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AW Rostamani Eyes India

  • The UAE’s AW Rostamani Automotive, which owns the Honda dealership in the Indian capital of New Delhi, is keen to get more dealerships in other cities and said the newly-launched Honda Brio will boost sales three times, chief executive officer Michel I. Ayat said.Capital Cars Private, a wholly-owned subsidiary of AW Rostamani Holdings, sold 1,751 cars in calendar year 2011 and this figure is expected to cross the 2,000 mark in its fiscal year, which ends in March.“It will be higher than the calendar year as we can touch easily 2,000 [vehicles],” Ayat told Khaleej Times in an interview.
  • “It was first year of operation after the acquisition and the fiscal year is not yet finished,” he said, adding that the calendar year was faced with some challenges.He mentioned that production was badly affected by the shortage of spare parts due to the tsunami in Japan and floods in Thailand.The main problem was the latter, because of many Honda components that come from there, he said, adding: “Thailand [floods] badly impacted the assembly plant in India, more than the tsunami.”

Expansion within India

  • AW Rostamani looks for more Honda dealership in India for its expansion. “Our strategy is to expand Honda within India. In areas where Honda will have dealerships, we will be a candidate,” Ayat said.AW Rostamani has over 45 years of experience in the automobile industry, he said, adding that: “So with the association of first-class manufacturer and first-class distributor like us, we are confident that we will be able to capture a reasonable size within Honda.”Honda SIEL has a vast distribution network of 135 authorised dealership in 83 cities across India. At the launch of Brio, Honda SIEL announced that the network is likely to go up to 143 facilities in 91 cities by the end of current fiscal year.AW Rostamani’s subsidiary has presence in three locations in NCR with 3S facilities.

Sales to triple

  • With the current fiscal year sales target of 2,000 vehicles the company expects three-time higher sales in the next fiscal year, which will start on April, 2012. Ayat mentioned that production level is improving and Brio is expected to boost sales because the Indian market is more than 50 per cent for small cars. Honda entered into the small segment with the launch of the Brio in India, Ayat said, adding that it is the largest passenger car segment in India.
  • “It will help Honda to triple its sales. Now Honda average sales is about 52,000 to 60,000 vehicles a year. With the Brio, it will take Honda to more than 1,50,000 units in India in next fiscal year,” he said.Honda has started delivery of the Brio that was launched in September last year in the Indian market. The car was developed following Honda’s extensive market surveys in India on people’s driving needs and lifestyles. He mentioned that passenger car growth in India was almost flat in the first nine month of the current fiscal year. New year is started with some growth, he added. “I believe that [in fiscal year] 2012-13... it will be one of the best years where Honda will achieve three times the volume,” he added.
  • India’s top auto makers began 2012 on a positive note with Maruti Suzuki India, Tata Motors and Mahindra & Mahindra reporting growth in sales for January. Honda reported sales of 1,784 units during the month of January 2012.As a result of the Thailand floods, company managed to source the crucial components from alternative locations. The company hopes to achieve peak production level next month. Ayat said that it was the decision of the AW Rostamani Group to expand in emerging markets and India comes at top of these markets with the potential to grow in the passenger cars as well as commercial vehicles.
  • Capital Cars operates under the brand name of Prime Honda, an authorised dealer of Honda SIEL Cars India. Capital Cars was acquired by AW Rostamani in the last quarter of 2010. “Our acquisition was end of 2010 and we have the Honda dealership in Delhi and National Capital Region for passenger cars,” Ayat said.He declined to disclose the value of the acquisition, saying: “It’s confidential.”“Since we have taken [the company], we have made many investments in expanding infrastructure facilities specially after sales with a cost of $2 million after the acquisition.”

Huge potential

  • India, which has been one of the world’s fastest growing car markets in recent years, suffered a slowdown in demand last year for numerous reasons. But its automobile sector has huge potential of growth in 2012. During the first nine months of the current fiscal year, total four-wheel passenger and commercial vehicles sold in India reached 2.37 million, while two-wheelers in the same period sold around 10 million.“The Indian market is dominated by two-wheeler, but there is a tendency of migration from two-wheeler to four-wheeler,” Ayat said.
  • “The market is only 20 per cent for four-wheels, which is almost bigger than the whole GCC market,” he said.Sales of new cars in India are likely to pick up in the next financial year, industry body Society of Automobile Manufacturers has also predicted. The body forecasts car sales to grow 11 to 13 per cent in 2012-13, well above the zero to two per cent growth it expects for this fiscal year.

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