Yet another development in the automobile sector in India has seen Imperial Motors entering into a JV with an Italian firm Allevard Rejna Autosuspensions. Currently operating in the automotive tubing sector in India, the company has chosen to partner with the Italian firm which is a part of the Sogefi group. Sogefi group is a famous manufacturer of elastic automobile suspension elements.

The new joint venture company, Allevard-IAV Suspensions Pvt. Lt.d is all set to invest Rs 25 crore to set up a plant production facility in Pune and is an 51:49 joint venture.

In a press conference on Thursday, the Managing director of the Sogefi Group, Emanuele Bosica has commented that given the demand present in India for automobiles their main objective is to become one of the leading producers of suspension components in the country.  “This is our second JV in India, the first was with a Bangalore-based company two years ago” he added.

He also claimed that their innovative product would help reduce the car’s weight by 50 per cent. This would be the right arena for them to test these innovative suspension systems with composite content.

“We are carrying out the testing of the prototype in luxury cars in Europe. Once we get the nod from the manufacturer after the trial, we will be aim at mass production of the product by 2012. The overall weight reduction will improve the fuel efficiency and also reduce carbon emission,” said Bosio.

The Chairman of Imperial Auto Industries, Jagjit Singh has confirmed that initially they would start off by manufacturing torsion bar and stabilizer bar for the utility vehicles as well as passenger cars. “These two components form the most critical parts of suspension system,” he said.

Hero Honda, India’s largest two wheeler manufacturer has introduced a new variant of their most popular bike on Thursday. The new variant is named Super Splendor and will cost Rs 45,950 which is the ex showroom price in Delhi.

Anil Dua, Hero Honda Motors Senior Vice President for Marketing and sales stated “The 125cc segment has been stagnant or even declining in the past one year, but we believe that we can grow the market. Our own expectation is to grow our own sales by about 15-20 per cent in the 125cc segment”.

However, Mr. Anil Dua declined to comment on the details of the incremental sales expected by the company with the introduction of this new bike, Super Splendor. He refused to share the details of the specific number of units that the company expected to sell.

Accounting for almost 20 percent of the entire motorcycle market, the value of the 125 cc market is pegged at close to 75 lakh units per annum.

He also added that once the new variant of super Splendor was introduced, in the market Hero Honda Motors plans to eventually phase out the old Super Splendor model.

Mr. Dua also said “With consecutive months of four lakh-plus sales since the month of May, our sales are moving at all-time high levels. We are looking to build on this momentum with a slew of new launches leading up to the festive season”.

In august 2010, the leading two wheeler manufacturer riding high on the auto sales trend has reported an increase of 2.28 per cent in their sales with close to 4,24,617 units being sold in august 2010 when compared to 4,15,137 units sold in august previous year.

He also went on to add “We will have three models in the 125cc segment, which includes Super Splendor, Glamour and Glamour PGM-FI”.

The brand Splendor was first launched by Hero Honda in 1994 in the 100 cc bike segment. This bike went on to break world’s sales record and as per the company is one of the highest selling bikes in the world.  Its new variant super Splendor was introduced by the company after ten years in 2005. The new variant was introduced in the 125 cc segment and offers enhanced features for better fuel economy and Quantum Core engine.

As predicted and expected by Analysis the sales of some of the top most Indian automobile manufacturers have risen by 20 to 30 percent and the demand continues to rise with the onset of the festival season.  However they have also cautioned the automobile manufacturers that this demand would be curtailed by the expected increase in interest rates.

The leading car manufacturer in India Maruti Suzuki has reported a 24 percent rise of sales in August.

A senior auto analyst with Angel Broking, Vaishali Jajoo has said “The second half of the year is a better period for the auto sales due to the festive season. Looking at the festive seasons coming in, dealers start stocking up. We can see that in the next month as well. The economy has also picked up and normal monsoon will also have a positive impact on rural sales,” she added.

The festival season starting out in September is at its peak in November after Diwali, the festival of lights.

India’s leading manufacturer of buses and trucks, Tata Motors Ltd. has also posted a jump of 32 percent in their auto sales in the month of August. A 29 percent jump has also been reported by Mahindra and Mahindra who is India largest tractors and utility manufacturer.

Jajoo has said that while there were expectations that the auto sales would increase further, however the growth would not be sustainable in comparison to the kind of robust growth that was witnessed during the earlier year. The main concern being expected increase of interest rates.

There have been four interest rates hike since March in order to reduce the effects of inflation and its is feared that the in order to further curb these effects, the central banks might increase the rates.

She also added “I think the interest rate hikes have still not impacted because, for one thing, the economic growth is higher, the consumer confidence has increased. Maybe if it increases by another 100 basis points, we can see the actual impact on financing and volumes.”

Another major challenge that Indian auto manufacturers are facing is the limited supply of components from the vendors that has been hampering their productions. These problems are faced by auto makers like Maruti and Mahindra and Mahindra.

As Honda prepares to launch its lowest price car by next year in India,  Honda Motor Co is gearing up to increase their dealerships by 28 percent  and to increase advertising.  From the current outlets of 117 in 71 cities, Honda’s local unit will increase the outlets to 150 in 90 cities by 2012 March.

In an interview in Greater Noida, the Vice President for Marketing, Jnaneswar Sen confirmed this yesterday. According to Mr. Sen, in the second half of 2011, Honda Siel Cars India Ltd proposes to launch a car for less than Rs. 5,00,000

This Tokyo based car maker has witnesses a decline of 4 percent in their sales figures in India in the last four months despite the increase of almost 35 per cent worldwide. According to the Society of Indian automobile Manufacturers, cars that were less than four meters and prices less than Rs 50,00,000 accounted for close to 70 percent of the sales.

The car maker believes that opening more dealerships would get them closer to the customers and when combined with their aggressive advertising, they would be able to beat their rivals. The small car to be launched by the auto major would compete with Volkswagen AG’s Polo, Maruti Suzuki’s Swift, Nissan Motor Co.’s Micra and Hyundai Motor Co.’s i20.

Mr Sen also said “This is the fastest growing segment. If you consider the population of the country and the car penetration, the auto industry is barely scratching the surface. There is space for everybody.”

As per the reports from the consulting firm Ernst & young, India has close to eight cars per thousand people when compared to 24 in china, 231 in Russia and 435 in America.

It was also anticipated that the sales growth for cars in India would reduce to almost half this year due to the increase in the interest rates and new emission rules. However the car sales have grown by 25 percent as against the earlier forecast of 12 per cent.

Mr. Sen also said that Honda first plans to manufacture its small car at its factory in Greater Noida. Currently the plan has a capacity of producing 100,000 cars where as only 61,000 vehicles were being manufactured as of now.
In the later stages, the company will manufacture cars in western Rajasthan in its second plant once the demand picks up.