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Indian auto makers shift into new areas

Indian auto makers shift into new areas
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First Published: Thu, Jul 31 2008. 11 24 PM IST
Updated: Thu, Jul 31 2008. 11 24 PM IST
Mumbai: When Tata Motors Ltd, India’s top bus and truck maker, unveiled its first car, the Indica compact car, a chorus of detractors said they could not pull off the transition.
More than a million Indicas later, Tata Motors has completed buying the Jaguar and Land Rover brands and will soon launch the world’s cheapest car, the Nano.
So, scarcely an eyebrow was raised on Wednesday when Mahindra and Mahindra Ltd, India’s top utility vehicles and tractors maker, said it was entering the two-wheeler market, the world’s largest after China.
Mahindra, which had already moved into the cars segment with the no-frills Logan sedan last year in a venture with Renault SA, is just the latest in a long line of Indian vehicle makers that have stepped out of segments they had parked in for years to cash in on booming demand.
“Two-wheelers is a natural fit and a natural extension for us,” vice-chairman Anand Mahindra said after announcing that the group would take over the assets of two-wheeler maker Kinetic Motor Co. Ltd for Rs110 crore.
Indian vehicle makers rolled out more than 1.5 million passenger vehicles, 7.2 million two-wheelers and nearly half a million commercial vehicles in 2007-08. Bajaj Auto Ltd, which made the switch to motorbikes from scooters over two decades ago, is building a $2,500 (Rs1 lakh) car with Renault and Nissan Motor Co. Ltd to take on Tata Motors’ similarly priced Nano, and will also make a light truck. The Hero Group, the world’s top bicycle maker, which has a stake in the No. 1 motorbike maker, Hero Honda Motors Ltd, now has a venture with Daimler AG for trucks. Two-wheeler maker TVS Motor Co. has branched into three-wheelers.
“These firms are cash-rich after years of growth, and are looking to expand their business and tap other segments,” said Pradeep Saxena, senior vice-president of research group TNS Automotive. “They are led by a younger generation more open to risk taking and less sentimental about change,” he said.
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First Published: Thu, Jul 31 2008. 11 24 PM IST