Global Auto Makers Keep Pushing for Inroads Into India

MUMBAI – Global auto makers in India are not complaining about falling sales. Quite to the contrary, they are preparing for better times by making fresh investments.

Ford has invited India’s HCL Technologies to join its “Car as an IT Platform” initiative. The auto maker is opening its OpenXC research platform to Indian software developers to create convenience applications for models in the country.

HCL already has developed an application for Ford India that can help a driver transmit information about traffic conditions and any delay in the time needed to reach the destination. Mobile connectivity is used to read and transmit data from the vehicle’s internal-data network.

Other applications relate to vehicle-to-vehicle communication.

Ford’s new-generation EcoSport small SUV, displayed in January at the New Delhi Auto Expo, will be built at the auto maker’s Chennai facility and is expected to go on sale in India later this year. It will offer most SUV features while measuring less than 13 ft. (4 m) long and using a 1.5L diesel engine to qualify for the lowest duty bracket of 10%.

To reach out to customers in Tier 2 and Tier 3 communities, Ford India is adding 45 sales outlets in 35 smaller cities. This will raise the auto maker’s total network to 230 dealers in 123 cities and towns.

Porsche is developing a small SUV with both gasoline and diesel versions to take advantage of tighter European Union emissions laws and India’s lower tax bracket.

To spur interest in its small XUV500 luxury SUV, Mahindra & Mahindra last month held a nationwide drawing in 19 cities to award 7,200 bookings out of 25,000 applications. The auto maker required a deposit of Rs80,000 ($1,600) that was refunded to unsuccessful applicants.  

Maruti Suzuki has increased dealer margins by 10% to promote sales of gasoline cars. Dealers now get an additional Rs1,000 ($20) for the Alto, WagonRand Estilosmall cars,

Rs1,500 ($30) for the Ritzand SX4sedans and Rs2,000 ($40) for the A-Starhatchback.

The auto maker is raising dealer margins for the first time in 10 years, as it responds to  falling sales of gasoline-powered cars resulting from rising fuel prices. The idea is to transfer long waiting lists for diesel cars such as the Swift to vehicles with gas engines.

Volvo is struggling in India, despite the country’s rapidly expanding luxury-car market. The auto maker has relaunched its range of three cars with new, smaller but more-refined and efficient 2.0L D3 diesel engines, replacing the D5.

The move will help cut prices about 15%, Volvo says. Its XC60 luxury compact SUV now is available for Rs3.3 million ($65,000), while its S80 midsize sedan costs Rs3.1 million

($62,000) and its S60 fullsize sedan commands Rs2.3 million ($46,000).

Volvo’s message to consumers is that the new variants offer power, comfort, economy and status, all at a lowered price.

Mercedes-Benz Indiaplans to invest an additional Rs3.5 billion ($70 million) to increase  localization and develop new assembly plants, instead of importing vehicles as completely built-up units tagged with high import duties.

The auto maker intends to assemble all the cars it sells in India by 2015. There are indications a further investment of Rs10 billion ($200 million) may be made at that time.

Mercedes has opened its largest luxury showroom in India is at Indore, where its full range of models is displayed. The dealership features an exclusive customer lounge with a cafe, offers service and parts and provides dedicated services and assistance for insurance, loans and leasing options.

Mercedes-Benz Financial also is offering leasing. Director Debashis Mitra says leasing is a better option than purchasing a car, because it does not require a down payment, allows for better tax writeoffs and does not require that the customer buy the car at the end of the lease period.

BMW, Mercedes’ sharpest competitor, likely will follow in its rival’s footsteps.

Mahindra and Tata, meanwhile, are setting up assembly plants overseas to increase their presence in global car markets by 2016. 

Tata has commercial-vehicle facilities in Myanmar, South Africa, Bangladesh and Thailand and has doubled its international business to 11%-12% in three years. The auto maker plans to develop another facility in the Southeast Asia region.

Mahindra is exploring potential sites for assembly plants in Africa and Southeast Asia. The auto maker aims to have its international operations account for 20% of its total business by 2016, up from the current 5%.

Mahindra already has factories in the U.S., China, Brazil and Egypt that assemble products ranging from tractors to SUVs. It also exports vehicles to 37 countries.