Indian Autos blog

Recent reports state that Nissan India will take hold of a minority stake in Hover Automotive Ltd. Hover is in control of the marketing, sales, dealer development and after sales activity for Nissan.

Once the joint venture is finalized, Nissan will become Hover’s 4th partner along with Moez Mangalji – serving as the Chairman of Hover from the Westmont Group , G Mohan Singh – earlier one of Honda’s largest dealers and Kevin Whalen – one of the founding members of Group One Automotive.

A top official from Hover has announced that once the alliance is formed instead of selling vehicles on a commission basis, Hover will be on task with all finished products in Nissan’s inventory by purchasing it from the manufacturers and distributing them to the entire dealer network which is scheduled to see a rapid growth from 45 to 100 by the end of 2012.

Its interesting to note that India is among the few places in the world where Nissan works with a joint venture as such. Hover which has already appointed 85 dealers for Nissan, seeks to attain 85% of the automotive market in India by 2013.

To meet Nissan standards, each dealer is expected to invest an amount 6 – 10 crore. This Joint Venture suggests that Nissan now being a stake holder, will have more control over the dealerships, its activities and so on.

Renault-Nissan has announced that it has signed a pact with Indian bike maker Bajaj on Thursday, 8 July 2010 for developing a small car (the Ultra Low Cost- ULC car). This announcement from Renault-Nissan has put an end to all the rumors about the ULC small car project being dropped due to a rift between the two companies.

We had reported yesterday that there wouldn’t be a joint venture between Renault-Nissan and Bajaj on this front but it wold be more like a MoU bet ween the two companies. It would be more like an OEM agreement.

While Bajaj would be in charge of designing, developing and manufacturing the ULC small car, Renault-Nissan would take care of branding, marketing and distribution. Renault-Nissan would also be exporting the car to other developing countries once the car is launched in India.

The Renault-Nissan-Bajaj small car would hit the market sometime in 2012 and could be priced at 1.17 lakh Indian Rupees (US$ 2,500). The ULC small car would be pitted against the Tata Nano.

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We had already reported about French carmaker Peugeot planning to enter India soon. The carmaker is reportedly planning to setup a factory in Andhra Pradesh and is said to be in talks with the Andhra Pradesh government which would be offering lucrative tax exemptions and other fiscal incentives to the Peugeot-Citroen group.

Now we have another development to Peugeot’s Indian story. A tie up between Peugeot and Hindustan Motors is also rumored to take place soon. Hindustan Motors could help Peugeot fasten its Indian entry and HM India could initially manufacture engines for the French company till its sets up its own engine plant (like it did for Ford India).

An anonymous Peugeot official -

PSA Peugeot Citroen can confirm that a project team is working on India as a strategic market. Our team is working actively on the project and has many contacts to build its conclusions.

Peugeot is planning to invest 4100 crore Rupees in phases for its Indian operations. Peugeot could also bring the Citroen brand to India and Citroen badged cars could be positioned slightly above Peugeot so that Peugeot-Citroen can cater to a wide range of customers.

Peugeot is planning to launch a new small car and a compact sedan for developing markets and the company could use India as the production base for all markets, like what Nissan is doing with the Micra hatchback. Peugeot is said to be planning to roll out 1,00,000 cars out of its India plant by 2014.

Nissan has secretively begun groundwork for its small car which could be jointly developed with Ashok Leyland in Chennai. Nissan is planning to develop a new small car that would be positioned between the Micra hatchback and the Tata Nano rivaling ULC car that would be developed by Bajaj for Renault-Nissan.

Nissan is reportedly getting feedback from Maruti Alto owners. The company is studying what draws buyers to the Alto which has been India’s largest selling car for many years now.

An Alto customer who participated in this exercise -

The Nissan team has been collecting feedback on owners’ experience with the Alto, while checking out what additional features they would like in a similar product.

This is a clear sign that Nissan is planning for an assault on the Maruti Alto. GM India was keen on developing an Tata Nano rival but GM withdrew from that and now GM India would be developing an Alto rival along with its Chinese partner SAIC. Hyundai is also developing the H800 to rival the Alto and we even spotted the car being tested in Chennai.

Maruti has been enjoying monopoly in the segment for many years now and with competition from new players like Nissan, GM India and Hyundai, would Maruti be able to hold its fort for long?

The question is would who among Nissan, Hyundai and GM India would be able to pull it off and dethrone the Alto as India’s largest selling car.

Volkswagen now owns a 19.9% stake in Suzuki and now the German car maker could benefit from Suzuki’s frugal engineering and packaging techniques which appeal greatly to developing markets especially.

Volkswagen which is a new entrant into the Indian car market made a bold move by investing 3,500 crore Rupees in its Chakan Plant, Pune. While Maruti Suzuki already has a strong presence in India with more than 55% share in the Indian car market.

Christian Klingler, Management Board Member, Volkswagen -

Of course, there is a possibility of developing products together, (but) I cannot confirm it. Suzuki is very strong in the Asian market, including India and Japan. They have knowledge in the small car segment, which is pretty unique. They make small cars and make money. Lot of manufacturers make small cars, but they don’t make money. Suzuki has lot of interest on the technologies that we have. There are lot of discussions going on about synergies and one synergy could be at the suppliers’ level as well.

The Volkswagen-Suzuki partnership could develop products globally and this partnership could extend to a partnership with Maruti Suzuki in India and thus VW would benefit hugely from the Japanese company’s cost-effective manufacturing techniques and its Indian arm’s strong supplier base.

Suzuki could have access to VW’s modern TDI diesel engines, TSI petrol engines and the DSG transmissions. The next gen 2011 Suzuki Swift could be benefit from these and could come with VW diesel engines and DSG transmissions.

The Suzuki Kizashi could also use VW engine when it comes to India while the next generation SX4 and the next gen Grand Vitara could share their platform with Volkswagen models.

Volkswagen UP, global small car is being developed by VW and a partnership with Suzuki seems to be coming at a right time as Suzuki’s prowess could really help VW package the UP cost effectively.

Click here for detailed product plans of the Volkswagen-Suzuki partnership.

Volkswagen recently bought 19.9% stakes in Suzuki. The German carmaker made a very smart move by buying stakes in Suzuki could create opportunities for VW to jointly develop low cost car models, which is the Japanese marque’s strength.

Volkswagen is planning to develop its next generation of small cars and compact crossovers/SUVs with Suzuki as the latter is best known for its frugal engineering and packaging. Volkswagen’s joint venture with Suzuki could help both the brands and also VW’s sub-brands, Skoda and Seat.

Volkswagen’s small car UP which is expected to be a very low cost city commuter, is already being developed and at this stage VW could do with Suzuki’s know-how on cost effective packaging and low cost manufacturing techniques. The next gen Alto could be based on the VW UP but that would definitely not come to India.

What we feel is that, this would pay Volkswagen huge dividends in India where Suzuki has a strong presence and the VW small car could be made by Suzuki and hence guaranteeing its success in India.

Other Suzuki models Volkswagen would be interested in, are the SX4 and the Grand Vitara. The next generation Suzuki SX4 could be used by VW to develop a small crossover which could be used by Volkswagen for the next gen VW Tiguan and Crosspolo, the Audi Q1, the Skoda Yeti successor and the Seat Tribu.

The next generation Grand Vitara could be jointly developed by both the companies and this could form the base for the Volkswagen SUV that could fill the gap between the Tiguan and the Touareg. This could be a Passat SUV and is dubbed the VW416. This platform could also be utilized for the Audi Q3 mini SUV and the upcoming Skoda Bigfoot.

Except for next gen Alto that could be based on the Volkswagen UP, the other cars that are mentioned above would come to India, if the joint-development exercise goes well.

Possible products that could jointly be developed by VW & Suzuki -

> Volkswagen UP – Next gen Suzuki Alto (only for Europe)

> Next gen Suzuki SX4 Crossover – next gen Volkswagen Tiguan – Audi Q1 – Skoda Yeti next gen

> Next gen Suzuki Grand Vitara – Volkswagen Passat SUV – Audi Q3 – Skoda Bigfoot

Mahindra is joining hands with a couple of companies in the Gulf to produce armored vehicles. Mahindra & Mahindra, its subsidiary Mahindra Overseas Investment Company Mauritius Ltd, Arabia Holdings and Ras Al Khaimah Transport Investments are coming together for this JV to be set up in the UAE.

Mahindra Defense Systems is one of the major players in the defense manufacturing sector in India. Mahindra had considerable experience in vehicle armoring and prepping military utilitarian vehicles with ballistic kits.

The JV project would be set up in the Ras Al Kaimah Emirate free zone, where the costs of manufacturing are low and the Emirate’s close proximity to the Gulf, African and Central-Asian countries which would be the target markets for this JV.

Mahindra’s Defense arm, through this JV would be manufacturing the heavily armoured Scorpio based Marksman and Armoured Cash transporting vehicles. These vehicles have already been developed for the Indian military and governmental organizations and are quite successful.

Mahindra could also build its High Mobility Multipurpose Wheeled Vehicle, the Axe which it is currently readying for the Indian Army. The Mahindra Axe is a heavily armoured vehicle which comes both in soft-top and hard-top versions. The Axe comes with either the 2.7 liter Ssangyong derived diesel engine or the 4.0 liter General Motors derived Vortec petrol engine. The Axe comes with an All-Wheel independent suspension system for extreme mobility during strategic missions.

The SAIC-GM-Wuling Automobile, a joint venture between Shanghai Automotive Industry Corporation(SAIC), General Motors and Wuling Motors to produce low cost minivans has also revealed plans to launch a new mid-size sedan completely developed in-house.

Codenamed GP50, the new midsize sedan is going to be pitted against the Guangzhou-Honda’s upcoming self-developed midsize car. SAIC-GM-Wuling is planning to complete formalities within August and sanction it for production by the end of this year.

There has been widespread speculation about the GP50 being based on the Buick Excelle (old Chevrolet Optra) platform. Styling can be expected to be sharp and edgy as the Chevrolet Beat.

Indian Autos Blog feels GM could bring the GP50 to India but would not sell it with ‘Tavera’ brand name, which GM is planning to tag its SAIC commercial vehicles with. We expect the new GP50 sedan to be selling as a ‘Chevrolet’ alongside the low cost hatchback and possibly produce it at the Talegon facility along with the new GM-Wuling’s low cost car speculated as the Nano’s competitior.

GM India could possibly position this new sedan between the upcoming Chevrolet Aveo and the Chevrolet Cruze. GM India could also retain the Optra badge for this vehicle, possibly market it as the next generation Optra.