This week in Auto: Bajaj Auto may make e-bicycles; car makers chase new buyers after demand meltdown

August marked the tenth straight month of decline for car makers. Manufacturers who had invested to expand capacity were forced to undertake production holidays.

But some of them are finding other ways to secure buyers.

Leasing and rental firms have stepped in at the time when private buyers are not enthused to buy anymore. In today’s auto wrap we take a look at the new way of possessing a car without actually owing it. But here is the list of all the major news that made it to headlines in the auto space.

Mahindra to shut plants this quarter

Mahindra & Mahindra on September 13 said it will suspend production at its automotive manufacturing plants in the ongoing quarter, ranging between 8-17 days, in order to adjust production with sales requirements.

The company had earlier said in August that it would be observing no production days for 8-14 days across its automotive sector plants in the July-September quarter.

Bajaj, KTM to explore bicycle, e-bikes

Motorcycle specialist Bajaj Auto and Austrian off-road bike manufacturer KTM are taking their 12 year-old partnership to the next level. Bajaj will not only increase stake in the European unit, but may also launch electric cycles, a first in its storied history.

Plans are also afoot to launch a range of performance electric two-wheelers by 2022. Both companies are working on a high-end electric motorcycle project, which is independent of the electric scooter that Bajaj has developed and will launch in FY20.

Hyundai to begin supplies to Ola

Hyundai Motor India will begin supplies of ‘affordable’ and ‘mass market’ range of electric vehicles to India’s ride-hailing giant Ola from 2022-23.

These vehicles, which are tailor-made for Indian buyers, will be based on a new vehicle platform that is aimed at keeping cost of manufacturing low and making them affordable. The vehicle, which will be sold to commercial buyers (like Ola) and to personal buyers, could be priced below Rs 10 lakh.

Cars sales crash for tenth straight month

India’s domestic passenger vehicle sales fell for the tenth straight month in August, declining 31.57 percent to 1,96,524 units from 2,87,198 units in the year-ago period.

Domestic car sales were down 41.09 percent to 1,15,957 units as against 1,96,847 units in August 2018, according to data released by the Society of Indian Automobile Manufacturers (SIAM).

Yamaha signs wage pact with Chennai workers

Two-wheeler maker India Yamaha Motor (IYM) Pvt Ltd on September 12 said it has signed a three-year wage settlement agreement with its workers at Chennai factory.

The pact will be implemented with retrospective effect from April 1, 2019, and will remain effective until March 31, 2022, the company said in a statement, without sharing the details of hike in the salaries of the workers.

Carmakers chase other mediums to market their inventory

This week two car manufacturers devised ways to market their products to a unique set of buyers whose business involves making multiple users use the cars.

Honda Cars India announced the launch of its new car leasing services in association with Orix one of India’s largest car leasing and rental companies.

As a part of this association, customers can avail leasing options for Honda CR-V, Honda Civic and Honda City for both corporate customers and individual customers. The leasing option can be availed by self-employed professionals, businessmen and salaried individuals.

Utility vehicle specialist Mahindra & Mahindra (M&M), followed suit with the roll out of a subscription-based model in partnership with Revv, a shared mobility platform. As per the deal, Revv users can drive an M&M vehicle without actually owning it but after a payment of a prescribed monthly rent.

M&M, which has models such as Scorpio, XUV 500, XUV 300, TUV 300, said the Revv offer begins at an “extremely attractive subscription price” starting from Rs 19,720 per month, inclusive of insurance and routine maintenance charges.

“We plan to sell our cars in every possible way that customers want to acquire them”, Anand Mahindra, chairman, M&M tweeted following the announcement. Last year the Mumbai-based company had tied up with Orix and ALD Automotive to adopt the car leasing space model.

This is the fifth such tie up so far this calendar year. Hyundai, Skoda and Fiat Chrysler Automobiles announced partnerships with car leasing and rental companies a few months ago.

Millennials are the primary target for the leasing and rental model but equally important are customers from the corporate world or entrepreneurs who run small and medium businesses. These users are likely to use the vehicle for six months to one year before switching to another model because of financial reasons or the novelty factor.

Car leasing has a penetration of less than one percent in India but is as high as 45 percent in developed markets such as US and Europe. This poor record in India is expected to change given the market uncertainties, prolonged poor buyer sentiments, hassle-free process to acquire a leased car and reducing ownership periods of new vehicles.

With a leased or rented car users are absolved from the hassle of paying for maintenance of the vehicle as well as insurance charges. Instead of getting a loan for the car users have to instead pay a fixed monthly payment. In the event of accident users does not carry any financial liability as the vehicle is owned by the leasing company and not the user.