Japanese auto maker Nissan is in talks with India’s Ashok Leyland to develop a small car for the fast-growing Indian market, a report said Wednesday.

The Business Standard newspaper quoted Nissan chief executive Carlos Ghosn as saying the group was looking for a new low-cost alliance in India in addition to one previously announced with scooter specialist Bajaj Auto.

“We are studying the possibility of tying up with Ashok Leyland and some other manufacturers in China and Indonesia for a small car project,” Ghosn told Indian reporters on the sidelines of the Geneva auto show.
The Indian vehicle would aim for the middle of the small car segment, which is coveted by almost all global car manufacturers but currently dominated by Indian-Japanese collaboration Maruti Suzuki.

“We are studying the possibility of tying up with Ashok Leyland and some other manufacturers in China and Indonesia for a small car project,” Carlos Ghosn was quoted as saying to Indian reporters at the Geneva Auto Show.

The small car project will be in addition to the ultra low-cost car that Nissan is planning to launch with its Indian partner Bajaj Auto , the newspaper reported.

Renault , Nissan and Bajaj Auto will launch an ultra low-cost car in India in 2012 that will cost less than Tata Motor’s Nano, the world’s cheapest car, it was announced in November last year.

Nissan will soon offer a line-up of nine vehicles in India including five built locally as it aims to catch up with rivals in the fast-growing market, the head of its Indian operations had said in January.

Maruti Suzuki India Ltd., India’s largest car maker by sales, Wednesday said its recall of up to 106,000 A-Star small cars includes about 30,000 hatchbacks supplied to Nissan Motor Co. Ltd.

Maruti, the local unit of Japan’s Suzuki Motor Corp., produces the A-Star at its factories in the northern state of Haryana. The same car is supplied to Nissan–which markets the vehicle in Europe as its Pixo model–under a contract manufacturing agreement.

“We have supplied a total of 50,000 A-Stars to Nissan till date,” R.C. Bhargava, Maruti’s chairman, told Dow Jones Newswires. “The Nissan part of it (the recall) should be somewhere around 30,000 units.”

Mr. Bhargava estimated the total cost of recalling the cars to replace a defective fuel tank part at between INR300 million and INR320 million.

“The costs are to be shared between Maruti and the vendor,” he said. “Of the total cost (of the recall), Maruti will have to spend 100 million rupees ($2.1 million) to 120 million rupees.”

Maruti said that there had been no customer complaints but an internal analysis had shown that when fuel was filled beyond a certain point, there was a possibility of leakage. About half of the faulty cars have been fixed. Vehicles affected were in a batch made up to 22 August last year. The company is replacing the fuel pump gasket and O ring on affected models.

Last year, the company exported about 100,000 A-Stars after first launching the line in India late in 2008. It sells 3,500 to 4,000 A-stars a month in India alone.

Maruti said in a statement: “At Maruti Suzuki, we constantly monitor quality of our products through feedback and internal analysis. In one such exercise in November 2009, we came across an anomaly reported in the fuel tank in some of the vehicles and by December 2009 we started contacting the customers by letter. These vehicles belonged to lot made until 22 August 2009 only.”

Honda Siel Cars India Ltd. unveiled the Honda New Small Concept, a concept model for a new small-sized vehicle, at the Auto Expo 2010 in New Delhi. HSCI also announced plans to begin sales of a new model in 2011 based on this concept model.

For the Honda New Small Concept, a wide platform with a stable center of gravity was adopted to create a highly efficient compact size with seating for five people. With the “Efficient Energetic Exterior” design, the dynamic design of the Honda New Small Concept with front forward fenders highlight the presence of the vehicle.

Honda is planning to introduce a new model based on the Honda New Small Concept in 2011, in India and also in Thailand.

Honda will strive to provide a new small-sized vehicle that is beyond the expectations of customers in rapidly growing markets and offer it at an affordable price by leveraging Honda’s global parts sourcing network.

TOYOTA MOTOR CORPORATION (TMC) announces its production and sales subsidiary in India unveiled today—under the banner: “World First, India First”—a concept version of the “Etios*”, a compact car newly developed specifically for the Indian market. Toyota Kirloskar Motor Private, Ltd. (TKM) is showing the concept car at the 10th Auto Expo automobile show in New Delhi, which runs until January 11.

The Etios is aimed at family users in India’s rapidly growing automobile market. Reflecting its “one class above” theme, the Etios’ styling evokes a sense of advanced status, and, along with a spacious interior with abundant storage space, it aims to offer both smooth and powerful driving and excellent fuel efficiency. To make the car as affordable as possible for potential customers, thorough use of local parts will be pursued to keep costs low. On display at the show are a sedan version with a newly developed 1.5-liter gasoline engine and a hatchback version with a newly developed 1.2-liter gasoline engine.

Etios chief engineer, Yoshinori Noritake, said at the show: “I visited many Indian cities and homes to learn the market and to hear from the consumer directly. Over four years, more than 2,000 engineers have been involved in the development of the Etios, and each has devoted his or her best effort with no compromises. I am convinced in my heart that the Etios offers joy of ownership and quality of life to consumers in India.”

TKM will produce the Etios from late 2010 at its second plant, which is now being built expressly for the new car. Annual sales in India are set at 70,000 units. Exports are planned.

At the show, the TKM exhibit, with its key message of “Quality Revolution”, comprises a total of 14 production and concept vehicles, including the third-generation “Prius” gasoline-electric hybrid passenger car, which is scheduled to go on sale in India in 2010, the “Prado” SUV recently unveiled for the Indian market, the “i-REAL” personal mobility vehicle and the “Fine-S” fuel-cell hybrid vehicle.

Source : www.facebook.com/cnbshow

Toyota Motor Corp. (TM) expects its Indian vehicle sales to remain flat in 2009, mainly because the automaker doesn’t yet sell a small car in the country.

The Japanese firm sold 51,800 cars and sport-utility vehicles in India last year, lagging behind competitors General Motors Corp. (GM), Suzuki Motor Corp. (7269.TO) and Hyundai Motor Co. (005280.SE).

“We would like to maintain what we did last year,” Sandeep Singh, deputy managing director of Toyota Kirloskar Motor Pvt. Ltd., said at the launch of the new Land Cruiser sport-utility vehicle, or SUV. “The market is doing well, but growth is more in the small car (segment).”

Toyota Kirloskar, which is 89% owned by Toyota and the remainder by India’s Kirloskar group, started operations in December 1999. It produces the Innova multi-purpose vehicle and the Corolla Altis sedan as well as importing the Camry and Land Cruiser Prado SUV as fully built units.

Toyota plans to introduce its first small car in India by the end of next year. Rivals such as GM, Suzuki and Hyundai already sell small cars – which comprised 73% of the 1.22 million cars sold in India in the fiscal year ended March 31.

That figure has led other automakers to introduce small cars in an effort to capture a larger share of the market.

Honda Motor Co. (HMC) will Wednesday introduce its first small car in India, the Jazz hatchback model. Ford Motor Co. (F) is also planning to debut its small car in India early next year.

Singh said Toyota is increasing vehicle production to meet a steady improvement in sales in the local market. The company had cut production since December as local sales declined.

“The market is improving in the last three months,” Singh said. “We have been ramping up our production since May.”

He said Toyota will produce 4,500 vehicles in June, increasing to 5,300 in July.

Car sales in India rose for the fourth straight month in April as easing loan rates and the introduction of new small cars attracted more customers.

Toyota has a factory near Bangalore that can produce about 60,000 vehicles per year. A new factory is being constructed adjacent to the current plant, where the company will produce its new small car.

“The new plant will have a capacity for 70,000 small cars and we will be able to increase it to 100,000 cars if the market improves,” Singh said.

Hiroshi Nakagawa, Toyota Kirloskar’s managing director, said the company will continue to introduce new vehicles to expand its presence in India.

“The Indian market is showing signs of recovery and we are expecting great potential from India,” he said. “Toyota aims to be a major player in this emerging marketplace.”

The new Land Cruiser, which has a 4.5-liter diesel engine, will be sold in two versions – costing INR8.16 million and INR8.31 million.

Toyota will also introduce the Fortuner SUV by September and plans to sell 400 units each month, Singh said.

Honda, leading premium car manufacturer in India, is soon going to start work on another small car for Indian roads, reports says. The car will be priced around Rs 5 lakh and will make Honda a major player in small car segment.

EVEN AS Honda Siel Cars India prepares itself for launch of premium small car Jazz, the parent company Honda has started to work on another small car for India.

Just like the Tata’s, the Japanese car manufacturer is starting its work wit the price. It has been learnt that a new research and development team will arrive in India and start work on the new small cars, said to be priced below Rs 5 Lakh. In comparison, the upcoming car Jazz has a price tag of Rs 7 Lakh. Honda hopes to unveil the new car in three years time.

The new car will make Honda a prominent player in the small car segment, which generates big volumes of sales. Currently, the premium car segment includes Hyundai Getz, Skoda Fabia and Chevrolet U-VA and Maruti Suzuki Swift in bother variants.

India will be the lead market for the new small car. Honda expects the large volumes of the new small car to compensate the slow selling Jazz in terms of revenue. Since, the new car will have high localisation content resulting in less expenditure. Also the production facility will be kept busy between the two small cars.

The research and development team comprising of 25 members will be headed by a senior official from Japan. The priority of the team will be to develop a car within Rs 4.5 Lakh margin. The new plant in Rajasthan will be the production centre for Jazz and the new car. Currently, it has a capacity to produce 60,000 units but this number could go up to 2.5 Lakh units annually, indicating the big plans by Honda.

Honda is launching Jazz in June this year. It will be the first small car from Honda Motors for the Indian car market. Apart from this product the company sells – CR-V, Accord, Accord 3.5L, Civic and City.

With the commercial vehicle segment showing very little signs of a revival, Ashok Leyland, India’s second largest truck maker, is “reviewing” its collaboration with Nissan Motor of Japan to manufacture light commercial vehicles.

Hinduja group sources told ET NOW that the review process is currently on and the two partners will work out the revised investment and capacity programme over the next few weeks. Industry insiders feel that the project, which was scheduled to go on stream over the next two years, could get delayed as a result.

Last year, Ashok Leyland struck a deal with Nissan to form three joint venture companies to manufacture light commercial vehicles, powertrains and for technology development for a total investment of Rs 2,400 crore. The project was supposed to have a debt-equity ratio of 1:1 with each partner bringing in about Rs 600 crore each. Under the revised plan, which is currently at the works, the capital investments are likely to be downsized sharply.

While 51% of the vehicle manufacturing joint venture will be owned by Ashok Leyland, Nissan is set to have a 51% shareholding in the powertrain joint venture. Nissan Ashok Leyland Technologies, which will be involved in technology development, will be equally owned by Ashok Leyland and Nissan.

However, R Seshasayee, managing director of Ashok Leyland, told ET NOW that the joint venture plans are very much on track. “There is no truth in the rumours that we are shelving our joint venture with Nissan,” he said.

The buzz that Ashok Leyland is in two minds about going ahead with its joint venture with Nissan has been gaining ground since the Hero group announced earlier this month that it was exiting its truck joint venture with Daimler. The Hero-Daimler break-up was clearly due to the sharp slowdown in commercial vehicle segment, and industry insiders fear that the current demand situation could force other alliances to review their truck plans in India.

The domestic commercial vehicle industry has been struggling in recent months with volumes down by almost 23% in the last fiscal ended March 2009. Analysts expect the industry to report a modest growth of 6-7% in the current financial year.

There are also reports that Bajaj Auto and Renault are also reviewing their collaboration for developing the ultra-low cost car for India, although Rajiv Bajaj, managing director of Bajaj Auto, maintains that the car joint venture is very much on track.

Mahindra & Mahindra, which has joined hands with US-based Navistar, to tap the commercial vehicle segment in India, has also made it clear that their plans for the domestic track are intact. “We are rolling out brand new platforms for the domestic market and there are no plans to delay the rollout,” Pawan Goenka, president (automotive sector), M&M, recently told ET NOW.

Even as no tangible signs of improvement are visible on the global economic horizon, luxury car maker Audi AG is stepping
on the gas with its counter-cyclical approach. It sees an opportunity rather than a threat in the current slump.

“We have significantly increased our share in national markets that are deep in recession…We are therefore looking to the future with confidence,’’ Audi chairman Rupert Stadler told a press conference here. He said, “Our investment spending as a whole will remain on par with recent years and a large part of these investments will be spent directly on our products.’’

“Unlike our competitors, we will not impose a freeze on recruitment and are convinced that the counter-cyclical approach will pay dividends in future,’’ he added.

In the company’s view, global markets are expected to contract by 15-20%. There was a sharp drop in sales in numerous markets, particluarly in the second half of the year. As a result global vehicle sales fell for the first time in five years. With sales of passenger cars at 55.7 million, the industry saw a 5.8% drop in 2008. “We might see a 10% drop in customer deliveries this year,’’ he added.

The company announced its global financial results for 2008.

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Tata Motors on Thursday announced that the much-awaited Tata Nano will be launched at a function in Mumbai on March 23, 2009.

The cars will be on display at Tata Motors [Get Quote] dealerships from the first week of April 2009. Bookings will commence from the second week of April 2009.

Since it’s unveiling on January 10, 2008, the Tata Nano has evoked an unprecedented interest in the country, with its Web site having recorded over 30 million hits in the past one year and the creation of over 6,000 interest groups and communities.

Tata Motors is making arrangements for the widest possible network to book the car, so that prospective customers can conveniently avail of booking facilities at their locations, across the length and breadth of India. The booking process and other details will be announced on March 23, 2009.