At the last count more than a dozen companies and brands had either quit India or were in the final phase of doing so. These instances, which happened in the last five years, took place despite the Indian automotive market growing at more than 40 percent in the last six years.
We take a look at the troubled brands in this edition of auto news wrap, as Nissan-controlled Datsun and a couple of two-wheeler brands prepare to quit India also make their exits.
But first here is a complete round-up of all the important events in the automotive space during the week.
Bike, scooter prices to rise after Diwali
Prices of motorcycles, scooters and mopeds will see an increase in November as manufacturers look to release Bharat Stage VI (BS-VI) variants into the market.
Two-wheelers strapped with BS-VI compliant engines are expected to see a 10-15 percent price rise, translating in a minimum increase of around Rs 4,000 on a 100cc bike costing Rs 40,000 (ex-showroom Mumbai). More expensive models will see a higher increase.
Honda Activa regains top spot in two-wheelers
Honda's largest-selling two-wheeler Activa regained the numero uno spot amongst India’s best-selling two-wheelers in the first six months of the year.
The slowdown in the market notwithstanding, Honda has more than doubled production of Activa to meet demand, the Delhi-based company said in a release on October 23.
Maruti’s discounts hit an all-time high
Maruti Suzuki, India’s largest carmaker, offered never-seen-before levels of discounts per car during the September quarter after sales slumped more than 30 percent. Maruti’s profit declined to Rs 1,358.6 crore in the quarter ended in September from Rs 2,240.4 crore in same period in 2018
The Delhi-based maker of Swift, Baleno and Brezza models said it had given out an average of Rs 25,761 on every unit it sold during the July-September quarter, aggregating to Rs 805 crore direct losses.
Audi launches A6 at Rs 54.2 lakh
With the festive season at its peak, Audi has decided to finally launch the Audi A6 at a price point of Rs 54.2 lakh (ex-showroom) for the Premium Plus variant and Rs 59.2 lakh (ex-showroom) for the Technology variant.
The eighth-generation Audi A6 is the company's first all-new launch in over a year now, and while Audi has confirmed a new model every quarter, the A6 has been in dire need of an upgrade for quite a while.
Tata Sons steps in to help Tata Motors
The board of Tata Motors has approved an allotment of equity share and warrants on a preferential basis to Tata Sons for an aggregate consideration of Rs 6,494 crore. Tata Motors on October 25 reported a 79 percent year-on-year (YoY) fall in its net loss at Rs 216.6 crore for the September quarter of FY20.
The funds raised would be used primarily to retire debt at the stand-alone level, which as of September 30, stood at Rs 26,815 crore. At a consolidated level, the company’s net automotive debt stands at Rs 50,000 crore
Mahindra buys the remaining stake in Peugeot Motorcycles
Mahindra & Mahindra (M&M) on October 25 said its subsidiary Mahindra Two Wheelers Europe, will acquire France-based Peugeot Motocycles (PMTC) for an undisclosed amount. Mahindra Two Wheelers Europe already has 51 per cent stake in PMTC.
This reaffirms the commitment of the Mahindra Group to the future growth of Peugeot Motocycles, M&M said in a regulatory filing. The homegrown auto major, however, did not disclose financial details. The acquisition would help M&M introduce seven new products between 2019 and 2021.
Nissan’s Datsun joins a growing list of India quitters
After six continuous years of struggle, Datsun, the brand that Nissan thought could gain a foothold in a demanding market like India is ready to make an exit.
Hiroto Saikawa, President and CEO, Nissan Motor Company, gave clear hints in August that axing Datsun could be one of the several steps needed to be taken by Nissan under a new revival plan.
Datsun, a low-cost brand, was brought back from the dead by Renault-Nissan’s former poster boy Carlos Ghosn who hoped to start a street fight with Indian heavyweights Maruti Suzuki and Hyundai.
However, despite a series of measures undertaken by Nissan including the launch of several new models and bringing in actor Aamir Khan as the brand ambassador, Datsun remained a fruitless venture for Nissan.
Datsun’s market share in India closed at less than one percent by the end of September. It will now join the list comprising over a dozen automotive companies and brands that have quit India in the last five years.
And while AMW, Ssangyong Motor Company, Eicher Polaris, Scania, Premier, LML, Hindustan Motors, MAN and General Motors are some of the brands and companies who have shut shop in India completely or partially, there are some more to follow.
Newbies like UM Motorcycles and Cleveland Motorcycles, who made their debuts only recently, are believed to be planning their exit from India too. Both companies are facing the ire of dealers who invested in brick and mortar assets and manpower.
India’s apex dealer lobby body the Federation of Automobile Dealers Association (FADA) even served a legal notice to UM Motorcycles asking the company to compensate for the unsold inventory and solve all dealer issues.
Renowned brands Fiat and Mahindra Two Wheelers have already scaled down their operations drastically. Fiat stopped producing cars under its own brand at the start of the year while Mahindra decided to focus on brands like Jawa, Yezdi and BSA simultaneously scaling down 100-125cc scooters and bikes.
The growing cases of exits notwithstanding a few international brands have volunteered to step in and fill the gap.
CF Moto, a Chinese manufacturer of motorcycles debuted a few weeks ago in India. The company partnered AMW, an entity that used to make heavy trucks before downing shutters a few years ago amid mounting debts.
Close on the heels of the debut of SAIC-owned MG Motors another Chinese company Great Wall Motors is readying plans for India. It is expected to debut in India using Haval, a brand specialising in sports utility vehicles.
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