Maruti Suzuki scores over nearest rival Hyundai, not just in volume

The edge that Maruti Suzuki enjoys over Hyundai and other rivals stem primarily from its gigantic scale

Maruti Suzuki is not just the country’s biggest carmaker with a 50 per cent market share, it also makes higher profit on each car than the industry peers, including its nearest rival and Korean automobile giant Hyundai.

Carmakers do not share the profit they earn per car though they declare the total company profit earned in a year. This profit includes money made on sales of spare parts though it is a small part compared to vehicle sales. A back-of-the-envelope calculation, however, can give an idea of the profit these manufacturers make per vehicle by simply spreading the total profit over the number of cars sold to arrive at an average number. It is true that the profit on different cars would be different. The smaller ones, for instance, will yield lower profits.

Let us take the case of Maruti Suzuki, which sells every second car in the world’s fifth-biggest market, India. The Suzuki-promoted company made a record profit of Rs 77.21 billion in the year ended March 31, when it sold a record 1,779,574 vehicles, a fraction of these were the newly-launched light commercial vehicles. A simple calculation shows the company might have earned as much as Rs 43,386 on an average per unit.

This is an impressive profit, considering the average per unit realisation of Rs 397,000 for the year, announced by the company in April.

Hyundai is not a listed company in India and its financial results are shared with the registrar of companies with a time lag. Information with the Korean parent, however, shows that it made approximately Rs 22 billion in profits in the year ended December 31, 2017. In the same year, it sold a record 678,221 cars. The annual profit translates into a per unit share of Rs 32,437.

A comparison of per unit profit of Maruti Suzuki and Hyundai shows the former makes around 33 per cent higher gains to its Korean peer. While Maruti Suzuki is miles ahead in volume to Hyundai, which has a market share of about 16 per cent, the product portfolio of the two players are not very different. Both thrive on a strong hatchback and SUV product line up.

The edge that Maruti Suzuki enjoys over Hyundai and other rivals primarily derives from its gigantic scale. “Look at the scale of Maruti Suzuki. The second-biggest player in the market sells less than half of what the biggest player does. The sheer volume gives Maruti Suzuki enhanced economies of scale and the capacity to bargain with component supplies.

No-fly list: Govt proposes maximum 2-year ban on unruly flyers

Draft rules, a first of kind in the world, have three levels with progressively higher sanctions

Almost a month after the country was shocked by the visuals of a parliamentarian assaulting an airline crew member for not being able to provide a business class seat as it didn't exist, the government took steps to empower airlines to ban unruly passengers.

The centre on Friday released draft rules for a 'no-fly list' -- a first of its kind in the world -- for unruly passengers. The rules allow airlines to bar a passenger from three months to maximum two years depending on the intensity of the offensive behaviour. The government has placed disruptions from flyers into three categories -- level-1 will include disruptive behaviour such as physical gestures etc., level-2 will be physically abusive behaviour like pushing, kicking and sexual harassment, and level-3 is for life-threatening behaviour and damage to aircraft operating systems.

Also Read : Maruti Suzuki opens bookings for all new Dzire

Punishment for unruly behaviour will simultaneously depend on the category of the offence.

The corresponding time of grounding for offenders, would be three months for level-1 and six months for level-2, while level-3 will attract a ban of two years. The new rules will be open for public comments for a month, and will pass through stakeholders' consultation before being finalised.

"There is no other country in the world with a no-fly list based on safety. There are no-fly lists based on security where people are seen as grave threats and they are not allowed to fly. India is blazing a new trail in this regard," Jayant Sinha, minister of state for civil aviation said. Read more

Tata Tiago trains guns on the Celerio, i10 at Rs 3.39 lakh

India's biggest vehicle manufacturer Tata Motors today launched the compact hatchback Tiago at Rs 3.39 lakh petrol (ex-showroom, Mumbai), while the diesel is priced at Rs 4.18 lakh.

The Tiago (formerly named Zica) will compete against Hyundai i10, Maruti Celerio, Maruti Wagon R to name a few in the B Segment space.

The Tiago, promoted by ace footballer Lionel Messi, is built on an all-new platform and will fill the product gap between the Nano and the Bolt as the ageing Indica is now increasingly pushed for commercial usage. 

The Tiago will feature two new engines, petrol (1.2 litre) and diesel (1.05 litre). The 1.2 litre, three cylinder petrol is a new ground up naturally aspirated engine generating peak power of 85ps. This is the first new engine from the gasoline family of Tata Motors. The petrol version has a claimed mileage of 23.84 kmpl

The diesel version, meanwhile, carries the smallest engine yet developed by Tata Motors for passenger application, a 1 litre three cylinder, turbo-charged mill that develops peak power 70ps. The diesel version of the Tiago has a claimed mileage of 27.28 kmpl.

Features like bottle holders on all doors, iPad or tablet holding tray inside the glove compartment, hands-free telephony above the drivers’ head, new fabric for upholstery are not seen on other models.

The Harman-developed but Tata Motors-funded entertainment system is the Tiago’s biggest draw. With eight speakers (a first in the segment) the compact hatchback is made to appeal to the music loving youth. The car will have five variants each of both fuels.

The car will have a multi-drive mode — City and Eco — a feature also seen on the Zest sedan though it has one more drive option Sport. The two drive modes are supported by an advanced Engine Management System.

Tata Motors team spent three years in developing the car and was originally slotted for a commercial launch in January, just before the Auto Expo. Though the car was showcased at the Expo it was not commercially launched.

The Tiago is the first car to flaunt the new Impact design philosophy. The car is developed with inputs from Pune, UK and Italy design studios.

Eager to cash in on demand for automatic transmission Tata Motors will be offering AMT technology on the Tiago as well in later months.

The Tiago will be the third all-new product launch by Tata Motors in 20 months, Zest and Bolt being the two products. Last financial year the company launched the updated Nano called GenX Nano with a host of new features, new styling and an added automated manual transmission (AMT) variant.

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Maruti's LCV launch delayed due to activism against diesel vehicles

Maruti Suzuki has missed a date set earlier for entering the light commercial vehicle (LCV) segment, pointing to the activism against diesel use. The country’s largest car maker was to launch a mini truck, which it has been developing since 2013, before March 31.

Kenichi Ayukawa, managing director, said: “Launching the LCV this financial year is quite difficult. So much has happened against diesel.

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Maruti Suzuki to launch compact SUV Brezza today

Maruti Suzuki will formally launch the Vitara Brezza on Tuesday, its first serious attempt to break into the already-competitive sport utility vehicle segment.

Designed and fully developed in India by Indian engineers, the Brezza will take on the likes of Ford EcoSport and Mahindra TUV300 (in the sub-4 meter category) as well as the Hyundai Creta and Renault Duster.