Here is a wrap of all the important news that broke during the week in the auto industry
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var titStr=”;var editw=”; var typevar=”; var pparr= new Array(‘Monitoring your investments regularly is important.’,’Add your transaction details to monitor your stock`s performance.’,’You can also track your Transaction History and Capital Gains.’); var phead =’Why add to Portfolio?’; if(secglbVar ==1) { var stkdtxt=’this stock’; var fltxt=’ it ‘; typevar =’Stock ‘; if(lastRsrs.length>1){ stkdtxt=’these stocks’; typevar =’Stocks ‘;fltxt=’ them ‘; } } //var popretStr =lvPOPRHS(phead,pparr); //$ (‘#poprhsAdd’).html(popretStr); //$ (‘.btmbgnwr’).show(); var tickTxt =’‘; if(typparam1==1) { var modalContent = ‘Watchlist has been updated successfully.’; var modalStatus = ‘success’; //if error, use ‘error’ $ (‘.mc-modal-content’).text(modalContent); $ (‘.mc-modal-wrap’).css(‘display’,’flex’); $ (‘.mc-modal’).addClass(modalStatus); //var existsFlag=$ .inArray(‘added’,newappndStr[1]); //$ (‘#toptitleTXT’).html(tickTxt+typevar+’ to your watchlist’); //if(existsFlag == -1) //{ // if(lastRsrs.length > 1) // $ (‘#toptitleTXT’).html(tickTxt+typevar+’already exist in your watchlist’); 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Coronavirus dominated national news throughout the week and the auto industry was not spared by the deadly pandemic either. Auto companies announced plant shutdowns for reasons ranging from diverting oxygen consumed for medical purposes to containing the spread of the virus. Amidst all the chaos Mahindra & Mahindra announced the full takeover of the ride hailing company Meru. More on this later in the copy but first, here is a wrap of all the important news that broke during the week in the auto industry
Maruti Suzuki to shut plants from May 1
Maruti Suzuki will advance its maintenance shutdown period by a month to reroute oxygen consumed by its two Haryana plants for medical needs, the company said in a stock exchange filing.
Parent Suzuki Motor Corporation has also decided to shut its Gujarat plant for the same purpose. Thus, production at all the Suzuki factories will remain suspended during the first week of May.
TVS lines up investments for EV
TVS Motor Company plans to widen the sales of its only electric two-wheeler, iQube, to more than 20 cities and expand its electric vehicle (EV) portfolio with higher investments this year, a top company official said.
According to company officials, a substantial portion of the capital expenditure (capex) of Rs 600 crore lined up for the year will be routed to EVs and emerging technologies.
Suzuki Hayabusa launched at Rs 16.4 lakh
2021 Suzuki Hayabusa has been launched in India at Rs 16.40 lakh (ex-showroom, Delhi) and as expected, as part of the new generation it gets a lot of updates.
The Suzuki Hayabusa enjoyed a legendary status ever since its launch back in 1999. The bike was discontinued in India only recently but has returned with the new generation.
Jagdish Khattar passes away
Former Maruti Suzuki managing director Jagdish Khattar passed away due to a cardiac arrest on April 26. He was 78 years old.
Khattar, a former bureaucrat, was considered one of the most high-profile leaders of the Indian auto industry, and was credited for laying the foundation for Maruti’s future growth.
Rahul Bajaj steps down as Chairman of Bajaj Auto
Rahul Bajaj has resigned as Chairman of Bajaj Auto. He will be replaced by Niraj Bajaj, the Non-Executive Director of the company.
Rahul Bajaj will step down as the Non-Executive Director and the Chairman of the company with effect from close of business hours on April 30, 2021.
M&M buys remaining stake in Meru
Mahindra & Mahindra (M&M) has assumed 100 percent control of Meru Cabs, the ride-hailing firm that was founded in 2006 by entrepreneur Neeraj Gupta. M&M will pay Rs 97.66 crore; the price it agreed to pay in 2019 for 55 percent stake when the first round of share purchase was done in Meru.
M&M would acquire 44.14 percent shares from private equity investor, True North and others for Rs 76.03 crore and 12.66 percent shares from Neeraj Gupta and Farhat Gupta for Rs 21.63 crore.
M&M claims that Meru has a significant presence in the airport transfer business, operating in the ride hail segment and providing employee transportation services to corporates.
Neeraj Gupta, founder CEO and Whole Time Director of Meru and its subsidiary company Meru Mobility Tech and Director of two other Meru subsidiaries – V-Link Automotive Services and V-Link Fleet Solutions will be stepping down effective April 30, 2021. He will continue as an employee until June 30, 2021.
Pravin Shah, who was earlier President Automotive, M&M till March 2017 will be the CEO of Meru and its subsidiary companies, with effect from May 1, 2021, M&M said in a statement.
M&M’s full control of Meru comes at a time when the ride-hailing business is staring at an uncertain future given the work from home culture adopted by offices which has led to dramatic reduction in corporate demand for transportation.
Further, the spike in demand for personal mobility has pushed sales of entry level and B segment cars since the past several months thereby reducing the demand for taxis.
First time car buyers have appeared to be keen to avoid public transport or shared transport options like taxis and autorickshaws for rising anxiety over the rapid spread of COVID-19.
Car companies have reported a sharp decline in demand for cars from drivers using app-based taxi platforms firms like Ola and Uber. From the peak of 15 percent, the share of commercial taxis in the overall pie of domestic passenger vehicles skidded to 3-4 percent, according to top officials of Maruti Suzuki and Hyundai.
This is evident from Meru’s own revenue chart over the last few years. The company has posted a steady decline in revenues since the past four years. Its FY20 revenues stood at Rs 133.3 crore, less than half compared to FY17 revenues of Rs 277.2 crore.
Meru has been using M&M’s only surviving electric car e-Verito in its fleet. But M&M has not produced even one unit of this model so far in 2021, as per production data shared by the company.
In March 2019, Hyundai Motor Co. and Kia Motors led a $ 300-million investment in Ola for smart mobility solutions. Hyundai is working on an affordable electric car which is being developed for Ola’s specific requirements besides catering to Hyundai’s and Kia’s own needs.
