customer with global technology, HMIL commissioned its second plant in February 2008 which produces an additional 300,000 units per annum, raising HMIL`s total production capacity to 600,000 units per annum.

HMIL has invested to expand capacity in line with its positioning as HMC`s global export hub for compact cars. Apart from the expansion of production capacity, HMIL currently has 253 strong dealer network across India, which will be further bolstered in 2009.
In 2008, HMIL also successfully completed 10 glorious years of operations in India and to commemorate its achievements, initiated a unique trans-continental drive from Delhi to Paris in two of its hugely popular i10 Kappa cars. The drive created automobile history by completing a distance of 10,000km in just 17 days after which the i10s were showcased at the Paris Motor Show in October. In fact it was at the Paris Motor Show that HMIL first unveiled the Hyundai i20 and the car received a phenomenal response from the auto enthusiasts across the world. Hyundai Motor India also accomplished the landmark of producing the fastest 20th lakh cars in India in 2008.

Like 2008, the year 2007 had also been a significant year for Hyundai Motor India. It achieved a significant milestone by rolling out the fastest 400,000th export car. Hyundai exported to over 100 countries globally; even as it plans to continue its thrust in existing export markets, it is gearing up to step up its foray into new markets. 2007 also saw the launch of the i10 and yet another path-breaking record in its young journey by rolling out the fastest 1,500,000th car.
Hyundai`s new model i10 made a clean sweep of all the `Car of the Year 2008` awards from the leading automotive magazines and TV channels like BS Motoring, CNBC-TV18 AutoCar, NDTV Profit Car & Bike India and Overdrive magazine. The i10 was also the choice of the discerning automotive media of the country as they conferred the prestigious `Indian Car of the Year` (ICOTY) award to the i10 as well.

The Santro and the Accent also received the `TNS Voice of the Customer - 2008` award for the Premium Compact Car (Santro) and the Entry Mid size Car (Accent). In March 2008 it achieved yet another milestone by rolling out the fastest 500,000th export car.

In 2007, the Hyundai Verna had also bagged some of the most prestigious awards starting with the Overdrive magazine`s `Car of the Year 2007`, the `Best Mid-size Car of the Year` award from NDTV Profit Car & Bike India, the `Best Value for Money Car` from CNBC Autocar and `Performance Car of the Year` from Business Standard Motoring.

Hyundai cars have been a favorite at all awards ceremonies and has won many awards. The Sonata Embera won the `Executive Car of The Year 2006` award from Business Standard Motoring magazine and NDTV Profit Car & Bike India had declared the Tucson as the `SUV of The Year 2006`.

Not only this, HMIL has also been awarded the benchmark ISO 14001 certification for its sustainable environment management practices.

Corporate website: www.hyundai.co.in

Want a Tata Nano? Get In Line Behind 200,000 Indian Buyers

Tata Motors

The Tata Nano, India's equivalent of the Ford Model T a century later, finally went on sale on April 9th. And while it may not seem like much of a car to US buyers, more than 200,000 eager Indian buyers put down deposits for cars that won't be delivered for as long as two years.

And that should be a relief to Tata, whose $2 billion purchase of Jaguar Land Rover from Ford Motor Company last August couldn't have come at a worse time, just weeks before the global auto market began to implode. Deposits of roughly 90 percent for confirmed Nano orders have added $500 million to company coffers (though of course they'll have to spend most of that money to build the cars).

And in a first for any Indian car, roughly 4,000 were ordered and paid for online, via the Tata Nano website.

According to Tata, in just two weeks, it received 203,000 paid orders and sold another 600,000 booking forms for the car. The first year's production of 50,000 cars from a factory in Pantnagar will be delivered starting in July. They and another 50,000 Nanos from a factory--which had to be relocated from Singur to Gujarat after protests over land seizures--will be allocated among paid-up buyers by lottery.

Proving the allure of optional equipment, just one of five Nanos ordered are the bare-bones Nano Standard model, costing $2,000. Another 30 percent are the mid-level Nano CX, which adds air-conditioning and power brakes, but fully half the buyers paid for the top-of-the-line Nano LX, which tops out at $3,300. That model has electric windows and door locks, nicer trim, body-colored bumpers, and more.

The Nano has gotten good reviews, from a first ride report in December to more recent full road tests. They pretty much add up to: "Yep, it's a real car. Handles decently, not that fast, fits four adults. Gee, that's pretty amazing, isn't it?"

While Tata will have its hands full with home-market orders for a couple of years, it's moving ahead aggressively with plans to sell the Nano in Europe and perhaps even in the United States. For reference, the Nano is 10 feet long, longer than the two-seat 2009 Smart ForTwo but shorter than a 2009 Mini Cooper.

Tata Nano Europa at Geneva Auto Show

Smart Cars in Metro Detroit: Still Smart?

Enroute to winning $448,000 on the Los Angeles set of NBC game show Deal or No Deal last October, Tommy Knowlton scored something bigger than the briefcases of buckos on offer: It looks like a dinosaur's roller skate, but runs on a 1-liter, 3-cylinder engine. It has environmental sex appeal. Oh, and it takes two of these cuties to fill one parking space.

"Before they revealed the car, they said to me, 'The challenge is, all you need to do is get in it. You have to get in and shut the door, if you can fit inside it's yours'…So I walked right down there and with ease just got in it and shut the door and they said it was mine, free and clear," recalls the pharmacy technician from Sterling Heights.

He knew the smart fortwo – at just over eight feet long and five feet wide, a weehicle by any measure – was his for the taking. He'd already comfortably slid his six-three, 400-pound frame into the two-seater on display at the Detroit auto show.

Over the last 5,000 miles on the road, he and his wheels have been regularly recognized and photographed – and admired. "All the girls think it's so cute!" he claims.

Knowlton also owns a Chrysler 300C, but commutes to work at Beaumont Hospital in his babe-magnet black Passion Coupe. Off duty, he cruises with his six-foot-plus, 300-pound buddies. (One passenger at a time, please).

A brake on gas

Bloomfield Hills-based Smart USA, a division of Penske Automotive Group, is the exclusive U.S. distributor for the brand owned by Daimler AG and manufactured in France. The ballyhoo? At EPA ratings of 33 mpg in the city and 41 on the highway, the smart fortwo gets the highest mileage of any gasoline-powered vehicle in the United States; comparable to a hybrid, but without the cost premium, Rick Cortwright, brand manager at smart center Bloomfield, says.

As such, the smart fortwo's share of the Compact Basic Car segment has nearly doubled in the U.S. – from 3.3% in March 2008 to 6.3% in March 2009, according to the Power Information Network. Parked an average of just 29 days on dealer lots, it's a top 10 hot model for March 2009.

Itty-bitty, inexpensive, and fuel-frugal are the operative words the world over. Similar in appearance but slightly larger than the smart (it holds four people), the Tata Nano, at about $2,500 the world's cheapest new car, is now available for sale exclusively in India.

Without the winning prize, the three models – the Pure Coupe, the Passion Coupe, and the Passion Cabriolet – are base priced at $12-17,000. A fully loaded Cabriolet runs just over $20,000, Cortright says. Not quite nano-level, but not otherworldly.

While cars are typically sold through an online reservation system, where $99 gets your order in with options to customize, smart center Bloomfield (Michigan's sole outlet) has stock now for clients flexible with colors and options. Delivery used to take about a year, but the economic slowdown now equates to a 5-month wait, Cortright says.

While Italy is the top market for the vehicle, in the United States "We're perfectly happy to fill 25-30,000 vehicles a year, which is what we can get in allocation from the assembly plant, and as far as Detroit is concerned it does just as well as most markets," Cortright observes. "We've sold beyond our planning volumes in Detroit. We were expecting short of 800 the first year and we sold over 800, so we're very pleased."

There is no typical buyer, he says. Baby boomers, urban dwellers, and commuters all find room in this buggy. "Something like 70% of all vehicles are driven with one occupant. It works extremely well as an add-on or second vehicle for a lot of homes."

Revving up recycling

The car, which is 95% recyclable, has a big following among green enthusiasts, Cortright adds. The entire manufacturing process is green-driven, from the construction of the plant to its exterior grounds, which eschew manicured lawns in favor of more natural vegetation, to the powder-coat painting process, which eliminates overspray.

Environmental considerations were top priority when Linda Diane Feldt, a holistic health practitioner from Ann Arbor, made her purchase decision. "I was looking for something very fuel-efficient and very safe, and then the environmental practices of how it's built and their consistency at every stage of the process was extremely impressive. And that includes the dealership, which is selling it from a LEED-certified building." She notes one drawback: the carbon footprint of shipping the car to the U.S. from France.

Her Passion Coupe is metallic blue with black exterior trim, red interior, and a WIZDOM vanity plate. She's driven her primary car about 1,600 miles thus far, at up to 38 mpg in the city. She also has a 14-year-old pickup truck, but the smart feels roomier to her. It handles well on snow and ice, and fits in parking spots half-filled with snow, she says.

Moreover, the social benefits of being the runt of the road are hardly miniscule. It helped her get a date – plus an unexpected burst of affection. A woman ran up and hugged the car when Feldt rolled into the drive-in section of Ann Arbor's Downtown Home and Garden store.

Curb appeal

Cortright says it's common to see the smart backed or pulled into a parallel parking spot; at just over eight feet, its length is similar to the width of many cars. And in 90 minutes, barely more time than it takes to change your hairstyle, the co-polymer body panels can be switched out for those of another color – a good disguise for hiding from the police.

According to Metromode's unscientific survey of the owners featured here, with 12 cubic feet of storage space, the cargo area holds everything from a gaggle of groceries to a 32-inch TV (with front seat folded flat) to a 65-pound dog. On the minus side, the car lacks a tilt wheel, armrest, cruise control, and spare tire (it comes with an air pump as a temporary fix). The plusses? All cited the interior roominess and the fun factor of ownership.

The brand has its own social networking website that serves as a hub for Michigan owners to trade tips and make play dates. At last year's Grand Prix on Belle Isle, 45 cars took a lap on the racetrack. And 80 vehicles rode in a caravan in the Woodward Dream Cruise.

Dream cruiser Mark Carlson (aka Mr. Incredible) has gotten up to 45 mpg in his Passion Coupe. It's been a heroic year for the engineer and wanna-be comedian from Bloomfield Hills. He's put 22,000 miles on his ride (including a trip to Florida); been photographed in caped costume; and completely made over his Incredible Mobile. He switched the body panels from white to red, black powder-coated the wheels, painted the brakes yellow, and added an Incredible logo and NCRDBLE license plate.

Carlson, who also owns a Jeep and two minivans, says that until 2007, his auto purchases had been strictly "pragmatic", but the smart car's entertainment value clinched the deal. While driving through Chrysler property recently, "I come to a stoplight and there are two geese by the side of the road. Their heads are following my car. Everybody looks at this car, even the geese." They didn't honk, but "they gandered."

Apparently, even the geese see that micro-compact fuel-sippers may really be overtaking our streets. Feldt hopes so, but also envisions a larger road map. "I'd like to see a combination of Zipcars, the co-ownership of larger vehicles, small cars for commuting, and access to vans and larger cars for families that need them... So a whole system that has greater mass transportation and co-using, sharing either commercially or privately, is the future. But certainly, small safe commuter cars are an essential component."
http://www.metromodemedia.com/features/smartcarsdetroit0113.aspx

Now on sale: The Tata Nano

Tata Motors has begun taking orders for its Nano minicar.

The Indian automaker on Thursday opened up its booking system for the high-profile Nano, which it has pitched as the "people's car"--a first automobile for families that, until now, have had to crowd onto a scooter. There are only approximately nine vehicles per 1,000 people in India, according to the Reuters news agency.

The deluxe version of the Tata Nano (photo from January 2008).

(Credit: Tata Motors)

Bookings will close in just more than two weeks, on April 25. The company had made application forms for bookings available at the beginning of the month and said the response has been "very encouraging."

Priced starting at about $2,000 for the standard version, the Tata Nano is a very modest machine. It's about 10 feet long, weighing in at about 1,300 pounds, and Tata says it can "comfortably" seat four adults. The top speed for the car, which has a two-cylinder, 624-cc, rear-mounted engine, is about 65 miles per hour. The gas mileage is said to be about 56 miles per gallon.

Prospective buyers seemed most attracted by the low price (only about three times that of a low-end scooter), according to a Reuters report.

"I have experienced other foreign small cars," Denis Quadros, 42, who owns a Maruti Wagon R, told Reuters. "They are expensive to maintain and consume a lot of fuel. But look at Nano's mileage, and we know Tata cars are cheaper on maintenance."

Tata plans to begin delivering the cars in July.

But even then, there could be a long wait for those who've booked a Nano order. At the end of June, Tata plans to announce the allotment of the first 100,000 cars, as determined by a computerized random selection. News agencies reported that it will likely take Tata more than a year to fill the 100,000 orders.

http://news.cnet.com/8301-17938_105-10216340-1.html