24-NOVEMBER-2009 “Maruti, Hyundai and Tata seek engineering talent from Detroit”

From what is left of Detroit, Maruti, Hyundai Motors India and Tata are sifting the gold from the rust. The once-iconic automobile now going through a journey of bankruptcy, is turning out to be the ideal hunting ground for the car-makers who are eyeing talent laid off by General Motors. Chrysler and Ford.

The Big Three of Indian auto sector are scouring Detroit and other such fallen auto hubs across the US and Southeast Asia, placing advertisements in leading auto magazines seeking engineering talent, expats as well as NRIs, to run factories back home.

“With big automakers like GM, Ford and Chrysler downsizing people, we found that there was a capable population in the US, which can be effectively used to meet our own requirement,” says SY Siddiqui, Maruti Suzuki’s managing executive officer for HR & IT.

India’s largest car maker had sent a team to Detroit to shop for talent. It bagged 10 engineers so far, two of them expats. “We are so happy with our talent acquisition that we are looking at hiring more from Motown next year,” Mr Siddiqui says.

Maruti plans to hire around 500 people in managerial capacity next fiscal. An equal number of people will be recruited by the automaker on the shopfloor.

The company plans to enhance its R&D capability to become a 1-million unit carmaker by 2010. For this, it plans to scale up its R&D workforce from 781 to 1,000, apart from adding to the talent pool in other departments. In the current fiscal, Maruti plans to hire 500 engineers and 200 technicians.

The compensation package for those automobile engineers shifting base from US to India depends on three factors: competence, the comparative cost of living and the prevailing compensation market in India.

Sunil Goel, director of GlobalHunt India, says there is a serious shortage of skilled manpower in India, which has forced these companies to look outside. He believes that hiring trends in the automobile sector in India are showing signs of a turnaround, and expects recruitment to increase in Q3 and Q4 this fiscal.

Hyundai Motor India is using the advertising space of  Automotive News, US, source manpower, says Arvind Saxena, senior VP (sales & marketing).

“We have always believed in hiring the best and if this means extending the boundaries to include those living outside India, we are open. I am sure this will be a good opportunity for many Indians as well, who want to come back home. It will be an excellent opportunity for us too since we will be able to get experienced people, who have a wealth of knowledge and experience in international markets,” he says.

Hyundai has recruited some 1,200 people on the shopfloor this year.

 

24-NOVEMBER-2009 “Mahindra eyes Rs 500 crore turnover”

Mahindra and Mahindra, a renowned name of auto-mobile sector, which entered into the business of sale-purchase of pre-owned cars in 2007, is eying the turnover of Rs 500 crore in the current fiscal.

“Market of sale-purchase of pre-owned cars was at least 20 times big than the market of new cars and we want to tab the market to double our current Acquired Turn Over of Rs 250 crore in the current financial year”, Sharad Agarwal, General Manager, Sales (North) of the Mahindra First Choice Wheels Limited, a wing of Mahindra and Mahindra, told reporters while inaugurating a showroom of the company here today.

At present the company had 97 dealers in the country, which would be increased to 300 by 2013 apart from opening 27 super showroom for sale-purchase of at least one lakh cars, he added.

“The newly opened showroom of the company will display several brands of pre-owned cars and will function as a one-stop shop for all those wishing to either buy or sell a car. We will offer a wide range of services for customers, including purchase and sale of pre-owned cars, car finance and insurance, fitment of car accessories and assistance with paperwork and documentation,” said Agarwal.

24-NOVEMBER-2009 “BMW xDrive: A rear axle pitches in to steer”

Engines, transmissions, chassis controls and cockpit infotainment systems have all had their turns as the must-have features that brought shoppers into showrooms. Could it now be time for the lowly differential – a vital drivetrain part seen by few drivers and understood by even fewer – to shine?

The differential is a compact gearbox that lives in the dark recesses between a vehicle’s drive wheels, earning its keep by allowing a smooth delivery of engine power while going around turns. Its array of gears and shafts makes it possible for the left and right wheels to spin at different speeds even though they are geared together on the same axle.

This is necessary because the wheel on the outside of a turn rolls along an arc that’s significantly longer than the path tracked by the inside wheel – so it must rotate faster, much as a rider on the perimeter of a merry-go-round travels faster than a rider near the center. Vehicles that drive through all four wheels have a differential in the front axle and another in the rear axle.

Over the years, refinements have been added to address the differential’s one glaring foible: allowing the drive wheel with the least amount of traction to spin fruitlessly while the wheel with a better grip on the road takes a break. One solution, the so-called limited-slip differential, has proved effective in distributing torque more effectively during acceleration, and it is a lifesaver when your garage is at the end of a steep, slippery driveway.

The rear differential at the heart of the BMW xDrive all-wheel drive system used in the X6, X6M and X5M goes beyond maintaining forward motion in adverse weather. This is a differential with brains – one smart enough to lend a helping hand in extreme cornering maneuvers.

The version of xDrive in these BMWs includes a capability called Dynamic Performance Control whose purpose ist o contribute what engineers call a yaw torque. To understand yaw torque, visualize a scale-model car with a toothpick stuck vertically through its roof. Spinning the tooth pick between your fingers mimics the vehicle’s yaw motion – movement about its vertical axis – experienced during cornering. In this example, your fingers supplied the torque that produced the yaw motion.

All four tires generate the lateral forces that cause a vehicle to track around a corner in response to a driver’s commands at the steering wheel. Together, those four forces yield a yaw torque. But some tires work harder than others; in a front-heavy vehicle, the right-front tire does most of the work guiding the vehicle around a curve to the left.

Dynamic Performance Control pitches in once the hardest-working tires have reached their traction limits. This added yaw torque – essentially an extra nudge to help the vehicle complete the cornering maneuver – is generated at the rear. By forcing the outside rear tire to push forward while the inside-rear tire pulls back a bit, a helpful turning force is generated about the imaginary vertical axis.

What accomplishes this feat is an ingenious collection of clutches and gears inside the differential. The device, called Vector Drive by its maker, ZF, a supplier of transmissions and steering hardware based in Germany, is commanded by a computer that keeps abreast of the vehicle’s every move through speed sensors positioned at all four wheels.

When cued by the control computer, a planetary gearset inside the differential temporarily changes the speed ratio between the left and right wheels from the normal ratio of 1:1 in straight-ahead driving to 1.25:1. In other words, the outboard wheel strains to speed up while the inboard wheel strives to slow down. The resulting push-pull is the yaw torque that supplements cornering forces normally generated by the tires. In principle, it is like a bulldozer, which turns by changing the relative speeds of the tracks on each side.

The beauty of this arrangement is that it works independently of the BMW’s propulsion system. Whether the driver is accelerating, braking or coasting through a tight turn, this computer-controlled differential is always on call to add a yaw-torque contribution.

Also packed inside the Vector Drive housing is a conventional ring-and-pinion gear set as well as the components that provide a limited-slip function for slippery roads.

There are no alarm bells or warning lamps to alert the driver when the Vector Drive differential is at work. Instead, this high-riding BMW hatchback adeptly executes maneuvers that would otherwise be beyond its reach. And, for those who push too hard – you know who you are! – the BMW stability control system is still on duty as a safety net.

 

24-NOVEMBER-2009 “Maruti Suzuki to launch van to replace Versa”

The country’s largest car maker, Maruti Suzuki India (MSI), today said it will launch a new van within this fiscal to replace its MPV Versa , whose production has been stopped.

“We will be launching a new van by the end of this fiscal. This vehicle will replace the Versa, whose production has already been stopped,” Maruti Suzuki India Managing Executive Officer (Engineering) I V Rao told reporters on the sidelines of the Fourth Environmentally Friendly Vehicle Conference here.

He, however, did not give the price point of the soon-to-be launched vehicle.

MSI is also looking to produce one million vehicles by the end of this fiscal.

“Hopefully, we will have one million units in production by the end of this financial year by utilising our full capacity,” Rao said.

He added the company is working on making all its models Bharat Stage-IV compliant as required under the government norms.

“We have not completed BS-IV compliance norms on all our models but we are working towards that direction,” Rao said.

The company is also working on hybrid and electric vehicles for demo cars, but Rao said it has no plans for a full-fledged launch of vehicles with such alternative fuel technologies.

1-NOVEMBER-2009 “Car companies come up with sporty, stylish designed models for young buyers”

It was the biggest challenge for the country’s largest carmaker looking for some success in the domestic market it had ruled for over two decades after its premium multi utility vehicle Versa, flopped. Despite Maruti best ever glitzy campaign, Versa endorsed by Bachchan father-son duo hardly had any takers. Looking for obvious answers to save its mammoth market share, Maruti played its biggest gamble in India.

After two years of intensive market research and hectic car clinics, it introduced Swift in May 2005 — a design marvel crated by a blend of Mini and Beetle hatchbacks. The car, developed keeping in view the evolving demographic and psychograpy of Indian customers proved to be a runaway success.

Now it’s the largest selling brand in the A2 segment. But more importantly it has paved way for sporty and sharply designed stylish cars carved out keeping in mind the younger customers.

Why? The obvious answer comes from Maruti’s chief general manager (marketing) Shashank Shrivastava: “Customers are getting younger, so make cars they love to buy.” New car buying customers are now six years younger at an average age of 33 years over the past decade.

Swift has answered most of Maruti’s woes. From mere 3,000 cars per month since 2005, now over 9,000 cars are sold every month, leaving many market gurus puzzled to become country’s third largest selling brand. It has killed all its competition, cornering almost three-fourths market share in the segment. Most marketers accord success to its superb “Design”.

Swift was a whole new departure in Suzuki’s design philosophy. Styling themes originated from Concept-S and Concept-S2 (S for sports) cars, making Swift the first global platform from Suzuki’s stable to blend urbane appeal with sporty features away from its edgy Ignis and Alto platforms.

Its the first car to have wraparound headlamps (somewhat standard on most new cars in India) and distinct black A and B pillars seen in Ford Mustang earlier. Moreover Suzuki tweaked its proven 1.3 litre Esteem engine by adding up five computer chips to increase torque keeping in mind the younger customers.

Koreans weren’t late to learn the rules of the game. As for design elements Hyundai always stood out be its ‘Tall Boy’ Santro or the curvaceous i20, which has appealed to a very large segment of buyers in India. At least that is what its Getz successor i20 portrays.

Though much pricier than Swift this car with sports embedded in its basic design and every bit of interiors has set the benchmark for top-end premium hatch market. It consistent sales grew from 2,000 car since January this year to over 4,500 cars to date.

Honda’s flagship brand, City has been a precursor of changes in the mid-size car segment where it has maintained its leadership since its launch 11 years ago. One of the most aesthetically designed sedan, its three sporty incarnations have made it common man’s most aspirations car.

1-NOVEMBER-2009 “Audi looks at 50 pc growth; to assemble more models in India”

German luxury car maker Audi today said it is looking at over 50 per cent growth in sales in both this and the next year in India, and is planning to assemble more models in the country as part of its strategy to achieve this target.

The company will also launch one new model in the country next year, besides brining in advanced version of an existing model.

“Our target is to grow by over 50 per cent both in this year and 2010. In 2008, we sold around 1,050 units in India and this year our target is to sell 1,600 units and then continue the momentum next year,” Audi India Head (Marketing) Martin Birkner told PTI.

He said the company had a good growth so far this year but did not provide the exact figures of the number of units sold so far in 2009.

Audi is also planning to assemble more models in India from next year.

“We are looking at shifting assemble operation of at least one or two more models to India in 2010. This will give us a better advantage in the market,” Birkner said, without giving further details.

Audi currently has seven models in India, of which only two — the entry level luxury sedan A4 and the volume model A6 — are assembled here, while the others are shipped in as completely built units.

24-OCTOBER-2009 “Second-hand auto sales surge, financing too catches on”

The recession seems a thing of the past for the second-hand car market. Auto majors such as Maruti,General Motors and other second hand car dealers have witnessed a significant surge in their pre-owned car business in the first half of the current fiscal. Sales have picked up from September and auto majors are hopeful the trend will continue.

Financing companies and banks are also getting into the act. Interestingly, small cars like Alto, Maruti 800, Omni, Maruti Wagon R, Zen, Santro and Spark sold more in the first half of 2009-10 and customers steered clear from larger cars in absence of financing options.

A Maruti Suzuki official told ET: “There’s been no adverse impact on sale of pre-owned cars sold through Maruti True Value. In the first quarter, Maruti True Value pre-owned car sales grew by 20% and in the second quarter, the momentum continued with sales in excess of 42,000 units, with growth accelerating to 34%.” Overall, the sales of pre-owned cars through Maruti True Value outlets in the period April to September 2009 was over 74,500 units, registering a growth of 27%.”

In September, Maruti saw a marked surge in second-hand car sales. Over 15,500 preowned cars were sold through the network of 321 Maruti True Value outlets operating in 188 cities across the country. In September 2008, sales was around 10,000 units. A Maruti Suzuki official added there was a positive trend in financing of used cars. “The number of used cars financed are increasing. It is also reflected in interest being shown by new NBFC players for having tie- ups with us. We expect True Value pre-owned car sales will continue to have solid growth in the second half as well,” he added.

General Motors, too, has witnessed a growth in its second-hand car business, Chevy OK. “We had launched our pre-owned car business in April 2009 with five outlets. We now have 22 outlets and by December 2009, we propose to have 30. We had kept a target of selling 500 pre-owned cars between April to December 2009. But we have been able to achieve a sales of 554 used cars by September 30. Customers have picked up Spark and some have bought Opel Astra. The financing companies are also showing interest in second hand car financing,” said Mr P. Balendran, VP (sales) of GM India.

Second-hand car dealers are also optimistic about sales going up in the second half. “Sales have really picked up from the first week of September. Growth is coming mainly in the small car category,” said a Chennai-based preowned car dealer.

Incidentally, the size of the used-car market in India is estimated at about 10 lakh units per annum, with the market being largely fragmented and unorganised. The share of the organised market in this segment is only about 10% while unorganised dealers account for another 30% share. The balance 60% of the sales in the used car market is through personal dealings between the buyers and the sellers.

24-OCTOBER-2009 “Reva may sport made-in-US tag”

Bangalore-based electric car maker, Reva Electric Car Company may become India’s first auto company to make its vehicles in the US, by asembling its next generation NXR smart car in New York.

Reva has roped in a New York-based electric car maker Bannon Automotive, in a joint venture to assemble its three-door plug-in hatchback, banking on emerging demand for environment-friendly cars.

The proposed JV is expected to see an investment of over $38 million with $11.6 million funding coming from the local New York State as incentives for the eco-friendly project. It likely to set up America’s first assembly plant for electric cars.

A senior Reva executive who didn’t wish to be named confirmed the new proposed venture and said: “We are exploring all options and would be working in many international markets to export and manufacture our cars. Talks are on to license the technology that can open new revenue stream for the company.”

He declined to share more details on the proposed venture. Interestingly, Reva has not tied-up with General Motors, once the world’s largest car maker. This is despite the fact that Reva is developing electric technology for General motors India for its small car Chevrolet Spark Electra.

The new car will run on a Lithium-ion battery, with a top speed of 104 kmph and a range of 160 kms on a full charge. Reva has also developed Lithium Polymer battery and the fuel cell technology but they would be launched at a later stage. Reva had launched its two next generation cars – NXR and NXG – in September at the Frankfurt Auto Show, which will hit the international market from next year. Reva will send the fully built kits to the US market which are expected to be assembled by Bannon at a location which is yet to be decided.

Reva has scaled up its manufacturing capacity in India to 30,000 cars per year with an investment of Rs 30 crore. The company is banking on the global shift towards eco-friendly cars and is exploring entry into many markets including South East Asia and Europe.

Reva already has a presence in the UK market, where it has managed to sell over 1,000 cars in the past decade. The US market currently has only a couple of electric car plants, but the market is dominated by hybrid cars (petrol+electric) such as Toyota Prius and Honda Insight. Toyota has sold over a million unit of the segment leader Prius in the past decade.

22-OCTOBER-2009 “Renault open to single partner in India”

Renault-Nissan on Wednesday said it could dump two out of its three partners in India, triggering fresh speculation about the fate of its Mahindra-Renault joint venture that sells the mid-sized car Logan.

Speculation has been rife that Renault is scouting for an Indian partner to replace utility vehicle and tractor major Mahindra & Mahindra in Mahindra-Renault. The Renault-Nissan combine has alliances with Bajaj Auto for developing an ultra low-cost car, and with Ashok Leyland for light commercial vehicles.

When asked at the Tokyo Motor Show whether Renault will part ways with M&M in their 49:51 joint venture company, Renault-Nissan president and CEO Carlos Ghosn said: “I am not saying we will, I am saying we can. I don’t want anybody to be surprised.”

“We have today three partners (in India). Our intention is to continue with the (three) partners, but if it is not possible, I can tell you that we need at least one,” he added.

ET had in its October 6 edition reported about the simmering differences between the French car major and its Indian partner M&M, which centre around Logan’s poor performance in the Indian market.

The low-cost car, a winner across the world, has seen its sales crash 71% in September to just over 500 vehicles, while its April to September numbers are down to less than a third of last year.

“It is a matter of concern. Every time your sales go down on any model, not only in India, we always check why. We are going to try for some more time, if it does not work then we will go with a second car, probably with a different partner. We are in India to stay,” Mr Ghosn said.

He said the failure of Logan was because “it is more expensive than we hoped it would be in India. The market here is extremely sensitive to the price. Another reason is, we don’t have enough localisation in India”.

Mr Ghosn stressed on the importance of working with local partners in India to benefit from their knowledge and capabilities. “At this stage there is no decision, nor any plan to cease co-ordination with any of its current partners,” he added.

22-OCTOBER-2009 “Get set for Prius, Swift hybrid”

World’s largest carmaker Toyota on Wednesday said it will launch its hybrid car Prius in India early next year and roll in a 10% more fuel-efficient small car in early 2011, as Japanese carmakers revealed big India plans at the Tokyo Motor Show.

Nissan said it will roll out its new global V platform small car from its Chennai plant from mid next year, while Suzuki unveiled a Swift with a Plug-In hybrid and a Suzuki SX4-FCW hydrogen drive under the slogan, ‘Small cars for a big future’.

Toyota Motor Corporation will introduce Prius in India, its vice-chairman Kazuo Okamoto told a group of visiting Indian journalists here. Toyota is also planning to launch a small car in India in 2011.

Nissan Motor Company, Japan’s third largest automobile firm, will make its Chennai plant the export hub for Western Europe, West Asia and Africa, said Vincent Cobee, the firm’s program director for global compact cars. He said the company expected to sell one million vehicles a year at full capacity from its new ‘V-platform’ compact car units in Chennai, Thailand and China by 2015.

A recent global survey found that Indians would rather buy their dream car than a green car, but with the coming of Swift Plug-In, many Indians’ dream car may become a green car. The car is designed for short city trips with a petrol-driven generator in addition loading the battery of the electric engine. The battery can be connected to an electric socket that gives the car a range of 20 km on one charge.