Chinese biggies want to enter Indian car market

The Chinese dragon has set its eyes on the Indian car market. Two biggies Chery Automobile and Great Wall Motors are planning to enter India soon through joint ventures, senior company officials told TOI at Shanghai Motor Show.

"We are looking at a joint venture partner for India as it holds a good potential for car sales in the coming time," Chery Automobile president Yin Tongyao said. He termed India as a "very important" market and said the company was looking at "several proposals" for finalising a local partner.

Chinese carmakers are shifting focus from their main markets like US and Europe as volumes there are shrinking due to the global slowdown. At the same time, India's rising status as one of the fastest-growing car markets in the world, spells opportunities.

Chery was believed to be in talks with tractor maker Sonalika's car venture, International Cars & Motors Ltd (ICML), around three years back to roll out its small car in India. But the talks never fructified into a joint venture. Chery, famous for its small car QQ, is eyeing sales of 4.19 lakh units in 2009, an 18% increase over 2008. The QQ comes in two petrol engine sizes 0.8-litre and 1.1-litre.

Gavin Chen, marketing specialist with Chery's international division, said the company plans to sell cars in India by 2010. "While initially we will look for a distributor, the final plan is to build a factory in India." Chen said the company saw India as a big market due to its huge population and thus wanted to develop some specific models. "The plan is to make cars at good price with good quality," he added.

Great Wall Motor (GWM) listed on the Hong Kong Stock Exchange is China's largest privately-owned car maker and specializes in SUV and utility models, while recently expanding into the multi-purpose vehicle and hatchback segment.

Chris Guan, GWM's South Asian region GM, said the company wanted to launch at least one or two models in India this year. "We are currently evaluating partnerships. Initially, we are looking for a distributor for which we have been contacted by some companies," he said.
On 100%-plus import duties, he said the company wanted to have a partner that can assemble the models. "If the partner has a factory, the customs duty can be reduced," he said. GWM sold 1.25 lakh units in 2008 and exports cars to countries like Russia, Ukraine, Egypt, Senegal and the Middle-East region.

Daimler buys Hero's stake In truck JV For $21.2 Million

Daimler will pay 16 million euros ($21.2 million) for the remaining 40 percent in its Indian heavy truck joint venture after dwindling finances forced local partner Hero Group to focus on its core business of motorcycles. Referring to the significance of India as "a key to a completely new generation of products," Daimler Trucks said on Wednesday it would invest more than 700 million euros over four years to enter and eventually use the subcontinent as a bridgehead to other emerging markets. The two partners had originally planned to divide the investment in proportion to the size of their stakes. "I really regret the Hero Group's decision, but Daimler Trucks will nonetheless enter the truck volume market in India," said Daimler Trucks chief Andreas Renschler in a statement on Wednesday. "Nothing has changed regarding our plans to manufacture trucks in Chennai. I'm counting on continued good relations with the Hero Group, whose expertise regarding the Indian market is very important for us." Daimler, the world's largest commercial vehicle maker, had hoped its JV with Hero would allow it to compete better against rivals like Volvo, which has a deal with India's Eicher Motors, as well as Tata Motors Ltd, Ashok Leyland and Mahindra & Mahindra. Daimler agreed in December 2007 to locally produce light, medium and heavy-duty commercial vehicles with the Hero Group, which controls 26 percent of India's leading motorcycle maker Hero Honda. The German group had forecast market potential of 500,000 units by 2018, translating to annual growth rates of 7 percent on average versus 2006 -- almost twice as much as the global truck market. Demand for heavy duty vehicles weighing over 16 tonnes would rise by an even faster 10 percent per year. Daimler plans to use to low cost base to export a type of premium commercial vehicles tailored for emerging markets.

Tata Motors enters into tie-up with Bank of Baroda

In order to provide an added facility of car finance to its customers, Tata Motors has entered into an understanding with Bank of Baroda for financing its range of passenger vehicles.
Bank of Baroda, a public sector undertaking, caters to the needs of industry as well as retail segment. The bank has pan India presence with over 2900 branches spread all over the country. It has recorded over 50% growth in the auto loan segment during the first 11 months of this fiscal.

Bank of Baroda offers car loans up to 85% of the invoice price, for tenure ranging up to 7 years, at a very competitive rate of 10.5% p.a.
This facility will be available at all 2900 branches of Bank of Baroda and 470 sales touch points of Tata Motors. This tie-up will provide a single window for both cars as well as car loans and will make car buying easier for the customers.

Eicher founders may sell majority stake

Founders of truck maker Eicher Motors Ltd are exploring selling their majority holding to a global commercial vehicle maker, media reported on Monday quoting sources.

DaimlerChrysler, which already holds a 3.56 per cent indirect stake in the company, is tipped to be the front runner.

Daimler wanted a majority stake in Eicher as part of its long-term India strategy. Eicher's founders own about 58 per cent of the firm.

Eicher officials could not be immediately reached. The company last week said it plans to evaluate "strategic partnership opportunities."

It had clarified the plan was broadbased and it would evaluate all opportunities. Media reports have said global truck makers including Daimler and Hyundai Motor were eyeing a stake in Eicher.

Daimler, which also holds a 6.6 per cent stake in Tata Motors, imports the Actros range of trucks in India and also plans to assemble semi-knocked down trucks. It is building a plant in Maharashtra state to make 5,000 Mercedes cars a year.

Bajaj may join hands with Renault

Nissan Renault boss Carlos Ghosn’s pet $3,000 car project could trigger off a new partnership for Renault in India with Bajaj Auto (BAL). BAL MD Rajiv Bajaj will meet top Renault officials in Paris shortly to discuss a possible partnership.

The small car partnership could be part of a larger alliance between Renault and Bajaj Auto covering commercial vehicles as well. Initial discussions on this front have already begun. When contacted Mr Bajaj refused to comment. Carlos Ghosn has already announced that the combine would develop a $3000 small car using Indian expertise. The car is Renault’s big pitch for global volumes after the Logan and will be positioned below it.

Renault’s current partner in India is Mahindra & Mahindra with which the French company has two separate joint ventures. Mahindra Renault, a largely marketing company, is in charge of selling Renault’s global low-cost sedan Logan in India. Sources say M&M is not interested in the $3000 car project because it’s long-term strategy is to be a global player in the SUV market.

(Source:Economic Times)