| INDUSTRY Go To Top The Hindu Business Line (Web & Print Edition)
http://www.thehindubusinessline.com/2009/05/06/stories/2009050650580200.htm
GOVT MAY IMPOSE ANTI-DUMPING DUTY ON AUTO COMPONENTS PTI
Last month, the component industry approached us to protect them from cheap imports... If it is required, we will impose anti-dumping duties, which will be completely in accordance with the WTO norms, Additional Secretary in the Department of Heavy Industries, Surajit Mitra, said on the sidelines of a Ficci seminar here.
The government had asked the component players to support their demand with adequate data about imports and on which components or parts they needed protection, he added.
Right now, we are waiting for the industry data to come. We are ready to take action, either in the form of safeguard duty if it is universal, or an anti-dumping duty if it is country-specific, Mitra said.
He, however, denied that any such measure would lead to protectionism of the domestic market, saying there is no question of protectionism as it will be fully WTO compliant.
In the last financial year, imports constituted 31 per cent of the Indian component industry, Mitra said.
In percentage terms, it may be very high, but in absolute terms, it may not be very high. Still, the imports are worrisome as they have been uni-directional, he added.
Meanwhile, the government has been considering imposing anti-dumping duties on front axle beam and steering knuckles used in the production of commercial vehicles to guard the domestic industry from cheap Chinese shipments.
It is mulling a provisional anti-dumping duty in the range of $0.50 per kg to $0.69 per kg.
The Directorate General of Anti-dumping and Allied Duties (DGAD) has recommended to the commerce ministry the imposition of the duty.
Acting on an application from Pune-based Bharat Forge Ltd on behalf of the domestic industry, DGAD had initiated the investigation into dumping of auto components from China. http://www.business-standard.com/india/news/govt-may-impose-anti-dumping-dutyauto-components/357239/ http://www.thehindubusinessline.com/blnus/03051906.htm http://www.dailypioneer.com/174119/Duty-on-auto-component-imports-likely.html http://deccanherald.com/Content/May62009/business20090505134550.asp http://www.dnaindia.com/report.asp?newsid=1253290
TATAS TO PRODUCE MORE TOP-VARIANT NANOS Shweta Bhanot See similar story in: Yahoo India, (Web Edition) The Hindu Business Line (Web Edition)
Till now, the company was producing all the three variants of the car - Standard, CX and LX - in equal numbers. This will now see adjustments since there have been 2.03 lakh bookings, almost 50% of the total number, for Nano's top-end variant VX. As many as 20% customers booked Nano Standard and 30% opted for Nano CX. At present, 70 cars are produced at the facility per day.
The company, which managed to get nearly Rs 2,500 crore as the booking amount, is now looking forward to speed up the delivery process and ramp up production. According to sources close to the development, the company will have an inventory of around 8,000-10,000 Nanos ready for delivery by July.
"The production has been scaled up slowly at Pantnagar. From five units per day, we have reached to the level of 70 per day now. In coming months, the target is to reach 150-200 cars per day," said sources. This can be scaled up further to 300 a day. However, they pointed out that in a bid to streamline the production process and to ensure a smooth production flow in the long time, planned production holidays in the initial stages are inevitable. "This is typical for a new product and does not mean something is wrong," they added.
The company will announce the names of one lakh lucky customers by mid-June, selected through a computerised random selection procedure. The delivery of the car will commence from July and is expected to complete in the last quarter of 2010.
Tata Motors shares of Tuesday closed at Rs 272.50, up 5.95% on the BSE.
When contacted, a Tata Motors spokesperson said, "Tata Nano is currently being manufactured at the company's Pantnagar plant in Uttarakhand, which has an annualised capacity of 50,000 cars." According to sources, the 50,000-unit is a cautious figure and the production can be stretched to 90,000 units per annum.
On the status of the construction of Nano's mother plant at Sanand in Gujarat, he said, "The construction of the new dedicated plant, at Sanand in Gujarat, is in full swing. The new plant will be ready in 2010 with an annualised capacity of 3,50,000 cars."
Sources say the test production at the Sanand plant is expected to start by October this year. http://in.biz.yahoo.com/090505/50/batj2o.html http://www.thehindubusinessline.com/2009/05/06/stories/2009050651611000.htm
ANALYSTS FEAR NANO CANCELLATIONS OVER PRODUCTION PROBLEMS AFP See this story in: mint (Web & Print Edition)
Tata Motors said on Monday that it had received over 203,000 fully paid orders for the tiny, jellybean-shaped car, just weeks after it appeared in Indian showrooms.
Bookings beat expectations but the company may not be able to retain orders going ahead, said Mahantesh Sabarad, an analyst at Centrum Broking in Mumbai.
All 203,000 customers who placed orders will go into a lottery with computerised random selection being used to choose 100,000 people to be the first to get keys to a Nano by the end of next month.
Tata Motors is likely to produce just 50,000 cars at present from existing plants after being forced out of its planned factory in eastern India over a land dispute.
A new plant in western Gujarat state is being built and expected to be operational by years end.
Unsuccessful customers in the ballot can either cancel their order or keep the cash advance they paid with the company to earn 8.5% interest for the first year.
But analysts said the rate was not competitive and expected between a third and half of the outstanding orders after the lottery to be cancelled.
This is a common trend... there is not much incentive to hold onto the order, Sabarad said, estimating that some 30,000 people would ask for their money back.
Most of Indias state-run banks offer higher rates of return on deposits.
Most applicants who fail to get a Nano in the first round will withdraw bookings, said Deepak Jain, analyst at Edelweiss Securities, who expects Tata Motors to retain only 50,000 of the outstanding orders.
The four-door Nano, whose basic model sells for just Rs100,000 ($2,000), has been hailed as The Peoples Car and touted as a revolution in transport for millions of Indians who currently travel on two-wheels. It is expected to hit the streets from July. http://www.livemint.com/2009/05/05165439/Analysts-fear-Nano-cancellatio.html
KEY NANO SUPPLIERS GATHER AT SANAND PLANT Priyanka Vyas The Hindu Business Line (Web & Print Edition)
Industry officials told Business Line that vendors are expected to be located in the park by the year-end. The volumes in the first year from Sanand are expected to be between 1.5 lakh and 2 lakh units, sources said.
The Sanand plant is likely to be up and running by January. Tata Motors wants the suppliers to be located in the vendor park by December. However, the volumes are expected to be ramped up by March, said one of the leading suppliers.
Tata Motors is expected to provide land to 60 of the key Nano suppliers who will be located in the plant premises.
Tata Motors wants the plant to be operational in eight to nine months. Volumes in the first year will be about 1.5 lakh, said another industry source. This means that Nano production in the first year from Sanand may be at a lower capacity utilisation. This could be because in the first year it may be difficult to scale production to the peak capacity.
The company had said that the annual capacity will be 2.5 lakh units at Gujarat. Tata Motors plans to take the Nano production to 3.5 lakh units in the first phase which can then be stretched to 5 lakh units.
Currently, Tata Motors has said that the first 50,000 units of Nano that will be available in the market will be rolled out from its Pantnagar plant. Next year also, it intends to roll out a similar number from this facility, while it simultaneously begins production at the mother plant in Gujarat. http://www.thehindubusinessline.com/2009/05/06/stories/2009050650590200.htm
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| INTERVIEWS/FEATURES Go To Top |
| CARS, SUVs, MUVs Go To Top PTI
It (price hike) is a matter of concern as demand is falling and the government also gave incentives to the car makers by cutting excise duty, but they hiked prices (of products) after that, Additional Secretary in the Department of Heavy Industries, Mr Surajit Mitra said on the sidelines of a FICCI seminar on the Indian automobile industry here.
Asked if the government would monitor automobile prices as commodities prices, especially that of steel, has come down, Mr Mitra said: We do not do the micro-management of price control. It is market driven and up to the car makers. But wherever, there is any tax-payers' money involved we will monitor that.
He said the government wants customers to get the best benefit and hence reduced the excise duty in December, 2008.
We are worried about the price hike. However, if we look at the raw material prices and the operational costs of the manufacturers, it (the price hike) is not that high, Mr Mitra added. http://www.thehindubusinessline.com/blnus/14051812.htm
LUXURY CAR BRANDS MAY COST UP TO RS 50K LESS Chanchal Pal Chauhan See similar story in: The Times of India (Web & Print Edition)
may become cheaper by up to Rs 50,000, if a proposed duty cut being discussed by the government gets implemented. The ministry of heavy industries has written to the finance ministry to waive off the specific excise duty levied on mid-size and top-end cars last year, said a top government official. size between 1,500-2,000cc and Rs 20,000 on all vehicles beyond 2,000cc. But the actual impact on the selling price of cars was much higher, as the tax was imposed on ex-factory price of vehicles over which consumers have to incur the burden of sales tax and other local levies. Sales of premium cars dipped 20% to 33,642 units in the last fiscal. While there is no time frame for withdrawing the tax, it could bring down the price of these vehicles by Rs 20,000 to Rs 50,000 per car.
MARUTI TO LAUNCH INDIA'S FIRST BS IV CAR 'RITZ' ON MAY 15
"Ritz will be the first passenger car in India to be compliant with the BS-IV emission norms, in petrol as well as diesel variants," MSI said in a statement.
The small car would hit the roads on May 15 and would be positioned in the premium A2 segment, it added.
"With Ritz, MSI aims to consolidate its leadership in the highly competitive compact car segment. The company commands the largest market share of 58 per cent in the A2 segment," the statement said.
MSI will offer Ritz with two different engine options -- K-series 1.2 litre petrol engine and 1.3 litre diesel engine.
Ritz will be MSI's eighth new model in 48 months, following Swift, Zen Estilo, SX4, Swift Diesel, Grand Vitara, Swift DZiRE and A-star. http://www.hindustantimes.com/StoryPage/StoryPage.aspx?
SUZUKI, HONDA GET THE ROYALTY TREATMENT Shally Seth Mint (Web & Print Edition)
Indias top car maker Maruti Suzuki, which sold 792,167 cars in the fiscal to 31 March, paid Rs685 crore in royalties to Suzuki Motor Corp., 38% more than the Rs495 crore it paid a year earlier.
The countrys largest two-wheeler maker Hero Honda, which sold 3.72 million units, paid Rs324 crore to Honda Motor Co. Ltd, up 17.3% from the previous fiscals Rs276.6 crore.
Of the auto makers in the Indian market, only Hero Honda, Maruti Suzuki, Tata Motors Ltd, Hindustan Motors Ltd and Mahindra and Mahindra Ltd are listed entities and disclose royalty information.
In an emailed response, Soni Shrivastav, spokeswoman for Hindustan Motors, said, We cannot disclose the internal arrangements. Tata Motors spokesman Debasis Ray said his company doesnt pay any royalty.
According to its annual report for fiscal 2008, Mahindra and Mahindras royalty payments came to Rs6 lakh. It has not yet readied its figures for 2008-09, a spokesperson said.
All car makers in India pay royalties to the companies they are sourcing technologies from within the regulatory framework, said Gurgaon-based Pankaj Chadha, director, automotive practice, at consulting firm Ernst and Young. The amount is ascertained by the level of technical assistance sought for a particular model introduced in the Indian market.
Indian law does not allow the royalty fee to exceed 5% of net sales. Royalty payments also depend on volumes and product mix, since royalty rates differ by product models.
Higher sales of a model that has a lower royalty percentage will drag down overall payments to the principal, and vice-versa, said Ravi Sud,chief financial officer at Hero Honda.
I.V. Rao, Delhi-based chief executive, research and development, Maruti Suzuki, said a change in the product mix and newer models contributing more to overall sales had pushed up its royalty payments. Maruti Suzuki launched a new sedan, Swift DZire, and a hatchback, A-Star, in fiscal 2009. Mint could not ascertain how much these two models contributed to the total royalty paid.
While royalties are built into the retail price, Indian partners typically do not mind the 4-5% as technology fee as it helps them reduce lead time on new models. It helps them pursue the aggressive sales push with new models in a very short span of time, said S. Ramnath, vice-president, research, at Mumbai-based brokerage IDFC-SSKI Securities Ltd. As companies try to diversify offerings with models that use the latest technologies, such payments will likely only increase.
This is because of the necessity to launch new models coupled with lack of local technical capabilities, said Chadha. If you look at the technology outflows today, a larger chunk of it continues to be shared between the US, Japan and Germany. This will continue till the time you have more Nanos (developed by Tata Motors) or locally developed technologies.
For example, in the just-concluded fiscal year, Hero Hondas highest selling model was the 100cc Splendor, which has the lowest royalty fee. So, while such payments increased in rupee terms, they declined marginally as a percentage of net sales.
For the year, Hero Hondas royalty as percentage of net sales was 2.62%, or 0.5% less than the previous fiscal. Maruti Suzukis was 3.3%, about 0.5% more than the preceding accounting year. http://www.livemint.com/2009/05/05213127/Suzuki-Honda-get-the-royalty.html
The Economic Times (Web Edition)
http://economictimes.indiatimes.com/News-by-Industry/MM-riding-high-on-SUVs/articleshow/4488966.cms
STRIKE AFFECTS WORK AT M&M PLANT The Hindu Business Line (Web & Print Edition) See similar story in: Business Standard (Delhi Print Edition)
http://www.thehindubusinessline.com/2009/05/06/stories/2009050650620202.htm
PTI See this story in: Business Standard (Delhi Print Edition)
LABOUR ROW IN CHENNAI HITS HYUNDAIS SMALL CAR PLANS FOR INDIA Yogima Seth
There have been worker problems at our plant over the last two years. Since Hyundai i20 is mainly catering to the European market, the company is considering to shift production of i20 to one of its existing plants in Europe to ensure the delivery of vehicles on time, says Rajiv Mitra, spokesperson, Hyundai Motor India, adding that it is an illegal strike and the company is trying to resolve it as were reporting loss in efficiency.
Hyundai already has an arrangement with the government of Tamil Nadu wherein the company has made it clear that it would not allow any unions to operate in the factory. Instead, it has a workers committee that takes care of all labour issues at the companys two plants in Chennai.
Hyundai Motor Company of South Korea has manufacturing bases in Turkey, Slovakia and Czech Republic.
According to Mitra, the company had set a target of producing 1,20,000 to 1,30,000 units of i20 in 2009 and over 65% of this (around 80,000 units) were to be exported to Europe.
India offered economies of scale for manufacturing small cars. However, if this unhappy scenario continues to exist, we might miss out on delivery schedule and hence we are considering the option of shifting i20 out of India, he said, adding that the vehicle would, however, be continued to be manufactured in India to meet the domestic demand.
Hyundai Motor India is planning to launch a diesel variant of i20, its premium hatchback, in India by the end of 2009 to grab a bigger pie of the market. While there would be no new product from Hyundai this year, we will have some variant and the diesel variant of Hyundai, which would be launched towards the end of this year, would be significant, said Mitra.
GM SAYS NO CADILLAC LAUNCH PLANS Neha Rishi
Media reports had said the wholly owned subsidiary of auto giant General Motors Corporation was going to bring the marque brand to India sometime this year.
Arora said GM India also doesn't see any reasons to worry about its parent company being on the brink of bankruptcy. Despite the slowdown, it is going ahead with its planned launches in the country. The company has already launched Captiva (automatic) in January and will be launching the Chevy Cruze between August and September, and its small car by year-end.
Arora said, "In India, our business has been consistent in the last five years. We are a debt-free company and we don't have to worry about paying our interest bills." He said the company's investments are made through equity injection and internal accruals.
Also, the Indian arm sources parts from Korea and vendors across the globe and will not suffer if GM does file Chapter 11. The company plans to launch a mid-range, multi-utility vehicle in calendar 2010.
GM India is now visible across all categories -- A2, A3, A4. With Cruze, it will also enter the A5 category. The focus, however, wouldn't be on any particular segment. Arora said, "The top end luxury segment is for creating brand image. You may not get volumes out of that but it becomes your brand's identification. We expect volumes from the small car and the MUV segments, where we have the Spark/U-VA and Tavera, respectively. Together, these two constitute 80% of our volumes."
Asked if Cruze is expected to cannibalise Optra Magnum, Arora said the upcoming car is positioned higher than the Optra Magnum. "There will be no cannibalisation. The Optra Magnum petrol variant starts from the Rs 8 lakh and goes up to Rs 10.5 lakh. The Cruze will be in the Rs 12-14 lakh bracket and is placed a little higher than the Honda Civic," he said.
He said demand among consumers hasn't fallen. "Footfalls in showrooms haven't fallen. The problem is conversions as consumers are in a wait and watch mode and even if they do want to buy, financing is an issue," he said.
The company will introduce the CNG and LPG versions of Aveo and Spark in the next 3-6 months. GM India will focus on increasing its share in the passenger cars market from the current 4% to 10% by end of 2010 and expects the Spark to drive this increase. http://www.dnaindia.com/report.asp?newsid=1253297
FIAT MOVE TO SHAKE UP INDIAN MARKET: ANALYSTS D Ravi Kanth Business Standard
Having made sustained losses till 2003, Fiat returned to profits in the last six years and wants to challenge the largest car manufacturer, Toyota, by adding the GM and Chrysler brands.
In a rare move, the Italian car giant surprised the recession-hit global auto industry with an announcement that it is bidding to take over the GMs struggling Opel brand to consolidate its global base.
However, securing the deal is contingent upon Fiat getting a green signal from the German government, which is currently assisting Opel, facing its worst-crisis since its parent company, GM, went into a tailspin due to endemic losses and sudden collapse in demand since 2008.
On Monday, Fiat Chief Executive Sergio Machionne met Germanys Vice-Chancellor and Foreign Minister Frank-Walter Steinmeier, and Economy Minister Karl-Theodor zu Guttenberg to gain financial support for the deal.
But the German government remained cool to Fiats proposal, pressing the Italian car giant, which has about 10 per cent of the European car market, to give a range of guarantees and assurances.
The two German ministers, for example, insisted that Fiat should not move the merged company out of Germany or cut jobs on a large scale at the struggling Opel units.
Sergio Machionne, who is known for his hire and fire policies since he took over the ailing Italian car company in Turin, Italy, in 2004, was unable to give any firm assurance about cutting jobs, while agreeing to continue with the Opel units in Germany.
We dont want to close any of the four Opel factories in Germany, he told the German newspaper, Bild, adding that he would need the plants in the future to build enough cars. But of course, staff levels have to fall. No one will be able to change that. The plants have to become more efficient.
At present, Opel has a job strength of about 25,000 and there will surely be substantial reductions in the workforce should Fiat succeed in its move, analysts say.
Besides Fiat, Canadian-Austrian automotive supplier Magna is in the race for taking over Opel, but auto analysts predict that Fiat is in a strong position due to strong commonalties with GMs Opel in terms of sharing platforms, technology and management. GMs brands in Europe include Chevrolet, Opel, Saab (a Swedish brand) and Vauxhall in Britian.
Fiat, which has already acquired a stake in another dying American company, Chrysler, wants to combine all three brands Fiat, GM, Chrysler to manufacture about 7 million units a year. Its luxury brands include the sports car Ferrari and Maserati. If Fiat succeeds with its Opel move, it will launch a success bid for GMs operations in China, India and other Asian countries, analysts say.
Though Fiat entered India almost six decades ago, it is facing rough competition from car manufacturers from Japan and South Korea. It tied up with Tata Motors for building a manufacturing plant near Pune to increase its supply capacity in 2007. http://www.business-standard.com/india/news/fiat-move-to-shakeindian-market-analysts/357228/
FIAT TARGETS 100 DEALERS BY JUNE END Business Standard (Delhi Print Edition)
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| COMMERCIAL VEHICLES Go To Top |
| 2/3 WHEELERS Go To Top IANS See this story in: The Economic Times
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| COMPONENTS Go To Top PTI
Company's Profit Before Tax was Rs.32.2 crore for 2008-09 compared with profit of Rs. 22 crore in 2007-08, up by 46 per cent, said an company release issued here.
During fourth quarter ended on March 31, 2009, the company's net revenue stood at Rs. 49.9 crore against last fiscal's Rs. 36.0 crore and Profit before Tax reached Rs. 8.3 crore from last year's profit of Rs.6.7 crores, up 24 per cent, it said.
The Board of Directors has also recommended an equity dividend of Rs. 5.00 per share for FY 2008-09, it said. http://www.thehindubusinessline.com/blnus/02051821.htm http://www.tribuneindia.com/2009/20090506/biz.htm
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| ALLIED INDUSTRY Go To Top
New Delhi: The government has imposed anti dumping duty on imports of nylon tyre cord to guard the domestic industry from cheap Chinese shipments. India has also imposed anti-dumping duty on imports of thionyl chloride from the European Union. The government imposed a variable antidumping duty on nylon tyre cord ranging between $1.24 and $1.76 per kilogram while on thionyl chloride, the duty ranged from $33 to $84 per tonne, Central Board of Customs and Excise said in its notification. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
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