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| INDUSTRY JLR to get 'conditional' support only: UK govt Jaguar Land Rover: As much Britains problem as Tatas INTERVIEWS/FEATURES Maruti, Tata hunt for US, European car engineers Maruti, Hyundai seek to ride on Europe benefits Hindustan Motors posts Rs. 38 cr loss BMW overtakes Merc in Jan-Apr sales COMMERCIAL VEHICLES Hino trucks to roll out in 2-3 months CONSTRUCTION & AGRI MACHINERY Electric two-wheeler sales dip on subsidy withdrawal COMPONENTS Setco Automotive posts Rs 12.5-cr profit | ALLIED INDUSTRIES FINANCE & INSURANCE Shriram Transport to set up equipment biz subsidiary Shriram transport finance: growth slows, but cushioned LUBRICANTS & ALTERNATIVE FUELS INTERNATIONAL NEWS Hyundai denies reported approach by GM on brand Toyota plans management overhaul: Report Chrysler seeks to drop 789 dealers, one in four Fiat hits 10 pc market share in Western Europe Ford walks tightrope amid industry downturn ECONOMY & FINANCE Sensex tanks again before election results Inflation rate down on higher base effect RBI survey of forecasters predicts 5.7% GDP growth
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| INDUSTRY Go To Top Shweta Bhanot, Sanjay Jog The Financial Express (Web & Print Edition) Mumbai: Undeterred by the Nashik Industrial Courts decision declaring strike called by Mahindra & Mahindra (M&M) employees union as illegal at the Nashik plant since May 4, the union preferred to stay away from work and considered approaching the Bombay high court against the industrial courts judgement. Employees, who were asked to call off the strike and resume work within 48 hours by the managment, preferred to go in for voluntary retirement. The company has so far incurred a loss of Rs 495 crore since the closure from May 4. Incidentally, Maharashtra labour minister Nawab Malik told FE that he has directed the department officials and the labour commissionerate to tell the company management to carry out an inquiry into union president Madhav Dhatraks alleged misconduct by appointing an arbitrator (a retired judge). Dhatrak was issued showcause notice and suspended on the May 4 without being given an opportunity to plead his case. Malik has also asked the company management and union to restart the work immediately. M&M employees union is also considering approaching the Bombay high court against the industrial courts judgement. State government official said that the strike at the Nashik plant has adversely impacted over 120 small and medium enterprises around Nashik as nearly 70 such units have been closed down for want of orders from M&M. Meanwhile, contrary to M&Ms claim that the strike will not have an immediate impact, the dealers Fe contacted expressed concern over the ongoing strike at the companys Nasik plant. Few dealers said that they are sending apology letters to the customers who have already booked a car, especially Xylo, while telling the potential customers of a waiting period anywhere between six to eight weeks. The concern waves also came through from the vendors, who are believed to be sitting on a piled up inventory of approximately two days since the production came to a standstill. http://www.financialexpress.com/news/Striking-MampM-union-explores-HC-option/459621/ JLR TO GET 'CONDITIONAL' SUPPORT ONLY: UK GOVT Pankaj Doval The Times of India (Web & Print Edition) New Delhi: In a signal that government support may not come easy for Tatas-controlled Jaguar and Land Rover (JLR), the British government said that it was ready to provide only "conditional" help to the two brands as it had to "protect the interest of taxpayers". http://timesofindia.indiatimes.com/Business/Only-conditional-support-to-JLR/articleshow/4531688.cms JAGUAR LAND ROVER: AS MUCH BRITAINS PROBLEM AS TATAS The Hindu Business Line (Web & Print Edition) The Jaguar motorcar, along with its sister brands such as Land Rover and Range Rover are the most recognisable British marquees in the world. Once a magnet for the aspiring classes, these brands have been icons for style, performance and ruggedness. Yet, in the 21st century the name Jaguar has been subject to chicanery, double-dealing, egregiousness and inequity. At the heart of the processes generating such opprobrium are the activities of the British government. It seems all common sense has deserted the policy-making establishment in the UK. The refusal of the British government to guarantee a loan (it is not even a provider of that loan) from the European Investment Bank unless 15 per cent of the loan amount is passed on as a commission to the government is a sign of explicit corruption. On top of all of the goings-on in the UK, the MPs expenses scandal, the Gurkhas episode, the attempts to tarnish the reputation of the parliamentary opposition and the utter shame of the Iraq genocide, the blatant statement our cut is 15 per cent makes all the Mr and Ms 10-per-cents of the world look like amateurs. Source of the fuss What is the source of this fuss? The Tata group has run into heavy weather, no fault of its own, as the global recession has led to a catastrophic slump in the demand for luxury cars. It has several choices. It can seek additional emergency financing from various bodies, such as the European Investment Bank, to continue with reduced production, keep employment levels going, invest in technology and capacity in the downturn and ride out the recession. This is good strategy. This is what it wants to do. This is what any sensible firm thinks of doing. A firm will emerge from the recession leaner and stronger, and able to face the future. It can also shutdown operations for a period, shed several thousand jobs in the UKs prime manufacturing belt and, when demand revives, scale up production. But by then it simply will not have the capacity or the innovativeness to deal with a market that has grown in sophistication. It will have lost its position. It can also simply shut down all operations in Britain, ship whatever plant is very specific and cannot be remanufactured elsewhere to another destination, and since all the worthwhile technology is intangible and human-capital specific, re-locate its key technology-related employees in its new locations. Jaguar cars, Land Rovers and Range Rovers, will still be made. They will be made in Chennai, India, rapidly emerging as the Detroit of the 21st century, or in Dallas-Fort Worth, US, which has massive automobile industry infrastructure, and at both locations there will be welcoming committees waiting with open arms to receive the relocated Jaguar, Land Rover and Range Rover operations. Bye, bye Birmingham. What is good for Jaguar is good for the States of Tamil Nadu or Texas. This is the outcome of globalisation and the contingency is less than far-fetched. In the 1950s, the entire Morris Oxford operations were shipped en-bloc to India and the model still continues to be manufactured as the Ambassador. Denial Illogic At the heart of the British government misjudgment perhaps is unawareness of the basic tenets of economic life. It is simply that foreign owned firms are the most attractive to a government or financial institutions. Foreign firms are consistently associated with the enhancement of firm value. They offer the security of higher market valuations. This factor enhances credit ratings and reduces cost of capital. Foreign firms have advantages in operating overseas because of their abilities that helped them expand abroad in the first place. As firms grow domestically they acquire rare and unique knowledge and these capabilities can be leveraged overseas to transform mediocre activities in a host country into successful outcomes. It is the ability to leverage strengths, expertise, technologies and brand equity that enables, say, a Tata firm to engender growth, employment and sustainable performance. The better performance from a Tata will spur recovery from the recession that much faster in the British Midlands. Yet, in operating overseas, foreign firms can encounter liabilities because of their ownership status. Foreign identity can become a liability. The discrimination faced by the Tatas in the UK, in having to pay 15 per cent of the EIB loan amount as a tax to government as they seek funds to keep Jaguar afloat, is typical of the type of roadblock that a foreign-owned firm can encounter. In this case, it will add to costs, raise the price of the Jaguar cars struggling to be sold and push back any recovery. What is the done thing? Raising funds is an important activity, for domestic and foreign firms alike operating in a host country. A critical host country incentive will be preferential access for foreign owned firms to the host countrys financial sector agencies, bodies and organisations. Not discrimination. Latest research shows Indian companies are among the worlds most reputed. Their overall size may not be as big as their global peers in terms of revenues, but Indian companies head the list when it comes to reputation. The Tatas are ranked above Google, Microsoft, Coca-Cola, GE and Walt Disney, with respect to reputation. As the world looks to corporations from India to find competence, quality, trust and admiration, a group like the Tatas can help Jaguar emerge from the recession in a more robust way than could another owner. Thus, it is in the British public interest that the government substantially subsidises funds for Tata so that Jaguar can be kept alive. It is absolutely sensible policy and strategy for the British government and its financial institutions to provide the Tatas with cheap debt and not behave like extortionists. The latest thinking is that foreign firms should, and do, access debt cheaper than their domestic host country counterparts. In India too, far from being discriminated against, firms with foreign ownership enjoy relatively greater access to funds from financial institutions, compared to Indian publicly-owned companies. It has been to Indias advantage to have foreign-owned firms operating on its soil. As firms from a variety of countries operate across borders, in conducting their business they will need recourse to funds in the countries they operate in. If their ownership status is important in accessing debt cheaply, quickly and without strings, then, quite clearly, foreign firms may not engage in operations in a host country where foreignness is a liability in attracting debt financing. That seems to be the case in the UK. The UK is floundering in a turbulent sea and the ship of state no longer possesses an ethical, a moral, a political, an economic or a social compass. Where will it all end? Tamil Nadu and Texas may look forward to the Jaguar, Land Rover and Range Rover facilities soon being transferred and established in their jurisdictions if Jaguar says Tata to Britain! http://www.thehindubusinessline.com/2009/05/15/stories/2009051550150800.htm | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INTERVIEWS/FEATURES Go To Top | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CARS, SUVs, MUVs Go To Top Chanchal Pal Chauhan The Economic Times (Web Edition) New Delhi: Global carmakers looking to the booming Indian car market to salvage their fortunes are planning to imitate Maruti Suzukis strategy of launching hatchback and sedan variants of the same model, as they explore ways to cut costs. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" MARUTI, TATA HUNT FOR US, EUROPEAN CAR ENGINEERS Sohini Das Business Standard (Web & Print Edition) Kolkata: As Indian car manufacturers plan to tap the growing global market for fuel-efficient compact cars through a series of launches in Europe and the US, two of the majors recently went scouting to Detroit for experienced engineers. Tata Motors and Maruti Suzuki India Ltd (MSIL) participated in the Society of Auto Engineers 2009 World Congress Career Fair at Detroit last month. The fair lures a significant number of engineers from the US, and given the current slump in the job market, many would actually be available for Indian firms. Maruti has shortlisted 10 candidates from the fair so far. Tata Motors declined to give details, but confirmed it is looking at recruiting specialists for different functions of product development, given their research and development (R&D) expansion plans in India. It currently has a 2,000-strong team across facilities, here and abroad. As both the companies firm up plans to strengthen their R&D infrastructure to launch new platforms, delving into technologies on alternative fuels, hybrids and electric vehicles, among others, they are looking at people with relevant know how on emission and safety norms in Europe and the US. MSILs India R&D is among the largest Suzuki facilities outside Japan. Currently employing 730 people, it is, at present, in the process of being strengthened to develop new cars independently. The focus will primarily be on small cars, informed a spokesperson. We are recruiting for engine, transmission, body electricals, styling and product planning, brakes, suspension, safety & crash, interiors, BIW (body in white exterior). The companys export order has doubled to 150,000 cars in the current fiscal, largely on the back of demand from Europe for its hatchback A-Star, that sells under the Alto brand overseas. It is also working on upgrading the Omni and the M-800 to Bharat Stage-4 standard. On a similar drive, Tata Motors, which aims to take the Nano model to the US, has to work on the emission norms and safety parameters to meet standards there. The Tata Nano now meets BS-2 and BS-3 standards. The company recently displayed the Nano Europa at the 79th Geneva Motor show, together with the Tata Prima, a concept luxury sedan, and Tata Indica Vista EV, an electric vehicle. It also has plans to launch an electric version of Ace, the popular sub-one tonne pick-up truck, in the US. Besides making it more fuel-efficient for domestic sales. http://www.business-standard.com/india/news/maruti-tata-hunt-for-us-european-car-engineers/358197/ MARUTI, HYUNDAI SEEK TO RIDE ON EUROPE BENEFITS N. Ramakrishnan The Hindu Business Line (Web & Print Edition) Chennai: Maruti Suzuki and Hyundai Motor India are looking to benefit from fiscal incentives being offered by European governments to kickstart their economies. A number of European countries are offering scrapping incentives as part of stimulus packages to get car owners to scrap aged cars for new, fuel-efficient ones that also meet higher emission standards. The two largest compact car manufacturers in India, who are also the leading exporters, are eyeing increased orders from their European distributors thanks to these incentives. Hyundai Motor India exports the i10 and i20 hatchbacks while Maruti Suzuki sends its A-Star hatchback, which is badged as Alto in Europe. According to the European Automobile Manufacturers Association (ACEA), 12 EU countries have put in place a fleet renewal programme, including market incentives and car scrapping schemes. These include Austria, France, Germany, Italy, Portugal and Spain. Some more such as Belgium, the Czech Republic and Hungary are discussing introducing similar schemes while the UK will launch one shortly. Car registrations up Information on ACEAs Web site shows that: new car registrations in Germany increased by 30 per cent in February after the launch of the fleet renewal scheme; roughly 20 per cent of all cars sold in France in January replaced old cars that qualified for the scrapping incentive; in Portugal, 16 per cent of all cars purchased in 2008 replaced old cars that qualified for the scrapping incentive. The incentive varies from 1,000 for scrapping cars over 10 years old in France to 1,500 for cars over 13 years old in Austria to 2,500 in Germany for cars over nine years old. Says Mr Arvind Saxena, Senior Vice-President Marketing and Sales, Hyundai Motor India, Europe is doing a lot for the automobile business through its stimulus package. Also, because of the economic slowdown, Europeans tend to be frugal, which means they will switch to smaller, fuel-efficient cars. More orders According to him, a single dealer for Hyundai in Germany sent in a request for 11,000 cars in February alone. Hyundai Motor India, which is the largest passenger car exporter, started exports of the i20 premium hatchback in November 2008 and its exports have been consistent. In January, its exports totalled 16,200 units (both i10 and i20), February - 17,039, March -21,406 and April - 22,124. According to Maruti Suzuki, it has benefited from the scrapping incentives being offered by European nations. The company says that it has seen an upward trend in orders from its European buyers. Maruti exported 19,000 units of the A-Star to Europe last fiscal (2008-09). Further impetus Thanks to the government incentive scheme, its sales have got a further impetus with distributors requesting for larger numbers of the A-Star. In an e-mailed response, Maruti Suzukis Managing Director and CEO, Mr Shinzo Nakanishi, said the company hoped to export over 100,000 units of A-Star this financial year, against 70,000 in 2008-09. Of these, about 90,000 units will be to Europe. This includes 30,000 to Nissan under the Pixo brand. With such incremental export volumes for A-Star, our overall exports are likely to increase substantially to around 130,000 units. http://www.thehindubusinessline.com/2009/05/15/stories/2009051550980200.htm HINDUSTAN MOTORS POSTS RS. 38 CR LOSS The Hindu (Web & Print Edition) See this story in: Business Standard (Delhi Print Edition) Kolkata: Hindustan Motors entered the loss zone, reporting a Rs. 25.30 crore loss in the fourth quarter of 2008-09 against a net profit of Rs. 10.90 crore in the year-ago period. Net loss for the whole year stood at Rs. 38.90 crore against a net profit of Rs. 30.80 crore in the previous year. Net sales stood at Rs. 591.10 crore for 2008-09 against Rs. 662 crore in 2007-08. The company showed profit from sale on its immovable properties for both the years, although the amount was almost half of that of the previous year. http://www.hindu.com/2009/05/15/stories/2009051551671400.htm SMALL IS BEAUTIFUL FOR FORD New Delhi: Banking on its small car to be launched early next year, Ford India is targeting over three-fold increase in its sales to over 1,00,000 units per annum. Fords small car will compete with the likes of Maruti Wagon Rand Hyundai Santro. The small is likely to come in both petrol and diesel version. The company, which sells mid-size sedans Ikon and Fiesta, the MUV Fusion and the SUV Endeavour in India, is investing $500 million (Rs 2,500 crore) towards a new engine plant and expansion its vehicle assembly facility to 2,00,000 units per annum. BMW OVERTAKES MERC IN JAN-APR SALES Yogima Seth The Financial Express (Web & Print Edition) New Delhi: BMW India has taken a lead of over 200 units, the average monthly sales of BMW in the country, over Mercedes Benz India in cumulative sales for the first four months of 2009. According to industry estimate, while BMW India sold 1,232 units between January and April, Mercedes Benz sold 1,014 units, a lag of 218 units in four months, thereby putting brakes on the undisputed growth and number one position of Merc in the country over the last decade. Audi India, on the other hand, continues to be a third largest luxury car manufacturer in the country with total sales of 496 units in last four months. However, the number is far bigger when Siam figures (Society of Indian Automobile Manufacturers), which gives wholesale numbers (vehicles sold from manufacturers to dealers) as against retail sales are taken into account. According to Siam, Mercedes was 306 units behind BMW in the first four months of 2009 at 926 units as against 1,232 units of BMW India. Despite economic downturn, BMW India has managed to become the number one player because of the companys fast expansion in tier-II towns and a series of new products that were launched since January this year, including the new 7 Series, 3 Series, X5 and the diesel variant of X3, says Peter Kronschnabel, president of BMW India, adding that the company is ahead of Merc by its average monthly sales. While Kronschnabel refused to divulge the companys capex plans for 2009 and 2010, he said that BMW India has already started its second phase of expansion that includes opening up of 10 new dealerships by the end of 2010, starting with Coimbatore. BMW currently has 12 dealerships in India that were set up as part of the companys Rs 110 crore investment in India in the last three years. Mercedes Benz, on the other hand, has earmarked an investment of Rs 150 crore for expansion of dealerships across the country and a part of it will also be used to bring a new car to the domestic market. The company, which manufactures C, E and S-Class in India at its Pune plant, currently has 12 dealerships. According to an expert, if Merc wants to rule the luxury car segment in India, it has to continuously bring in new products to meet the aspirations of its buyers. Mercedes Benz India sold 3,600 units in 2008 while BMW sold 2,908 units last year. http://www.financialexpress.com/news/bmw-overtakes-merc-in-janapr-sales/459643/2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COMMERCIAL VEHICLES Go To Top The Economic Times (Web & Print Edition) Mumbai: Japanese truck maker Hino Motors, part of the Toyota group, is launching its premium range of trucks in the country, joining a growing list of firms, including Volvo, Tata Motors and MAN, who have recently launched their truck range in the fast growing Indian market. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" HINO TRUCKS TO ROLL OUT IN 2-3 MONTHS Sumantra Barooah mint (Web & Print Edition) See this story in: The Economic Times (Delhi Print Edition) Mumbai: The lorry-making subsidiary of Toyota Motor Corp., Hino Motors Ltd, is poised to enter the Indian market with its 6X4 tipper and 6X2 haulage models. Sales of these diesel trucks is expected to begin in two-three months. The company will also launch next year a 49-tonne tractor model, which is currently undergoing modifications mandated by local standards for product and service quality, also known as homologation. Tata Motors Ltd, Indias largest truck maker, currently dominates the 6X2 and 6X4 truck segments, which have estimated annual volumes of 50,000 units. A 6X2 model would have six wheels, out of which two are powered. Similarly, a 6X4 truck would have four powered wheels out of six. Hino trucks are equipped with CRDi technology, which the company claims is more fuel-efficient. This type of heavy trucks are a first in the Indian market. The auto maker also claims that these models are capable of running for 1 million km before requiring an overhaul. Although these engines are much more expensive, Hinos sales team have started explaining to potential customers that these vehicles would provide better returns in terms of efficiency and business. http://www.livemint.com/2009/05/14225934/Hino-trucks-to-roll-out-in-23.html | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONSTRUCTION & AGRI MACHINERY Go To Top | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/3 WHEELERS Go To Top PTI See this story in: The Economic Times, The Hindu Business Line, mint New Delhi: Pune-based Bajaj Auto said it has received patent for its invention -- multi-spring vehicle shock absorber -- used in its motorcycles, with which it hopes to counter cheap Chinese copycats. http://www.thehindubusinessline.com/2009/05/15/stories/2009051551060201.htm http://www.livemint.com/2009/05/14134337/Bajaj-gets-patent-for-multisp.html ELECTRIC TWO-WHEELER SALES DIP ON SUBSIDY WITHDRAWAL Vijay C Roy Business Standard New Delhi/ Chandigarh: After getting off to a promising start, electric two-wheeler dealers in Chandigarh are finding it increasingly difficult to expand sales on account of withdrawal of the subsidy by the Chandigarh administration and high VAT of 12.5 per cent. Our sales have been hit by 15-25 per cent on account of scrapping of the subsidy. Earlier, we used to sell at least 60 vehicles per month, which has now been reduced to 50 vehicles per month after withdrawal of the subsidy, said Vineet Aggarwal, managing director of Rattan Motors, an authorised dealer of Hero Electric, a 100-per cent electric two-wheeler manufacturing arm of the Hero Group. Aggarwal urged the government to reintroduce subsidy and bring the VAT rate to 4 per cent from 12.5 per cent at present. Echoing similar sentiments is an official of Yo Bikes authorised dealer Ganesh Automobiles, who maintained that sales have been affected by 20 per cent to 25 per cent due to withdrawal of subsidy. The cuts in petrol prices announced in December 2008 and February 2009 have acted as a dampener in sales and the withdrawal of subsidy by the Chandigarh administration on electric two-wheelers is a big blow for the dealers and manufacturers, he said. http://www.business-standard.com/india/news/electric-two-wheeler-sales-dipsubsidy-withdrawal/358083/ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COMPONENTS Go To Top K. Giriprakash Bangalore: The largest auto parts maker in the world, Bosch, has decided to delay the manufacture of its marquee braking system product ABS in India though local plants are returning to full production. Sources close to the company told Business Line that the Germany-based Bosch which was expected to start production of ABS, the anti-lock braking system, and ESC, the electronic stability control in April has decided to delay their manufacture till the automobile industry gets back to normal. Bosch was planning to manufacture ABS and ESC at its Pune plant through its subsidiary Bosch Chassis Systems India Ltd, which makes hydraulic brakes for vehicles. The manufacture of ABS and ESC was part of the Rs 2,300-crore investment plan the German company had earmarked between 2006 and 2010. Bosch manufactures another breakthrough product, the common rail injection systems (CRDi), at its Nashik plant. It has invested about Rs 350 crore to manufacture injectors from the Nashik plant. According to its earlier forecast, Bosch expects to sell about 1.3 million complete units of common rail injection systems in India by 2010. Once Bosch starts making ABS, it will be able to supply the product to its global clients, Hyundai and Toyota, who have their manufacturing plants here from its local plant itself. The anti-lock braking system prevents wheel locking in case the driver suddenly applies brakes while the electronic stability control helps the driver to stabilise the vehicle when there is a risk of skidding. Output stabilising Meanwhile, production at all the plants of Bosch in India is returning to normal. Earlier, to adjust inventories, production was periodically halted in some of the plants. Sources said demand for Boschs products has picked up from the lows of December 2008. For the first quarter of the calendar year, Bosch India recorded a decline of 70 per cent in its net profit to Rs 49.38 crore. This was because of lower net sales due to poor growth in the automotive sector and production loss from staggered production schedule. Boschs total income was down 21 per cent to Rs 1,005 crore during the same period. http://www.thehindubusinessline.com/2009/05/15/stories/2009051550730300.htm SETCO AUTOMOTIVE POSTS RS 12.5-CR PROFIT
The 33 per cent fall in sales in the medium and heavy commercial vehicle segment dampened the companys business with the original equipment manufacturers. However, the company reported profit because of 60 per cent growth in aftermarket sales. The total sales grew 15 per cent to Rs 160 crore. http://www.thehindubusinessline.com/2009/05/15/stories/2009051550960200.htm | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ALLIED INDUSTRY Go To Top G. Srinivasan The Hindu Business Line New Delhi: At a time when the countrys industrial growth has been distinctly on the downside with its worst performance in fiscal 2008-09, the Standing Board of Safeguard found it expedient to defer its final call for a couple of months on slapping safeguard duty on a range of industrial products, including HR Coils, auto components, acrylic fibre and paper products. This is refreshingly salutary, given the general bent of the authorities to fall in line with the demands of the apparently hard-hit domestic industry. Import surge The Board recommends the safeguard duty to the Revenue Department even as the Directorate-General of Safeguard does the preliminary probe to determine the causal link of import surge inflicting injury to indigenous industry. The Commerce Secretary, Mr Gopal K. Pillai, who heads the Board, told Business Line here that the country has till now slapped safeguard duties only on some five products after ascertaining their import surge. He said such safeguard actions would cover less than one per cent of the countrys aggregate imports. Trade policy analysts say that unless import surge actually supervenes of a particular product it would not be fair to use this weapon to deprive consumer of a cheaper and qualitative substitute from imports. Even as the rules under safeguards provide for hearing from user industries and consumers, it is the complainant in the form of import-hit industry that gets its case sail through the preliminary probe. Tyre dealers argument Against this backdrop where industry is able to get the safeguard duty to render import dear, the All-India Tyre Dealers Federation (AITDF) has filed a submission to the Directorate-General of Safeguards, arguing that the reported move to impose special safeguard duty on passenger car radial tyres at the request of domestic tyre companies as anti-trade and anti-consumer. The Federation Convenor, Mr S.P. Singh, trots out figures to state that the monthly average domestic passenger car tyre sales were Rs 300 crore a month in the first three quarters of fiscal 2008-09, against monthly import of Rs 29 crore only. This is because the replacement market for passenger radials has been growing due to 10-15 per cent annual growth in vehicle numbers in the last decade. But the old passenger cars, with bad usage and maintenance practices, cry out for quick replacement of worn-out tyres with new ones. This generates high import demand as domestic industry does not have the quantity and even quality tyres to cope with such mounting demand. In this scenario, the Federation said that it is obliged to safeguard the consumers interests as it stands equidistant to tyre makers/tyre importers on one side and tyre users (car owners) on the other side. The moot question raised by the Federation is that the Safeguard machinery should not rush to the rescue of the domestic manufacturers who might function as cartel to keep imports at bay and deprive the user industry/consumers from acquiring the subject goods at an assured quality and at competitive price. Tyre pricing review In fact, the Federation has said the entire tyre pricing for all categories of tyres and tubes i.e., trucks and buses (radial and non-radial), light commercial vehicles (LCV), passenger cars, sport utility vehicles/multi utility vehicles, mining/OTR tyres, two wheelers/three wheelers, tractors and animal driven vehicles (ADV) and industrial tyres should be subject to a fresh review. This would help establish the inter-price impact on the profitability of each segment of tyre and tube for both radials and bias ply tyres, besides facilitating the causal link of the so-called surge in imports of a particular segment/size of tyre to the cost structure of domestic tyre company and how this is connected. Trade analysts say that even as there is merit in providing stimulus measures to domestic industry hit by downturn, there should not be a free for all by any industry in lining up more safeguard measures on the alleged grounds of import surge hitting its very viability. In the ultimate analysis, the user of the imported product be an industry or an individual consumer should not be left high and dry to the caprices of domestic industry cartel or oligopolies. http://www.thehindubusinessline.com/2009/05/15/stories/2009051551341500.htm | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NBFCS, BANKS SEE RISE IN LOANS FOR TRUCKS Neha Rishi Daily News & Analysis Mumbai: The trend of declining sales in the commercial vehicles space started reversing in December last year. Truck financiers --- non-banking financial companies and banks --- have been quick to take cue and have tried to go apace. Jaspal Ahluwalia, business head, transportation and equipment group, L&T Finance, said in the third quarter of last fiscal ended December 2008, the company financed vehicles worth Rs 100 crore. "This has risen 150% in the fourth quarter (up to March 31, 2009)," Ahluwalia said. K A Subramaniam, deputy general manager, Sundaram Finance Ltd ,said the company saw 20% growth in financing of medium and heavy vehicles in the fourth quarter, while light-vehicle loans were up 10-15% "But April seems dull as sentiment is still weak. Few enquiries have indeed come in but how far this trend will go is very uncertain," Subramaiam said. Overall commercial vehicle sales fell by 11.25%. While sales of light vehicles recorded a healthy growth of 28.23%, medium and heavy ones declined by almost 42%.
"Medium and heavy vehicles are still selling good numbers, followed by trailers. Since light commercial vehicles have recently started doing well, financing is also taking place for these vehicles," he said. A key factor that determines medium and heavy vehicle sales is manufacturing growth, which declined 2.3% in April compared with the same period last year. "The iron-ore business is down, especially after Olympics in China. Further there was a slump in the industrial production after September, affecting production of steel, construction business slowing down. These factors determine demand for heavier vehicles. Overall this category is a bad shape," Ahluwalia said. Overall production was down 18.67% in April. But that's better than the almost 29% decline in March and about 40% in February. R Sridhar, managing director, Shriram Transport Finance, the biggest used-vehicles financier, said liquidity was better in the fourth quarter compared with the third. "And the second stimulus package announced by the government has done some good to the industry. We have seen a 10-15% growth in financing over the third quarter. Our financing is now mainly for 10-16 tonne vehicles and light commercial vehicles," Sridhar said. Sridhar concurs. "There has been a marginal correction in cement, coal and steel demand, but overall manufacturing has to do better for there to be a positive rub-off on heavy vehicle sales." Private banks have been cautious with auto loans due to rising bad loans and commercial vehicles had almost turned pariah some months ago. But banks are also watching the sales trend in the space. Ashok Khanna, executive vice-president, HDFC Bank, said in the last three months the bank has been financing vehicle acquisitions. "Last month we financed Rs 110 crore of commercial vehicles. This month we expect the advances to grow by 15% at least. In the third quarter, our financing was roughly around Rs 65 crore," Khanna said. The deadline for depreciation benefit has been extended from March 31 to September 30, this has given some push to CV sales and thus financing. The players now wait for a new government at the Centre to give fresh traction. http://www.dnaindia.com/report.asp?newsid=1256138 SHRIRAM TRANSPORT TO SET UP EQUIPMENT BIZ SUBSIDIARY PTI See this story in: The Hindu Business Line Mumbai: Asset financing NBFC Shriram Transport Finance Company (STFC) plans to set up a wholly-owned subsidiary for conducting equipment finance business. We have obtained our board approval and this business should be operational in the next three-four months, STFC Managing Director, Mr R. Sridhar, said. Around 10 per cent of our total portfolio comprises of equipment finance and there is a huge demand for equipment. Hence, our decision is to set up a subsidiary for this business, Mr Sridhar said. The subsidiary would mainly focus on construction equipment, he said. There would be a capital requirement of Rs 100-150 crore and Shriram Transport Finance would be providing this, he said. The company also plans to raise Rs 1,000-crore through issue of non-convertible debentures in tranches. We should be ready for the issue in about two months time. We will be appointing merchant bankers for this soon, Mr Sridhar said. http://www.thehindubusinessline.com/blnus/02141160.htm SHRIRAM TRANSPORT FINANCE: GROWTH SLOWS, BUT CUSHIONED Manas Chakravarty and Mobis Philipose mint Shriram Transport Finance Co. Ltd has expectedly reported a sharp drop in growth rates. Net interest income grew by 22% in the March quarter, compared with a growth of 56% in the three quarters. With demand for commercial vehicles coming off sharply since the second half of the previous fiscal year, the drop in growth isnt surprising. According to the management, the company has been going slow in disbursing loans because of concerns that delinquencies may rise owing to the economic slowdown. Disbursements have dropped by at least 25% in the last two quarters and this is reflected in the drop in the growth of net interest income. In the quarter, the company financed 2,700 vehicles, compared with 3,600 vehicles in the year-ago period. But considering that sales of commercial vehicles have been falling for quite a few months now, the companys performance is noteworthy. What has insulated it to a large extent is its focus on financing used vehicles, as well as its tilt towards light commercial vehicles that ply short distances. Managing director R. Sridhar points out that about 70% of the firms outstanding disbursements is in the used vehicles space. In terms of fresh disbursements in recent months, because of the pressure on new vehicle sales, the ratio stands higher at 85%. Besides, 85% of vehicles against which disbursements have been made are small-sized commercial vehicles which ply for short distances on state highways. The category of truck operations that has been hit in recent times is the one that plies long distances on national highways, ferrying industrial goods. Shrirams exposure to this segment is relatively low. For this reason, its delinquencies have also been maintained at relatively low levels. But this is not to say that the company hasnt been affected. The sharp drop in growth rates in the March quarter is testimony to the impact the company has seen already. Having said that, the slowdown hasnt been as bad as some had feared, and as a result, the company expects disbursements to grow by 20%-plus in this financial year. The markets seem to be comfortable with that, what with the stock having risen by about 35% in the past two months, tracking the rise in the broad market. http://www.livemint.com/2009/05/14233345/Shriram-Transport-Finance-gro.html | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LUBRICANTS & ALTERNATIVE FUELS Go To Top AP See this story in: The Times of India New York: Oil prices fell below $57 a barrel Thursday as US unemployment continued to rise and a new report predicted the world's petroleum appetite will shrink even more than expected this year. http://timesofindia.indiatimes.com/Business/Oil-falls-below-57-as-US-recovery-hopes-wane-/articleshow/4531004.cms | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INTERNATIONAL NEWS Go To Top Agencies See this story in: The Economic Times Brussels: Sales of new cars in Europe fell for the twelfth month running in April, taking the drop in the first four months of the year to 15.9percent, trade data showed on Thursday. http://economictimes.indiatimes.com/articleshow/4529523.cms HYUNDAI DENIES REPORTED APPROACH BY GM ON BRAND Agencies See this story in: The Economic Times Seoul/South Korea: Hyundai Motor Company denied on Thursday a report that General Motors Corp. has approached it about buying one of the troubled US automakers brands. http://economictimes.indiatimes.com/articleshow/4529560.cms TOYOTA PLANS MANAGEMENT OVERHAUL: REPORT Reuters See this story in: The Economic Times London: Toyota Motor Co is planning one of the most drastic management overhauls in its 70-year history next month when Akio Toyoda, grandson of the Japanese car company's founder, takes over as chief executive, the Financial Times reported on its website on Thursday. CHRYSLER SEEKS TO DROP 789 DEALERS, ONE IN FOUR Agencies See this story in: The Economic Times New York: Chrysler asked a bankruptcy court on Thursday to shut down 789 dealers, or one-fourth of its sales outlets, saying this will cut costs and boost the odds for the success of its alliance with Italy's Fiat. FIAT HITS 10 PC MARKET SHARE IN WESTERN EUROPE Agencies See this story in: The Economic Times Milan: The Italian automaker Fiat, which has reached a deal for a stake Chrysler and is in talks to take on GM's European operations, defied a contracting market for the second straight month, increasing its European sales in April by 5 per cent, according to new figures released Thursday. FORD WALKS TIGHTROPE AMID INDUSTRY DOWNTURN Reuters See this story in: The Economic Times Detroit: Ford Motor Co executives face stockholders on Thursday to detail the automaker's plans to complete a turnaround without resorting to US government help and steer clear of the industry collapse now swallowing rivals General Motors Corp and Chrysler. http://economictimes.indiatimes.com/News/International-Business/Ford-walks-tightrope-amid-industry-downturn/articleshow/4528483.cms | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ECONOMY & FINANCE Go To Top The Hindu Business Line Mumbai: The rupee fell by about 10 paise against the dollar, although it recovered some of its intra-day losses. The rupee opened lower because of weak Asian currencies. A heightened risk aversion among investors led to the dollar strengthening across the board, said forex dealers. The rupee opened at 49.95 and touched a low of 50.02, a level seen last on April 30. It recovered during the day due to dollar selling by exporters to close at 49.78, against the previous close of 49.69 . A forex dealer with a public sector bank said, Exporters are hedging their positions prior to the poll results. Also, the fall in equities was not as much as expected. The forward premia saw very dull trade, with the six-month closing at 2.88 per cent (2.85 per cent) and the one-year at 2.38 per cent (2.35 per cent). There was some receiving of interest in forward premia as exporters sold dollars in the spot market. But mostly the trade was very dull, the dealer said. http://www.thehindubusinessline.com/2009/05/15/stories/2009051551130600.htm
PTI See this story in: The Hindu Business Line Mumbai: The Bombay Stock Exchange benchmark Sensex on Thursday fell for the second day in succession, losing 146 points, on investors selling ahead of the outcome of the Lok Sabha elections. The Sensex, which commenced the day lower, fell further sharply to trade at 11,695.52 points before ending with a loss of 146.74 points, or 1.22 per cent, at 11,872.91. The 50-share National Stock Exchange index Nifty fell by 41.80 points, or 1.15 per cent, to 3,593.45, after touching the day's low of 3,537.60 points. Bucking the general weak trend, shares in realty, auto, consumer durables and FMCG rose to avert a major fall in the market. The market lost 2.70 per cent in opening trade.Shares of DLF Ltd and Maruti Suzuki stole the show by gaining 7.18 per cent and 0.75 per cent, respectively. Information technology and banking shares dropped as the financial markets remained weak on fears that none of the leading political parties would get a majority, traders said. They said the outcome of the general elections this Saturday would decide the direction of the capital markets. http://www.thehindubusinessline.com/blnus/05141901.htm INFLATION RATE DOWN ON HIGHER BASE EFFECT\ The Hindu Business Line New Delhi: The annual Wholesale Price Index-based inflation rose 0.48 per cent during the week ended May 2, below the previous weeks annual rise of 0.70 per cent, government data showed on Thursday. The dip in the year-on-year inflation reading was primarily on account of the high base last year. The annual inflation rate was recorded at 8.73 per cent during the corresponding week of the previous year. Dearer ragi The official WPI for All Commodities for the latest reported week rose by 0.4 per cent to 231.6 points from 230.7 points for the previous week. On a disaggregated basis, the Primary Articles group index rose by 0.4 per cent as the index for Food Articles group rose by 0.3 per cent due to higher prices of ragi (17 per cent), tea (2 per cent) and bajra, maize, fruits and vegetables and urad (1 per cent each). Wool flares up The index for Non-Food Articles group rose by 0.8 per cent due to higher prices of raw wool (24 per cent), raw rubber and sunflower (6 per cent each), raw cotton (2 per cent) and copra (1 per cent). However, the prices of raw silk (2 per cent) and tobacco (1 per cent) declined. The fuel and power group index rose by 0.2 per cent due to higher prices of furnace oil and naphtha (3 per cent each) and light diesel oil (1 per cent). However, the prices of bitumen and aviation turbine fuel (1 per cent each) declined. The Manufactured Products group index rose by 0.4 per cent as the index for Food Products group rose by 0.7 per cent due to higher prices of imported edible oil (4 per cent) and sugar (3 per cent). However, the prices of groundnut oil, rice bran oil, gingelly oil and gur (1 per cent each) declined. Pesticides up The index for Chemicals and Chemical Products group rose by 1.3 per cent due to higher prices of pesticides (33 per cent), benzene (27 per cent), calcium ammonium nitrate n-content (24 per cent) and purified terephthalic acid (11 per cent). However, the prices of P.V.C. resin (6 per cent) and methanol (2 per cent) declined. For the week ended March 7, the final WPI for All Commodities stood at 227.7 points as compared to the provisional estimate of 226.7 points and annual rate of inflation based on final index, calculated on point to point basis, stood at 0.89 per cent as compared with 0.44 per cent points reported provisionally. http://www.thehindubusinessline.com/2009/05/15/stories/2009051551330700.htm RBI SURVEY OF FORECASTERS PREDICTS 5.7% GDP GROWTH The Hindu Business Line Mumbai: The real gross domestic product (GDP) growth for the current fiscal will be 5.7 per cent, the latest survey of professional forecasters by the RBI says. This is lower than the central banks 6 per cent projection in its Annual Policy Statement for 2009-10. The survey on major macroeconomic indicators of medium-term economic developments is conducted by the RBI on a quarterly basis. In sync with the lower GDP estimate, the survey has forecast a 16 per cent growth in bank credit in the current financial year, against RBIs projection of 20 per cent growth. In its annual policy statement, RBI had urged banks to expand credit beyond 20 per cent. A sector-wise break-up of the real GDP for 2009-10 from the survey shows that growth on account of the industrial sector has been revised downwards from 5 to 4.1 per cent, while it remains unchanged for agriculture and for services, at 3 per cent and 7.5 per cent respectively. The forecasters are also projecting a negative WPI inflation of 1.4 per cent in the first quarter of the current financial year. This is contrary to the forecast of inflation at 2.4 per cent in the previous quarterly survey. For the full year, while the RBIs projection for WPI inflation stands at 4 per cent, the forecasters have assigned highest 40 per cent chance that inflation will be in the range of 5-5.9 per cent. According to the survey, broad money (M3) is likely to grow at 17.5 per cent in the current financial year, lower from 18.3 per cent predicted in the earlier survey. http://www.thehindubusinessline.com/2009/05/15/stories/2009051552100100.htm Last Financial closing
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