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Home arrow News arrow Automotive arrow Premier Ltd to manufacture compact SUV - RiO at its Pune plant
Premier Ltd to manufacture compact SUV - RiO at its Pune plant Print E-mail
Written by Ganesh   
Thursday, 29 October 2009
Mumbai: Premier Ltd. (formerly known as Premier Automobiles Ltd.) has re-entered the Indian passenger vehicle market with a compact SUV named RiO. Premier will assemble the RiO at its Pune plant.

It already has an assembly plant for 15,000 units per annum and the RiO will be assembled using the same facilities. However, the company will undertake product specific investments to streamline production.

The production has already commenced and the first cars are expected to hit selected dealer showrooms in the first week of November. Premier will commence deliveries in December 2009.

Initially, local content will constitute about 20-25%, including the full engine - Premier's 1489 cc turbo diesel engine based on Peugeot technology. The company has stated that future localization will depend on volume growth. Premier also has a long term component and kit supply agreement with Zotye encompassing future models or variants of the current product.

The 5 seater vehicle, based on a Daihatsu model, will be sourced from China through a component supply agreement with Zotye Group, the Chinese manufacturer that sells close to 100,000 units per annum of the RiO from its plant near Shanghai, China.

Initial volumes are planned at 500 units per month until March 2010. The capacity will be enhanced according to additional market requirements.

Premier plans to have a region-wise sales rollout and dealer development. The phased roll out will start with west and south India. The company currently has 30 dealers that it is expanding to 100 in the next 6 months thereby creating an all India network. Premier is also developing its sales and service support and will be offering a 3 year warranty for the RiO. According to a Company spokesman "Our spare parts pricing will not be a profit centre but rather provide customer service and delight".

The Premier RiO aims to cater to the segment between mid-size passenger cars and larger utility vehicles. The RiO will retail in 3 versions with the base model priced at around Rs.5.25 lacs and the deluxe model at Rs. 6 lacs, both prices ex-showroom Pune, making it nearly Rs. 1.5 lacs cheaper than other SUVs on the Indian roads. The engine delivers close to 65 BHP and a fuel efficiency of about 16 kms per litre.

Raising of funds

A meeting of the Board of Directors of the Company will be held on October 30, 2009, inter alia, to consider and approve the unaudited financial results of the Company for the quarter ended September 30, 2009 and the raising of funds by way of issue of securities through various modes. Premier still has considerable hidden value in its real estate consisting of 216 acres of industrial land at Kalyan conservatively valued at 450 - 500 crs.

Engineering, Machine Tools & Vehicles

Today, Premier has 3 major divisions - Engineering, Machine Tools & Vehicles. All industrial activities are now based at Premier’s Pune plant.

Premier’s Engineering Division is a new thrust area. It is 3 years old and is nearing Rs 100 crs in sales. The division's 2 main thrust areas include Windmill parts and Automotive components. The company has invested Rs 60 crores in plant, machinery and equipment. It's clients include Enercon, Regen Powertech, Winergy, Tata Motors, BEML, Cummins.

Premier’s Machine Tool Division, according to the company, has a market share of 70% for CNC gear cutting machines and CNC vertical turning centres. The company has invested over Rs 90 crores to create it's manufacturing infrastructure. It has design and technology centres in Pune, Delhi and Bangalore.

As per Premier’s current vehicle strategy, the company will focus on a niche market and develop potential segments. In addition to customizing products to meet specific market needs, the company will adapt existing products to reduce development time and costs. In it's manufacturing strategy, the company will focus on final assembly and build quality. It will optimize investment to match realistic volume target and reduce breakeven point by outsourcing components (local and imports).

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