Country’s top carmaker Maruti Suzuki India is on a strong wicket. The company, which has been outpacing industry growth for the past six years, is aiming to touch the two million sales by next fiscal.
It achieved total domestic sales of 1.64 million units in 2017-18. For FY19, it has set a double-digit growth, higher than the expected industry growth of 8-9 per cent.
“We hope that the two million mark will be reached in the next financial year and the next goal is three million cars a year by 2025,” said R C Bhargava, Chairman, Maruti Suzuki India. “The contract manufacturing arrangement with Suzuki Motors Gujarat is working very well. The first line is in full production and the second line will be commissioned early in 2019. Work has started on the third line and is expected to be commissioned in early 2020,” he said.
Bhargava also pointed out that India’s car market is unique: 75 per cent of the cars sold are below 4 metres in length and cost under Rs 6.5 lakh at the factory gate.
The Chairman felt that it would be a good intermediate step to expand the use of clean fuel such as CNG. Kenichi Ayukawa, Managing Director & CEO of the company said: Suzuki Motor Corporation is stepping up R&D efforts especially to provide better technologies and products. The company’s R&D centre at Rohtak plans to proceed to the next stage – Design in India.
The Rs.84,040 crore company spent Rs.125 crore on CSR activities in FY18, which was more than two per cent of the average net profit for the last three financial years.
Tata Motors: bets big on ‘Turnaround 2.0’ plan
Tata Motors is hopeful of reaping more benefits through its Turnaround 2.0, which is being implemented in this fiscal.
“In FY19, we have announced the launch of ‘Turnaround 2.0’ with three clear objectives: win decisively in CV, win sustainably in PV and embed a culture of ‘Turnaround’ deep into the organisation,” said Guenter Butschek, CEO and Managing Director, Tata Motors.
Building on the success of the first ‘Turnaround’ story, which focused on execution, Turnaround 2.0 aims to embed the turnaround thinking deep into the organisation. The Company is laying the future roadmap for its passenger vehicle business.
The objective is to enable the PV business to fund itself for the future and also help in making it much beyond the aspirations of being the No. 3 player in the domestic market by FY19 as stated the current vision of the company, along with a continuing focus on CV business.
The market share of Tata Motors in CVs increased by 70 bps to 45.1 per cent and by 60 bps to 5.7 per cent in passenger vehicles. Its standalone net revenues increased by 31.6 per cent to Rs.58,457 crore for the 12 months ended 31 March, 2018 and its standalone profit before exceptional items and tax for the year came at Rs.20 crore, compared with a loss of Rs.2015 crore in the previous year.
New India: will retain the leadership position in general insurance
Country’s top non-life insurance major New India Assurance Co Ltd has chalked out an apparent future strategy of growth with profitability.
“New India is adequately capitalised and have a comfortable solvency margin, much above the mandatory level of 1.5. We intend to bring down the Incurred Claim Ratio and Combined Ratio gradually year by year until we reach the desired level to ensure profitability along with a growth rate keeping in line with the growing market. We aim to retain our leadership position in the market as well as in all lines of business,” said G Srinivasan, Chairman-cum-Managing Director.
GS expects the growth trajectory of the general insurance sector, as well as that of his company to remain strong in the next few years due to pick up in economic growth and increase in the manufacturing, services and infrastructure activities.
India’s general insurance penetration has been hovering around 0.7-0.8 per cent, much lower than the global average of 2.8 per cent, and penetration of between 1.6-1.8 per cent in the Asian economies of China, Malaysia and Thailand.
The company opened 70 new micro offices in FY18 to increase its reach to the whole population.
Alternative distribution channels, digital marketing strategy, online portals and increasing number of insurance agents and other intermediaries have greatly helped in expanding the reach to the customers as well as creating insurance awareness among the public.
Srinivasan said the crop insurance business grew significantly in FY 18 and accounted for nearly 16 per cent of the overall industry premium in the FY 2017-18.
While the company opened 70 offices in the domestic market during 2017-18, it has obtained a licence to operate in Dubai Financial Centre. It is also in the process of registering with Qatar Financial Centre, Doha. As of now, nearly 15 per cent of New India’s business comes from the international operations
The net worth of the company including fair value was Rs.38,301 crore, and the asset base stood at Rs.76,904 crore FY18.
Sundaram Finance: eyes potential in three growing segments
Sundaram Finance hopes to tap opportunities in construction equipment, LCVs and tractors.
“Diesel prices continue to remain stubbornly high and coupled with higher interest rates could prove a dampener for the transport operator’s viability and consequently on the commercial vehicle off-take” said S Viji, Chairman, Sundaram Finance.
Addressing company’s 65th annual general meeting, viji said that with inflation numbers trending upwards and liquidity tightening, interest rates have already shown an upward bias in the first quarter of the current financial year. RBI, for the first time in almost two years, raised the policy rate by 25 basis points in June this year. It is widely predicted that further increases are likely in the coming months, he felt.
The government has increased the maximum safe axle weight of commercial vehicles resulting in a 14-18 per cent increase in the load carrying capacity of trucks, in a move that is intended to reduce logistics costs in the country. The load carrying capacity of tractor trailers has also been increased.
While a prospective application of the new axle load limits is unlikely to have an impact on the sale of new CVs, making them applicable to existing vehicles could have negative implications for new CV offtake in the near term, said Viji.
T T Srinivasaraghavan, Managing Director, Sundaram Finance said: “our disbursements last year grew by 18 per cent and our loan book by close to 20 per cent in 2017-18.”
Ashok Leyland: to maintain its growth path
Ashok Leyland has been growing the fastest among CV manufacturers. The product development focus along with the extension of the network has been the principal reason. Over the last 4-5 years, our market share has grown to 32 per cent from 24 per cent,” said Dheeraj Hinduja while addressing the company’s 69th Annual General Meeting.
Non-core businesses such as defence and power solutions are seeing good growth and are helping the company.
Hinduja Foundries has turned around well in recent months after going through its worst phase. It is now showing cash profit.
LCV business of the company has become PAT positive and operating margins for the segment are now almost at par with the M&HCV margins.
The Hinduja Leyland Finance, which is planning an IPO this year, offered huge scope for growth in the near future.
