Aiming for a 10% share of the Indian market by 2017, Nissan plans to introduce new products and start a common-module family series of versatile platforms. But the automaker first would like to give existing models a chance to succeed.
Maruti Suzuki has held its own during the industry slump but also is looking to improve. India’s No.1 automaker has set a challenging target of 9% to 10% overall growth in the current fiscal year, and 15% in rural areas.
Rising production costs, interest rates and sale prices, plus a decline in availability of financing, have damaged Indian automakers in the past 24 months. Investments have been delayed, jobs have been curtailed and worker unrest is widespread.
Automakers are working to expand not only by exporting but also by producing compact vehicles, increasing dealerships and promoting rural sales and service within India. The domestic manufacturers face the additional challenge of strengthening their technological capabilities.
Sales have plunged since jumping by triple digits in 2010 and 2011, with VW and SkodaAuto deliveries tumbling 19% year-on-year to 82,239 units in 2013, WardsAuto data shows. Indian production fell by roughly half.
While Mahindra has earmarked Rs40 billion next year for facilities and capacity expansion, Maruti Suzuki roughly will match its rival’s 2015 spending level to develop new models and marketing and upgrade R&D facilities.
Recalling Mahatma Gandhi’s non-cooperation strategy that won independence for India in 1947, the Ford employees are showing up for work but are refusing the company’s offers of a free lunch and free round-trip transportation to and from their homes.
Automakers are making automatic-manual transmissions affordable by simplifying the technology and overcoming the cost disadvantage. AMTs also save money in the price-sensitive India market by offering fuel efficiency equal to, or better than, manual gearboxes.
Stagnant sales are reflected in the decline of the industry’s 5-million-unit plant capacity to 60%-65%. Large discounts and even larger incentives have squeezed profit margins, forcing many automakers to shelve investment plans.
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