India Auto Blog

December issue of Autocar India magazine makes a mention of a new Maruti Baleno. They don’t seem to have much substance in their story, yet they seem to be confident about it. All they have are some pictures of a left-hand-drive car with Suzuki logo behind it, and they don’t even say where the pictures are taken from. But there is a small mention that the new Baleno will be similar to its Chinese counterpart. They support their argument by another fuzzy image, which they claim to be that of the new Baleno being tested by Maruti. The date of launch they are projecting is 4-5 month down the line in 2007, and make a price estimate of Rs.7-8 lakh for the new car.

I am not sure how true is the story, but Baleno surely needs a replacement. Infact, Baleno is a much appreciated car and is the best value for money car in its segment, but its dated looks alone have done lot of damage to its sales. Customers who would want to buy a Baleno are also discouraged by the fear that it may be obsoleted by Maruti very soon. If they launch a completely new car costing 7-8 lakhs, Maruti will loose the value for money advantage they have on current Baleno. Maruti has an experience of sprucing up the looks of their cars in the past - like the Zen and Esteem. Neither Zen not Esteem see an improvement in sales after they got the new looks, but a similar job could do wonders on the Baleno if they can make it look contemporary but retain everything inside and keep the same price tag. If they do that, they can also work on getting a replacement for Esteem, which is badly needed immediately, instead of spending their energy on a new Baleno.

After a long time since Chevrolet Aveo was rolled out, General Motors has now launched the hatchback version of the car, called Aveo UV-A. For a price tag starting from almost 4 lakhs, the Aveo UV-A appears big, impressive and value for money. It also has looks that can impress anyone. The Aveo comes with 3 variants, all of them sporting a 1.2L, 72bhp engine. For more details on the specifications, details and images, see Chevy website.

Continuing on the discounts raining during the year end, Mahindra has announced upto Rs.50000 discounts on Scorpio. I heard it on an ad on the radio, and could not get the details. Mahindra Scorpio website was down when I was writing this.

Ford also is running good discounts on all its vehicles, which will be on only till December end. Here is a summary of discounts:

Endeavour: In car DVD player worth upto Rs.30,000 free
Flair: First year insurance free
Fiesta: Sporty pack worth Rs.20,000

See more details on this on Ford website.

Rediff says is a good time to buy a car if you are looking for discounts, with companies trying to meet their targets at the end of the year. The discounts they are mentioning look pretty attractive, which includes a good 35,000 on Hyundai Santro, double that money on Accent CRDi, a 20,000 off on Maruti 800, and 26,500 to 40,000 on some Tata cars like Indica and Safari. See the entire list here. Go for it now if you were planning to buy a car.

It has been some time since Honda has launched the new CRV. The review at Business Standard Motoring says it is better than the old CRV, but still has room to improve. They also think it is not exactly value for money.

So you do get a safe automobile when you put in Rs 20 lakh and some more for your CR-V. It has got the space, has more comfort at the back (if you employ a chauffeur), ride quality, presence and handling that apes a car.

The new CRV comes with 6 speed manual transmission or 5 speed automatic versions, powered by a 161bhp engine. See the detailed webpage of the new Honda CRV for more details.

The relaunched new version of the Zen, called Zen Estilo, which was due for a while, was revealed to the Indian buyer yesterday. It has been a fairly quiet launch, without much publicity or fanfare.

The Zen Estilo comes with Maruti’s time tested formula or variants - the no frills LX, LXi and high end version VXi. The car comes with a 1061ml capacity engine which can deliver 64bhps. See more details of the car on Maruti Zen website.

The LX is expected to be priced at 3.2lakhs and the VXi will cost 4.02 lakhs, keeping the pricing competitive.

M&M is planning to launch Scorpio in US, and if it works out, will be the first Indian vehicle to be on US roads. Indian vehicles had found their way, though in small numbers, into many countries in Europe and Africa, but never before to North America. It is a long way yet; they have signed a distribution deal with an automobile dealer in the US, but the date of launch is expected to be announced only in second quarter of 2007. See more detailed here.

It could be a bit hard to believe, but now Indica is ready to compete with a much smaller rival - Maruti Alto. Tata Motors has launched new versions of Indica V2 Xeta Petrol with a smaller 1.2 liter engine(against the existing 1.4 liter engine) and have reduced the prices significantly. Now available at 2.27 lakh ex-showroom Delhi, its price now compares with the Alto!

In another news, Maruti reached half million sales mark on Alto so far and are celebrating with a limited edition variant, call Alto Xfun, which costs Rs.8000 more.

More and more people are buying bikes today and sales of two wheeler companies has never been better, and still growing. Bike makers should have been happy. TVS and Bajaj should be elated because they are seeing faster growth and improving their market share and their cash boxes must have been full.

But all is not as well as it seems to be. Increasing competition, rising input costs and commoditisation of 100cc bikes market is eating up the margins of two wheeler companies. See some recent quarterly results.

Hero Honda Q2 net down 9.2%
TVS Motor Q2 net drops 22.28%
Bajaj Auto: Shrinking margins

Bajaj did show a bottomline growth but margins were hit considerably.

Competition has never been more tough. Once upon a time, Bajaj ruled the market with very little competition. When Hero Honda took over market leadership, they too enjoyed their leadership with little threat. TVS was on and off, but they were having a good run for the last few years. Most of the market belonged to these three. While that may remain so for many days to come, other manufacturers are doing their bit to increase the competition and put pressure on pricing and margins. Suzuki and Honda, though do not have a major presence, can still elicit trouble. Competition with the big three puts even more pressure on the prices, resulting in thinner margins.

Rising input costs, especially of steel and transportation, a problem in every maufacturing industry has not escaped two wheeler companies too. And there is also the pressure to keep the prices low.

Besides all this, the primary segment - 100cc bikes have become commodotized, which means that no company or brand can afford to expect a premium from customers willing pay the extra money to buy the best brand.

This is a tough time for two wheeler makers and it does not look like there are good days in near future either. It would take a few years before we can see some change in the equations of two wheeler markets.

After nearly six months after CBZ was taken off the market, Hero Honda has now launched a new version of the bike, called CBZ X-treme. Looking at the specifications, Hero Honda looks like they are getting their equations right and there could be some competition for Pulsar, but that depends on the quality of the bike. I haven’t seen any reviews yet, but I shall keep looking for it and update here once there is any.

The new CBZ comes with a approximately 14bhp, 150cc engine and costs Rs.54,500 ex-showroom at Delhi, which makes it a perfect rival to Pulsar in all sense - price, engine capacity and power. See the specifications of the bike on CBZ website.