Steals show: The $2,500 (Rs. 1 lakh) Tata Nano attracts attention during the press day of the Geneva International Motor Show on Tuesday in Geneva. Tata Motors is considering the possibility of global licensing of the production of people's car Nano, which, when launched abroad, will be positioned on the same platform as the one back home

The real winner is the small car buyer who will have to pay Rs 5,000 to Rs 20,000 less for his purchase.

Rajkot company in talks with Australian firm. The Tata group may have set a trend in automobile history with the Nano, the world's cheapest car. Now, a Rajkot-based diesel engine maker is working on a small electric car with foreign collaboration that is likely to be priced at Rs 99,000. The manufacturer, Fieldmarshal Group, is planning to enter the small car market in partnership with an Australian technology- and project-development firm. The car, which appears to be a classic commuter vehicle, could have a maximum speed of 70 to 80 km and is being designed to have lightweight batteries and low manufacturing costs. Under the terms of the joint venture, which is to be signed soon, the Australian company will take the lead role in bringing international foreign investors for the project. The foreign collaborator has already developed a concept car specifically for the Indian market that could be manufactured at Fieldmarshal's plant at Rajkot. It is learnt that the Australian company is looking at an arrangement by which Rajkot would house the primary plant and assembly plants could be set up in other parts of the country. The joint venture is also planning a 24-seater electric bus. Early discussions have revolved around setting up separate companies for the car and bus projects. The initial focus will be on domestic markets but exports are also on the cards considering the booming market for electric vehicles. Once it is on the roads, Fieldmarshal's electric car would be another offering after the Reva, which became the highest selling on-road electric vehicle globally last year on the back of tax exemptions and subsidies given to electric car-owners by governments. In the UK, owners of electric vehicles are exempt from paying parking fees, congestion taxes, sales and road tax. The French government has also introduced free parking for electric vehicles, low road tax and 100 per cent depreciation for companies. No taxes are imposed on electricity used for charging the cars. At present, the Fieldmarshal group, which is known for its flagship company PM Diesels, manufactures diesel, petrol and LPG auto-rickshaws at its new facility at Shapar near Rajkot. It has a capacity of 1,000 rickshaws per month and rolls out 450 vehicles per month. It has exported 1,500 vehicles in the last six months, selling petrol rickshaws to Egypt, Sudan and Nigeria and diesel vehicles to Kenya, Tanzania and Ethiopia. The company expects exports to account for 40 per cent of revenues in the next two years.

The Budget has evoked mostly a positive response from the automobile industry. About large cars: The General Motors India President, Mr Karl Slym, has said the company expected duty reductions for all types of cars. "Generally, it is all right. We have heard about national highways programme but we are yet to get the details. Large cars (which attract excise duty) at 24 per cent are left out. That is a bit of disappointment.' Positive for the sector: Mr Baba Kalyani, Chairman and Managing Director of auto-parts company Bharat Forge said input cost reduction and lower project import duties are a positive for the sector. "Scrap duty has been an area of concern for the auto component industry and (the fact) that this has been reduced is also good news,' he said. Not hurting: The Sona's group's Chairman and Managing Director, Mr Surinder Kapur, termed the Budget an election year Budget but one which had not hurt the industry. Using-up stocks: While lauding the proposals, the Kinetic Group's Chairman, Mr Arun Firodia, said dealers have stocks purchased at a higher rate of excise duty. When these stocks are exhausted there would be a reduction in prices, he said. Rekindling interest: Mr Ajit Rai, Managing Director of Suprajit Engineering, which makes auto components, said the duty reductions will rekindle consumer interest to buy cars. He said reduction in customs duty on scrap should moderate price increases in steel and aluminium, which has seen a big run up. Softening effect on input cost: Mr V. Mahadevan, Managing Director of Ennore Foundries, said the duty cuts will have a positive impact on the growth of the manufacturing industries. "Removal of custom duty on scrap import will have a softening effect on the input cost of raw materials,' he said. Demand trigger: The Managing Director of Aditya Auto Products & Engineering Pvt Ltd, Mr C. Jayaraman, said the duty reduction would not help the auto component industry directly, since the savings have to be passed on to the customers immediately. Small car hub: The Managing Director of Liners India Ltd, Mr S. Ganesh, pointed out that the Budget was on the same lines of the Automotive Mission Policy and the country was set to become a major hub for small cars.

Mar 1 February, which is generally a lean month for car manufacturers as prospective buyers tend to postpone their purchase in anticipation of excise duty cuts in the Budget, saw market leader Maruti Suzuki India Ltd (MSIL) register flat sales in the domestic market at 59,311 units as compared to 59,095 units in February last year. Two-wheelers continued their year-long trend of decline in sales with major Companies witnessing a single digit negative growth. Analysts however, predict that sales will revive with a reduction in excise duty, both on smaller cars and two-wheelers, from 16% to 12% and simultaneous reduction in prices by various manufacturers with effect from March 1. While leading car manufacturers like MSIL, Hyundai Motor India Ltd, Tata Motors and General Motors reduced prices between Rs 7,000 and Rs 20,000 depending on the models, two-wheeler major Hero Honda, TVS Motor and Honda Motorcycle and Scooter India Ltd have also announced reduction in prices by Rs 1,000 to Rs 2,500. During February 2008, General Motor India witnessed a growth of 80% at 5,563 units as against 3,087 units during the same period last year. Sales of premium car manufacturer Honda Siel Cars India (HSCI) also grew 7.2% to 3,774 units during this period as compared to 3,521 units in February last year. Even Skoda India witnessed a growth of 102% at 1,303 units as against 644 units in February 2007. This is in contrast to the two-wheeler industry that has once again failed to recover from the woes of high interest rate and liquidity crunch. Sales of Hero Honda declined 5.37% to 2,65,431 units in February 2008 as compared to 2,80,515 units during the same month last year and that of Bajaj Auto dipped by 8.4% to 1,59,508 units as against 1,74,220 units in February 2007. The entry-level 100 cc segment has been badly hit after high delinquency forced major banks to withdraw finance availability in certain clusters across the country. According to industry estimates, the segment witnessed a decline of about 13%, which had offset stable sales in the 125 cc segment and above, resulting in an overall dip of 10% in the motorcycle industry. No wonder, players are now shifting focus to executive and premium bikes as the segment is comparatively less price sensitive and is giving higher margins to all manufacturers.

The dream of climate-friendly, petroleum-free motoring is creeping closer - thanks to a clutch of breakthroughs in nanotechnology. Several recently reported lab findings promise to vastly improve the safety and performance of the high-capacity batteries that electric cars will need, at last making them a viable alternative to today's petroleum-powered vehicles. Feb 27, 2008

New models seen giving a boost to '08 vehicle sales Bloomberg Domestic vehicle sales may rise this year as carmakers introduce new models, the country's automobile dealers group said. Vehicle sales excluding minicars may be higher than the 3.43 million sold in 2007, Yoichi Amano, chairman of the Japan Automobile Dealers Association, said Monday in Tokyo. Vehicle sales fell to the lowest in 35 years in 2007 as declining wages and a shrinking population cut demand for automobiles. Toyota Motor Corp. introduced a new version of its Crown sedan earlier this month and Honda Motor Co. brought out a new version of its Fit compact, the country's best-selling car, in October. Nissan forecasts gain Nissan Motor Co. forecast its sales in China will rise 11 percent this year as it introduces new car models. The company expects to sell 500,000 vehicles in the country this year, including light commercial vehicles, compared with 450,000 last year, it said in a statement Monday. The carmaker will introduce three Nissan-brand vehicles in the world's fastest-growing major car market this year, starting with the Qashqai sport utility vehicle in March. Last month, the company brought out the Infiniti M35 sedan in an effort to win customers from Daimler AG and Bayerische Motoren Werke AG.

The weeklong Auto Expo, which concluded in Delhi on January 17, showed contrasting trends

Last fortnight, when the world's richest Indian Lakshmi Mittal visited Kolkata, the city of his youth, he was thrilled to see change. Mittal told the media that the biggest difference he saw was the many flyovers dotting the city skyline and "disciplined traffic".

India will choke unless it modernises its city transport systems, and you can't blame the Nano for this. Tata's Nano has set the dovecotes aflutter and reactions are flying in all directions. Some people have hailed it, rightly, as the advent of mobility in India's frozen countryside. Others, wrongly, have denounced it as a bad idea, fearing that these tiny beetles will overwhelm our cities and choke their already badly clogged arteries.