SOME C(Z)ARS WILL BE LEFT BEHIND

Article Abstract:

The car market in India offers stiff competition, which is likely to continue for the next 5 years. A shake-out or consolidation is likely among the car manufacturers. About 4.2 lakh cars were sold in India in 1997-98 and small cars accounted for 85 percent of them. The total production will be 1.2 million cars by 2000 AD (now 700,000 cars). The small car will account for 900,000 of the total production of 1.2 million cars. Car-makers have to operate on 3 parameters - price, product features and quality and distribution and after-sales service. Car finance companies have to be careful in assessing the quality of their lending as the asset value of the product will depreciate fast. The price of Hyundai's 999 cc Santro car ranges from Rs2.99 lakh to Rs3.69 lakh. The price of the Indica ranges from Rs2.59 lakh for the petrol version to Rs3.99 lakh for the diesel deluxe versions. The price of the Maruti varies from Rs1.84 lakh for the 800 cc model to Rs3.73 lakh for the Zen VX. The price of Daewoo's Matiz ranges from Rs3.12 lakh for the standard model to Rs3.75 lakh for the luxury version. Hyundai has 70 percent indigenisation and Daewoo only 45 percent and its cost structure is likely to depend on the Korean currency. Maruti Udyog Ltd, the maker of the Maruti brand cars, has a fully depreciated facility and high economies of scale. Its capital cost per car is Rs49,000 against Hyundai's Rs1.77 lakh per car. As Tata Engineering and Locomotive Company (Telco) does not have any experience in car making, its small car operations are through a separate company with distribution and service network. The Indica car is placed between the Fiat Siena quality and the Maruti price advantage. The luxury car segment has fallen in volumes, where Ford's Escort, General Motor's Opel and Daewoo's Cielo are placed. Honda has sold 4,180 cars in 8 months since the launch in January 1998. The quantitative curbs on automobiles and automobile parts will be lifted by 2003 AD and imports will be placed under open general licence. Second-hand cars will be imported into India. The production line in the world is increasing with a mismatch in demand. The over-capacity will be around 30 percent. Mergers and take-overs are likely in 1999. (rk) (kvr)

Comment:

The car market in India offers stiff competition, which is likely to continue for the next 5 years.

Motor Vehicles & Parts, Transportation Equipment Manufacturing, Maruti Udyog Ltd.

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AIR CONDITIONERS - TOO COOL TO BE TRUE

Article Abstract:

The Rs1.2 billion air conditioner (AC) industry in India comprises of hi-tech, project oriented central AC segment. The central AC segment which is largely dependent on major projects has been adversely affected by recession. Earlier, it was the public sector which was the main client of this segment. But now mega projects in the private sector are also going in for central AC. The room AC segment is growing at a steady pace. It is made up of two segments - the room ACs and split ACs. A number of domestic players and multinationals are making a foray into this niche segment. Among them are Videocon with a capacity of 50,000 units per annum, Carrier Aircon to expand to 60,000 units in room ACs and 200,000 units of compressors. Blue Star has tied up with York International of the US and Amtrex plans to expand capacity. Godrej GE Appliances is another major player. Multinationals LG Electronics, Samsung and Mitsubishi are all investing in the AC industry. The overseas players are equipped with financial muscle but their prices are on the higher side. The domestic players are equipped with a wide product range and a vast network of dealers. Voltas introduced 44 models during the summer of 1998 while Amtrex and DCM Shriram are launching new models. With increased players and competition, price cutting inevitably happens. Carrier Aircon slashed prices by 10 percent in 1997-98. The market for ACs has also expanded with more new players at the lower end. Also, ACs are no longer perceived as luxury items and the government has slashed duty levels on air-conditioners. (uh)

Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing, Room Air Conditioners

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NDDB - WHERE WHITE RIVERS FLOW

Article Abstract:

National Dairy Development Board (NDDB), India's largest milk co- operative, is said to be the catalyst behind the white revolution in India. NDDB's presence has enabled a substantial rise in the quantum of milk production in India. During 1996, India produced 70 million tonnes of milk (54.9 million tonnes in 1991). It procured 4.5 million tonnes of milk in 1996 which included a huge part secured outside the Operation Flood programme. This move of NDDB has initiated many states to take up similar programmes. NDDB's move of supporting Indian Dairy Machinery Company for setting up a local dairy machinery production has helped the local industry and has affected the multinational companies (MNCs). This is so as MNCs had declined from offering the technology for making milk powder as Indian climate does not help in making milk powder. NDDB has been successful in raising the milk production by more than 50 million tonnes. It plans to earn Rs100 billion from the milk business by the year 2003. (ag)

Comment:

India: Natl Dairy Dvlpmt Board, country's largest milk co-operative, is said to be catalyst behind white revolution in country

Dairy Cattle and Milk Production, Raw Milk, Article

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