Behr-Hella expects India to grow at double the pace of its global business

Source: Economic Times, 22 June 2022

European Auto component major Behr-Hella Thermocontrol GmbH (BHTC), a leading player in the climate control and thermal management solution, expects India to grow at double the pace of its global businesses. The company plans to tap into the growing domestic market and use it as a critical sourcing base for EVs.

The global board had visited the country to inaugurate the new manufacturing facility in Pune. In an exclusive interview with ET, Michael Jaeger, CEO of BHTC Group, stated that India will be amongst the fastest growing market for BHTC globally.

“We expect India to grow at a CAGR of 15% in the next five years, as against a plan of 7% growth we expect globally. The new facility will cater to the growing demand in the country but will also be a key strategic export hub for our thermal management system and automotive displays or Human Machine Interface solutions,” said Jaeger.

The company has committed Rs 100 crore to expand a new facility in Pune.

The German auto component maker expects the share of Indian business to double to about 10% of its total revenues and profits in the next five years. BHTC believes that the shift towards electrification only adds to the opportunities for the company to grow, and its content per car is only set to grow in the coming years. The share of exports which is merely 5% of its total business at present is likely to shoot up to 25% by 2025.

This location will grow on the manufacturing side and R&D side. The company will be hiring about 150-200 engineers to participate in global development of projects, “The big growth plan for the global development from India. The centre of competency here will also work on software development for global projects,” added Jaeger.

BHTC’s engineers in India are already working on the latest technologies and innovations for our local and global customers. With the expansion, BHTC aims to accelerate the global development activities in the coming months and ramp up our R&D strength to about 300 very soon.

As a global centre of competency for advanced climate control and HMI solutions, BHTC continues to leverage their local expertise to provide end-to-end, innovative and cost-effective solutions to their global and local customers.

The head of BHTC believes that the change in the interiors is becoming a “key differentiator or USP” in the automotive industry, which puts BHTC in a very good position given its products that are very well integrated into functionalities of the future cars.

“We sincerely believe that the Indian automotive industry can play a key role in the global industry. Having a strong presence in India will play a key role in the future of BHTC,” added Jaeger.

The facility in Pune already specializes in end-to-end product development and manufacturing of advanced HMI and Climate Control Panels for leading automotive OEMs in India and across the Globe. The facility houses an advanced testing and validation centre, global R&D centre, global IT and shared services under one roof.

Luxury vehicle sales may breach 2018 peak of 40,000 units next year: Audi

Source: Economic Times, 14 July 2022

Sales of luxury vehicles in India should breach the 2018 peak of around 40,000 units next year, on back of strong consumer demand after the pandemic, said a top executive at German luxury-car company Audi.

The automaker is optimistic of growth prospects given the demand momentum it has witnessed in the Indian market in the first half of the year.

Industry estimates that around 17,000 luxury vehicles were sold in the country during January-June this year, which is an increase of 55% over the 11,000 units sold in the year-earlier period. Upwardly mobile consumers continue to purchase top-end vehicles, despite inflationary pressures and long waiting periods.

The luxury vehicle industry is poised to make the leap into the next stage of expansion over the next few years, Audi India head Balbir Singh Dhillon told ET. “In the luxury vehicle segment, we expect the momentum to continue in the second half of the year. Sales have not only been good, (but) there are also decent customer orders. Pent-up demand, as well as new product launches have helped shore up volumes. There is a lot of positivity in the market.”

While globally there are several major challenges, the Indian economy seems resilient, Dhillon said. “Even as FPIs (foreign portfolio investors) are moving out, Indian investors are investing in the market. We feel India will grow and grow strongly. This year, we (luxury vehicle makers) should be coming very close to the previous peak and thereafter take a leap and get a little larger share of the overall passenger vehicle market,” he said.

Luxury vehicles now account for just a 1.0-1.5% share in India’s total car sales, which is among the lowest in the world.

Dhillon was speaking on the sidelines of the launch of the new A8 L on Tuesday. The car is priced at Rs 1.29 crore for the celebration edition and Rs 1.57 crore for the technology edition. This is the second launch for the company this year, after the Q7 SUV.

Dhillon said supply challenges were expected to continue for some more time. “While we definitely expect to grow in strong double-digits in the second half, it is difficult to predict numbers in the current environment given supply constraints,” he said.

Audi’s India sales grew 49% to 1,765 units in the first six months of 2022.

The company has plans to launch a few more models this year to maintain the growth momentum. Dhillon declined to share the number or the specifics of the remaining products scheduled for launch.

June qtr PV sales overtake Q1FY19 volumes, two-wheeler sales lag

Source: Business Standards, 14 July 2022

Passenger vehicle (PV) sales in the domestic market for the June quarter rose to the highest in four years amid easing semiconductor shortage and robust demand, the Society of Indian Automobile Manufacturers said on Wednesday.

This was the first time that the quarterly volumes surpassed peak volumes seen in 2018-19 (FY19).

Strong growth in utility vehicles (UVs) led the overall momentum. UVs accounted for a little more than half the PV volumes in the first quarter (Q1), against 27 per cent in Q1FY19.

While the automotive industry can draw some comfort from PV sales surpassing the peak, indicating strong growth trajectory for the segment, it cannot take its eyes off the red flags.

Sales of entry-level models in two-wheelers and cars have plunged year-on-year, underscoring the distress at the bottom of the pyramid.

A 59 per cent drop in the mini car segment and 36 per cent and 42 per cent fall in scooter and motorcycles, respectively, indicate buyers are feeling the head-on impact of persistent high inflation and deferring new vehicle purchase decisions.

A bright spot for two-wheeler makers during the June quarter was record shipment in overseas markets. Led by Bajaj Auto, TVS Motor and others, exports zipped past the 859,000 unit-mark of FY19 and reached 1,149,000 units in Q1 of 2022-23.

Bosch to invest over Rs 200 cr in next 5 years in India: Soumitra Bhattacharya

Source: Economic Times, 12 July 2022

Auto components major Bosch Ltd NSE -0.25 % will invest over Rs 200 crore in India in the next five years in advanced automotive technologies and digital mobility space, its Managing Director Soumitra Bhattacharya has said. The company is also “quietly and cautiously optimistic about having a double-digit growth in FY2022-23 over the previous fiscal year”, Bhattacharya, who is also Bosch Group India President, wrote to the company’s shareholders in the annual report for FY22.

He pointed out that the world is going through “unprecedented” challenges like the supply chain crisis, including the continued chip shortages, China lockdown — in particular Shanghai, Ukraine-Russia War and geopolitical shifts.

“…this has resulted in one of the highest inflations we have seen in the world with impacts on interest rates and slowing down of the economy with a looming and possible recession,” Bhattacharya said.

In 2021-22, the company recorded a total revenue from operations of Rs 11,104.7 crore with profit after tax at Rs 1,217 crore.

On the future plans, he said, “We are invested in the future…Bosch Ltd will invest more than Rs 200 crore in India in the next five years in advanced automotive technologies and in the digital mobility space”.

According to Bosch NSE -0.25 % Ltd Chairman Markus Bamberger, the company’s markets are in flux due to “climate action, electrification, automation, and connectivity”.

“Bosch global is prepared to tackle tough situations and has a strong product portfolio in electromobility with strong order books. We are also focusing our efforts on the promising field of fuel cells,” he added.

In India, Bamberger said, “Bosch Ltd will support OEMs through system expertise and participate in ecosystem partnerships to become a major player in the electrification ecosystem”.

“We will also be involved in the hydrogen ecosystem with complete powertrain modules already present in our portfolio. Our target is to continue the transformation of India’s mobility into clean, convenient, and congestion-free,” he added.

While electric vehicles will make inroads into India, Bamberger said Bosch still sees the “dominance of Internal Combustion Engine (ICE) with a share of 70 per cent to 75 per cent till 2030”.

Passenger vehicle sales rose 40% in June as semiconductor supply improved

Source: Economic Times, 05 July 2022

The country’s retail passenger vehicle sales increased by 40% in June, showing better semiconductor supply despite continued strong demand, particularly for SUVs, according to the auto dealer association FADA.

The number of passenger vehicle (PV) registrations increased to 2,60,683 units last month from 1,85,998 units in June 2021, representing a 40% rise, as per Federation of Automobile Dealers Associations (FADA).

Vinkesh Gulati, the president of FADA, stated in a statement, “The PV segment continued to see robust growth. An increase in dispatches clearly shows that semiconductor availability is now getting easier,

However, because of a chip shortage, waiting times are still long, particularly in the compact SUV and SUV sectors, he added.

Despite long wait times, he stated that new vehicle releases are seeing strong bookings, which reflects a strong network of demand.

Gulati highlighted that slow two-wheeler sales were caused by a number of factors, including adverse market mood, particularly in rural India, high ownership costs, inflationary pressure, and June traditionally being a lean month due to rain.

According to FADA data, two-wheeler retail sales increased 20% last month to 11,19,096 units from 9,30,825 units in the same period the previous year.

Compared to June of last year, when there were 14,735 three-wheeler registrations, there were 46,040 units registered last month.

Retail sales of commercial vehicles increased last month by 67,696 units or 89% year over year. Additionally, retail tractor sales grew by 10% last month to 57,340 units from 52,289 units in June 2021.

On the commercial front, he noted that the rising cost of nearly all essential goods has put a strain on the average family’s budget.

Gulati also noted that the high cost of transportation was a result of the high cost of fuel.

The two-wheeler and entry level PV markets, which are often dominated by first-time buyers, will suffer as a result, he continued.

In June, retail sales were 15,50,855 units, an increase of 27% from the previous year’s total of 12,19,657 units.

“On the other hand, ease in availability of semiconductors will see increased supply especially in the PV segment and thus reduce waiting period. If rural India stabilises, auto retail will enter the festive season on a good note, ” Gulati said.

Gulati did observe, however, that overall sales for the previous month were still lower by 9 percent when compared to June 2019, which was a month that occurred before COVID.

Tata Motors plans to sell half a million cars in FY-23, electric vehicle sales will cross one lakh units: N Chandrasekaran

Source: Economic Times, 05 July 2022

N Chandrasekaran, chairman of Tata Motors NSE 0.86 % told shareholders that the company plans to sell half a million cars in FY-23 and expressed confidence that electric vehicle sales will cross one lakh units by the next fiscal year.

Speaking to the shareholders at the 77th AGM, Chandrasekaran told shareholders that the company is keen to return to paying dividends soon.

“In FY-21 we sold about 5000 electric vehicles, in FY-22, it was about 19,500 units, this year we plan to sell 50,000 electric vehicles and we plan to double it to 1 lakh EVs by next year,” said Chandrasekaran highlighting the potential for EVs in the future.

The company has plans of expanding the product portfolio to 10 electric vehicles by 2025 and he expects the share of electric vehicles in total sales to rise to 25% in the next five years.

With plans to invest $2 billion in the passenger electric vehicle business, Tata Motors has already raised about Rs 3500 crore from TPG last year and added that the second tranche from the private equity major is expected to come in the third quarter of FY-23.

Referring the mainstream market, Chandrasekaran said the company has already hit a monthly sales run rate of 45,000 units, and he expects the company to cross half a million mark in FY-23.
To address the rising demand, Chandrasekaran explained the company is ramping up capacity and the acquisition of the Ford factory in Sanand will offer significant capacity to cater to the high demand.

He informed the shareholders that while the company does not have any plans to make electric two-wheelers, but it will offer a charging solution for different segments of the market.

On a specific question of getting into tractor manufacturing, Chandrasekaran said, the company will deliberate on the same.

Volvo Group launches green casting developed in India

Source: Economic Times, 24 June 2022

New Delhi: Swedish automotive major Volvo Group on Thursday announced the launch of its first ‘green casting’ developed and sourced from India that will be used for its engines globally. The green castings from India will include bearing caps and bearing housing for select Volvo engines, and this is the first step, the group said in a statement.

It further said these castings will be produced by Brakes India, utilising scrap, alloys, and raw materials that are 100 per cent radioactive elements free. It involves recycling 100 per cent metallic scrap generated by other industries to manufacture a usable product.

The plant will operate on 100 per cent green power from solar and wind energy, it added.

“When fully adopted, the potential reduction in CO2 per year due to green castings would amount to 0.86 million tons for Volvo and 210 million tons for the industry (assuming the industry adopts this approach),” the group said.

This is a significant step as India is a key source for Volvo Group’s global casting requirements, and also the country has a significant share of the global casting demand, it added.

Commenting on the development, Volvo Group India President and Managing Director Kamal Bali said, “India is a home base for the Group and we not only ‘Make in India’, but also design, process, sell and source from India to the world”.

In line with the group’s global sustainability targets and ambitions, he said, “Our aim is to create an environment that is safe and sustainable for future generations – while being immersed in advanced technology that goes into making world-leading commercial vehicles. Green Casting has the potential to kick-start a revolution in the casting manufacturing process for a sustainable future”.

Commercial Production of these green castings will start this month, the statement said.

Moto Morini collabs with AARI to reenter Indian market; to launch 4 vehicles

Source: Economic Times, 23 June 2022

Italian niche motorcycle brand Moto Morini announced its reentry in the domestic market with plans to launch four vehicles in collaboration with Hyderabad-based Adishwar Auto Ride India. Under the partnership, Adishwar Auto will manufacture and distribute Moto Morini’s premium range of motorcycles in the country, a release said on Thursday.

Earlier in 2013, the iconic bike brand had partnered with the city-based Vardenchi Motorcycles to establish its presence in the country.

Moto Morini is the third overseas bike maker Adishwar Auto Ride India Pvt Ltd (AARI) has associated with in the last four years.

AARI already has partnership with premium Italian motorcycle brand Benelli since 2018 and last month, it announced a collaboration with Hungarian two-wheeler maker Keeway.

“We are delighted to introduce Moto Morini brand to the Indian motorcyclists. At Adishwar Auto Ride India, one of our key endeavors is to create values through our relationships with our customers,” said Vikas Jhabakh, Managing Director of Adishwar Auto Ride India Pvt Ltd.

With the introduction of Moto Morini, Adishwar Auto aims to cater to the requirements of Indian buyers in the premium mobility segment, he said.

“With our tenure and experience in the superbike segment, we are certain of successfully establishing the brand in the country,” Jhabakh said.

Founded in 1937 by Alfonso Morini, Moto Morini motorcycles are designed, and developed in Italy with a substantial racing pedigree and known for making lightweight, fast race bikes through the 50s and 60s, a DNA that the current generations of these motorcycles inherit, the release said.

Kia Sonet crosses cumulative sales milestone of 1.5 lakh units

Source: Economic Times, 21 June 2022

Automaker Kia India on Monday said its compact SUV Kia Sonet has crossed the cumulative sales milestone of 1.5 lakh units since launch in September 2020. The model has contributed over 32 per cent of the company’s total sales and commands almost 15 per cent share in the highly competitive compact SUV category, Kia India said in a statement.

“The Sonet has won several accolades not only for its design, performance, and practicality but also by creating favourability for iMT (intelligent manual transmission) and introducing the only Diesel AT in the segment,” Kia India Chief Sales Officer Myung-sik Sohn said.

In April this year, he said, “We added four airbags as standard across even the lower variants of Sonet, further enhancing the vehicle’s safety and propelling its popularity.”

Kia India said the top variants of the model contributed to 26 per cent of its overall sales, while 22 per cent of buyers preferred automatic transmission and diesel powertrain accounted for 41 per cent of the total sales.

Ashok Leyland sales jump four-fold in May

Source: Economic Times, 01 June 2022

Hinduja flagship firm Ashok Leyland on Wednesday reported a four-fold jump in total commercial vehicle sales at 13,273 units in May.

The company had sold 3,199 units in the COVID-hit May last year, Ashok Leyland said in a regulatory filing.

Domestic sales stood at 12,458 units, as against 2,738 units in May 2021, it added.

Medium and heavy commercial vehicle sales last month stood at 7,268 units, as compared to 1,513 units in the year-ago month.

Sales of light commercial vehicles in the domestic market stood at 5,190 units in May, as against 1,225 units in May 2021, the company said.