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| INDUSTRY Tatas may issue bonds overseas to repay JLR debt Corus, JLR acquisitions at inopportune time: Tata We want access to credit, not bailout for UK biz Tata Steel sees flat growth in supplies to auto sector this year Workers strike at Hyundai, M&M plants sets off alarm bells Concor, NYK to set up JV company INTERVIEWS/FEATURES Maruti not decided on phasing out 800, Omni Maruti Suzuki aims for 85 pc growth in its export revenue Maruti eyes rural market, Europe Honda to bring products with India-specific engines Ford betting big on Indian car market VE Commercial Vehicles' April sales fall by 22.73% CONSTRUCTION & AGRI MACHINERY COMPONENTS Auto parts suppliers swing back to full capacity | ALLIED INDUSTRIES FINANCE & INSURANCE INTERNATIONAL NEWS No decision on US stake in General Motors: officials Experts say GM bankruptcy almost inevitable Russia's Putin says Magna asked GAZ to make Opel bid Creditors accept defeat in Chrysler-Fiat merger Reborn Fiat shakes up Italian stereotype Hybrid car sales to jump 7.6-fold in 12 yrs: Research ECONOMY & FINANCE CII survey shows early signs of economy revival
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| INDUSTRY Go To Top PTI (May 11) London: Indian conglomerate Tata group-owned Jaguar Land Rover (JLR) is planning to raise up to 1 billion by September to keep the cash-starved company afloat without the British government's help, media report said. According to British newspaper the Guardian, Tata is trying to raise up to 1 billion by September to keep Jaguar Land Rover afloat without government help. As per the report the Tatas have mandated financial adviser Citigroup to find banks with solid credit rating prepared to underwrite some of the 340 million loan pledged by the European Investment Bank (EIB). The Tatas are also seeking to tap the debtmarkets to help secure the 500 million pound to 1 billion pound short-term financing package needed, the newspaper added. Even if Tata can raise more debt and find banks willing to underwrite part of the EIB loans, the cost of the financing will be very high, the Guardian said. The report further said the Tata Group, which controls Jaguar Land Rover through its subsidiary Tata Motors, will cut or freeze investment plans for new models. More redundancies from its 15,000-strong workforce are also likely. http://www.thehindubusinessline.com/blnus/02101820.htm http://economictimes.indiatimes.com/News/News-By-Industry/Auto/Automobiles/ http://www.indianexpress.com/news/tata-plans-to-raise-1-bn-pound-to-keep-jlr-afloat-report/457041/ http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=253929 http://www.tribuneindia.com/2009/20090511/biz.htm#1 http://www.telegraphindia.com/1090511/jsp/business/story_10946860.jsp TATAS MAY ISSUE BONDS OVERSEAS TO REPAY JLR DEBT MV Ramsurya & Lijee Philip (May 11)
repayment by June, Tata Motors is currently exploring options, including an overseas bond issue, to partly repay the loan obligation as there is a reduced appetite for a local bond issue. CORUS, JLR ACQUISITIONS AT INOPPORTUNE TIME: TATA PTI See this story in: The Economic Times (Web Edition), Asian Age (Web & Print Edition), Business Standard (Web & Print Edition) (May 11)
http://www.business-standard.com/india/news/corus-jlr-buys-came-at-inopportune-time-tata/357685/ WE WANT ACCESS TO CREDIT, NOT BAILOUT FOR UK BIZ PTI (May 11)
In an interview published in British newspaper Sunday Times, Mr Tata said: We're responsible for the fortunes of the company but this is a bone-dry situation in terms of access to credit. Nobody can operate on that basis unless you have large cash balances, which we don't. My concern is that the government doesn't appear to care about manufacturing. The comments follow reports about the UK government denying financial aid to Jaguar and Land Rover, the iconic car brands acquired by Tatas last year. I would like to see the British government playing only one role. It controls the banks, and all I see k is the facilitation to provide access to credit on commercial terms. It's not a bailout, Mr Tata said. Tata is one of the largest inward investors in Britain. Besides JLR and Corus, which together employ about 40,000 people, the Indian conglomerate also owns Tetley Tea and is also present in the UK through other businesses such as chemicals and IT. http://www.thehindubusinessline.com/blnus/02101621.htm http://economictimes.indiatimes.com/News/News-By-Industry/Auto/Automobiles/ http://www.dailypioneer.com/175292/We-want-access-to-credit-not-bailout-Tata-to-Britain.html http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=253928 http://www.deccanherald.com/content/1867/we-want-access-credit-not.html http://www.livemint.com/2009/05/10213308/We-want-access-to-credit-not.html http://www.business-standard.com/india/news//we-want-access-to-credit-not-bailout//357687/ TATA STEEL SEES FLAT GROWTH IN SUPPLIES TO AUTO SECTOR THIS YEAR Manu P. Toms The Hindu Business Line (Web Edition) See similar story in: The Statesman (Web Edition) (May 10)
With a 40 per cent share, the company is the market leader among steel suppliers to the automotive industry. And even while vehicle production grew three per cent in 2008-09 to close at 1.12 crore units, the consumption of steel just did not keep pace. Sources say that this occurred largely due to the commercial vehicle segment which, as a major steel consumer, had a tough year and fell 24 per cent to close at 4.17 lakh units. It was worse with medium and heavy commercial vehicles which saw a 35 per cent drop to 1.93 lakh units. About 55 per cent of a vehicles parts are made of steel. We saw a severe reduction during November-December but normalcy was resumed by March-April, said Mr Anand Sen, Vice-President, (TQM and Flat Products), Tata Steel. The company launched Galvano, a galvanised plain steel with zero spangles used in manufacture of engineering goods, consumer durables and body parts of automobiles. The total domestic need for galvanised steel is 1.9 million tonnes, of which the auto sectors share is around one lakh tonnes, said Mr Sen. Galvanised steel costs Rs 8,000-Rs 12,000 more (for every tonne) than cold rolled steel and is being increasingly used in bus body building. http://www.thehindubusinessline.com/2009/05/10/stories/2009051050760200.htm http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=253924 WORKERS STRIKE AT HYUNDAI, M&M PLANTS SETS OFF ALARM BELLS PTI See this story in: The Economic Times (Web Edition) (May 11)
CONCOR, NYK TO SET UP JV COMPANY Mamuni Das The Hindu Business Line (Web & Print Edition) (May 11)
The Indian car transportation market is estimated at around 1.5 million units a year, according to Concor officials. The market is dominated by road-based transporters who provide end-to end service. Nippon Yusen Kabushiki Kaisha (NYK) of Japan is known internationally for its expertise in operating automobile terminals and its extensive fleet of Ro-Ro ships that offer regular sailings to and from the major ports. Frames for containers The joint venture company is keeping its options open with regard to the design of wagon that will be used to move automobiles. It is currently focusing on transporting cars in containers. We are designing a frame that can be fitted in a container to allow us to fit in the maximum number of cars, said a source. The company is likely to focus on the Delhi-Chennai sector initially. We will target automobiles of Maruti-Suzuki and Hyundai in this sector, to start with, said the official. The joint venture company will also foray into services for first-mile and last-mile connectivity for auto manufacturers, which will be road-based. Additionally, the company will provide value-added services, such as stockyard management. This where NYKs technical expertise in areas such as storage, pre-dispatch inspection, accessories installation or customisation, repair and paint shop facilities will come in handy. In India, NYK and Wallenius Wilhelmsen Logistics (WWL) of Norway have signed a memorandum of understanding with Mundra Port and Special Economic Zone (MPSEZ) to set up a world-class dedicated automobile terminal. Patli-Mundra sector At present, only Adani Logistics, the Adani Groups container train operating arm, transports cars in container trains between Patli (in Haryana) and Mundra port. The company uses special containers of South African firm Kar-trainer and fits in five small (Maruti Suzuki 800 model) cars in each 40-feet unit equivalent (feu) container. Each rake can carry 45 containers, thus allowing 225 cars to be transported in a rake. The cars are then exported from Mundra port to various European countries in NYKs vessels. Last month (April), Adani Logistics moved 1,752 cars from Maruti Suzukis Gurgaon plant to Mundra port, a top company official said. Earlier attempts Concor has attempted to capture a share of the auto-transportation market earlier as well. In late 2005, Concor had signed a memorandum of understanding with NYK to carry out a feasibility study on the automobile transportation market. Concor had subsequently tried introducing specially designed wagons to move cars. But the project did not take off because the haulage charges decided by the Indian Railways for moving the specially designed wagons were high and rendered the project financially unviable. Concor has a licence from the Indian Railways to offer container train services. So, in order move specially designed wagons, the company had to seek fresh haulage charges from the Railway Ministry. Another company, the Pipavav Rail Corporation Ltd, in which the Indian Railways has a 50 per cent stake, had also designed and developed modified containers with lower height, along with special fitments to carry four cars per container. But that project did not move forward after the Railway Ministry declined to give some approvals. Then, Shreyas Shipping started moving cars from the Delhi region to Kochi by a combined container train and coastal shipping service. Adani Logistics moved cars from Maruti Suzuki Indias Gurgaon manufacturing plant to Mundra port in its container trains. The cars were subsequently moved to Kochi using Shreyas Shipping Corporations coastal shipping service. However, the service was discontinued because of the lower costs offered by the road sector. http://www.thehindubusinessline.com/2009/05/11/stories/2009051150331200.htm | |
| INTERVIEWS/FEATURES Go To Top | |
| CARS, SUVs, MUVs Go To Top See this story in: Daily News & Analysis (Web Edition), The Times of India (Web Edition), The Pioneer (Web & Print Edition), The Economic Times (Web Edition), Hindustan Times (Web Edition) (May 10)
"Ritz will directly compete with Swift. In the past, when we have launched cars in the same segment, it has helped the market to grow," Maruti Suzuki's Managing executive officer IV Rao said here. "With the launch of Ritz, our customers would have two cars to choose from in the same category," he said. Ritz and Swift would compete with Fabia, Getz, UVA and i20. Swift has been estimated to have a marketshare of 75 per cent in the compact car segment. In the next couple of years, seven new cars are being planned to be launched in the compact car segment by various car-makers. Swift which was launched four years ago, has been a successful product of Maruti. At present, Maruti sells about 10,000 Swifts a month, Rao said. The company has put up a new assembly line for Ritz at its factory in Gurgaon. Last year, Maruti launched Swift in the European market. It makes Swift at a plant in Hungary. http://www.dnaindia.com/report.asp?newsid=1254550 http://timesofindia.indiatimes.com/Business/Maruti-to-launch-Ritz-on-May-15/articleshow/4503749.cms http://www.dailypioneer.com/175047/Snapshots.html http://economictimes.indiatimes.com/News/News-By-Industry/ http://www.hindustantimes.com/StoryPage/StoryPage.aspx? Go To Top
http://economictimes.indiatimes.com/News/News-By-Industry/Auto/ http://www.indianexpress.com/news/maruti-not-decided-on-phasing-out-800-omni/457028/ http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=253927 http://www.thehindubusinessline.com/blnus/02101520.htm http://in.biz.yahoo.com/090510/50/batjw2.html http://www.business-standard.com/india/news/after-omni-maruti- http://www.tribuneindia.com/2009/20090511/biz.htm http://www.telegraphindia.com/1090511/jsp/business/story_10946857.jsp
The Indian Expres (Delhi Print Edition) "The export tally includes around 19,000 units of A-star exported to Europe including United Kingdom, France, Germany, Italy, Netherlands, Denmark and Switzerland," said Shashank Srivastava, chief general manager, Maruti Suzuki. "The company's exports included 70,023 units in 2008-09, up by 32.1 per cent over sales of 53,024 recorded in 2007-08. The 2008-09 export numbers, the highest ever by the company, was led by A-star, the fuel-efficient compact car launched in Europe during the year as Suzuki Alto," said Srivastava. The company is launching its new model Ritz, which will be available in petrol and diesel variants. This will be India's first BS-IV compliant car. The car is positioned in the premium A2 market segment, which includes its compact offerings such as Alto, WagonR, Swift, Zen and the newly-launched A-Star. "Ritz is the eighth new model within 48 months following the launch of Swift, Zen Estilo, SX4, Swift Diesel, Grand Vitara, Swift Dzire and A-star," a company official said. India's annual car exports grew 54 per cent to 3.35-lakh cars in the last fiscal, registering an export revenue of 6 billion dollars. However, it is far behind several smaller countries such as Thailand (15.6 billion dollars) and Brazil (20.5 billion dollars). "We are still growing. It differs from countriy to country due to the operational cost and government policies," said Srivastava. MARUTI EYES RURAL MARKET, EUROPE Vineetha Athrey (May 11)
The company, which clocked growth in unit sales of 3.6% in the year ended March, is targeting 8-10% growth this fiscal year in the domestic market alone. In 2008-09, rural sales contributed 8% of Marutis overall domestic sales, double the 2007-08 component. And the company hopes to replicate this success in the current fiscal as well. In the domestic market were ambitiously targeting 8-10% growth. We have grown in that range in April, and Im sure things will only improve hereafter, said Rajiv Gandhi, chief general manager of Maruti Suzuki India. The company is also betting big on the Western European market. In exports, were planning a (near) 50% increase in growth. A-Star is doing very well in Europe and is best suited for the European market, Gandhi said. A-Star, sold under the Alto banner in Europe, has been a winner in overseas markets, making up nearly 90% of the car manufacturers 120,000 vehicle export target. Maruti Suzuki plans to make India the A-Stars production hub for exports. http://www.livemint.com/2009/05/10215701/Maruti-eyes-rural-market-Euro.html Sohini Das Business Standard (Web & Print Edition) (May 11)
Ambassador, the ubiquitous taxi or government vehicle has transformed into a limousine! Affectionately called Amby, the countrys first indigenous car manufactured by Hindustan Motors (HM) is quietly finding a place in the vintage segment of luxury cars offered by premium hotels. Amanresorts International Pte Ltd, the Singapore based company that owns and manages 21 small, luxury resorts worldwide has a fleet of 10 Ambys for its New Delhi property. It seemed natural to embrace the understated unique style of Hindustan Motors Ambassador and add it to our fleet. The car is synonymous with India as well as New Delhi, said Antony Treston, general manager for Aman Delhi. The ultra luxury resort is planning to add five more Ambassadors to its all-Amby fleet. All our international guests loved them and, in fact, many asked if they could have one shipped, Treston said. But to be offered as a limo service, the car underwent a makeover. Aman worked with HM for a custom-made retro dashboard, with a large, central speed dial, mushroom leather interiors, wood finish details together with I-pod docking, cool box and a modern music system. All the 10 Ambassadors in the hotels fleet are painted in a special shimmering silver colour that has been developed exclusively for Aman Delhi. s Its probably the flexibility of the car that makes it unique. We are aware that we cater to strikingly different market segments. At one end, the brand association is with the premium (read government power). On the other, it is the common mans taxi, said the spokesperson for the C K Birla Group. Clearly, the brand appeals to both ends of the spectrum; taxi operators love it for ease of maintenance and availability of spare parts. But thanks to its association with Indian politicians, government officials and diplomats, its become the symbol of power. The HM spokesperson said that the companys small marketing team canvasses the product in various circles. However, it is not planning to launch any communication campaign to reposition the brand. The numbers dont support its promotion for the luxury segment. HM sells around 15,000 Ambassadors annually of which around 65 per cent are run as taxis, 20 per cent are sold to various government departments and the rest go to individual consumers. To leverage its vintage value some cars are exported to countries like the UK. We sold around eight to ten cars to one of UKs car rental companies Karma Kabs, said the HM spokesperson. The company offers a unique Indian experience to its customers and decks up the vehicle with incense sticks, marigolds and hibiscus flowers. A customer has to shell out around twice the amount for a Karma Kab compared to a regular taxi, she added. Hindustan Motors Ambassador, the first car to be manufactured in India, has been in production since 1948 and is the sole survivor of the 1950s era of Morris sedans. The rear axle from a 1949 Morris is still used in the Ambassador for its excellent roadworthiness. The Amby is robust and suited to Indian road conditions. The mechanic across the road can fix it. He knows the car inside out, said the spokesperson. HM plans to continue banking on the retro value of thsse Ambassador as a brand and quietly position it as the iconic Indian car. The company is not eyeing huge numbers, but its a way to keep the brand alive, especially, among the youth. Though Tata Nano is Indias latest claim to fame in the fast changing global automotive masrket, its the Hindustan Ambassador that dominated Indian roads for most part of the 20th century. And just when everyone thought it has run out of steam, the Amby is back in a new avatar. http://www.business-standard.com/india/news/vintage-car/s-luxury-avatar/357627/ HONDA TO BRING PRODUCTS WITH INDIA-SPECIFIC ENGINES PTI See this story in: The Economic Times (Web Edition) The Statesman (Web Edition), mint (Web Edition) (May 11)
"The Jazz, which will be launched in India this June, has an engine, which has been specially developed for India keeping in mind the conditions here," Honda Siel Cars India Vice President Marketing Jnaneswar Sen told mnedia. http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=253927 http://www.livemint.com/2009/05/10155905/Honda-to-bring-products-with-I.html FORD BETTING BIG ON INDIAN CAR MARKET The Pioneer (Web & Print Edition) (May 11)
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| COMMERCIAL VEHICLES Go To Top (May 11) New Delhi: The long wait for low floor buses - AC and non-AC on your route will continue; thanks to the persistent delay in delivery of the same by supplier firms. http://www.dailypioneer.com/175380/Low-floor-makers-delay-bus-supply-indefinitely.html
Samar Srivastava Mint (Web & Print Edition) (May 11)
A pickup truck is a vehicle with an open top rear cargo area and front-seating cab area for the driver. All these plans remain unchanged for the very simple reason that the value proposition we have actually becomes stronger in the current situation, says Pawan Goenka, president of the automotive sector at M&M, as the firm is called in short. In fact, I wish we could launch sooner. Right now is the time to go in. The pickup trucks will be based on the same platformassembly line, engine and transmission technology, chassis and other infrastructureas the one M&M developed and uses for its Scorpio sport utility vehicles (SUV). Goenka, who says the pickup trucks will be competitively priced, points to what is expected to be M&Ms main selling point in the US: top-of-the-line diesel technology, which is seen as green and would deliver higher mileage. Unlike India, most small trucks in the US are primarily petrol driven. M&M, which already sells tractors in the US, also plans to launch its SUVs about a year after the pickups. Tapping the recession-hit American market, where vehicle monthly sales have plunged at least 35% since September, is going to be a significant challenge for the company. Its worked hard to get environmental clearances and has modified its pickups significantlybrakes, airbags, stylingfor the US launch. Without referring to the amount spent on developing the Scorpio-based pickup trucks for the US, Goenka said a company needs to spend around 50% over the cost of developing a platform in India for such an offering in North America. M&M spent Rs550 crore on the Scorpio platform. The turmoil in the US is helping M&M because there are several dealerships available on the cheap. Global Vehicles USA Inc., a Georgia firm that will distribute the Indian firms vehicles in the US, has already lined up 334 dealers. John Perez, chief executive of Global Vehicles, says each franchise has put up $195,000, or nearly Rs1 crore, for parts, training mechanics and salespeople and advertising. Global Vehicles, which has put $65 million into the venture so far, plans to add another $30 million in marketing costs. Perez says he plans to take Mahindras pickups and display them at football games, school events and hunting tournaments. His first-year target: to sell 25,000 trucks in the first year. That works out to seven or eight trucks per dealer per month, which is attainable, he says. In partnering with Global Vehicles, M&M has been able to save significantly on costs. If Mahindra were to build a ground-up full-fledged dealer network across 50 states and major population centres, the set-up costs would be between $800 million and $1 billion, says Vikas Sehgal, partner at consulting firm Booz and Co. For now, M&M will import pickups into the US as completely built units at a 25% duty from India. While Goenka declined to say when it would be viable for the firm to assemble them in the US, Perez believes it will be once sales cross 50,000 units a yeara tiny sliver of the two million such trucks sold in that country. In the past, new entrants to the US market had an uphill ride for many years. A lot will depend on the pricing strategy and how much marketing they do, says Rakesh Batra, national automotive leader at Ernst and Young, a consulting firm. Batra points to Hyundai Motor Co., whose sales languished in the US for many years until the Korean firm decided to offer a 10-year warranty. Sales at Hyundai in the US fell only 13% last month, compared with 30% declines for both Ford Motor Co. and General Motors Corp., according to Motorintelligence.com, a website monitoring the global auto industry. http://www.livemint.com/2009/05/10235033/MampM-8217s-US-plan-on-tr.html?h=A1 VE COMMERCIAL VEHICLES' APRIL SALES FALL BY 22.73% PTI (May 10) New Delhi: Auto maker VE Commercial Vehicles on Saturday reported a 22.73 per cent decline in its total sales of Eicher trucks and buses in April at 1,547 units as against 2,002 units in the same month last year. Its domestic sales also decreased by 24.72 per cent to 1,401 units compared to 1,861 units in the same period a year ago, the company said in a statement. Exports during the month stood at 146 units compared to 141 units last year, up 3.55 per cent. Sales of light commercial vehicles in the Indian market during the month fell by 27.84 per cent to 1,024 units, the same stood at 1,419 units in April, 2008. Heavy commercial vehicle sales also recorded a slump of 59.47 per cent at 77 units as against 19 0 units in April last year, it added. http://www.thehindubusinessline.com/blnus/02091920.htm | |
| CONSTRUCTION & AGRI MACHINERY Go To Top | |
| 2/3 WHEELERS Go To Top Vinay Umarji Business Standard (May 11)
"The high powered bike will bear a capacity of over 250 watt and will redefine the battery operated two wheeler segment. The product has also been approved by the Automotive Research Association of India (ARAI)," said a source close to the development. While the investment figures could not be ascertained, the product will be launched in a few months. Unlike the company's previous products, the 250W plus two wheeler will be specifically a two-seater. "People have developed lot of misconceptions about battery-operated vehicles. While they use these products unwisely, they blame the manufacturers for the failures. For instance, a battery-operated two wheeler with less than 250 wattage should not be driven with a pillion. But since the Indian conditions require such kind of a vehicle, the company has planned launch one," the source said. The new electric bike will require an RTO registration as well as a legal number plate since the product has been approved by ARAI," the source added. Apart from 'Power Byke', Ashapura Trade & Transport also manufactures battery operated two wheelers under the brand names of 'Power Fule', 'Power Ride', 'Power Tune' and 'Power Bird'. "In the recent times, battery operated bikes have not been so popular due to low battery life. Since an electric two wheeler, which is supposed to carry only one person, carries two persons, the battery wears out quickly. This forced the company to research and come up with a stronger bike that can carry more load," the source said. While some of the components are imported, the vehicle is assembled at its plant on the outskirts of Ahmedabad. PTI (May 11)
The company is looking to raise Rs 81.28 crore from the sale of its shares, including Rs 61.28 crore from the IPO. Besides, it has tied up for a bank term loan worth Rs 20 crore, as per its draft IPO prospectus filed with the SEBI. This is the first Indian automaker in many years to come out with an IPO and the second company to file for an initial public offer this fiscal after Adani Power. The total investment plan of Rs 101.28 crore includes those for land, building, plant and machinery, research and development, brand promotion and other expenses. Chennai-based Kabirdass Motor Company Limited was incorporated as a private limited company in November 2006 and is engaged in the manufacturing and distribution of electric bikes and scooters under the brand name 'Xite'. It presently outsources various parts of the scooter it assembles and the finished product is sold in the market through dealers. However, the company is now looking for in-house development of some critical parts such as mainframe, plastic parts, motor, controller, paint shop chargers and battery. http://www.thehindubusinessline.com/blnus/05101520.htm | |
| COMPONENTS Go To Top PTI (May 10)
The company had a net profit of Rs 10.07 crore for the same quarter ended March 2008, Swaraj Engines said in a filing to the BSE. Total operating income of the company rose to Rs 158.28 crore for the quarter under review, over Rs 89.41 crore for the same quarter previous fiscal. http://www.thehindubusinessline.com/blnus/26091920.htm AUTO PARTS SUPPLIERS SWING BACK TO FULL CAPACITY Priyanka Vyas The Hindu Business Line (May 10)
This is subsequent to a good show by auto makers in April and an optimistic outlook for May and June. Some of the leading suppliers such as Minda Industries, Sriram Pistons and JBM Auto have said that the capacity utilisation at their plants is now going back to 85-90 per cent. As of now signals are better. We are going back to normal production level. In some components it is 80-85 per cent of capacity utilisation. In other parts it is up to 90 per cent, said Mr Nirmal Minda, Chairman and Managing Director of the Rs 900-crore Delhi-based Minda Industries Ltd. In October-December when car sales had fallen, Minda Industries, which makes components such as horns, switches and lighting products, witnessed a 20 per cent cut in output. It had also put on hold Rs 50-crore investment at Bawal to make lighting products mainly to supply to Maruti. But now with sales looking encouraging, we are re-thinking of some of the investments, said Mr Minda. Rico Auto too said that its utilisation has gone back to full capacity mainly because of robust sales of Hondas two wheeler companies and Maruti Suzuki. We are operating at full capacity as far as domestic sales are concerned. Export volumes had declined by 50 per cent. So we expect that capacity to be optimised only by the end of the calendar year, said Mr Arvind Kapur, Managing Director of the Gurgaon-based Rs 700-crore Rico Auto. In the next five to six months, Rico Auto, which supplies mainly engine components, will invest at Hardiwar to cater to Hero Honda and at Sanand for Tata Motors Nano plant. Meanwhile, it is also expanding at Gurgaon to supply for Nano till the Sanand plant gets completely operational. Both Maruti and Hyundai are operating at their peak capacity. Apart from Hero Honda, Bajaj too is at a better production level. So these suppliers whose capacities are linked to these companies are going for the next phase of investment, said Mr A.K. Taneja, President, Sriram Pistons & Rings. According to JBM Auto Director, Mr Nishant Arya, the company has witnessed about 10 per cent increase in capacity at its plants. But we are still being cautious in new investments, he said. http://www.thehindubusinessline.com/2009/05/10/stories/2009051050710200.htm | |
| ALLIED INDUSTRY Go To Top PTI (May 10)
The company had a net profit of Rs 12.62 crore in March quarter last financial year, Goodyear India said in a filing to the BSE. However, net sales of the company during Q1 of FY'09 fell to Rs 193.43 crore from Rs 208 crore of the same quarter a year ear lier. http://www.thehindubusinessline.com/blnus/26091420.htm | |
| FINANCE & INSURANCE Go To Top | |
| LUBRICANTS & ALTERNATIVE FUELS Go To Top SHELL TO FACE RIVALS HERE HEAD-ON; RAMP UP OPERATIONS Piyush Pandey (May 11)
Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://economictimes.indiatimes.com/News/News-By-Industry/Energy/ | |
| INTERNATIONAL NEWS Go To Top Reuters See this story in: Business Standard (May 11) Detroit: A group of Chrysler LLC's dissident lenders disbanded, representatives said on Friday, removing the last legal hurdle to the automaker's quest to complete a merger with Italy's Fiat SpA with U.S. government backing. "After a great deal of soul-searching and quite frankly agony, Chrysler's Non-TARP lenders concluded they just don't have the critical mass to withstand the enormous pressure and machinery of the U.S. government," said Tom Lauria, the White & Case attorney representing the group. NO DECISION ON US STAKE IN GENERAL MOTORS: OFFICIALS (May 10) Washington: The federal task force overseeing auto industry restructuring has made no decision yet on a potential government stake in GM Corp, an Obama administration official said on Friday. Responding to a report that the government would hold any shares in a restructured GM for at least two years, the official said the company was still working on its restructuring plan with the administration. GERMANY TO DECIDE ON OPEL IN MAY Reuters See this story in: Business Standard (May 11) The German government is examining competing plans to invest in carmaker Opel and aims to decide by the end of the month whether to provide the firm with financing guarantees, a leading Social Democrat (SPD) said. Italian carmaker Fiat is seeking a three-way merger with Chrysler and the European operations of General Motors, which include Opel. EXPERTS SAY GM BANKRUPTCY ALMOST INEVITABLE Agencies See this story in: The Economic Times (May 11)
into the equity swap deal. In Chrysler's case, some secured debtholders resisted taking roughly 30 cents on the dollar for what they were owed, but most gave in after they were identified in court documents. http://economictimes.indiatimes.com/News/International- RUSSIA'S PUTIN SAYS MAGNA ASKED GAZ TO MAKE OPEL BID Reuters See this story in: Yahoo India, The Indian Express Moscow: Canadian-Austrian auto-parts maker Magna has asked Russia's GAZ to make a bid for a stake in General Motors' (GM.N) German carmaker unit, Opel, Russian Prime Minister Vladimir Putin has said. Putin, speaking in an interview published on Sunday, said Russia would not intervene in a possible deal that German media say could be part of a plan to create a car giant that would produce up to 5 million cars a year. "Canadian-Austrian company Magna asked Russian financial institutions and GAZ to make a proposal to Opel," Putin said, according to a transcript of the interview with Japanese media provided by the Russian government. "These are commercial questions. Everything needs to be carefully calculated," Putin said. "The Russian government is attentively following what is going on." German media have said Magna would take over Opel jointly with Russia's debt-laden carmaker GAZ and Russian state bank Sberbank. GAZ and its owner, Oleg Deripaska, have repeatedly denied an interest in Opel. Sberbank has also denied any bid. GAZ and Sberbank were unavailable for comment during the Russian bank holiday weekend. GM's planned sale of Opel has pitted Fiat (FIA.MI) against Austrian-Canadian Magna, and both companies have reportedly presented proposals to the German government. GM Europe has said $1.2 billion worth of cost cuts could help Opel return to profit by 2011. It has also said it needed 3.3 billion euros ($4.4 billion) in state aid from European governments to avert job cuts and site closures. German Chancellor Angela Merkel is under pressure to help Opel and save jobs to avoid mass layoffs in the run-up to a federal election in September. (Reporting by Guy Faulconbridge, editing by Greg Mahlich) http://news.yahoo.com/s/nm/20090510/bs_nm/us_opel_russia REDITORS ACCEPT DEFEAT IN CHRYSLER-FIAT MERGER Deccan Herald (May 10)
http://www.deccanherald.com/content/1636/creditors-accept-defeat-chrysler-fiat.html REBORN FIAT SHAKES UP ITALIAN STEREOTYPE Agencies See this story in: The Economic Times (May 11)
A citizen of Italy and Canada, Marchionne has focused on bringing out the best of Fiat's Italian DNA, that sense of style that made the original Cinquecento a raging success. Shapur Kotwal The Hindu (Metro Plus) The four-door supercar Porsche Panamera combines space, speed and sports car performance Porsche states that its four-door supercar, the Panamera, is anything but your average family saloon under the skin. To back their statement, they allowed us a sneak-peek into the engineering secrets that go under this cars bodywork. Looking at the Panamera from the outside, youll be surprised at just how low the car really is. A feature thats really difficult to make out from photographs. This car is also really wide. You simply cant help sing this cars praises, that is, until you come to the rear. Whatever angle you look at it from, the rear section simply doesnt gel with the rest of the car. The interiors of the Panamera are surprisingly as plush as that of a Bentley. It features some of the best chrome seen on a car, fine leather and plenty of shiny wood. Though huge, this car doesnt give you a Limo feel. The full length of the central console gives it a cockpit-like feel. The dashboard, apart from the very attractive Carrera GT-like central console, could have come from any Porsche 911 variant. Rear passengers have adjustable bucket seats that are almost identical to those in the front. We asked R&D vice-president Wolfgang Durheimer if Porsche had thought about coming up with a rear-engined, four-door car with the 911 being the perfect donor. And the response was : We needed to use the V8s from the Cayenne, so the rear engine was out. Still, we think that this would have made for a much more fascinating car. The Panameras current objectives are pretty clear: Raw speed, four doors and good fuel economy. The last part may surprise some , but the fact is that Porsche has recently been hammering away at getting its cars to deliver good economy, even when driven hard. Their efforts did not go in vain as the outcome resulted in fantastic fuel economy for the Panamera S and the Turbo. Porsche has pieced together many small gains to make a big difference one of them is the dual-clutch gearbox which is programmed to shift up as early as 2000rpm in Normal driving mode. We were taken for a ride in the car, no pun intended, in Normal mode. With both air chambers in the air suspension open and the active anti-roll bars not exerting much effort, the cars ride quality impressed us. The car felt refined and smooth, making us feel relaxed. The long wheelbase and medium profile tyres meant bump absorption were pretty good, the suspension rounding off most of the bumps silently. But knowing that Porsches famous Weissach test track is more suited to some flat-out laps we had to oblige our test driver to do the needful, and he willingly complied. With air springs set stiffer (with one of the air chambers locked out), twin clutch box extracting maximum from the turbo motor and active anti-roll bars keeping the car flat, the test driver began hurling the Panamera around as if it was a Boxster. Fundamental agility and the manner in which the car tackled steep dips and tight corners were splendid. Boasting comfort for four plus luggage and sports car performance in a single package, Porsche might have just cracked the segment wide open. And how! http://www.hindu.com/mp/2009/05/06/stories/2009050611110300.htm HYBRID CAR SALES TO JUMP 7.6-FOLD IN 12 YRS: RESEARCH Agencies See this story in: The Economic Times, The Financial Express (May 10)
http://www.financialexpress.com/news/hybrid-car-sales-to-jump-in-two-years/456912/ | |
| ECONOMY & FINANCE Go To Top Ranju Sarkar (May 11)
Private corporate spending, which had touched 16 per cent of GDP in recent years, had played a key role in India posting 9 per cent growth in the last three years till March 2008. If theres a sharp decline in this, companies fear it will hurt demand. Indeed, some like JSW Steel joint MD Seshagiri Rao fear that things may worsen from here unless people are able to raise money and start investing again. Banks say both current accounts and credit off-take remains subdued. Consider the investment pipeline. According to new project tracker ProjectsToday.com the value of new projects announced by Indian companies shrank 51 per cent in the second half of 2008-09 to Rs 283,722 crore from Rs 578,912 crore in the first half, with the number of projects falling to 5,421 from 7,112 in the first half. The manufacturing sector saw a sharper decline. The value of new projects announced in the second half of 2008-09 fell 63.83 per cent to Rs 66,849 crore from Rs 184,810 crore in the first half. The investment scenario is a huge, huge risk hanging over our system, said Abheek Barua, chief economist, HDFC Bank. In a pick-up year, private investment grows at over 20 per cent, he said, but right now theres no improvement in investment-related credit, theres so much uncertainty. Indias 9 per cent growth was led by investment demand, which touched a high of 40 per cent of GDP, after averaging 25 per cent for many years. Economic reforms in the early 1990s and after 2002 encouraged private corporate investment, which touched 16 per cent of GDP in recent years and surpassed government spending for the first time. Ajay Shah, senior fellow at the National Institute of Public Finance and Policy, said household consumption and government spending doesnt fluctuate much; it is private corporate investment that responds to fluctuations in business cycles. If the recent upsurge of private corporate investment reverses itself, we could see a drop from 16 per cent of GDP to 6 per cent of GDP, Shah said. Each percentage point of GDP is Rs 50,000 crore; so we are discussing massive numbers. A 10 percentage point decline in private corporate investment is a decline in investment demand of Rs 500,000 crore, he added. Andrew Holland, head of institutional equities, Ambit Capital, says companies will not resume investing when they are laying off people and foreign direct investment in manufacturing has slowed (for instance, Mittal Steel has deferred its steel project in India). When companies are looking at cost structures they are unlikely to think of expansions or new projects, he said. Consider the other demand drivers. Economists say household consumption is stable; in fact, the Pay Commission and the rural economy are counter-cyclical factors at work. They say if government spending can be sustained, it can partially offset the fall in private corporate investments. Consumer and government spending will partially offset the slowdown in exports and private investment but they will not entirely do so, said Subir Gokarn, chief economist, Standard & Poors Asia Pacific. Government spending is unlikely to fill the gap because it amounts to only a tenth of Indias output. Moreover, one rupee spent by private firms is more effective than by the government because of leakages. Some sectors, however, could continue to do well, like cement, which is being fuelled by rural demand. But ACC MD AL Kapur said there could be a supply overhang because 40 to 45 million tonne of fresh capacity will be added this fiscal, though only half of this will come to market since it takes time to ramp up capacity. Similarly, though large engineering companies like ABB and Larsen & Toubro continue to be bullish, analysts say the pace of new orders has slowed. Some power projects have achieved financial closure but most of them are still struggling to tie up funds. On the positive indicators economists say there is no need to get carried away. Whatever improvements in the non-consumer sectors, it is because of inventory adjustments, said Barua. He suspects this could be a W-shaped recovery like in 1999, when theres a recovery for a few months but demand slumps again. When demand falls off a cliff, you cut inventories to match sales. Globally, inventories are still at high levels and sales have fallen faster than inventories, said Holland. Figures from the US and China show signs of recovery, but theres still contraction, he added. Things are stabilising but it doesnt mean we start investing in new projects, which is still six to nine months away, he said. Even if the new government decides to boost spending on infrastructure, it will take three to six months to feed the demand (a new road, for instance, would take three months to dig up before it starts consuming steel or cement). With equity markets still in limbo, new capacities would have been largely funded by debt. Steel-makers would have invested Rs 50,000 crore in adding 50 million tonne. Imagine what would have happened if these capacities had come up in a downturn. These debts could have been a burden on the banking system, said Arvind Parakh, Chief Financial Officer, JSL Ltd (formerly Jindla Strips). http://www.business-standard.com/india/storypage.php?autono=357694 CII SURVEY SHOWS EARLY SIGNS OF ECONOMY REVIVAL Samar Srivastava mint (May 11) New Delhi: Spurred by three stimulus packages announced in the last two quarters, the Indian economy is showing nascent signs of revival, according to data from a survey carried out by business lobby Confederation of Indian Industry, or CII. While CII said there were marginal signs of recovery, it also cautioned against reading too much too soon as on a year-on-year basis all sectors grew slower. The survey carried out by its Association of manufacturing, agriculture and service councils, or Ascon, reported that 18.75% of the 80 sectors tracked showed high growth last fiscal compared with 15.63% in the first nine months. High growth is defined as between 10% and 20%. The number of sectors reported contraction in the same period was down 3 percentage points to 30%. Industry watchers view the numbers as forward looking as they are reported about six weeks ahead of the governments Index of Industrial Production and so act as a bellwether. Data pertains to about 65% of the countrys industrial output, and is from CII and its affiliated associations. There are certainly signs of revival, said R. Seshasayee, chief executive of Ashok Leyland Ltd, the countrys second largest commercial vehicle maker. Truck makers have been hit hard in the last six months but Seshasayee said that hes seen revival in demand even for heavy trucks where demand has been muted in the last few months. Export-dependent sectors continue to be under pressure, he said. Indeed, half of the 22 export sectors surveyed reported negative growth in the report. Significantly, pig iron, which is a key input in making steel, moved from negative growth to moderate growth between the third and fourth quarters of the last fiscal year. As a result, steel output also registered moderate growth. Fertilizers also fell in this category of moderate growth. But when compared with the fiscal ended 31 March 2008, some of the differences in growth rates were stark. There was a sharp fall in industries and servicesfrom 15.38% to 6.25%that expanded by over 20%. And those that registered negative growth nearly doubled to 30%. Even so, there were two industries that stood out. Mobile phone services recorded a 34.24% growth rate in the year gone by. India, the worlds second largest phone services market by customers, has some 400 million such subscribers. Electric two-wheeler sales rose by about 36% but over a low base. Last year there were an estimated 100,000 electric scooters sold in India but manufacturers fear that in the absence of incentives from the government, sales might stagnate. http://www.livemint.com/2009/05/10213218/CII-survey-shows-early-signs-o.html?d=2 | |
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