Automobile companies are investing in building new capacity-Altius Finserv

The automobile growth story in India is double-layered: on the face of it, a mere 4-5% sales growth, 45-50% capacity utilization and profit margins under pressure in the previous fiscal.

Pawan Bansal MD of Altius Finserv Private Limited says "We expect India to become the third largest sales market, and production to reach 6 million units a year by the end of the decade. If Suzuki Motor is creating more capacity in India, Honda is looking to enter new segments. Renault, Nissan and Volkswagen on their part are building new capacity for exports while Ford and Fiat have both the domestic and export markets in mind.

Here's the break-up of the committed investments: 10 car makers have invested around Rs 31,570 crore, two-wheeler companies, nearly Rs 8,555 crore and tyre companies around Rs 7,350 crore in the past 10-12 months to build additional capacity of three million vehicles, according to PwC. That works out to nearly a third of the current Indian automotive market.  

"Brand India has been reinforced globally by the Make in India initiative. Japanese auto major Honda is investing Rs 3,565 crore in its two wheeler and car businesses in India as it looks to hike production capacity. With both its businesses having a dream run in the country, some of the Honda branded vehicles has been on a protracted waiting period, as the company struggles with capacity. The plan is to increase manufacturing capacity by 600,000 units for two-wheelers and by 60,000 units for cars by 2016.

India's largest utility vehicle and tractor major, Mahindra & Mahindra, which lost its No. 3 position to Honda is preparing for a comeback. The company plans to raise Rs 5,000 crore from the market for plant expansion, besides investing Rs 3,500 crore in capex and new investment every year over the next three years.

For auto makers, expansion plans are based on long-term projections and investment companies like Altius Finserv play a vital role in growing business. The market needs to grow at least 10% a year to absorb the additional capacities; there is always the risk of demand not improving, leaving companies saddled with high manufacturing cost, said a senior official of a car company who did not wish to be named.

Still, every car maker has done its homework and sees a potential in more investments in India. Car makers are making India an export hub for markets such as Africa, Latin America and the Middle East. The auto sector went through a rough patch for a good part of the previous year (2014-15), but the overall numbers and an 8% growth indicate hope. 

Altius Finserv simplifying Capital Markets for you

Pawan Bansal,Managing Director, Altius Finserv Pvt. Ltd has a simplified explanation of capital markets for you.As per him, Capital Markets are basically markets that entail to selling and buying of equities(stocks) and other debt instruments. They act as a platform bridging the gap between capital suppliers and users. In short, they connect the investors with the users who need capital for their businesses. So in Pawan Bansal’s words, capital markets simply facilitate the demand and supply. Capital markets are further bifurcated into 2 categories, primary and secondary. Primary capital market is the one where new stocks and bonds are sold whereas the secondary market deals with the equities and debts that already exist.

The next part ia a little tricky. The capital markets have a large number of participants, like individual investors, pension funds, mutual funds and even governments, PSUs etc. Also, now every investor wants as much profit as possible. So the common trade off is that an investor into your business would expect high returns. If in case you are an investor, then it is important for you to invest your money in a business where a good return can be expected.

Sounds tricky…right? Now this is where Altius Finserv will guide you. Altius Finserv Private Limited is a boutique investment banking firm offering financial advisory services like debt syndication, public offerings, private placements, spin-offs and restructurings. So all those terms that you find baffling are actually the ones we communicate in on daily basis. No wonder that’s why we boast of an elite clientele.

Karan Bagga of Altius Finserv talks about Capital Markets

If you can read and write your name in a language, then as per government rules, you are literate. If only financial literacy was so easy to achieve. Many of us Indians are hardly familiar with the concept of literacy, leave alone knowing about financial literacy. That’s why words like ‘Capital markets’ render us speechless. We try so hard to sniff out a literal meaning, but all in vain. So what is this capital market and why does it baffle us so much? Let’s find out.

Capital markets, equities, debts et al, aren’t these quite heavy words? Just the mention of these words makes one go dizzy. It is like an overwhelming chemical imbalance inside your mind. Such heavy finance related words often seem ambiguous. However has a simplified explanation for you.

As per Karan Bagga ,Executive Director, Altius Finserv Pvt. Ltd, Capital Markets are basically markets that entail to selling and buying of equities(stocks) and other debt instruments. They act as a platform bridging the gap between capital suppliers and users. In short, they connect the investors with the users who need capital for their businesses. So in Karan Bagga’s words, capital markets simply facilitate the demand and supply. Capital markets are further bifurcated into 2 categories, primary and secondary. Primary capital market is the one where new stocks and bonds are sold whereas the secondary market deals with the equities and debts that already exist.

The next part ia a little tricky. The capital markets have a large number of participants, like individual investors, pension funds, mutual funds and even governments, PSUs etc. Also, now every investor wants as much profit as possible. So the common trade off is that an investor into your business would expect high returns. And if in case you are an investor, it is important for you to invest your money in an area where a good rewarding return is expected.

Sounds tricky…right? Now this is where Altius Finserv will guide you. Altius Finserv Private Limited is a boutique investment banking firm offering financial advisory services like debt syndication, public offerings, private placements, spin-offs and restructurings. So all those terms that you find baffling are actually the ones we communicate in on daily basis. No wonder that’s why we boast of an elite clientele.

Altius Finserv gives you an insight into Capital Markets

Capital markets, equities, debts, aren’t these quite heavy words? Just the mention of these words makes one go dizzy. It is like an overwhelming chemical imbalance inside your mind. Such heavy finance related words often seem ambiguous. However, Pawan Bansal,Managing Director, Altius Finserv Pvt. Ltd has a simplified explanation for you.

As per him, Capital Markets are basically markets that entail to selling and buying of equities(stocks) and other debt instruments. They act as a platform bridging the gap between capital suppliers and users. In short, they connect the investors with the users who need capital for their businesses. So in Pawan Bansal’s words, capital markets simply facilitate the demand and supply. Capital markets are further bifurcated into 2 categories, primary and secondary. Primary capital market is the one where new stocks and bonds are sold whereas the secondary market deals with the equities and debts that already exist.

The next part ia a little tricky. The capital markets have a large number of participants, like individual investors, pension funds, mutual funds and even governments, PSUs etc. Also, now every investor wants as much profit as possible. So the common trade off is that an investor into your business would expect high returns. And if in case you are an investor, it is important for you to invest your money in an area where a good rewarding return is expected. Sounds tricky…right? Now this is where Altius Finserv will guide you. Altius Finserv Private Limited is a boutique investment banking firm offering financial advisory services like debt syndication, public offerings, private placements, spin-offs and restructurings. So all those terms that you find baffling are actually the ones we communicate in on daily basis. No wonder that’s why we boast of an elite clientele.

INDIA sales analysis by Altius Finserv Automobiles : JULY 2015

New product launches, scooters provide uptick to 2-wheeler sales 

A slew of new product launches from the major two-wheeler companies have pulled up the overall sales against the ongoing demand slowdown in rural markets, which are the main sales drivers of commuter motorcycles that comprise 70 percent of the two-wheeler market in India. July 2015 sales numbers of prominent two-wheeler makers indicate flat growth of 0.60 percent year-on-year. The OEMs together registered a volume of 14,62,740 units in July this year as against the total sales volume of 14,54,013 units in July last year. Among the many new products and product upgrades  the two-wheeler industry has seen in the recent times include the new models from Bajaj Auto (Pulsars: AS 150, AS 200, RS 200 and Platina ES, CT100, Discover 125), Honda Motorcycle & Scooter India (CB Unicorn 160, Livo, updated Activa-i, Aviator, Dio, Dream Neo and others), Hero MotoCorp (updated Xtreme Sports, Passion Pro, HF Deluxe, HF Deluxe Eco and others), Yamaha (113cc scooter Fascino, 125cc commuter bike Saluto, refreshed Saluto), TVS Motor Company (Phoenix 125), Royal Enfield (limited edition Classic 500 models – Desert Storm Despatch, Squadron Blue despatch), and Suzuki (Gixxer and Gixxer SF). While the new models are garnering customer attention along with the soaring demand for scooters across the urban pockets, woos such as irregular rainfall and effects of the delayed festive season that starts in Q3 this fiscal as against Q2 FY2015 continue to mar the commuter motorcycle sales in the rural region. This is clearly visible in the sales of Hero MotoCorp, motorcycle portfolio of HMSI, TVS Motor Company and others. However, industry expects that Q2, beginning from July 2015 will be better than the previous quarter. However, Pawan Bansal,Managing Director, Altius Finserv Pvt. Ltd has a simplified explanation for you.
Report by - Altius Finserv Automobiles

INDIA sales analysis by Altius Finserv automobiles : JULY 2015

A revival in the monsoon coupled with a slew of fresh launches and a decline in fuel prices has augured well for the Indian passenger vehicle industry as domestic sales rose in July. According to data by Altius Finserv Automobiles from seven of the country’s largest automakers, passenger vehicle sales rose over 17% in July 2015 to 206,455 units from 176,143 vehicles a year ago.   Rainfall activity had weakened in early July, but recovered in the latter half of the month, boosting farm produce and in turn demand for automobiles. Fresh launches in the month also spurred demand as companies tried to woo customers with their latest offerings.

Maruti Suzuki India, the country’s largest carmaker by volumes, remained on the top spot in July with over 22% on-year growth in domestic sales. The automaker registered positive growth in all segments in the month and sold a whopping 110,405 vehicles. Arch rival Hyundai Motor India also had a good month and registered a near-25% rise in sales to 36,500 vehicles. The launch of the much-talked-about compact SUV Creta, added to the company’s sales as it retained the number two spot. Commenting on the July sales, Karan Bagga, senior vice-president (Sales and Marketing), HMIL, said,“ The tremendous response for the Creta, i20 Active and Elite i20 shows customers’ increasing preference for products offering novelty value in style, first in segment features and strong aftersale assurances.” The Creta got more than 10,000 bookings even before its official launch in July, and at present the waiting period on the car for some variants is as long as 10 months, according to Autocar India. Given the overwhelming response for the Creta, it is likely to drive the company’s sales in the coming months. Honda Cars India also benefitted from the launch of its new Jazz, and reported an 18% rise in car sales in the month. Sales of the new Jazz surpassed that of both the City and the Amaze as the company managed to sell a total of 18,606 vehicles in the month. The product-wise split comprises 5,180 Citys, 4,589 Amaze sedans, 6,676 units of the new Jazz, 1,122 Brios, 909 Mobilios and 130 CR-Vs. 

To manage the surge of demand for the new Jazz, Honda Cars India has begun juggling production at both its Greater Noida and Tapukara facilities. Meanwhile, homegrown SUV maker Mahindra & Mahindra continued to struggle as the reducing gap between petrol and diesel prices, coupled with a slew of fresh launches, by competitors dented the company’s sales. M&M’s sales fell 13% to 14,456 units in July. Speaking on the sales performance,Pawan Bansal, president and chief executive (automotive), M&M, said, “While the auto industry is currently seeing muted growth, we do believe that the launch of some exciting new products will help it turn the tide. In addition, with the advent of a good monsoon till date and reduction in fuel prices, we expect sentiments to improve, leading to overall growth in auto sales.” The company recently launched the automatic version of its top-selling SUV, Scorpio and has also announced the launch of a new compact SUV named TUV 300. The TUV 300 is built on an entirely new platform and will hit dealerships by September. Tata Motors, on the other hand, saw yet another month with positive growth in sales. Passenger vehicle sales for the company in July rose 13% to 10,389 units, as the GenX Nano continued to draw buyers. The Zest also continued to post decent sales with most buyers preferring the automated manual transmission variant.  Toyota Kirloskar Motor (TKM) sold 12,070 units in July 2015 compared to 11,921 units in July 2014, registering 1% growth in the domestic market. Etios sales grew by 60% with 2,827 units sold last month when compared to 1,769 units in July 2014. The Etios series sold 31,301 units in the January-July 2015, up 16% year on year. Volkswagen India’s sales were up 18% in July 2015. The German carmaker sold 4,029 units compared to 3,409 units sold in July 2014. Michael Mayer, director, Volkswagen Passenger Cars, Volkswagen Group Sales India, said, “With the advent of the third quarter, and the encouraging customer response for the recently launched New Vento, we are happy to announce that our sales have gone up by 18% in July 2015, on a year-on-year basis. Also, with a slew of exciting made-for-India products lined for the next two years and backed by an impressive sales performance for the sixth consecutive month, we are confident of further strengthening our position in the Indian market over the coming months.” 

Report by Altius Finserv Automobiles 

​Altius Finserv Introducing Automobile Industry in India

The Indian car industry is one of the biggest on the planet with a yearly generation of 21.48 million vehicles in FY 2013-14. The vehicles business represents 22 for every penny of the nation's assembling (GDP).

A growing working class, a youthful populace, and an expanding enthusiasm of the organizations in investigating the provincial markets have made the bikes portion (with 80 for every penny piece of the pie) the pioneer of the Indian car market. The general traveler vehicle portion has 14 for every penny piece of the overall industry.

India is likewise a considerable auto exporter, with strong fare development desires for the not so distant future. Different activities by the Government of India and the significant car players in the Indian business sector is required to make India a pioneer in the Two Wheeler and Four Wheeler showcase on the planet by 2020.

Business Size

Offers of business vehicles in India grew 5.3 for each penny to 52,481 units in January 2015 from a year prior, as indicated by Society of Indian Automobile Manufacturers (SIAM).

Offers of Altius Finserv Automobiles additionally developed for a third month in succession to 169,300 units in January 2015, up 3.14 for each penny from the year-back period.

Auto market pioneer saw 8.6 for each penny higher deals at pretty nearly 118,551 units in February 2015, out of which 107,892 were sold in household market and 10,659 units were sent out.

Hyundai Motor India Ltd (HMIL) reported a 2.4 for each penny development altogether deals at 47,612 units in February, contrasted and 46,505 units around the same time a year ago.

In the bike fragment, Hero MotoCorp saw offers of 484,769 units in February 2015.TVS Motor Co posted 15 for each penny higher deals at 204,565 units against 177,662 units.
Altius Finserv Automobiles sold a sum of 243,000 two and three-wheelers fragment.

India is probably the most competitive country in the world for the automotive industry. It does not cover 100 per cent of technology or components required to make a car but it is giving a good 97 per cent, highlighted Mr Pawan Bansal, Corporate Vice-President, Mr. Karan Bagga.