Auto Update March
Auto Update March
Auto Update March
AUTOMOBILES
Volume growth sustained
Sales performance
Edelweiss Research is also available on www.edelresearch.com, Bloomberg EDEL <GO>, Thomson First Call, Reuters and Factset. Edelweiss Securities Limited
Auto Sales Update
• The company will drop the Honda brand from its flagship models i.e., Passion and
Splendor by June as part of a rebranding exercise and to carve out an independent
identity of the Hero Group at the earliest.
• Hero Investments, which has controlling stake in Hero Honda, will pledge its shares
in Hero Honda with institutional investors to raise about INR 35 bn in short-term
debt to buy Honda Motor's stake in the joint venture. The shares will be kept as
collateral till the Hero Group retires the debt, which will be raised through non-
convertible debentures (NCDs) expiring in three months.
• M&M is planning to enter the micro irrigation business by acquiring 38% stake in
EPC Industries for a consideration of INR 4.33 bn.
• The company will set up its automotive plant in Tamil Nadu, for which the
government has allocated land and a structured package of incentives. M&M is
entailing a capex of INR 18 bn towards a test track facility, an automotive plant at
Cheyyar, and a R&D centre near Chennai.
• Exports, as expected, have taken a back seat (down 15% Y-o-Y, up 8% Y-o-Y) as
the company is looking out for non European avenues to enhance sales.
• During the month, MSIL launched two models—diesel variant of SX4 and new
premium model Kizashi in the A4 segment.
• MSIL is developing a global model at its Manesar R&D facility centre that will be
launched not only in India but also in Europe, Japan, among other countries.
• Volkswagen (VW), which holds 19.5% stake in Suzuki Motor Corp. (parent company
of MSIL) has identified A-star to be the global car for marketing and selling in
European markets through its network. The news, however, as of now stands
unconfirmed.
• On the passenger car front, Indica (compact segment) sales continued to skid (down
13% Y-o-Y) while the Indigo range (sedan segment) reported yearly sales growth of
22% Y-o-Y. Nano sales have revived on the back of various promotional schemes,
easy financing availability and making it available through out the country, thereby
enabling it to clock volume of 8,262 units.
• The company announced that new Indica (yet to be launched) will become India’s
most efficient car with an all new BS4 compliant, CR4 diesel engine. The new engine
will pack in 32% increase in power, 65% increase in torque along with 46%
improvement in fuel efficiency.
Edelweiss Securities Limited, 14th Floor, Express Towers, Nariman Point, Mumbai – 400 021,
Board: (91-22) 2286 4400, Email: [email protected]
11-Feb-11 Tata Motors Inline; JLR leads the way; 1143 Buy
800 Result Update
25-Feb-10 25-Aug-10 25-Feb-11 09-Feb-11 Mahindra & Strong show continues; 655 Buy
Mahindra Result Update
EW Auto Index Nifty
Rating Distribution* 116 45 12 176 Buy appreciate more than 15% over a 12-month period
Copyright 2009 Edelweiss Research (Edelweiss Securities Ltd). All rights reserved
Edelweiss Research is also available on www.edelresearch.com, Bloomberg EDEL <GO>, Thomson First Call, Reuters and Factset. EdelweissEdelweiss
SecuritiesSecurities
Limited Limited
5