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| INDUSTRY RIL, Tatas most admired cos for CSR activities INTERVIEWS/FEATURES Growth from only two models is a concern: Maruti Suzuki School bus segment a new biz avenue CONSTRUCTION & AGRI MACHINERY 2/3 WHEELERS Hondas 100 cc bike to be on a new platform Bajaj Auto to move SC on TVS issue Bajaj to use KTM alliance to roll out bigger bikes COMPONENTS Bosch says no plans to scale down investments in India | ALLIED INDUSTRIES MRF lockout continues amid demand for a secret ballot MRF strike forces HMSI to turn to Falcon FINANCE & INSURANCE LUBRICANTS & ALTERNATIVE FUELS INTERNATIONAL NEWS GM reaches cost-cutting deal with Canadian union Big Auto keeps fingers crossed as day of big decisions dawns Fiat chief tries to clinch Opel deal in Berlin Germany set to disclose preferred bidder for GM units ECONOMY & FINANCE Sensex tumbles over 320 pts; IT stocks unhurt 9% growth not possible immediately: Pranab Mukherjee
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| TATA MOTORS REPRIEVE ON LOAN REFINANCING WILL NOT LAST LONG Mohammed Hadi & Santanu Choudhury Mint (Web & Print Edition) Tata Motors will soon gain some wiggle room. But the squeeze on it is far from over although you wouldn't know it from looking at the stock. Expecting Tata to successfully refinance a near $2-billion loan before its June 2 deadline, investors have driven the shares up 130% in the past three months. Late last week, Tata raised $840 million to repay part of the loan. The company is close to an agreement to roll over the remaining $1.05 billion. Taken to acquire Jaguar Land Rover, or JLR, last year, the loan is no small concern. With JLR's business for which Tata paid peak prices struggling, and the Indian rupee tumbling, Tata was scrounging for cash, raising the specter of default. But the euphoria over the expected loan rollover is hasty. Tata's stock, which trades at a rich premium to other Indian carmakers, was last at this price in October when the outlook for Tata's business was much more optimistic than it is now. Since then, India's economic slowdown has gathered force slamming Tata's bread-and-butter commercial vehicles business. A revival of India's economy will ease some of this pain, but JLR also means the company's fate is now firmly tied to struggling auto markets in the West. And then there is Tata's mountain of debt. The JLR loan notwithstanding, Tata had nearly $4 billion of short-term debt on its books at the end of December, Standard & Poor's says. This borrowing, coupled with a woefully thin cash chest, makes Tata particularly susceptible to the ongoing downturn. Tata may well be able to repay some of that by tapping into the recent shareholder enthusiasm to raise funds something it failed to do successfully last fall when a rights issue wasn't fully subscribed. It did recently raise about $475 million using an old-fashioned system of taking deposits from the public. Advance bookings of its fabled Nano minicar have yielded another $500 million. But important questions about JLR's financial state remain. When investors do get a better look at the unit something Tata has promised but is yet to deliver they may not like what they see. Given the extent of the recent run up in the stock, those sticking around for the revelations are taking a big chance. http://online.wsj.com/article/SB124333011293153923.html RIL, TATAS MOST ADMIRED COS FOR CSR ACTIVITIES PTI See this story in: Business Standard (Web Edition) New Delhi: Corporate behemoth Reliance Industries (RIL) and two Tata Group firms Tata Motors and Tata Steel have emerged as the country's most admired companies for their corporate social responsibility (CSR) initiatives, says a survey. According to a survey by global consultancy firm The Nielsen, RIL is on top followed by Tata Motors and Tata Steel as the most admired companies by stakeholders for their CSR initiatives. The companies have been engaged in various CSR activities such as promotion of primary and higher education among adults and economically disadvantaged sections of society, improving health care infrastructure and increasing environmental consciousness in the country. Interestingly, as much as 86 per cent of stakeholders feel that countering terrorism should also be taken up by companies under their CSR activities apart from the regular activities in the fields of education, health, infrastructure from corporates. "Public expectations of corporations are on the increase as stakeholders see significant impact they are having in various spheres, be it education, health infrastructure, environment conservation," The Nielsen Company Associate Director Consumer Research Vatsala Pant said. http://www.business-standard.com/india/news/ril-tatas-most-admired-cos-for-csr-activities/62881/on | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INTERVIEWS/FEATURES Go To Top | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CARS, SUVs, MUVs Go To Top The Hindu Business Line (Web & Print Edition) Chennai: Maruti Suzuki, which commands more than half the passenger car market in the country, believes that the recent general election offers it and its dealers many lessons. At a dealers conference in Bangkok, the companys Managing Director and CEO, Mr Shinzo Nakanishi, picked one to highlight the way forward for dealers. According to sources in Maruti Suzuki India, Mr Nakanishi referred to the Congress emerging victorious in the elections, which experts had attributed to the careful development of young leaders. New leaders Such a strategy, he said, would benefit the dealers. His advise to them was to have a proper succession plan in place. Grooming and developing a new line of leadership, he told the dealers, would strengthen their business. Mr Nakanishi said the company paid attention to the growth and profitability of dealers. Last year, when the automobile market slowed down, the company decided not to burden dealers with high inventory. It closed down plants on a few occasions to match production with demand. The company is of the opinion that higher workshop productivity would improve dealers profits. Financial problems Maruti Suzuki was taking steps to bring down inventory of spares at dealerships. The growth of the True Value business, the branded used-car business of Maruti Suzuki, helped the company last year and would have benefited the dealers too. Maruti Genuine Accessories (MGA) was yet another initiative that offered tremendous potential for the company and the dealers, while insurance and extended warranty offered strong revenue streams. Despite these efforts and the companys strong business model, the Managing Director told the dealers, the company had received reports of some of them facing financial problems, even while others had grown in the tough times. His appeal to the dealers was for them to manage their funds prudently. In this too, they could learn from the company. It was Maruti Suzukis strong cash position that saved it from problems last year. It also gave the company the confidence to implement its long-term objectives as scheduled even in a downturn. The company, Mr Nakanishi told the dealers, was going to train its regional managers to help the dealers in the areas of financial management and profitability. http://www.thehindubusinessline.com/2009/05/27/stories/2009052750710200.htm GROWTH FROM ONLY TWO MODELS IS A CONCERN: MARUTI SUZUKI New Delhi: Concerned over sales growth coming mainly from two of its models Dzire and Swift countrys largest carmaker Maruti Suzuki India said unless its other products contribute equally the company could face problems in the long-term. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COMMERCIAL VEHICLES Go To Top PTI See this story in: The Economic Times (Web Edition), The Hindu Business Line (Web & Print Edition), The Indian Express (Delhi Print Edition), Business Standard (Delhi Print Edition) New Delhi: Auto major Mahindra & Mahindra introduced CNG variant of its pick-up vehicle, Maxx Maxi Truck priced at Rs 3.79 lakh (ex-showroom Delhi) as it looks to strengthen its position in the segment. http://www.thehindubusinessline.com/2009/05/27/stories/2009052750750200.htm SCHOOL BUS SEGMENT A NEW BIZ AVENUE Manu P. Toms The Hindu Business Line (Web & Print Edition) Mumbai: As schools get set for the new academic year, bus manufacturers are also gearing up. Tata Motors, Ashok Leyland, Volvo Eicher, Ashok Leyland, Force Motors, Swaraj Mazda and Mahindra Navistar are eyeing business opportunities in the school-bus market. According to industry estimates, about 80 per cent of school-bus sales happens during March-July. The school-bus market is a rapidly growing segment. Of the 60,000 buses sold in India annually, schools account for nearly 10,000. This segment has grown at 20 per cent the last five years. Among bus-makers, it is virtually a war out there, said Mr Anil Baliga, Director, Product Marketing Group, Eicher Trucks and Buses. The potential can also be gauged by the fact that there are three lakh schools across the country. Only one lakh have buses; which means 65 per cent of the school market is still untapped, he added. Buses have become an incentive in parts of rural India where children end up walking a few miles to their schools. To ensure that they do not stop studying because of the distance factor, schools offer buses as an incentive for admission. We sent mails to about 10,000 schools in February. While a handful of big chains adopt a centralised procurement system, we will have to canvass individually for most others, said Mr Baliga. Volvo Eicher said it has a 20 per cent market share in the school-bus segment. It focuses on 40-seaters, which are fast becoming popular. The companys Skyline range, with a price tag of Rs 10.5 lakh plus, caters to the high end. Mahindra Navistar, the joint venture of Mahindra & Mahindra and Navistar USA, claims there is a shift in preference to smaller capacities of 15- and 25-seaters. Mahindra Tourister, for instance, is one of the popular models in this category. We have a comprehensive school-bus marketing programme called Mahindra School Fest through which we connect with over 65,000 schools across the country, said Mr Rakesh Kalra, Managing Director, Mahindra Navistar. The company, which sold around 2,500 minibuses in April-July 2008, expects 50 per cent growth this year. Safety, aesthetics and comfort are the norms of school buses. The preference for company-built buses is increasing. Elite schools also go in for add-ons such as air-conditioning, and high-back and reclining seats, said Mr Kalra.. What is mandatory for all school buses is a first-aid box, fire-extinguishers, space under the seat for the school-bag, horizontal window grills and door locks. In addition, they should be easily identifiable with the schools telephone number painted on the body. Market leader Tata Motors retails its modified Starbus range, which is produced at the Tata Marcopolo joint venture plant in Dharwad, Karnataka. The companys focus is on schools in the South. Recently, a chain in Andhra Pradesh bought 82 Tata Marcopolo buses each with a seating capacity of 40 and costing a little over Rs 11 lakh. Low-cost buses are also gaining ground as in the case of Volvo Eicher which retails the Starline range for under Rs 10 lakh. Similarly, Mahindra Navistar also recently launched its 14-seater low-cost school bus called Vikrant. http://www.thehindubusinessline.com/2009/05/27/stories/2009052750670200.htm | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONSTRUCTION & AGRI MACHINERY Go To Top Nandini Sen Gupta
The restructuring plan includes financial clean-up of its books, new products, higher margins and better return on capital. It also includes plans to list the groups construction equipment business. Speaking to ET, Escorts joint MD Nikhil Nanda said: Our primary focus was to clean up the balance sheet and so far we have managed to do that. When the financial restructuring of the company started in late 2004, term debt was Rs 850 crore, interest cost was a high Rs 175-180 crore and EBIDTA was negative. The debt will be down to Rs 110 crore by September end (Escorts financial year runs from August to September), term debt is down to Rs 95 crore and short-term debt is zero, said Nanda. Earnings before interest, depreciation and amortisation (EBITDA) were Rs 155 crore last year and should be Rs 200-210 crore this year, he added. Interest cost is down to Rs 60 crore. With the balance sheet cleaned up, Escorts is looking to get its product strategy up and running. In tractors we want to be a clear number two and we want to pursue farm mechanisation aggressively, said Nanda. In other words, apart from adding new products to its tractor stableit has added about eight new products in the last 18 monthsEscorts is looking to enter implements and other farm mechanisation products. The strategy also includes looking for export numbers in components such as the engine business, which will be expanded as a profit centre. Escorts is looking at both, new applications such as generator sets as well as buyback arrangement with MNC OEMs for its engines, Nanda said. Escorts is also looking for a similar business plan for axles and transmissions. As part of the reorganising, Escorts is also aggressively cutting costs. In FY09, it will save Rs 45 crore, which will go up to Rs 100 crore by September end this year, Nanda said. Added to the improved product mix larger tractors and more margin-happy sales, it will help increase EBIDTA margins, he added. Like the tractor business, Escorts is also expanding its engineering business through new products and expects its current revenue to double from Rs 200-220 crore to Rs 500-600 crore by 2012. The focus of the engineering division is on railways. Escorts is aggressively upgrading products and expanding applications, including a possible foray into metro railways. The groups third business of construction equipment, with a new plant in Ballabhgarh, will be positioned as a onestop-shop for mechanised construction machinery, Nanda said. The plan is to go for a public offer in the next 15-18 months to offer an exit option to Darby Overseas, the private equity arm of Franklin Templeton, which has invested Rs 75 crore in Escorts Construction Equipment Limited. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| HONDA LAUNCHES NEW VERSION OF 'CBF STUNNER' PTI See this story in: The Economic Times, mint, Deccan Herald, The Hindu Business Line, The Hindu New Delhi: Honda Motorcycles and Scooter India (HMSI) on Tuesday launched a new version of its 125 cc sports bike - CBF Stunner priced at Rs 64,630 (ex-showroom, Delhi). http://economictimes.indiatimes.com/News/News-By-Industry/Auto/ http://www.livemint.com/2009/05/26125240/Honda-launches-new-version-of.html http://www.deccanherald.com/content/4624/hondas-cbf-stunner.html http://www.thehindubusinessline.com/blnus/19261310.htm http://www.hindu.com/2009/05/27/stories/2009052755661300.htm HONDAS 100 CC BIKE TO BE ON A NEW PLATFORM The Hindu Business Line See this story in: The Statesman New Delhi: Honda Motorcycles and Scooters India says there will be no cannibalisation between its 100 cc bike and the existing models of its sister company, Hero Honda. Built on a completely new platform, its bike in the entry-level category will be launched by the end of the current fiscal. The company stated that its entry level bike could be priced between Rs 40,000-45,000. HMSI, which has so far claimed that its entry bike will be in premium category and with sporty look, indicated that the price gap between its model and Hero Honda would be marginal. Currently, Hero Honda, which has a joint venture with Honda Motor Co, is the largest player in the segment with models such as CD Deluxe, Passion and Splendor. There will be no cannibalisation. Our bike will be bit higher priced. But it will be less than the cost of a 125 cc bike. There is a market for the 100 cc bike. I am not aiming to make the product a big business in terms of volume. But I want to satisfy HMSI customers who are looking to buy the product, said Mr Shinji Aoyama, President and CEO, HMSI at the launch of a PGM FI (programmed fuel injection) Stunner in the 125 cc category. The new Stunner priced at Rs 64,630 (ex-showroom Delhi), offers more mileage and top speed. With the new variant launch, the company is aiming to sell 1.25 lakh units in the current fiscal. Last year, the company sold 83,000 units of its existing Stunner. In the current fiscal, the company intends to sell 12.5 lakh two-wheelers against 10.7 lakh units, last year. http://www.thehindubusinessline.com/2009/05/27/stories/2009052750660200.htm http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=255825 BAJAJ AUTO TO MOVE SC ON TVS ISSUE T E Narasimhan & Swaraj Baggonkar Business Standard See this story in: The Economic Times Chennai/Mumbai: Just over a week after the Madras High Court granted the Chennai-based two-wheeler company TVS Motor the permission to use twin-spark plugs in its motorcycles, Bajaj Auto has decided to move the Supreme Court against the ruling. The High Courts ruling had come as a big relief for TVS Motor, which was restricted by an earlier verdict from the same court that did not allow the company to produce or sell the disputed motorcycle Flame, a 125cc bike sporting twin-spark plugs, as Bajaj Auto held patent rights for the same. Bajaj Auto filed a separate petition in the Madras High Court asking it to put a stay on its earlier ruling. However, the court stated that this would come up for hearing only after two weeks. The HC had earlier observed that there was a difference between the three-valve engine configuration of TVS Motor Company and the two-valve configuration of Bajaj Auto Limited employed in the twin-spark plug engine. The combustion process of TVS Motor Company was not exclusively based on the twin-plug operation but was based on the three-valve configuration patented by M/s AVL GMBH of Austria, licensed to TVS Motor Company to use its technology, stated the HC. The division bench, headed by Justice S J Mukhopadhyaya and Hon Justice F M Ibrahim Kalifulla, held that merely because prima facie Bajaj Auto Limited was having a valid patent, that by itself would not mean that Bajaj Auto had made out a strong prima facie case of infringement against the TVS Motor Company. The bench further held that prima facie the product manufactured by TVS Motor has a distinctive feature, which is different from that of Bajajs patent. Accordingly, the division bench set aside the order of the single judge and discontinued the injunction granted by him. TVS Motor, which has come perilously close to Bajajs sales tally following massive erosion in demand for Bajaj models in the past few months, has been asserting that its product in no way infringes on the technology of Bajaj Auto. In February last year, the Madras High Court restrained TVS Motor from manufacturing, marketing and selling its 125cc motorcycle TVS Flame after Bajaj Auto alleged the bike used twin-spark plugs for combustion, a patented technology of Bajaj Auto. The order came after a petition was filed by Bajaj Auto seeking to restrain TVS Motor from manufacturing and selling the Flame motorcycle. http://www.business-standard.com/india/news/bajaj-auto-to-move-sctvs-issue/359310/ BAJAJ TO USE KTM ALLIANCE TO ROLL OUT BIGGER BIKES Swaraj Baggonkar Rediffmail Mumbai: A little more than two-and-half years after Bajaj Auto acquired its first stake in Austrian power bike maker KTM Power Sports AG, the Pune-based company is readying itself to derive full benefits from the alliance. In addition to selling imported as well as locally assembled KTM branded bikes in India, Bajaj Auto intends to utilise the partnership for jointly manufacturing complex, high-end and powerful engines in the near future. This is expected to give a huge boost to both the companies' prospects in India. Bajaj Auto, India's second-largest motorcycle producer, has been looking to establish itself as the leader in the premium bike segment through constant efforts in research and development, as well as through upgrade of the consumer to higher capacity bikes. Rajiv Bajaj, managing director, Bajaj Auto, said: "We will pull out bigger bikes from the partnership. We will bring KTM models here so that our suppliers get properly acquainted with their bikes and engines. It is a process that will demand a lot of effort and time. It will take around five years (for us) to sufficiently integrate them." The alliance will give Bajaj Auto a much needed access to KTM's intricate engine technology, while also being cost-effective through the use of its own R&D. Bajaj will spend Rs 140 crore (Rs 1.4 billion) this financial year towards R&D. In addition, Bajaj will tap into KTM's extensive service and dealer network spread across premium markets like Europe, while KTM will use Bajaj's influence in China, one of the world's largest two-wheeler markets. The Pune-headquartered company has so far spent about Rs 700 crore (Rs 7 billion) in KTM, mainly to buy shares in KTM through its Netherland-based subsidiary company, Bajaj Auto International Holding BV. From the 14.5 per cent acquisition bought in November 2007 for Rs 300 crore (Rs 3 billion), Bajaj had hiked its stake to 31.72 per cent till March this year in the Austrian company. According to the disclosures made by the company at a recent press event, which involved the fourth quarterly results, the company has invested Rs 138 crore (Rs 1.38 billion) alone in KTM last year. Rajiv Bajaj is now also on the board of KTM. The financial condition of KTM was hit hard by the ongoing downturn in the world market, as demand slowed down to alarmingly low levels. According to a financial report submitted by KTM to the Vienna Stock Exchange, it posted a net loss of euro 44.5 million in the first half of 2008-09, as compared to a net profit of euro 11 million in the same period of 2007-08. Despite this, Bajaj stated, "The downturn has impacted everyone. But we are confident that KTM will bounce back. Newer ventures will positively affect the company." Bajaj Auto is set to launch KTM's Duke 690 - a 654cc, single cylinder, 4-stroke engine motorcycle, as well as the 1190 RC8 superbike - a twin-cylinder, 1148cc motorcycle, next calendar year. Also, by the middle of next year, the market will witness the launch of a motorcycle being jointly developed by both the companies at present. Thereafter, Bajaj will perhaps launch its first big engine bike in 2011 developed with the help of KTM. Currently, Bajaj's Pulsar 220 is the only motorcycle from the company which has an engine capacity higher than 200cc. http://business.rediff.com/report/2009/may/26/bajaj-to-use-ktm-alliance-to-roll-out-bigger-bikes.htm | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COMPONENTS Go To Top Venkatesha Babu mint Bangalore: Think of Bosch Ltd, earlier Motor Industries Co. Ltd, or Mico, and the first image your mind is likely to conjure up is that of a spark plug. But the auto components maker, a 71% subsidiary of Germanys Bosch Group GmbH, has a strong presence in segments as diverse as diesel fuel injection equipment, auto electricals such as alternators, packaging machines and security technology products. In fact, the firm gets a quarter of its annual revenues in India from its non-auto businesses, including software, says managing director V.K. Viswanathan. On Tuesday, the company launched a subsidiary, Bosch Automotive Electronics India Pvt. Ltd, that will make electronic control units for diesel and petrol engines. The plant will supply its first batch of electronic control units to Tata Motors Ltds ultra-cheap car, Nano. The subsidiary has been set up with an initial investment of Rs60 crore, and will produce 100,000 electronic control units this year from the facility in Naganathapura, on the outskirts of Bangalore. The subsidiary will see an additional investment of Rs68 crore by 2010 and will ultimately have capacity to produce 2.5 million electronic control units a year for the domestic market. As the auto industry copes with a global slowdownI think we are at least a couple of quarters away before the overall auto market recoversthe company is leaning more on innovations that have started contributing significantly to our top line, Viswanathan said in an interview. Bosch is also on course to completing its Rs1,000 crore investment plan in India. Edited excerpts: Has demand started reviving in the auto sector? The Indian auto sector got hit by the global slowdown from October 2008. Since then, in the subsequent months, the slowdown got accentuated. However, from February onwards, there have been slight signs of revival, specially in the passenger car market. The heavy commercial vehicle segment continues to face severe headwinds both due to lack and high cost of credit as well as lack of demand from customers due to low industrial activity. The extent of decline in the heavy commercial vehicle segment is by 50-60% compared with the same period of the previous year, and this decline has only been slightly mitigated by the improving situation in the passenger car market. Bosch has been no exception to the impact, which has been there on all players. There is a noticeable, discernible, but hesitant recovery. It is difficult to say, but I think we are at least a couple of quarters away before the overall auto market recovers. Generally, the aftersales market is counter-cyclical to original equipment sales. Has that helped? Yes, it is true that during downturns fleet operators look to flog their vehicles longer and, thus, sales of spare parts tend to go up. For us, it is close to 21-23% of our turnover (of at least Rs5,000 crore a year) and has gone up by a couple of percentage points in the current environment. In 2007, you had outlined a Rs1,000 crore investment road map over three years. Given the current environment, are you still going ahead with it? Large parts of the investment which had to be done have already been done. In 2008 alone, we invested around Rs425 crore, and in 2007 we invested about Rs295 crore. Bosch looks to India as a medium- to long-term growth market and, therefore, our investment plans dont change dramatically overnight. There might be small adjustments. In 2009 also we are investing Rs250-300 crore as outlined under that plan. There was talk in 2007 that over the next three years, 30% of your revenue would come from innovative, new products. Have you achieved that? I am not sure about that third of revenues (from new products), but clearly the contribution of new technologies like common rail systems, advanced single cylinder based systems, compact alternators or our start-stop (micro hybrid) technologies have started contributing significantly to our top line. The work we have done, say on the injection systems, starters and alternators for the (Tata) Nano, have also been extremely innovative in delivering very high quality at very competitive prices. We will continue to invest in innovation. Some of the products we are introducing are breakthrough, first time in India kind of products. We continue to innovate on high fuel-efficiency and low-emissions technology. Since Bosch has six different firms in India, are there plans to consolidate them into a single entity? No, there are no such plans. Each of these companies address different needs and have different shareholders. There are merits in having them as separate companies. So they will remain separate entities. What is the status of Boschs buyback offer a couple of months ago? We had said that we will buy 1,500,000 shares or approximately Rs625 crore worth of shares. We have already brought back 500,000 shares, which have been extinguished. Bosch internationally gets around 60% of its revenue from the auto market, 12-15% from industrial technologies, and the rest from its consumer business. Is the Indian arm adopting a similar model? Of the approximately Rs6,500 crore that Bosch group companies did in India, about 25% came from non-auto business including software. Rexroth, which deals with the industrial goods sector through packaging machines, and others contributed sizably. We also have consumer durables where we sell security systems and power tools. We have grown significantly in the power tool sector, where we have more than a third of the organized sector amounting to Rs300 crore, and we have done very well in the security systems, which includes access control, surveillance systems, public address systems, fire protection and intrusion alarm systems. We are broadly evolving towards the Bosch global model. Packaging machines is an around Rs40 crore business. Internationally, Bosch has a joint venture with Siemens AG selling microwave ovens, refrigerators and washing machines. Any plans to enter the Indian market in this? We had earlier licensed to (home appliances maker) IFB and had an unhappy experience. So now, no plans for the present. What about Blaupunkt? It is a small business. Last year, we did about Rs40-45 crore. In this business, there has been global restructuring. The after market business of the car multimedia business has been sold, including the Blaupunkt brand, to Aurelius AG. Therefore, that business will get transferred. We will not have a presence in the retail market in a months time. We were not even manufacturing, but trading by importing from other Bosch locations. Some of the 25 people employed there will go to the new player (and the) rest will be redeployed internally. http://www.livemint.com/2009/05/26213855/Recovery-in-auto-market-may-ta.html?pg=2 BOSCH SAYS NO PLANS TO SCALE DOWN INVESTMENTS IN INDIA The Hindu Business Line See similar story in: The Hindu, Yahoo India, Deccan Herald, The Financial Express Bangalore: Bosch will maintain its India focus and there is no plan to scale down its investment in the country, due to the global economic environment. This is reflected in the companys latest commitment of Rs 128 crore to set up manufacturing units for electronic control units (ECU). The new unit was formally inaugurated by Mr Bernd Bohr, Chairman of the Automotive Group, Robert Bosch GmbH. Of the total investment, the German automotive component companys subsidiary, RBAI (Robert Bosch Automotive Electronics India Pvt Ltd), has invested Rs 60 crore. The remaining Rs 68 crore investments is expected to be made by next year. Mr Bohr said though Bosch suffered a setback in its sales globally due to the economic meltdown, India continued to be a growth market. Bosch India is an important constituent of the worldwide Bosch family. We have made substantial investments for various expansion projects and new production innovations. The ECU unit is another significant step in that direction, he said. The India plant set up at Naganathapura here, will cater to the domestic market, said Mr Bohr adding that the first batch of the ECUs produced at the plant would be supplied to Tata Motors Nano model. The ECUs integrate all required functions of modern engine control in a single unit for applications in fuel injection and ignition in motor vehicles. Addressing a press conference here Mr Bohr said the company, which has already introduced the common rail injection system for diesel vehicles in India, plans to extend the product to commercial vehicle segment in the country soon. Mr V.K. Viswanathan, Managing Director, Bosch Ltd, said production in its various plants have become normal after going through some slowdown and closure in the last few months. The capacity utilisation in all the plants is normal, he added. The company also plans to augment its employee strength by 2,000 in the next two years to reach 20,000, Mr Viswanathan said. http://www.thehindubusinessline.com/2009/05/27/stories/2009052750170300.htm http://www.hindu.com/2009/05/27/stories/2009052755761400.htm http://in.biz.yahoo.com/090526/50/batmx6.html http://www.deccanherald.com/content/4622/bosch-invest-rs-300-cr.html | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ALLIED INDUSTRY Go To Top Hemamalini Venkatraman & Chandra Ranganathan The Economic Times Chennai: The country might still feel the pangs of the economic downturn, but Tamil Nadu is on track to receive its first major investment post elections. French tyre giant Michelins Rs 4,000-crore project is on the take-off stage, with government machinery swinging into action to ensure that legal issues dont hamper investments. It is tying up all loose ends to allot 1,127 acres for the prestigious radial tyre project in Thervoy Kandigai village, near Gummidipoondi, in Tiruvallur district of TN. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" MRF LOCKOUT CONTINUES AMID DEMAND FOR A SECRET BALLOT The Economic Times Chennai: Amid demands for a secret ballot by striking workers, the lockout continued at tyre-maker MRFs factory in Arakkonam. Though MRF is expected to lift the lockout at its Arakkonam factory on Wednes-day, most workers said they would continue to strike at the Labour commissioners office in Chennai, hoping for government intervention. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://economictimes.indiatimes.com/News/News-By-Industry/Auto/Auto- MRF STRIKE FORCES HMSI TO TURN TO FALCON The Financial Express New Delhi: In an effort to counter production losses after a prolonged strike at MRF, Honda Motorcycles and Scooter India (HMSI) has started sourcing tyres from Falcon Tyres, a two-wheeler tyre manufacturing unit of Dunlop India. According to a company official, initially the company is sourcing around 5-7% of HMSIs daily production needs of 4,200 units of two-wheeler tyres from Falcon and this will go up to 20-25% by the beginning of the next financial year as the company gears up to increase production when it forays into the 100cc segment in 2010. We will increase the production of our Manesar plant by 20% from 12.5 lakh units to 15 lakh units, beginning next financial year, when the company enters into the mass volume 100cc motorcycle segment, says NK Rattan, vice-president (sales and marketing), HMSI. HMSI will launch a completely new 100cc bike by the end of this fiscal. It will be a bit higher priced than the entry level bikes in the market now, but it will not be higher priced than the 125cc bikes, Shinji Aoyama, president and CEO, HMSI, said hinting at a range of around Rs 40,000-Rs 45,000. The company, on Tuesday, launched a new variant of its 125cc bike CBF Stunner priced at Rs 64,630 and will be available from first week of June. The Indian two-wheeler market is predominantly motorcycle oriented, so we have to align ourselves according to the market, Aoyama said, adding currently HMSIs product mix is about 60:40 in favour of scooters but we expect it to become 50:50 in due course of time. Currently, the 100cc segment is dominated by Hero Honda, which is a joint venture between Japanese auto major Honda and Munjals-promoted Hero Group. HMSI sold about 10.7 lakh units in 2008-09 and the company is eyeing 17% growth in 2009-10 at 12.5 lakh units on the backdrop of new launches across all categories. According to the Society of Indian Automobile Manufacturers, the total two-wheeler sales in 2008-09 stood 74,37,670 units with motorcycles constituting 58,35,145 units. Earlier, HMSI had announced an investment of Rs 300 crore in the next three years for expanding its production capacities and launching new models. The company has so far invested Rs 900 crore at its production facility at Manesar. http://www.financialexpress.com/news/mrf-strike-forces-hmsi-to-turn-to-falcon/466475/ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FINANCE & INSURANCE Go To Top Kumar Shankar Roy The Times of India Chennai: The choice of red colour for your dream car may match your vibrant personality but vehicle insurers say certain colours like beige, red, blue are less visible during dusk or the night and hence, prone to a higher rate of accidents. Therefore, when arriving at the premium, vehicle owners with such colours could end up paying a higher premium due to their presumed higher claims ratio. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://timesofindia.indiatimes.com/Business/India-Business/Vibrant-car-colour-Get-ready-to-pay-higher-premium-on-cover/articleshow/4581452.cms | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LUBRICANTS & ALTERNATIVE FUELS Go To Top AP See this story in: The Times of India Oil prices fell to below $61 a barrel Tuesday as investors looked for signs of crude demand to justify the recent market rally and as the world's biggest oil exporters were expected to keep production levels unchanged at an upcoming meeting. http://timesofindia.indiatimes.com/Business/Oil-falls-below-61-as-traders-eye-economic-data/articleshow/4578249.cms | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INTERNATIONAL NEWS Go To Top Agencies See this story in: The Economic Times Detroit/New York: General Motors Corp has failed to persuade enough bondholders to accept a debt-for-equity swap, setting the stage for the largest ever US industrial bankruptcy within days. GM had no comment on the bond exchange. The automaker said it would detail results of the exchange on Wednesday morning. Reuters sources said GM could file for bankruptcy some time after midnight Tuesday, but before June 1. GM REACHES COST-CUTTING DEAL WITH CANADIAN UNION AFP See this story in: Hindustan Times Some 10,000 CAW members "voted overwhelmingly in favor of a new collective agreement, ratifying the deal by 86 per cent," following the tentative agreement reached with GM on Friday. The cost-cutting move, which involves about a 15-16 dollar wage cut per hour, was demanded by Ottawa and the Ontario government as part of a joint bailout of GM, to try to make the company more competitive vis-a-vis Japanese and European car makers. "Although we were forced to make a number of important sacrifices, the support we received from our members is proof that they recognise the incredible challenges the industry is facing," said CAW president Ken Lewenza in a statement. The company has asked for a loan of three billion Canadian dollars (2.7 billion US dollars) from the Canadian and Ontario governments, and billions more from Washington, to keep it afloat as it restructures its North American operations. Ottawa had set a May 15 deadline to reach a deal, but the talks continued until Friday and votes were cast over the weekend. GM is expected to present Ottawa and Washington with its restructuring plan by June 1. The agreement, which also includes major benefits, wages and pension concessions but keeps plants open in Ontario province, came days after GM secured a similar cost-cutting deal with its unionized American workers. BIG AUTO KEEPS FINGERS CROSSED AS DAY OF BIG DECISIONS DAWNS Reuters See this story in: The Economic Times Detroit/Washington: General Motors Corp faces a number of major deadlines and events expected late on Tuesday that will go a long way toward determining how and when the company files for an expected bankruptcy later this week. FIAT CHIEF TRIES TO CLINCH OPEL DEAL IN BERLIN Agencies See this story in: The Economic Times, Asian Age Berlin: Fiat chief Sergio Marchionne jetted back to Germany on Tuesday for an eleventh-hour attempt to win over a sceptical Chancellor Angela Merkel to his bid for General Motors' Opel unit. With indications that Berlin and GM prefer a Russian-backed bid from Canada's Magna International, Marchionne met Merkel and Economy Minister Karl-Theodor zu Guttenberg, reportedly after talks Monday in Detroit with GM. GERMANY SET TO DISCLOSE PREFERRED BIDDER FOR GM UNITS PTI See this story in: The Hindu Business Line London: The German government is set to announce the name of the preferred bidder for General Motors' stricken European units -- Opel and Vauxhall, a move which may lead to one of the biggest state-supported bailouts of a company, a media report says. The German government is set to name a preferred bidder for General Motors' cash-strapped European operations, paving the way for one of the biggest state-supported industrial bail-outs in the countrys history,'' the Financial Times said. The report noted that German chancellor Angela Merkel would meet top officials from the US, General Motors and the bidders for GM's European units Opel and Vauxhall tomorrow. The three bidders in the running are Italian carmaker Fiat, Canadian car parts group Magna and Belgium-based financial investor RHJ International. The successful bidder would get access to 5-7 billion euros (4.4 billion pounds and 6.2 billion pounds) in state guarantees. The German government also wants to strike a binding agreeme nt with GM and the US Treasury on shielding Opel or Vauxhall from an insolvency filing of the US carmaker, it added. http://www.thehindubusinessline.com/blnus/10261836.htm | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ECONOMY & FINANCE Go To Top The Hindu Business Line Mumbai: The rupee fell steeply against the dollar on Tuesday, depreciating by around 64 paise against the greenback. The rupee opened at 47.44 and weakened to touch an intra-day low of 47.92. It closed at 47.93 against the previous close of 47.28. Profit-taking by investors, month-end dollar demand and short-covering from importers exerted pressure on the rupee, said a dealer with a private bank. The negative domestic equity indices adversely impacted forex market sentiments, added the dealer. In the forward premia market, the six-month closed lower at 3 per cent (3.24 per cent) and the one-year closed at 2.46 per cent (2.63 per cent). http://www.thehindubusinessline.com/2009/05/27/stories/2009052751630600.htm SENSEX TUMBLES OVER 320 PTS; IT STOCKS UNHURT PTI See this story in: The Hindu Business Line Mumbai: The Bombay Stock Exchange benchmark Sensex on Tuesday plunged by over 320 points on hectic selling by funds and investors exited even the small and medium stocks which had surged in the past few trading sessions. While selling emerged across counters, IT stocks bucked the trend to record handsome gains on fresh buying after the US dollar was seen firming up against the rupee. After closing higher in the past two days, the bellwether index fell sharply by 323.99 points to 13,589.23. The index swung between a low of 13,518.79 and a high of 13,991.46 points. Similarly, the wide-based National Stock Exchange index Nifty shuttled between 4,092.25 and 4,239.55 points before ending with a whopping loss of 120.85 points at 4,116.70. Marketmen said selling pressure gathered momentum as major market players indulged in unwinding their pending positions ahead of expiry of derivatives segment on Thursday. Concerns that the new government might have to borrow more to boost economy also dampened the investor sentiment. Brokers said retail investors and funds took out money from small and medium size shares, which were on upward march in the recent past. Midcap index fell by 3.40 per cent to 4,724.09 and small cap index by 3.12 per cent to 5,608.66 points. http://www.thehindubusinessline.com/blnus/05261901.htm 9% GROWTH NOT POSSIBLE IMMEDIATELY: PRANAB MUKHERJEE Hindustan Times This is one of the most difficult times the world has ever seen. When do you see a revival for the Indian economy? It would be difficult to predict an exact time frame. Certain signs of recovery are there. For instance FII inflows have started. The stimulus packages that we passed in December and January have also started yielding results in certain sectors like steel and cement. But much more is needed for faster growth. It will not be possible for us to spell out those measures as we are in the process of formulating the budget. As and when the budget is presented, the scenario will be clear.
On the growth front, what is the modest and reasonable expectation that one should have? In the next couple of days, the CSO figures for 2008-09 (GDP) will be available. I think we have registered around 6.5 per cent growth in that year. Growth in 2009-10 will depend on when and how the recovery starts, but I will not say it will be too bad. Agriculture and rural development were the thrust areas for the UPA government. Is this thrust going to continue? If you glance through the interim budget, you will find that all these areas have been spoken about. What are you doing to boost investment in infrastructure? Infrastructure expenditure that we have given through the stimulus packages, its spending has started in some areas. But in certain areas it is yet to pick up. For instance, as part of support to the automobile industry, 1,400 buses were to be purchased by state governments. But the code of conduct became operational and so it was not possible to actually realise that. Now, it should happen. What about private investments that have flagged in recent months? For that we have made credit accessible. Eased the liquidity position through monetary policy. Farmers on the ground complain that benefits dont reach them There are certain mismatches in the delivery system, which need to be addressed. In infrastructure, construction of houses, private sector can play an important role. The other issue that is affecting people directly is the loss of jobs in unorganised sectors, and sectors like handicrafts and textiles. Half a million jobs have vanished. What do you plan to do on that front? Job losses are a matter of serious concern for us. We shall have to create jobs and for that we have to make investments. And for that we need money. I do hope to be able to make more resources available for employment creation. Now that you no longer depend on the support of the Left parties, will you push for liberalisation measures like disinvestment and easing of foreign investment caps? I will address them at the time of the budget. I cannot comment now. Should we be looking at a budget in the first week of July? More or less around that time. http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=Business Last Financial closing
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