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| INDUSTRY Shorter seven-day auto expo in January Tata Motors affirms Thai eco-car project INTERVIEWS/FEATURES CARS, SUVs, MUVs M&M may buy out partner in Mahindra South Africa COMMERCIAL VEHICLES Bosch to start operations at Tata's vendor park by Oct Bosch ECU unit starts sparking Auto ancillary companies take a U-turn on overseas acquisitions TVS exits from joint ventures with Wabco | ALLIED INDUSTRIES FINANCE & INSURANCE New system launched for auto-LPG pricing Shell engineers cutting edge lubrication Oil prices firm above USD 70 per barrel INTERNATIONAL NEWS Chrysler assets sale to Fiat on Wednesday: Fiat Chrysler, Fiat finalise global alliance US apex court refuses to stay Chrysler-Fiat deal China car sales jump 'beyond imagination', bring wait Lamborghini sees no recovery until 2011 Owners in debt torch cars to claim insurance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INDUSTRY Go To Top Chanchal Pal Chauhan The Economic Times (Web & Print Edition) New Delhi: Six months after an excise duty cut on vehicles worked as a turbocharger for their sales, the auto industry wants more benefits in Budget 2009 to maintain the graph. Removal of specific duty on big cars, tax sops on vehicles for rural markets and revival of the duty-free credit scheme for quantum growth in exports are some of the incentives the auto sector believes will act as another stimulus package. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://economictimes.indiatimes.com/News/News-By-Industry/Auto/Motown-seeks- SHORTER SEVEN-DAY AUTO EXPO IN JANUARY Hindustan Times (Delhi Print Edition) New Delhi: A shorter seven-day Auto Expo 2010 has been announced by organizers SIAM, CII and ACMA to be held between January 5 and 11 next year. The expo was threatened by a 23 per cent hike in rentals being charged by ITPO, but SIAM director general Dilip Chenoy said he is hopeful of an amicable solution. TATA MOTORS AFFIRMS THAI ECO-CAR PROJECT Reuters See this story in: The Indian Express (Delhi Print Edition) Bangkok: Tata Motors Ltd said on Wednesday its 5-billion-baht ($147 million) project to produce an "eco car" in Thailand by 2012 was still on track. Ajit Venkataraman, chief executive of Tata's Thai unit, dismissed local newspaper reports that the Indian car giant may be wavering on its Thai project. Tata is one of six foreign carmakers applying for government incentives to manufacture mini passenger cars with at least an annual production capacity of 100,000 units, he told reporters. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INTERVIEWS/FEATURES Go To Top There are two ways to get hold of any market. One is to compete with existing products, fight over volumes and eke out breathing space for a new product, but leaders through automotive history have seldom taken this approach of beating others at their own game. The truly iconic automobile has always been about being avant garde, about setting new benchmarks and creating a whole new and wide open segment for itself. It is about inviting competition, not fighting it. Which brings us to the hot new and much anticipated Honda Jazz that yours truly had the opportunity to drive recently in sunny Goa. Walk around it, and the Jazz's form appears chic, dynamic and utilitarian all at The Jazz's design is based on a simple and catchy machine-minimum, manmaximum concept that Honda has kept faith with for ages. The pudgy little hood reveals some very smartly packaged mechanicals (with Honda renowned for the brilliance of its powertrains) and this is exactly the factor that liberates massive amounts of space for occupants on the inside. The feeling of airiness once in the cabin and strapped into the seat is almost heady with the wide open vista that the windscreen opens before the driver. Wide, tall and large windows through the length of the cabin ensure that the rear bench occupants feel almost the same way. The Jazz is as much a car for practical use as it is for going out there and having some fun in the sun. Honda's 'magic seats' work wonders to create storage space on the inside where the rear bench can be folded upwards to liberate height or downwards to have a freer area lengthwise. This flexible way of folding the rear means that the Jazz can accommodate a tent as easily as it can swallow a barbeque rack. Fit and finish are exceptional - and this hatchback is even better put together than the acclaimed Honda City which bagged the coveted 2008 ZigWheels Car of the Year accolade. Safety of passengers and pedestrians has also been emphasized adequately, and the Jazz breaks new ground for cars in its class to feature not just ABS and EBD as OE along with a full compliment of airbags. Open the hood and one finds the familiar i-VTEC badge on a pretty compact looking engine. For excise benefits, the Jazz gets a 1.2-litre unit which is pretty much the norm these days. However what is extraordinary about this jewel of a motor is the amount of horsepower it churns out. The Jazz produces all of 90PS @ 6200rpm and a maximum torque of 110Nm @ 4800rpm from its diminutive 1,198cc engine. These figures are more than the previous generation City which produced a mediocre 77PS from a 1.5-litre engine. Definitely the peppiest unit in its class, the Jazz engine also features some very clever technology, like the SOHC i-VTEC system which allows one inlet valve to remain closed at low revs to boost not only the low end torque but also the fuel efficiency without impairing drive ability.
Coming to the million dollar question about pricing, and we have already seen a spate of angry messages on our online ZigWheels.com message boards from readers who seem to think that the Jazz carries a hefty price, but then they may very well expect a sub-Rs 3 lakh price tag for this car in their automotive utopia. Just to factor in a bit of context, Honda sells the very same Jazz and the Honda City in Thailand and unlike in India, it is the Jazz which is the more expensive model on offer. From Rs 6.98 lakh for the basic version up to the sport pedal and rear spoiler equipped Active variant for Rs 7.33 lakh (all prices exshowroom Delhi) it is by no means an inexpensive car, but then it would be unfair to caste the Jazz in the same archetype as an everyday hatchback. Be it the space, the refinement and punch of its sublime powerplant, its balanced pep in the steering and handling department or simply the high levels of quality that lie inside the car, there are few hatchbacks that truly challenge the Jazz. Also factor in the Honda brand equity and you know that the Jazz presents a mighty big challenge to one and sundry thanks to it being a most competent and irresistible package. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CARS, SUVs, MUVs Go To Top Business Standard (Web & Print Edition) See similar story in: The Economic Times (Web & Print Edition), The Financial Express (Web & Print Edition), The Hindu Business Line (Web & Print Edition), The Tribune (Web Edition), Daily News & Analysis (Web Edition), Hindustan Times (Web & Print Edition), The Hindu (Web & Print Edition), The Pioneer (Web & Print Edition), The Telegraph (Web Edition), Rediff India (Web Edition), The Times of India (Web & Print Edition), mint (Web & Print Edition), The Indian Express (Delhi Print Edition) New Delhi: Honda Siel Cars launched its first small car the Honda Jazz in the capital. The Jazz falls in the super premium category of the A2 segment which, until now, was occupied by Skodas Fabia. Available in three variants, the Honda Jazz is priced in the range of Rs 6.98-7.33 lakh. Market researchers say this super premium price tag, which is around Rs 2 lakh more than Marutis Swift and Ritz (also A2 premium segment), occupies a niche segment which sells few numbers. According to one estimate, of the 6,000 units of Fabias sold in the financial year 2008-09, less than 10 per cent would have come from the top-end Fabia compact cars, which cost around Rs 7.39 lakh. We expect the customer of a Jazz to be an owner of an executive car looking for a second car, which will probably be a compact car. Its unlikely the Jazz customer will be a first-time buyer. Itll take time for this premium segment to gain acceptance. We are willing to wait for three-four years for this to happen, Honda Siel President and CEO Masahiro Takedagawa said. The Jazz, which shares Honda Citys platform, is expected to sell about half as much as Honda City, of which about 2,500 are sold each month. Industry executives say the Honda Jazzs numbers will remain subdued due to two reasons. First, traditionally, the Indian customer has always preferred a car with a boot. Since the customer cannot afford a sedan, the choice gravitated towards a hatchback. At Rs 7 lakh, the customer has a range of options from the mid-size cars, beginning with Marutis Dzire, the price of which begins at Rs 5.36 lakh, said one analyst. The other concern, which the company has to address, is the limited range of engine options. According to one market researcher, the petrol version of the Jazz may not sell that much in the market. Despite all the bells and whistles the Honda Jazz may incorporate, it lacks a diesel engine, which makes the price tag of Rs 7 lakh hard to justify, said one industry analyst. Marutis diesel-powered Dzire models cost between Rs 6 lakh and Rs 7 lakh. Honda Siel plans to launch another small car in the next two years. http://www.business-standard.com/india/news/honda-siel-launches-jazz-at-rs-698-lakh/360757/ http://www.financialexpress.com/news/honda-launches-jazz-priced-at-rs-6.98-lakh/474303/ http://www.thehindubusinessline.com/2009/06/11/stories/2009061151300200.htm http://www.tribuneindia.com/2009/20090611/biz.htm#5 http://www.dnaindia.com/report.asp?newsid=1263809 http://www.hindustantimes.com/redir.aspx?ID=7720dc8c-607f-4230-9041-11a89ebe98c3 http://www.hindu.com/2009/06/11/stories/2009061155791700.htm http://www.dailypioneer.com/182028/Honda-makes-debut-in-small-car-segment.html http://www.telegraphindia.com/1090611/jsp/business/story_11094223.jsp http://business.rediff.com/report/2009/jun/10/honda-jazz-launched-in-india.htm http://www.livemint.com/2009/06/10234429/Honda-Motor-launches-Jazz-hatc.html M&M MAY BUY OUT PARTNER IN MAHINDRA SOUTH AFRICA Sohini Das Business Standard (Web & Print Edition) Kolkata: Leading Indian utility vehicle (UV) player Mahindra & Mahindra (M&M) is likely to buy out its local partner in Mahindra South Africa (Mahindra SA), which is currently a 92 per cent subsidiary. The company is also evaluating the possibility of starting a local completely knocked down (CKD) assembly unit there. A decision on buying out the stake of its local partner is likely to be taken in a months time. The 8 per cent stake is held by African Automotive Investments Corporation, a subsidiary of African Resources and Logistics Corporation. Mahindra SA sells the Bolero, Scorpio and Xylo ranges in South Africa, with the Thar off-road vehicle on its way later this year. On the ownership issue, we are moving ahead in a months time or so. This will help in building the brand Mahindra in the South African and adjoining markets as we will be able to take independent decisions, M&Ms Executive Vice-President for international operations, Pravin Shah, said. He, however, did not reveal the valuation of the 8 per cent stake. As for the local CKD assembly unit, the company is evaluating options as it is focussed on South Africa as a long-term strategic market. The companys local assembly ambitions could be facilitated within an existing vehicle plant of another vehicle manufacturer, which has spare capacity available. Mahindra already has an assembly plant in the North African country of Egypt. Logistics costs and potential import duty benefits are the key drivers behind the decision to have a local assembly unit. Shah pointed out that, while one would definitely make savings in terms of duty and logistics, one had to invest in the assembly plant at the same time. At a time when international car markets are witnessing a 30-35 per cent downturn in sales, one has to take a cautious decision. One has to reach a critical mass to make the project viable, Shah added. He maintained that, while M&M was evaluating options, no concrete decision has been taken so far. Once an assembly unit is set up in South Africa, Mahindra can use it to serve the adjoining markets like Zambia, Angola, Zimbabwe and Botswana, among others. Analysts pointed out that another tangible benefit might also include the access to the US market through its local assembly in South Africa. The African Growth and Opportunity Act provided duty-free access to the US for a large number of products from over 35 African economies. Mahindra plans to enter the US market with its Scorpio later this year. Mahindra SA had sold over 1,500 vehicles in the local market last year. At its peak before the recession, Mahindra sales had reached roughly 5,000 units a year in South Africa. http://www.business-standard.com/india/news/mm-may-buy-out-partner-in-mahindra-south-africa/360758/ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| COMPONENTS Go To Top T. Murrali The Hindu Business Line Chennai: Empirical evidence gathered from auto component manufacturers in the country shows the industry is on the path of recovery, growing faster than expected. Leading players say that the outlook for the auto component industry is good on the domestic front, but discouraging on the export front. In 2008-09, the automobile industry grew 2.96 per cent to 11.17 million units but the components industry outpaced the vehicle manufacturers with a 6 per cent growth. Last year, the total value of auto parts sold was Rs 76,300 crore. Momentum to continue Industry experts feel that the momentum will continue, since the recovery in the passenger car, two-wheeler segment and light commercial vehicles seems to be sustainable, aided by dropping interest rates and better availability of finance. Mr Vishnu Mathur, Executive Director of ACMA, believes that the segment is doing better now. However, there is cautious optimism and better clarity will come after the Budget. As of now, we cannot make any forecasts for growth, he adds. Last years sales volume was affected by the downturn from the third quarter and slowdown in exports since the second quarter. Besides, volatility in commodity prices and foreign exchange rates added to the woes, says Mr L. Ganesh, Chairman, Rane Group. The power cut from the third quarter and high cost of diesel added fuel to the fire to units in Tamil Nadu. Most companies saw stability on the cost front beginning January 2009; however, it was too late to have a significant positive effect for the year. The Finance Ministers assurance of reducing interest rates further will help sustain the current growth, says Mr Mathur. Mr Ganesh sees the current year to be better than 2008-09 if the trend in the first quarter continues. The dramatic slowdown in the third quarter of 2008-09 was across the board. Fortunately, since last January, all segments except commercial vehicles started recovering after inventory correction. Cyclical downturn The CV segment has gone into a cyclical downturn since last month (May). This is expected to correct only by the fourth quarter this year or first quarter of next year. The recovery has been reasonable for the component industry, says Mr Ganesh. The Chairman of Sona Group, Dr Surinder Kapur, says auto component manufacturers having diversified market portfolio including aftermarket are better placed than those focusing on one segment of the vehicle industry. Even considering the current performance levels, India is doing better than the rest of the world except China. However, it is necessary to be much more competitive. Mr Vijay Menon of Kholapur-based castings manufacturer Menon & Menon Pvt Ltd agrees that the auto component industry is recovering much faster than expected. Except CV, other segments have shown an upward trend and it will continue in the current year. Exports hit Exports have been affected due to lower demand from major markets such as the US and Europe, says Mr Mathur of ACMA. Mr Ganesh views 2009-10 as a bad year for exports since the industry is facing an uncertain situation. The current developments in the US market have to play out. Dr Kapur indicates that component manufacturers who predominantly concentrate on exports or cater to the CV segment have been affected significantly. The momentum will sustain and the best indicator is the stock market. Besides, it also depends on the performance of the new Government, which many people believe that it will do so, he says. General Motors filing bankruptcy might turn an opportunity for Indian vendors. Those who supply to specific North American models may suffer while others stand to gain. Adds Mr Menon that those companies depending on export market can expect less-than-average growth during the year since the export market is in a bad shape. The companies exporting a large percentage of their output, particularly to the US and Western Europe could face a prolonged period of uncertainty. Mr E. Balaji, CEO and Director of MaFoi Management Consultants, sees seven to nine per cent growth in terms of number of enquires from automotive industry for recruitment, in April-May period against the previous three months. This is more from the passenger car and two-wheeler segments and not so many from the auto component industry. During the first three months, nobody was willing to even discuss recruitment. Now companies are willing to hire. Mr V.G. Ramakrishnan, Senior Director (South Asia, Middle East & North Africa), Automotive & Transportation, Frost & Sullivan, says it would take at least four years for the CV component manufacturers to recover. "Overall, it will be a tough year for the component industry," he says. It will take a long time for the industry to revive to the level of the first half of 2008-09. For this to happen, all segments of the industry should revive. The segment that predominantly decides the overall performance of the auto component industry is CV, which could take at least another two years to revive to the level of the first half of 2008-09. http://www.thehindubusinessline.com/2009/06/11/stories/2009061151310200.htm BOSCH TO START OPERATIONS AT TATA'S VENDOR PARK BY OCT Business Standard Mumbai/ Ahmedabad: Bosch Limited, the flagship company of Bosch Group in India, plans to commission its unit in Tata Motors' Vendors Park in Sanand, near Ahmedabad, by October 2009. The auto component company is planning to be on schedule with its supply to Tata Motors' Nano. "Tata Motors have asked us to supply components for Nano atleast by October this year and we have to be on schedule with them. Therefore, we plan to commission our Vendor Park unit in Sanand by that time atleast," said a company spokesperson", said a company spokesperson. Recently, Tata Motors met its component suppliers on at the Sanand plant in Gujarat in order to allot suppliers land in the vendor park and also show them progress at the plant. Tata Motors is expected to provide land to about 60 of the key Nano suppliers who will be located in the plant premises. Among several products, Bosch Limited would be supplying brake solutions, fuel injectiion systems, electronic control unit (ECU), starter motor and generator to Nano. Its braking systems comprises a tandem master cylinder (TMC) and four drum brakes. "While initially fuel injection systems will be supplied from Bangalore inspite of commissioning the Sanand unit, the components will be later manufactured from the Vendor Park," the spokesperson said, refusing to divulge investment details of the project. Meanwhile, for the Nano gasoline variant, Bosch has also developed a state-of-the-art gasoline engine management system which may be supplied from the Sanand unit. According to the company spokesperson, the components have been developed in the low cost and high fuel efficiency requirements of Tata Motors in mind. Tata Motors aims to roll out Nano from Sanand mother plant by early 2010. BOSCH ECU UNIT STARTS SPARKING Adil Jal Darukhanawala The Economic Times, Zigwheels The world's largest automotive supplier and technology specialist Bosch commenced manufacturing operations for its new electronics facility for ECUs at Naganathapura near Bangalore. This unit would be making electronic control units (ECUs) for both petrol and diesel fuel injected engines in India and the first products to roll out from this spanking new facility are ECUs for Tata's small wonder, the Nano. In any modern automobile with fuel injected engines, ECUs play a critical role to control their behaviour across their operating spectrum while also having a great deal of logic built into them for optimum efficiency. The main components of an ECU consist of a microcontroller with software applications and power stages. The software is embedded in a compact chip set which controls the fuel injection and also the ignition. ECU manufacturing is an art form especially as regards robust build with proper heat and dust insulation for use in an automobile. The Naganathapura facility, is absolutely state of-the-art with near complete automated manufacturing systems including a very innovative software embedder which is directly controlled from the Bosch technical HQ in Germany depending on the work flow for various car models from different car makers. A total of Rs 60 crores have already been invested in this facility and Bosch intends to put in an additional Rs 68 crores by the next year. Speaking exclusively to ZigWheels, Dr Bernd Bohr, chairman of the Bosch Automotive Group said "With the start of manufacturing of electronic control units we are taking the next logical step (after common rail diesel fuel injection systems) by bringing the brain of the systems to India. With Bosch India's and former Mico's over 50 years legacy of producing mechanical parts of the highest precision and quality, the start of this facility at Naganathapura brings a whole set of competencies and opens up significant market segments in the area of engine management and also beyond, in the realm of vehicle safety and comfort." Bohr's statement is pretty significant in that it indicates its next prong of advancement in the technological upgradation of Indian vehicles, notably in the retardation department. It is gearing up for a move with its Start-Stop system to be incorporated in various models from different OEMs plus from next year it is planning to commence manufacturing its Anti-lock Braking Systems (ABS) in India itself. Both these modern vital components in a car's make-up need to have their operating parameters controlled by a central unit and this brings the commissioning of the new Naganathapura facility into sharp focus. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" AUTO ANCILLARY COMPANIES TAKE A U-TURN ON OVERSEAS ACQUISITIONS Shally Seth mint Mumbai: In a significant shift in strategy, Indian automotive ancillary manufacturers are holding off acquiring troubled overseas companies, even when going cheap, largely on account of foreign banks hesitation with the auto industry and already idle capacity at existing units abroad. Indian ancillary units are instead looking to Indian banks for funding and are restructuring existing units to counter the fall in demand and a shortage of working capital that has plagued these units following the global economic downturn and the crisis of confidence the auto industry is going through after bankruptcy filing by General Motors Corp. and the sale of Chrysler Llc. to European auto maker Fiat SpA. Hemant Luthra, president of Mahindra Systech, an auto component manufacturing and engineering solutions arm of auto maker Mahindra and Mahindra Ltd, said compared with two years ago, he is no longer excited by proposals from investment bankers to acquire troubled European auto parts makers. Mahindra Systech and other auto ancillary firms such as Bharat Forge Ltd, Amtek Auto Ltd and Sona Group, had earlier adopted overseas acquisitions as a way to access technology and expand their global presence. But that strategy hit a bump when, faced with a global economic slowdown, and the crisis in Detroit, banks in European countries started avoiding the auto sector. Luthra said he could not understand why Mahindra Systechs businesses abroad are categorized with the rest of the auto industry despite the fact that these firms are operationally profitable. The auto sector in that part of the world has become a four-letter word for the banks and they have been too busy shrinking their balance sheets, said Luthra. Some of the banks are straining their relationship with Mahindra even for an amount as small as $25 million (Rs118.2 crore) to $30 million, he said. Systech hence had to seek assistance from Indian and some other foreign banks to meet its requirements. The banks in Europe are not reliable. They are the first to press panic button when the going gets tough, said Santosh Singhi, chief financial officer at Amtek Auto, which has subsidiaries in Germany, the UK and the US. We are hence happy working with PSU (public sector) banks like State Bank of India, who are any day more dependable. Executives at both companies though conceded that with global economy improving, bankers are beginning to start lending. Industry experts, however, maintain that the decision by Indian firms to adopt the acquisition route for growth was the right one at the time, and that the current situation is an unforeseen one. Its only a hump they need to get over as more than anything its all the function of the business environment, said R. Venkatraman, partner at AT Kearney Ltd. With most Indian companies getting exposed to multi-currency issues for the first time, there is a need for a more prudent financial management, he said. Which is what most Indian firms are doing with their overseas units as demand falls precipitously. Volume at auto makers in markets such as the US and Europe have fallen as the global economy reels under recessionary pressures, forcing many ancillary parts makers to go under. The US, which had sales of 16.5 million light vehicles (cars and vans) annually, is down 60% to 9.5 million in one year, while European sales have fallen from 15 million units to 11 million units, Baba Kalyani, chairman of Bharat Forge, had said in an earlier interview to Mint. Amteks Singhi said his firm foresaw the crisis to some extent and has managed to bring down the working capital requirement of the company from 40 million in 2007-08 to zero in 2008-09. Mahindra Systech recently tied up a deal with its union in Germany for cutting personnel costs between 5% and 7% of revenues. Working hours have also been cut from 36 hours a week to 10; workers will forego their Christmas bonus, leave encashment and other such benefits till normalcy is restored. Instead of fresh capital infusion in its India unit, it is also utilising idle capacities at its facilities in the US, the UK and Germany. While margins will be lower because of shipping charges, this will bring down overall costs, said Luthra. Amtek, which had five units in the UK, now has only two. It has laid off 300 employees in that country. The Sona Group, which has manufacturing units in Germany and the US, in February announced that its German subsidiary Sona BLW Prazisionsschiede GMBH was starting a restructuring process in which four plants in Germany and the US would be transferred into independent business units. http://www.livemint.com/2009/06/10230215/Auto-ancillary-companies-take.html TVS EXITS FROM JOINT VENTURES WITH WABCO The Economic Times Chennai: The TVS group has exited from the four decades old air brakes business in favour of its US partner, Wabco. This follows TVS and Wabco smoothly exiting from their two joint ventures, Sundaram Clayton ( SCL) and Wabco- TVS. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://economictimes.indiatimes.com/News/News-By-Industry/Auto/Auto-Components/TVS-exits-from-joint-ventures-with-Wabco/articleshow/4641182.cms | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ALLIED INDUSTRY Go To Top M Sarita Varma The Financial Express Thiruvananthapuram: The domestic tyre industry has urged the government to correct the inverted duty structure in favour of rubber to make it more competitive with others. Even at a critical juncture when tyre exports are sliding, customs duty on its main raw material natural rubber (NR) remains 20% and that on the finished product (tyres) stays 10%, Automative Tyre Manufacturers Association (ATMA) said in its pre-budget note. The inverted duty structure issue in the country's tyre industry policy framework is a 'pain in the neck' at a time when governments all over the world are bending backwards to make industry competitive, ATMA argued. From 1996-97, customs duty on NR is 20%, though that on tyres in 1996-97 was 50% (just 10%, at present). The key thrust of the wish-list is that either the customs duty on NR should be down pegged to 10% or import duty of tyres jacked up to 20%. One favourable context is that there is no bound rate of tariff for tyres. "So, we feel that tyre import duty rates can be brought on par with that of NR," Rajiv Budhiraja, director general, ATMA told FE. A stimulus package is also top in the tyre industry demand-dossier. Onkar S Kanwar, chairman, Apollo Tyres, who made the presentation to finance ministry on behalf of ATMA early this week, argued that government support is "imperative", in the context of governments in the countries of competitors spreading out stimulus packages for revival and accelerated growth. Since tyre-manufacture is raw-material intensive, the increase in raw-material prices in second half of last fiscal (2008-09) has led to erosion in net profitability. According to the figures culled by industry, the net profit as a percentage of top five tyre companies has collapsed to 0.96% in 2008-09 against 4.84% in 2007-08. The industry is on toes at NR price in the last three months surged by about 40% (from Rs 70 per kg in early March to Rs 100 per kg at present). Domestic price is sailing Rs 15-20 per kg higher to international price. But each price jump of Re 1 per kg for NR translates to an extra annual financial burden of Rs 50 crore for tyre industry. What irks the tyre industry is that for the first time in the last seven years, truck a bus tyre production (accounting for almost 60% of total industry turnover) has clocked a negative growth of 2% in 2008-2009. Truck and bus tyre exports fell by 20%. Passenger car tyre exports are down by nearly 10%. Passenger car segment had been showing double digit growth for last one decade. This has shown flat growth (just 1%) in last financial. http://www.financialexpress.com/news/tyre-makers-want-correction-in-import-duty/474517/2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| LUBRICANTS & ALTERNATIVE FUELS Go To Top Aniek Paul mint Kolkata: The cry for cleaner fuels is growing louder globally, but in India, the Union governments latest restrictions on biodiesel sales has forced several manufacturers, already squeezed by a pricing subsidy, to halt production. Sandeep Chaturvedi, director of Gujarat Oleo Chem Ltd and president of the Biodiesel Association of India, said nearly all manufacturers, with combined capacity for some 3,000 tonnes of biodiesel a day, have suspended production. We produced biodiesel for three days a month ago, and we still have stocks left that we can sell for three more months, said Aditya Agarwal, a director at Emami Biotech Ltd, which has a 300-tonne-a-day production facility in Haldia, West Bengal. The petroleum ministry issued a directive in March asking state governments to ensure that biodiesel is not sold as transport fuel directly to consumers. In a letter issued on 6 March to the chief secretary of Andhra Pradesh, the ministry has stated that under the Essential Commodities Act, No person shall sellany petroleum product or its mixture other than motor spirit or high speed diesel authorized by the Central Government. A copy of the letter was reviewed by Mint. (The) marketing right for transport fuel has to be secured from the government through a process...anybody and everybody cannot start selling transport fuel without obtaining permission from the government, said Apurva Chandra, joint secretary in the Union petroleum ministry. Otherwise you cant keep a tab on what is being sold. This directive is in addition to the pricing restrictions in force, which allows biodiesel manufacturers to charge state-owned oil marketing companies such as Indian Oil Corp. Ltd, Bharat Petroleum Corp. Ltd and Hindustan Petroleum Corp. Ltd a maximum of Rs26.50 a litre, which is lower than the cost of the feedstock. Biodiesel is considered a clean alternative to fuels such as petrol and diesel as it biodegrades fast, results in lower emissions, and is made of renewable resources such as vegetable oil, animal fat or jatrophaa key feedstock for biodiesel production in India. It can be blended with petrodiesel or used alone in vehicles powered by diesel engines, though some may require minor modifications. The use of biofuels such as ethanol and biodiesel is encouraged globally. For instance, the European Union issued a directive in 2003 that its member countries are required to ensure that transport fuels contain at least 5.75% biofuels by 31 December 2010. India has about a dozen biodiesel producers. Many of these were selling the fuel to state-run transport corporations for blending with petrodiesel, charging Rs30-32 a litre. Some years ago, the Union government created hype about biodiesel as an alternative fuel, after which several state governments announced incentives for jatropha cultivation, said Chaturvedi of Gujarat Oleo, which claims to be the first commercial producer of biodiesel in India. These encouraged a lot of entrepreneurs to start manufacturing biodiesel, but we still dont have a clear policy framework under which we can produce and sell biodiesel, he said. Biodiesel manufacturers in India had invested about Rs1,200 crore to instal capacity and have brought at least 700,000 ha of land under jatropha cultivation. The government needs to intervene at a policy level... World over, fossil fuels are currently cheaper than biofuels...so somebody has to pay either the consumer or the government, said joint secretary Chandra. The petroleum ministrys directive has also put a spanner on the plans of biodiesel manufacturers to launch their own dispensing stations. Emami Biotech had secured land to set up five biodiesel pumps in West Bengal and Orissa, but it cannot operate these until it obtains clearances from the Union government, director Agarwal said. To minimize its dependence on biodiesel sales, Emami has adapted its plant to refine edible oil. We were fortunate that we created 1,000 tonnes (per day) refining capacity for edible oil as well. Otherwise it would have been difficult to meet interest and other costs, Agarwal said. Currently, there are only two markets open to biodiesel manufacturersusers of generator sets, who consume a very small amount, and the railways. Railways, too, arent consuming a big amount just nowbut eventually we expect them to be a big consumer, said S.K. Mondal, another director at Emami. NEW SYSTEM LAUNCHED FOR AUTO-LPG PRICING Pratim Ranjan Bose The Hindu Business Line Kolkata: The public sector oil companies including IndianOil, BPCL and HPCL have introduced a new pricing mechanism for auto-LPG. Under this, auto LPG has been priced 40 per cent cheaper than petrol to boost sales. The move has been initiated because pricewise auto-LPG was proving less attractive to consumers. Not without reasons though. In sharp contrast to petrol and diesel, whose prices are controlled by the government, auto LPG, an alternative to petrol, was marketed under free pricing mechanism. The oil PSUs earlier sold auto-LPG at prices directly linked to those in the international market. The policy suffered a setback last year because, with the rise in international crude prices, the auto-LPG price also shot up causing drop in its sales.
Auto LPG is currently priced at Rs. 26.43 a litre, nearly 40 per cent cheaper than petrol at Rs. 44 a litre in Kolkata. According to the official, the pricing mechanism, introduced at the beginning of this fiscal, yielded fruits. So far monthly auto-LPG sales volume by the three companies posted over 20-30 per cent increase to 14-17 thousand tonne in the first quarter of 2009-10 compared to the corresponding period last year. True, the number retail outlets have gone up, but the per pump throughput too has risen, the source said. When contacted, an IOC official said that the company added 56 new outlets during the last fiscal taking the total to 223 as against a total of 447 of all three companies. IOC was planning to add at least 70 more auto-LPG outlets during this fiscal. http://www.thehindubusinessline.com/2009/06/11/stories/2009061151240200.htm SHELL ENGINEERS CUTTING EDGE LUBRICATION Adil Jal Darukhanawala The Economic Times, Zigwheels While petrol and diesel might be the oxygen and food for our cars, bikes and commercial vehicles to power themselves in the course of their drive, keeping everything working in fine seamless order have to be the lubricants and not just in engines and transmissions. This was just one of the key issues emphasized and reinforced by the world's largest lube maker Shell during the course of its technology forum held in Mumbai recently. The three day seminar in Mumbai had a strong roster of the top lubricant specialists from Shell's worldwide operations being in attendance. Fronting such a powerful and highly acclaimed team of boffins indulging in the black art of lubrication technology was Donald Anderson, managing director of Shell Lubricants in India. The seminar was liberally sprinkled with case studies and tech workshops which brought to the fore the concept of energy efficiency while also enhancing vehicle performance. Shell may have had a low profile in the country and might need to truly invest in brand building but given its technological might, its latest initiatives towards customer awareness and resultant benefits would be the first move from this world giant. Speaking on the occasion of the tech forum, Donald Anderson mentioned "This technology forum is a vital opportunity for us to deepen our relationships with India's vehicle manufacturers and to find out how we can best help them. India's increasing vehicle population makes it one of the fastest growing lubricants market in the world - and we want to be a part of that."
Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" OIL PRICES FIRM ABOVE USD 70 PER BARREL See this story in: The Indian Express Singapore: Oil firmed above 70 dollars a barrel to new seven-month highs in Asian trade on Wednesday on weakness in the US dollar and hopes of a recovery in the global economy, analysts said. New York's main futures contract, light sweet crude for July delivery, climbed 81 cents to 70.82 dollars a barrel after closing above the 70-dollar mark for the first time since November in US trade overnight. Brent North Sea crude for delivery in July also hurdled the 70 dollar level, gaining 55 cents to 70.17 dollars in morning trade. Analysts attributed the price rise to signs that the worst is over for the recession-hit US economy, the world's biggest energy consumer, as well as weakness in the US dollar. A weaker dollar makes dollar-priced crude cheaper for buyers holding stronger currencies. That tends to stimulate demand and push the market higher. Singapore's DBS Bank said the US dollar weakness is likely to be a topic during a meeting of the Group of Eight (G8) industrialised countries in Italy this weekend. Oil prices were up even as the US Energy Information Administration (EIA), the Energy Department's analytical and statistics wing, said yesterday that global oil demand was expected to fall two percent to 83.7 million barrels a day. http://www.indianexpress.com/news/oil-prices-firm-above-usd-70-per-barrel/474217/ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FIAT COMPLETES CHRYSLER ACQUISITION, EMERGES WORLDS 6TH-LARGEST CAR CO Bloomberg See this story in: The Economic Times, The Pioneer, The Telegraph, Asian Age, The Times of India Michigan: Fiat and partners bought most of Chryslers assets, creating the worlds sixth-largest carmaker in chief executive officer Sergio Marchionne drive to survive the recession by establishing a global presence.
http://www.dailypioneer.com/182031/Fiat-closes-deal-to-take-Chryslers-good-assets.html http://www.telegraphindia.com/1090611/jsp/business/story_11093764.jsp http://www.asianage.com/presentation/leftnavigation/news/business/fiat-to-acquire-chrysler.aspx
CHRYSLER ASSETS SALE TO FIAT ON WEDNESDAY: FIAT Agencies See this story in: The Economic Times, Business Standard Washington: The US Supreme Court has cleared the way for Chrysler's alliance with Fiat, lifting a freeze on a government-backed deal that the Italian automaker now says will go through on Wednesday. http://www.business-standard.com/india/news/fiat-closes-deal-to-take-chrysler/s-good-assets/64327/on CHRYSLER, FIAT FINALISE GLOBAL ALLIANCE Agencies See this story in: The Economic Times Washington: Chrysler and Fiat announced on Wednesday they have finalized a global strategic alliance, forming a new Chrysler Group that will begin operations immediately. "We intend to build on Chrysler's culture of innovation and Fiat's complementary technology and expertise to expand Chrysler's product portfolio both in North America and overseas. US APEX COURT REFUSES TO STAY CHRYSLER-FIAT DEAL PTI See this story in: Business Standard Newyork: The US Supreme Court has refused to stay the much-touted Chrysler-Fiat deal, paving the way for the bankrupt American auto maker to steer itself out of bankruptcy soon. A group of pension funds from Indiana had approached the apex court to stay the proposed deal between Chrysler and Italian car maker Fiat. The planned deal would give Fiat a 20 per cent stake in the battered Chrysler, which filed for bankruptcy protection in April. "The applications for stay presented to Justice Ginsburg and by her referred to the court are denied. "The temporary stay entered by Justice Ginsburg on June 8 is vacated," the Supreme court said in a two-page order.
Noting that a stay is "not a matter of right", the Supreme court said, "...The party requesting a stay bears the burden of showing that the circumstances justify an exercise of that discretion. "The applicants have not carried that burden," the court noted. CHINA CAR SALES JUMP 'BEYOND IMAGINATION', BRING WAIT Bloomberg Business Standard Beijing: Zhao Hang, who helped devise Chinas auto-stimulus package, is facing demand from car buyers battling an unexpected consequence two-month waiting lists. Eight friends have asked me to make calls or write notes to contacts to help speed purchases, Zhao, president of the government-linked China Automotive Technology & Research Center said in an interview. Given the world economic situation, demand for cars is surprisingly strong in China. Beijing drivers, used to leaving showrooms with new cars the same day, now have to wait about three weeks for a Hyundai Motor Co Yuedong Elantra, Chinas bestselling car, or as long as eight weeks for a Honda Motor Co CR-V sport-utility vehicle. Carmakers failed to predict a 14 per cent sales jump caused by an economic rebound, tax cuts and subsidies and are now trying to raise Chinese output even as they cut US and European production on plunging sales. We are having headaches and shortages because the automaker cant make enough Yuedongs, said Li Minghui, a salesman at dealership Beijing Hyundai Boshishan. We expected sales to pick up at the beginning of this year, but its beyond our imagination that it would be this good. The China Association of Automobile Manufacturers in January forecast a 5 per cent increase in 2009 auto sales after demand declined in four of the last five months of 2008 amid the global recession. That would have been the slowest pace in 11 years. General Motors Corp, the largest overseas automaker in China, made a similar prediction. Instead, auto sales have surged after the government offered subsidies to drivers in rural areas and cut retail taxes as part of a wider 4 trillion yuan ($585 billion) economic stimulus plan. The demand jump has caused GM to double its 2009 industrywide growth forecast. Combined with a 37 per cent slump in US auto sales because of the recession, the surge has made China the worlds largest auto market so far this year. Customers have to book in advance because theres not enough stock of the bestselling cars, said Guo Yong, information manager at Beijing Asia Games Village Automobile Exchange, which houses dealerships accounting for about 10 per cent of Chinese car sales. Fourth-quarter sales werent that good last year and most carmakers curbed production as they were pessimistic about sales this year. Industrywide production trailed domestic and exports sales by about 300,000 vehicles in the six months ended May, according to the China Passenger Car Association. Thats helped push new vehicle stockpiles to near two-year lows. To increase supplies of Yuedongs and other models, Beijing Hyundai Motor Co, Hyundai Motor Cos main China venture, ran plants at near-full capacity last month. Inventories had dropped to 80 per cent of monthly sales, said President Noh Jae-man. Volkswagen has also added 50,000 vehicles to its 2009 production plan because of the demand jump. The development of the passenger-car market in the first quarter exceeded our expectations, said Winfried Vahland, Volkswagens China head. Hondas two ventures in China have been running with three shifts because of demand for models including City cars and CR- Vs, the bestselling SUV in China. Still, the company hasnt yet decided to expand capacity on concerns demand may not be sustainable, said Zhu Linjie, a Beijing-based Honda spokesman. The tax cuts and subsidies may have caused a short-term sales surge that will fade over the coming months, said Ricon Xia, a Daiwa Institute of Research (HK) analyst in Shanghai. Both stimulus measures are due to expire at the end of the year. It is not yet clear how demand will go in the second half, Xia said. In May, passenger-vehicle sales surged 47 per cent from a year earlier, the most since February 2006. The biggest logjam for Chinese automakers seeking to raise production is a shortage of parts, particularly more complex components, such as automatic gearboxes, generally imported from overseas. These are in short supply as plunging auto sales in the US, Europe and Japan, coupled with the collapse of GM, has forced partsmakers into bankruptcy. Component-makers going out of business is causing headaches for carmakers in China, said Qin Xuwen, a senior analyst at Orient Securities Co. in Shanghai. It will take a couple of months to fix this. To safeguard future supplies, Chinese companies are buying overseas partsmakers. BeijingWest Industries Co in March agreed to acquire the remaining global suspension and brake businesses of Delphi Corp, the bankrupt former GM parts units. The same month, Geely Holding Group Co, Chinas biggest private automaker, agreed to buy Drivetrain Systems International, an Australian gearbox-maker that was in receivership. Such deals may help boost Chinese vehicles supplies in the long run. For now though, drivers may have to continue waiting. People are lining up for cars, and vehicles are going out of stock, Zhao said. Who could have expected that last year? LAMBORGHINI SEES NO RECOVERY UNTIL 2011 Reuters See this story in: mint Paris: Luxury sports carmaker Lamborghini sees no recovery in its markets until 2011 after a 30% drop in sales in the first five months of this year, chief executive Stephan Winkelmann said on Wednesday. Still, first-half figures would be positive, and the company, based in SantAgata Bolognese in central Italy, would achieve a full-year pre-tax profit, Winkelmann told the Reuters Global Luxury Summit. We could stay profitable with sales that are dropping at 40% (in 2009). We are foreseeing a scenario that is staying on the same level next year and coming back in 2011, he said. Im prepared to face another tough year in 2010. Known for its low, sleek designs and high top speeds, Lamborghini identifies itself as uncompromising and extreme. Its badge carries the image of a bull. We are the bad boys, Winkelmann said. Its main competitor is Ferrari, owned by Italian carmaker Fiat. Lamborghini was founded in 1963 by Italian Ferruccio Lamborghini. It is now a unit of the Audi brand, owned by Europes biggest carmaker, Germanys Volkswagen. Lamborghini sold 2,430 cars in 2008 and prices range from 170,000 to 360,000, Winkelmann said. Its biggest market is still the United States despite a fall in sales of over 40% there in the first five months. Winkelmann said he expected China to overtake Italy as its second-biggest market in the next three to five years, up from ninth-biggest last year. Lamborghini boosted pre-tax profit by 27% in 2008 to 60 million ($84.66 million) on revenue up 2.5% to 479 million as it cut costs. Winkelmann said the company had cut production by 30% in line with the sales fall this year. But even so, waiting time for deliveries had fallen to 6 months from over a year. Deep Crisis Lamborghini is in constant dialogue with its suppliers to help them bridge a difficult situation, Winkelmann said. It has temporarily laid off workers for seven weeks in total so far under an Italian state-supported scheme. We are in the middle of the line between suppliers and dealers and we also have to deal with the unions, he said. The company has lost customers in real estate and investment banking markets which have been hit very hard by financial market turmoil and the credit crunch. I think the crisis is very deep, he said. But many customers were simply postponing purchases as the decision to buy a Lamborghini was emotional and financial. You buy it because its a dream, he said. But even Lamborghini must cut carbon emissions to comply with European Union targets. It has agreed an individual target because of its small size to cut emissions from its cars by 35 percent over the next six years. The average car produces 150-160 grams of carbon dioxide per kilometre while the average Lamborghini produces more than 400 grams. The EUs target for most carmakers is 120 grams by 2012. http://www.livemint.com/2009/06/10165621/Lamborghini-sees-no-recovery-u.html OWNERS IN DEBT TORCH CARS TO CLAIM INSURANCE AP See this story in: The Times of India Los Angeles: Driven to desperation, a growing number of financially strapped car owners are torching, sinking or ditching their vehicles and then reporting them stolen to cash in on the insurance. SUVs have been found ablaze in the Nevada desert, cars have been dumped in a Miami canal and a BMW was discovered buried in a field in Texas. Some vehicles have been parked in the path of a hurricane. Known as owner give-ups, the scams have increased even as auto thefts dropped nationally a sign that the meltdown is pushing the trend. Authorities say most of the false claims are filed by first-time offenders looking for a quick financial fix with little regard for the consequences. We see people doing this kind of crime who ordinarily wouldnt steal candy from a store, said Tom Reilly, a sheriffs investigator in Dallas County, Texas. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ECONOMY & FINANCE Go To Top The Hindu Business Line Mumbai: The rupee gained around 24 paise against the dollar on Wednesday, as other international currencies rallied against the greenback in the overseas markets. The domestic currency opened at 47.31 and gained to touch an intra-day high of 47.24, which was also the days close as against the previous close of 47.48. The rupee opened with a positive gap as the Asian currencies rallied against the dollar. The positive equity indices also propped up the rupee. It would have touched the 47.10 levels if not for the persistent bids by the Reserve Bank of India, said a dealer with a public sector bank. Nationalised banks were buying dollars at the RBIs behest to prevent a volatile movement in the rupee, added the dealer. RBIs intervention was to the tune of $700-800 million, he said. In the forward premia market, the six-month premium closed lower at 2.82 per cent (2.9 per cent) and the one-year closed at 2.4 per cent (2.44 per cent). http://www.thehindubusinessline.com/2009/06/11/stories/2009061151720600.htm
The Hindu Business Line Mumbai: The benchmark indices made strong gains for the second consecutive day on Wednesday. At its days high of 15,580, the Sensex touched a 10-month record, after an intra-day gain of 412 points through a volatile trading session. It closed 340 points or 2.25 per cent higher from Tuesday, at 15,466.81. The broader Nifty was up by 2.29 per cent. The markets rose in line with the global markets; there was also positive sentiment ahead of the budget, said Mr Dharmesh Mehta, Head of Broking, Enam Securities Ltd. Both foreign and domestic investors were net buyers, for Rs 738 crore and Rs 590 crore respectively. The market breadth was negative, with 1,218 stocks advancing on BSE, and 1,553 declining. http://www.thehindubusinessline.com/2009/06/11/stories/2009061152280100.htm ECONOMY TO TURN AROUND SOON: FM PTI See this story in: The Tribune New Delhi: Buoyed by better than expected economic growth last fiscal, Finance Minister Pranab Mukherjee has expressed hope that the economy, spurred by fiscal and monetary stimulus packages, would turn around soon. "I hope that the impact of various pro-growth measures would help turn around the economy soon. As a result of various measures announced by the government and RBI, we are looking at our economy with a lot of hope," Mukherjee told the heads of PSU banks here. He said the last quarter GDP growth figure of 5.8 per cent and the annual growth of around 6.7 per cent for 2008-09 is a pointer towards this direction. Despite contraction in manufacturing output in the fourth quarter last fiscal, economic growth figures were well in the range projected by RBI 6.5-7 per cent and better than what many had forecast. The Finance Minister's remarks assumes importance as the Prime Minister had yesterday said India can grow at 8-9 per cent despite the global slowdown. Mukherjee also said, "The stock market also seems to be quite bullish. Prime lending rates of banks have come down to the range of 12-12.25 per cent as against 13.75-14.25 per cent six months back." The benchmark equity index Sensex has gained 56 per cent this calendar year to close at 15,466.81 points. The government, has so far, given three stimulus packages by cutting excise duty by six per cent, service tax by two per cent and increasing public expenditure apart from taking other sector-specific measures. Besides, RBI also loosened money supply by cutting its policy rates to make funds available to the industry at a cheap rate. RBI had cut short term lending rate (Repo) by 4.25 percentage points, short term borrowign rate (Reverse Repo) by 2.75 percentage points and mandatory cash requirements for banks (CRR) by four percentage points. "The unwinding of earlier tightening measures and the relaxation in risk weights and provisioning norms facilitated flow of credit to the sector under stress," Mukherjee said. http://www.tribuneindia.com/2009/20090611/biz.htm#1 Last Financial closing
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