A look at
small- and mid-size segments reveals that car wars are little
more-than-pitched battles between variants alone. For carmakers,
the introduction of variant is a cost-effective strategy, as it
calls for just incremental investments to be made compared to what
it takes to roll out a totally new model.
Motor India Ltd (HMIL) president A P Gandhi is, however,
satisfied with the performance of Sonata, which has a
market price of Rs 13 lakh. In August 2001, HMIL sold
150 Sonatas and it plans to double that figure in September.
This fiscal the target is to sell 3,000 Sonatas, which
is nearly 3 per cent of the companys overall projections.
This premium model is marketed only in select cities,
as the production capacity is currently low.
HMIL plans to sell 78, 000 Santros and 20, 000 Accents (including
exports: 7,000 Santro/Accent) to take the total volume to just
over 1 lakh vehicles. In terms of value, this would translate into
Rs 3, 600 crore as against Rs 3, 060 crore last year.
has also prudently managed its finances to lower interest
payouts. HMIL has not availed of working capital loans
and has prepaid its domestic loans to the tune of Rs 100
crore. This is possible by managing the receivables efficiently
and leveraging the companys market position.
The ongoing war could make a dent in HMILs export earnings.
If the war continues for a long period, and if the rupee
depreciates much beyond the expected levels, HMIL will
take a relook at its pricing. But this logic applies to
other players as well.
currently exporting Santro/Accent to Algeria and Bangladesh, among
other countries. It also ships out components like body panels to
Korea. But the export of components has slowed down.
company is not obligated under the MoU route to export, HMIL has
to fulfill export stipulations under the EPCG scheme to the tune
of around $800 million. Gandhi says HMIL has got an extension to
fulfill its obligations.
marketing front, HIML plans to increase
its dealerships from 107 to 150 soon. Though September was not a
profitable month for HMIL, the company is confident of seeing the
year through. Says Gandhi: One sparrow does not make for summer
and one bad month is still no reason to rethink about target