I N D I A ’ S N O . 1 M A G A Z I N E F O R A U T O M O T I V E N E W S , V I E W S & A N A LY S I S
Auto Monitor ns Tur w No
ly k e We
Vol. 12 No. 22
23 July 2012
w w w.am o n l i n e.i n
SPECIAL
NORTH INDIA
50 Pages
` 50
INTERVIEW FADA WANTS AUTO ZONES TO OFFSET RISING COST OF RETAIL SPACE
Pg 20-25
Nikunj Sanghi, President, FADA
Pg 8
Maruti’s Manesar plant operations halted Nabeel A Khan New Delhi
T
he workers and the management remain bewildered as to what is going to come next after the inferno at Maruti’s Manesar plant recently. The violence erupted after an alleged derogatory remark made on a worker by a supervisor. The General Manager (Human Resources) Awanish Kumar Dev’s charred body was found in the plant and 100 employees were seriously injured in the grisly incident. An industry expert sees third party involvement as the reason behind aggravating situation. “The situation gets worse when there is third party involved. The best way to solve these kind of problems is when the two parties directly come on the table and talk,” said Partner, Automotive Pract ices, Pricewaterhouse
Coopers, Abdul Majeed Auto Monitor. He further pointed that; the government needs to revisit the labour law to avoid such occurrences. Many other manufacturers in the neighborhood hold the local politically-affiliated people’s involvement responsible for the flare up. The car manufacturer in a statement said, “We are deeply disturbed by the mob violence and arson at our Manesar Plant on Wednesday (18th July) evening. Several executives, managers and supervisors were brutally attacked and injured, and nearly 100 of them had to be hospitalised.” The company has not yet revealed the amount of damage. However, it is clear that the office facilities have been burnt beyond repair, as have the main gate, security office and the fire safety section. According to the company, the situation took a turn for the worse when workers’
union demanded the reinstatement of a worker who had been suspended for beating up a supervisor. While negotiations were on with the senior management, the first act of violence by the mob was to forcibly shut the main gate and prevent managers from leaving the premises after working hours. President, SIAM, S Sandilya, condemned the totally unprovoked and barbaric act of violence and called upon the state and central governments to take very strict action against the guilty. “The industry cannot accept such acts of violence no matter what the grievances are… such acts of violence sully the image of India as a manufacturing base, as an investment destination and destroys years of efforts made by the government as well as industry to nurture industrial development in the country, which cannot be allowed to happen. SIAM
also appealed to the workers of Maruti not to resort to violence but to resolve issues through mutual discussions.” CII also condemned the incident. “We deeply regret the incidence that occurred at Maruti and condemn the violence and vandalism. Loss of lives and scores of injuries
caused and sabotage by a group of workers is really unfortunate,” said Chairman, CII (Northern Region), Malvinder Singh. He added that CII strongly recommends that State of Haryana should administer this effectively and enforce law and order so that such incidence would not be repeated.
TML may enhance CV portfolio to counter competition Our Bureau Mumbai
T
ata Motors is looking to enhance its commercial vehicle portfolio to effectively counter double whammy of heightened competition and impending
DATA MONITOR Top 5 2W Makers Company
Jun-11
HML HMSI Bajaj Auto
208,883
211,510
1.26%
TVS
155,296
147,865
-4.79%
24,835
25,188
1.42%
Suzuki
Jun-12
Change
499,425
521,810
4.48%
137,745
216,208
56.96%
Top 5 2W Exporters Company
Jun-11
Jun-12
Bajaj Auto
113,944
106,867
Change -6.21%
TVS
23,337
17,545
-24.82% -4.20%
HML
12,819
12,281
HMSI
11,166
10,468
-6.25%
IYM
9,332
8,040
-13.84%
* Source: SIAM/ ** Excluding exports/ *** all sub segments considered/ ^ excluding MRPL
slower growth in the CV market. The company is looking to tap newer geographies in the international market to garner higher overall market share in the commercial vehicle segment in order to emerge as a global player in the CV segment. Tata Motors’ predominance in commercial vehicles will be challenged by the entry of international brands like Mercedes-Benz, Volvo and Navistar which have all entered, or are in the process of entering India. A new line of very competitive, fuel-efficient vehicles is being developed by Tata Motors to meet the competition head-on. The company will need to address the marketplace more effectively with its existing and future products in order to regain the level of market share that it earlier enjoyed, pointed out Chairman, Tata Motors, Ratan Tata in the company’s latest annual report. The report further points out that the company is in the process of developing or absorbing several technologies in the commercial vehicle business as well as other business segments. The technol-
The competition has intensified over the years as existing OEMs have launched new variants and new entrants have tried to gain foothold
Ratan Tata
ogies for the commercial vehicle segment include hydrogen recirculation blower system on fuel cell battery for the hybrid bus family and battery management system on bus and car hybrids. Additionally, the company has continued the development of fuel cell bus, next generation of gas injection technology for its LCV, MCV and HCV range. It is also developing engine management systems for series of hybrid technology for buses. TML has spent around `1,550 crore on R&D activities across vehicle segments in 2011-12.
The company’s total domestic vehicle sales grew by 10.9 percent to 863,248 vehicles in FY 201112, according to the company’s annual report. Commercial vehicle sales increased by 15.7 percent to 530,204 units in the last fiscal. The competitive scenario has been intensifying for the company over the last few years as the existing OEM’s launched new variants to protect market share and new entrants sought to gain a foothold in the market. The company maintained leadership with a market share of 59.4 percent in the commercial vehicle segment. During the last fiscal, the domestic commercial vehicle market, recorded a growth of 19.2 percent with the highest ever sales
of 892,349 vehicles. The Medium and Heavy Commercial Vehicle (M&HCV) segment grew by 6.5 percent, while the growth of Light Commercial Vehicle (LCV) segment stood at around 29.1 percent. In the M&HCV segment, the company sold 207,086 units during FY 2011-12, which resulted in a market share of 59.4 percent. The lower growth of agriculture, manufacturing and construction, mainly contributed to lower growth in the CV segment at 19.2 percent in current year as compared to 27.3 percent in FY 2010-11 over FY 2009-10. Further, M&HCV demand was mainly affected by higher interest rates and restricted availability of financing support, due to tight monetary policy by the RBI. The positive trend in the last fiscal was steady growth in SAARC and ASEAN countries. In particular, the growth in small commercial vehicle segments in these geographies was robust. The new launches during the last fiscal from the company’s stable included the Tata Divo, a super-luxury inter-city bus and new variants in the Tata Starbus Ultra range.