This week in auto: Volvo is here to stay, GM is almost gone, bad news for Bajaj
A round-up of the top news stories from the world of auto.
Swaraj BaggonkarMoneycontrol News
The week saw many key developments in the auto sector. General Motors stopping sales in India and Bajaj Auto's profit falling in Q4 were eye-openers. There were several other developments too. Here is a brief list of events that took place during the week.
*GM to stop India sales
Struggling US automotive company General Motors has pulled the plug on India sales after its market share slipped below 1 percent despite years of investment and new product launches.
While product sales will stop by the end of 2017, the company will focus exclusively on exports from its Maharashtra plant and product development centre in Bengaluru.
*Suzuki to pump Rs 6000 crore into Gujarat plant
Suzuki Motor Corporation will invest Yen 100 billion (Rs 6,000 crore) in the Gujarat plant toward capacity expansion. This will be in addition to the Rs 8,500 crore investment announced by Suzuki earlier. These investments are done by SMC in Suzuki Motors Gujarat, which is a 100 percent Suzuki subsidiary.
The plant will have three production lines, each having an installed capacity to produce 250,000 units a year. However, this can be stretched to 850,000 units a year. The Delhi-headquartered company is keen to defend its market share of 47 percent in the domestic market.
*Maruti Suzuki launches new Dzire
Maruti Suzuki, the country’s largest car maker, launched the much-awaited Dzire at a price tag of Rs 5.45 lakh (ex-showroom, Delhi). The car, which is built on a completely new platform (but shared with Baleno) is the third generation Dzire since its India debut in 2008.
The new Dzire is to take on Hyundai Xcent, Tata Tigor, Tata Zest, Honda Amaze, Volkswagen Ameo and Ford Figo Aspire. Maruti received 33,000 pre-launch bookings on the new Dzire. The Dzire is the second highest selling car for Maruti commanding a 50 percent share in its segment.
*Volvo to set up plant in Bengaluru
Swedish luxury car maker Volvo joined hands with Volvo Group India (truck and bus makers), for setting up an assembly plant near Bengaluru in an attempt to be seen as laying greater focus by the European company on India than ever before.
The assembly plant will import vehicle kits in knocked down forms and assemble them leading to substantial reduction in taxes. The plant will come on stream in the final quarter of this year. Details like production capacity of the plant and investments will be shared in the coming period. The plant will start with assembling the XC90 premium sports utility vehicles before adding new models.
*Bajaj Auto net falls to worst in 3 years
Weighed down by demonetisation, poor exports and the Supreme Court ruling on BS-3 vehicles, Pune-headquartered Bajaj Auto recorded its worst fall in three years during the quarter ended March 31, 2017.
At the standalone level, the company’s net profit fell by 15 percent to Rs 802 crore, even less than what analysts predicted. Net profit for the same quarter last year stood at Rs 949 crore.
*GARC test track inaugurated
Global Automotive Research Center (GARC), a vehicle testing facility developed under the aegis of government controlled NATRiP (National Automotive Testing & R&D Infra Project) was inaugurated this week.
The facility has full-fledged homologation test facilities including test tracks to certify all categories of vehicles, systems and components as per national and international standards. Some of the operational laboratories include the mileage accumulation chassis dynamometer, pedestrian safety lab, photometry lab, safety component lab, vibration shaker lab and RDU.