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| INDUSTRY Modern Auto wins awards for excellence CARS, SUVs, MUVs Maruti's 'made-in-India' car to retain Japanese touch Audi to raise dealership network; eyes 30% of luxury car market Luxury cars continue to bear brunt of slowdown; sales fall 8% Kolkata to host another German car showroom Fords hope hinges on small car to shore up its market share in India Fiat-Chrysler deal will have little to do with India, Tata Motors GM to expand used car business over five-fold in India COMMERCIAL VEHICLES Auto industry wants sops for CVs, exports CONSTRUCTION & AGRI MACHINERY | ALLIED INDUSTRIES FINANCE & INSURANCE Nearly all dealers agree to work with new GM: CEO Toyota well positioned for auto recovery- Barron's ECONOMY & FINANCE
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| INDUSTRY Go To Top MARUTI TAKES LESSONS FROM YOUNG FOCUS OF CONGRESS Pankaj Doval The Times of India (Web & Print Edition) (June 15)
New Delhi: As it fights a slowdown in demand, Maruti Suzuki, the country's biggest carmaker and Japanese major Suzuki's biggest overseas subsidiary, is looking at taking lessons from an unexpected quarter Congress' victory in the general elections and the party's focus on young leadership.
MODERN AUTO WINS AWARDS FOR EXCELLENCE (June 14)
Chandigarh: Modern Automobiles, a 25-year-old Maruti Suzuki associate having sales/service outlets at Chandigarh, Ambala, Karnal, Hisar & Panchkula has been receiving Maruti Suzuki awards for Excellence in Service, Sales and MGA sales for 2008-09.
Modern Automobiles won gold medal of being a member of Maruti Suzuki achievers club-2009. Modern Automobiles sold a total of 8312 vehicles from its various outlets in the year 2008-09 averaging a sale of 693 units per month.
Modern Automobiles, Chandigarh has bagged the award for achieving highest customer satisfaction index (CSI Score) for 2008-09. Modern Automobiles, Hisar, has won the award for achieving the highest customer satisfaction index in northern region.
Modern Automobiles was also awarded for highest MGA sale in vehicles sales less than 8999 category. http://www.tribuneindia.com/2009/20090614/biz.htm#3
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| INTERVIEWS/FEATURES Go To Top Mumbai: This has been a busy week for Fiat. In the US, it has just taken ownership of Chrysler while it rolled out its 10 millionth car in Brazil. In India, the company is slowly consolidating its base in a joint venture with Tata Motors at the Ranjangaon plant near Pune. This facility, now home to the Palio and Linea, will see a new entrant in the form of the Grande Punto top-end hatchback, which debuts on June 17. These days, a car launch is like your daughters wedding where you have to take care of so many things, quips Mr Rajeev Kapoor, Chief Executive Officer, Fiat India Automobile. He spoke to Business Line on Fiats road ahead in India.
What do you have to say about Fiats product line-up in India?
The Linea was the first locally manufactured car from the joint venture with Tata Motors. There was a lot of work in establishing the factory, building the team and network, as well as supporting infrastructure such as spare parts, after-sales service, training mechanics and so on.
The idea was to work on our earlier weaknesses, which explains why we were confident that the Linea would be a success. The next challenge is the volume-generating B segment where the Grande Punto, which sells huge numbers globally, is a right product. We said we would launch it in the second quarter of this year and are on time.
What kind of volumes are you targeting with this car?
Predicting numbers in these uncertain times is difficult but we do expect to sell 2,500 units of the Grande Punto each month. The car is in the B-plus segment where it will have to compete with the likes of the Honda Jazz and Chevrolet UVA.
Do you think the Palio did not quite live up to expectations?
Well, the Palio has been doing small numbers. At the time of its launch, the Palios cost of maintenance was high, but was brought down later. I do think there was an issue with its image though it is a high performing car. Things are looking up with its new multi-jet diesel engine, but it is still to generate more volumes.
Likewise, with the Linea, are you disappointed that it is not selling the initially targeted 2,000 units a month?
The Linea has been doing 1,200-1,500 units (a month). Our initial target did not account for the slowdown but things will change for the better in four to six months. The Linea has a 14 per cent market share in its segment. We have 5,000 enquiries for the car but people are putting off buying now till the Budget is presented next month. From our point of view, the launch of the Linea was to re-establish the Fiat brand in India.
Are you targeting high localisation levels?
The Linea will be 90 per cent localised by December, while we will be more aggressive with the Grande Punto whose local content will be increased from 55 per cent to 85 per cent seven months after its launch. The Palio still has a level of imported parts.
Does Fiat plan to export aggressively from India?
The Palio is being exported to South Africa, while the Linea is being planned for all Commonwealth countries, including New Zealand and the UK, apart from South Africa. Our export target of 3,000 units this year for the Linea will be comfortably achieved. We have also begun exporting powertrains and have a commitment of 20,000 units this year.
How has the plant been planned for your products and those of Tata Motors?
Our Ranjangaon plant has a capacity of 1.6 lakh units. Fiat is accounting for 70,000 while the balance is meant for Tatas. We expect low capacity utilisation this year though. The total investments made in the plant are Rs 4,000 crore and we hope to break even by 2011-12.
How does Fiat propose to build its network?
We will have 100 dealers by June 17 (the day the Grande Punto is launched) selling Fiat and Tata cars. There will be exclusive bays for Fiat cars. Similarly, at workshops, there will be distinct areas for Fiat cars. Service centres and spare parts will also be part of this network plan. As car parks increase, we will have service facilities in suitable locations at Tata Motors Authorised Service Centres. We plan to establish 24 of these in the next three months.
Are three locally manufactured cars adequate in meeting your target of 70,000 units by 2010?
Obviously, if one wants to be a major player, one needs to bring in more products. We will have new models and different variants. The good news is that customers have far more confidence in Fiat. The fact that it has taken control of Chrysler reflects what its capabilities are all about. http://www.thehindubusinessline.com/2009/06/15/stories/2009061550750200.htm
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| CARS, SUVs, MUVs Go To Top SIX OLD FAITHFULS RACE AHEAD IN THE INDIAN CAR MARKET Chanchal Pal Chauhan The Economic Times (Web & Print Edition)
New Delhi: Six brands, of which three belong to the Maruti Suzuki stable, together make up over 63% of the Indian car market, which has about 400 models churned out by 20 companies.
MARUTI'S 'MADE-IN-INDIA' CAR TO RETAIN JAPANESE TOUCH Swaraj Baggonkar Business Standard (Web & Print Edition) (June 14)
Mumbai: Given its nascent engineering strength, Indian auto co looking at existing platforms. Maruti Suzuki India Ltds (MSILs) planned made-in-India car is likely to come up using the platform of an existing model of the company. The company has taken this decision in view of its insufficient engineering strength.
The company has proposed to launch the made-in-India car in the next three years. The new compact car will be built on one of its three platforms WagonR-Zen Estilo, Alto-M800-A-Star and Swift-Ritz that are used by the companys India operations. The company will, therefore, save a fortune by not opting for a completely new car platform. Generally, the cost of developing a new platform constitutes a substantial part of the expenditure incurred on a new cars production.
Maruti Suzukis Managing Executive Officer (Engineering) I V Rao said: The new India car will be built on an existing platform.
The company kicked off the development process of the car more than a year ago with a handful of engineers stationed at its research and development (R&D) facility in Gurgaon. The company is aiming to deploy by next year 1,000 engineers, most of whom will be working on this project.
Officials declined to predict the proposed cars positioning and price-point, pointing out that it would be too early to do so as the company was yet to finalise the new cars size, dimension, design and power.
However, sources said that the company had already drawn up the basic outer sketch of the car and now moved on to other sequential design aspects of the vehicle. The company had also started talks with its component suppliers, they added.
Its only after the successful development of this India car that the company would take the next big step building of an independent platform. This would probably take place soon after the India car was launched, senior MSIL executives said.
Only after successfully launching the car by 2011 can we focus on developing our very own car, which will be built from scratch. The car will be completely made in India. That will actually test our abilities, Rao further added.
As part of its long-term corporate strategy, Suzuki Motor Corporation (SMC) is planning to outsource the development of small cars completely to Maruti Suzuki.
The company is making India its small car focal point in a bid to take advantage of the frugal manufacturing processes here.
This would aid SMC in focusing on other dimensions, including sedans, sports utility vehicles and alternative fuel technology. Many of the engineers hired by Maruti are currently undergoing training at SMCs facilities in Japan.
MSIL had worked on the development process of a car earlier too in the form of the Swift Dzire, the sedan version of the popular Swift hatchback. The car was launched by MSIL in March last year and has met with success in the market.
AUDI TO RAISE DEALERSHIP NETWORK; EYES 30% OF LUXURY CAR MARKET PTI See this story in: The Economic Times (Web & Print Edition), Business Standard (Web & Print Edition)
Chennai: Buoyed by overwhelming response, German luxury car maker Audi would increase its dealership network in the country and aims to grab 30 per cent share of the luxury car market by 2011, a company official said.
Apart from increasing its dealership networks, the car maker had also planned to increase its market share over the next two years, Tiers said. http://economictimes.indiatimes.com/News/News-By-Industry/Auto/Audi-to-raise-
LUXURY CARS CONTINUE TO BEAR BRUNT OF SLOWDOWN; SALES FALL 8% PTI See this story in: The Hindu Business Line (Web Edition), Asian Age (Web Edition), Daily News & Analysis (Web Edition)
New Delhi: With the economic slowdown hitting the people's spending power, sales of high-end cars dipped in May by 7.59 per cent, although the overall passenger car segment grew by 2.48 per cent.
According to the data provided by the Society of Indian Automobile Manufacturers (SIAM), sales of the premium and luxury cars went down to 3,360 units in May from 3,636 units in the year-ago period.
In the first two months of the current financial year also, the sales of the high-end cars declined to 7,098 units from 7,149 units in the same period last year, the SIAM said. The market leader in the premium segment Mercedes-Benz registered a decline of 34.18 per cent in May, while its competitor BMW's sales fell by 22.48 per cent last month compared to the year-ago period.
German carmaker Mercedes-Benz sold 181 units of its C, E and S-Class cars in India last month against 275 units in the corresponding month of last year.
While sales of its C and S-Class plummeted by 56.02 per cent and 31.58 per cent at 73 units and 39 units respectively, the sales of E-Class zoomed by 32.69 per cent at 69 units. Another German carmaker BMW saw its sales in the Indian market falling to 169 units from 218 units in the same month last year. Its entire portfolio of passenger cars, comprising 3, 5, 6 and 7-series sedans, registered steep falls during the month. http://www.thehindubusinessline.com/blnus/03141410.htm http://www.asianage.com/presentation/leftnavigation/news/business/slump- http://www.dnaindia.com/money/report_govt-warms-up-to-narrowing-excise-differential-on-cars_1264943
KOLKATA TO HOST ANOTHER GERMAN CAR SHOWROOM Sohini Das Business Standard (Web Edition)
Kolkata: Afer its group brands Volkswagen and Skoda opened dealerships recently in Kolkata, the Audi dealership got stuck in financial hurdles. The Bagarias of Imperial Auto that has Honda Siel Cars dealership here in the city had initially partnered with Audi to come up with a showroom here. A showroom was planned at Tagore Park on the Eastern Metropolitan By-pass.
An Audi spokesperson confirmed that the Bagarias had backed out citing financial reasons. She added that the company would make an announcement of a partner in the next two weeks and the showroom could come up within a few months.
Audi currently has eleven dealerships in the country including cities like Ahmedabad, Bangalore, Delhi, Gurgaon, Hyderabad, Chandigarh, Chennai, Kochi, Mumbai and Pune. It plans to have around 14 dealerships across India by the year-end. Apart from the Kolkata showroom, two more will come up at Jaipur and Lucknow.
The Audi showroom was supposed to have 6,000square feet floor space and showcase the entire Audi line-up, A4, A6, A8 sedans, the Q7 SUV and the sports car TT Coupe, prices for which range from Rs 30 lakh to Rs 1.25 crore. It recently launched the Audi Q5 in its existing dealerships in the city. http://www.business-standard.com/india/news/kolkata-to-host-another-german-
FORDS HOPE HINGES ON SMALL CAR TO SHORE UP ITS MARKET SHARE IN INDIA The Pioneer (Web & Print Edition)
New Delhi: Ford India is betting big on its small car, to be launched early next year, to shore up its market share in the country. The product will be available in both petrol and diesel.
Hindustan Times (Web & Print Edition)
Mumbai; After it launched Jazz with a Rs. 7 lakh price tag last week, Honda is getting down to action in the small hatchback market taking on Maruti Suzukis monopoly. The new small car would also match Japanese rival Toyotas global small car, which is under development.
Honda Siel Cars India is also mulling full-blown engine and gearbox plants in India, company officials said last week. The engine plant would have a capacity to produce 2 to 2.5 lakh engines per year, Masahiro Takedagawa, president and director, HSCI, said. The under development small car would have India as its lead market, which means the car would be designed with Indian users mainly in mind.
The plants are expected to be in time for the launch of the new small car, which should be ready by 2012, Takedagawa said.
FIAT-CHRYSLER DEAL WILL HAVE LITTLE TO DO WITH INDIA, TATA MOTORS Murali Gopalan The Hindu Business Line (Web & Print Edition)
Mumbai: Fiats recent move to get into the drivers seat at Chrysler and work out a revival plan for the US carmaker will have no implications for India in terms of Chrysler models coming into the country.
Equally, to expect this to translate into a windfall for Fiats local partner, Tata Motors, from the viewpoint of marketing the Nano in the US through the Fiat-Chrysler network is just wishful thinking for the moment, industry sources say.
In the first place, Fiat will have its hands full chalking out a product line-up strategy in Chrysler plants across North America. There are indications already that the Cinquecento (Fiat 500) will be a near-certainty, while other compact models from the Italian companys stable could follow suit. The challenge, of course, is to get these products accepted in the US market, which is still inclined towards larger cars and sport-utility vehicles.
Fiats main objective is to make a mark with its own products first in North America through Chrysler, sources said. The other challenge is to keep the alliance going smoothly because the battle is far from over. Thus far, things look good because the American carmaker has been thrown a lifeline but to sustain this momentum will require a lot of hard work.
Neither company has been particularly successful in global alliances. Chryslers mega-merger with Daimler did not take off, while Fiat and General Motors had to go their own ways too after an equity crossholding deal did not quite deliver on the expected lines.
Indias role In India, Fiat has a joint venture with Tata Motors to make cars at a plant near Pune. Targets for 2010 are modest at 70,000 units annually. However, the Italian company plans to make a low-cost car exclusively for the sub-continent towards 2012, keeping in mind the huge potential of the compact segment.
Tata Motors, of course, has been the trendsetter here with the Nano peoples car that is scheduled to hit the roads here next month. The company has also made public its intention to enter the US (in addition to Europe) with the car two years down the line. It will be quite a challenge to position the Nano in this market because Americans prefer to drive large, spacious cars. Further, the Tata car will have to comply with safety norms in the US. This will involve lots of hard work on the engineering front, which could translate into more time too, sources said. Whether the Indian company can keep its date for 2011-12, therefore, remains to be seen.
Effectively, this means that if Fiat were to even contemplate helping out in the Nanos marketing (with Chrysler), this will have to be preceded by detailed market analysis, feasibility from the viewpoint of volumes, impact on brand positioning (with Fiats products) and so on. Though Fiat and Tata products share showroom space in India, the equation may not always work in advanced markets where the threat of brand dilution is real, experts aver.
Incidentally, Fiat has planned its own low-cost car for advanced countries such as Europe and would ideally like to push it aggressively in a large, profitable market like the US. This product, which will not sport a Fiat badge, will be dearer than the Nano and loaded with technology. It will not come in cheap, for sure, because the low-cost term as understood in Europe is quite different from India, sources say.
Fiat has, of course, reiterated that it values the alliance with Tata Motors but the India connect is still miniscule compared to the world stage. It has had jinxed innings here for a decade and just when it seemed as if it could even shut shop, the Tata joint venture happened and a new chapter has begun. By the end of the day, though, India is not going to be a critical growth driver for Fiat at least for the next three-five years when it is still in consolidation mode. http://www.thehindubusinessline.com/2009/06/15/stories/2009061550810200.htm
GM TO EXPAND USED CAR BUSINESS OVER FIVE-FOLD IN INDIA PTI See this story in: The Economic Times (Web Edition), Business Standard (Web & Print Edition), The Financial Express (Web Edition), Daily News & Analysis (Web Edition), Asian Age (Web & Print Edition), mint (Web & Print Edition), The Hindu Business Line (Delhi Print Edition), The Hindu (Delhi Print Edition)
Jaipur: At a time when General Motors India is facing difficulties in raising funds to complete its engine plant, the company will expand its used car business by over five-fold across the country this year. http://www.business-standard.com/india/news/gm-to-expand-used-car-business-over-five-fold/64586/on http://www.financialexpress.com/news/gm-to-expand-used-car-business-over-fivefold/476256/ http://www.dnaindia.com/money/report_gm-to-expand-used-car-business-over-five-fold_1264796 http://www.livemint.com/2009/06/15000751/GM-to-expand-used-car-biz-at-l.html
The Hindu, Metro Plus Spotting changes in the face-lifted version of Audis sixth-generation A6 isnt an easy task. Like most Audi mid-life facelifts, noticeable differences are numerous but extremely subtle.
Look hard and you could spot the new front bumper, redesigned air ducts for improved engine bay cooling, new headlamps with integrated LED daytime running lights, new tail-lamps and an edgier rear bumper.
As subtle as the changes to the outside are, the firecracker under the hood is anything but that. Sitting longitudinally between the front wheels is Audis 290bhp, 3.0-litre supercharged direct-injection TFSi engine that replaces the existing naturally aspirated 252bhp 3.2-litre V6.
Running a conservative 11psi of boost and a high (for a forced induction engine) compression ratio, it lingers near sportscar status with its power and 43kgm of torque; this in a car thats supposed to be a premium saloon, mind you.
Amazing acceleration Superlatives fall spectacularly short in describing the jaw-dropping speed of this car. Its one of those cars in which any short stretch of open road becomes an opportunity to revel in the growling V6s accelerative forces which are thrown up with all the subtlety of a Gazelle after hearing a gunshot. At the sight of a green light, the A6 gives your right foot the ability to propel you through gaps in traffic before you know it. See an amber light, the six-speed transmission will catapult you through almost as soon as you tug the Tiptronic gear lever to downshift. Its a lively engine-and-gearbox combination, one that allows the A6 to tirelessly cover great distances in short amounts of time.
Its effortless because most of this torque around 30kgm is available as soon as you get off idle, and this means it responds to every millimetre of throttle travel with the aggression of your average metal-band concert. Keep your foot down and this 2995cc, 90deg V6 catapults the A6 to 100kph in a staggering 6.6 seconds, 200kph in 25sec and gets to its top speed of 250kph in no time at all. Patient A6 owners with a light right foot on the throttle will see the car will accelerate gently all the way to 180kph its that natural for this engine.
But, beyond terrorising other road users, the 3.0T can get a bit exasperating in traffic. The ultra-quick reflex of the throttle (especially in S mode) means your right foot is constantly tap dancing between the throttle and brake pedal to keep from charging into the car ahead. And, the six-speed autos jerkiness can become a pain in the neck. The brakes are strong, but the pedal feels wooden and inconsistent at times. The car builds momentum with such pace that you must keep alert at all times so as to not misjudge stopping distances if youre not careful enough.
Audis chassis engineers have put into improving steering feel and body control, providing fluid and unruffled responses when pushed hard over challenging roads. For such a big car, it is impressively agile and enjoyable from behind the steering wheel. Combine this with heady levels of grip and traction from the A6s newly reworked quattro four-wheel-drive system, which adopts a 40:60 front-to-rear power split and youve got the makings of a supremely enjoyable drive.
You expect some compromise on the ride quality safely containing all that power demands a stiffer set-up. However, the suspension does a very good job of ironing out bumps on the road.
Whats more impressive is that Audi has achieved this without resorting to adjustable dampers or air springs. Still, the occasional sharp vertical movements at low speeds over lumpy surfaces can get tiring. But as the needle climbs up the speedometer it evens out. The suspension is refined for the most part and except for the occasional thud through potholes you wont find much to complain about.
The engine is pretty refined too, except for a very distant gruff mechanical noise from the supercharger penetrating the cabin at around 4000rpm under hard acceleration. Its never E-class quiet, but on a constant throttle the engine remains well isolated thanks in part to the adoption of new engine mountings developed specially for the A6 3.0T.
Theres also a bit of wind and tyre noise entering the cabin at speed though a trait that doesnt blend well for a car of this class.
Forward-thinking The interiors are well-designed and of high quality, the insides of the A6 reflect Audis forward-thinking nature. The facelift comes with improved interiors but the changes are equally subtle and nothing too significant new instrument graphics, a redesigned armrest within the doors, some added chrome among the switches and minor tweaks to the MMI multi-media interface. Theres more than adequate amounts of space in the car, the seats are comfortable (especially at the rear), and the A6 comes well-equipped.
Glove box If you opt for the Luxury package, a good Rs 3.6 lakh more than the Rs 55.2 lakh base price, you get the reverse camera, a 13-speaker Bose sound system, an MMI system remote for rear passengers, a 40GB on-board hard drive (to copy your CDs onto) and slots to fit DVD screens to the back of the front seats.
Efficiency you ask? While choosing the most powerful engine in the line-up, you probably wont be too worried about fuel economy, but for the record, we expected it to be much worse. Under normal driving, the car returned 5.7kpl in the city and 8.8kpl on the highway. Only under hard driving will this 1725kg car require you to frequently visit the pump. http://www.hindu.com/mp/2009/06/15/stories/2009061550440300.htm
S.M. AAMIR The Hindu, Metro Plus General Motors Indias operations are absolutely not affected by what has happened to its parent company in the U.S. and I can assure you that our business in India is as usual and we are proud the way things are going on here for us, says the president and general manager of the company, Karl Slym. GM India gives an instance of this buoyancy by launching a bio-fuel version of its Spark car on World Environment Day.
This is also to claim a pie of the growing small car segment in India. With the rising traffic jams in the country, more and more people are increasingly switching to smaller cars which are easier to manoeuvre, and every car manufacturer is trying to get a good market share by launching new models fitted with added features. And so is GM India. The company, which in the last 12 years of its operations in India, has invested nearly Rs.5,000 crore here and made their presence felt with cars like the Captiva, Tavera and the U-VA.
Fuel-efficient The new Spark, which has the options of both petrol and LPG, is quite fuel-efficient. Spark LPG is fitted with the next generation sequential injection-type kit which in terms of technology is the latest and far superior to the venture-type LPG kit used by other manufacturers, claims the company.
What looks interesting is that the gas kit is fixed in the cavity of the spare wheel without comprising on space unlike other cars where a big cylinder is kept in the boot thus eating into the back space. It has a capacity of 26 kg of LPG which gives a mileage of 350 kms to a full tank of gas. Besides, it has a 40 litre petrol tank in case you run short of gas. The new sequential technology is so good, you cannot differentiate the power output and the pick-up of petrol and gas. The engine will never backfire while changing to LPG from petrol thereby ensuring a smooth ride, claims the company.
The only problem will be the filling stations. Till date there are nearly 400 LPG stations throughout the country. Keeping safety in mind, the company has done several crash tests in India and Europe. The extra price one has to shell out for the LPG kit is Rs.21,000. http://www.hindu.com/mp/2009/06/15/stories/2009061550430300.htm
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| COMMERCIAL VEHICLES Go To Top GOVT SPARES THE ROD FOR TATA MOTORS AND ALL John Sarkar & Shantanu Nandan Sharma The Economic Times (Web & Print Edition) (June 14)
New Delhi: Commercial vehicle makers, including Tata Motors and Ashok Leyland, may just escape being penalised by the urban development ministry for not meeting their deadline, a ministry official told SundayET on condition of anonymity.
AUTO INDUSTRY WANTS SOPS FOR CVS, EXPORTS Danny Goodman Business Standard (Web & Print Edition) (June 14)
New Delhi: Auto industry executives expect this years Union Budget to provide immediate relief to the ailing commercial vehicle (CV) industry. Sales of medium and heavy commercial vehicles had dipped 33 per cent in 2008-2009.
The Interim Budget in May this year had extended the depreciation benefit on purchase of new commercial vehicles to September from March 2009.
Industry executives said this should be extended as sales of large vehicles slumped 40 per cent in April and May this year. The other issue we expect the Budget to address is investment in infrastructure. Once this happens, the demand for commercial vehicles used in the construction industry will pick up. In addition to providing incentives for scrapping old trucks and lorries, which not only pollute but also pose safety risks, the Budget could provide funding for an integrated public transportation system. This will boost demand for buses, said R Seshasayee, MD of Ashok Leyland.
Manufacturers of passenger vehicles say that given the negligible growth in sales of cars and utility vehicles last year the growth was a mere 0.13 per cent the Budget needs to tackle two anomalies in the system. Additional taxes on large cars need to be rationalised in line with the excise duty on small cars, said Masahiro Takedagawa, president and CEO, Honda Siel Cars. While small cars attract 8 per cent excise duty, the effective manufacturing duty on large cars and utility vehicles is 22-24 per cent. A company executive said since utility vehicles like Safaris and Maxx were widely used in rural areas where public transport was underdeveloped, it didnt make sense to impose such high taxes on these vehicles. The other issue impacting car sales is the different VAT rates that states levy, said Ankush Arora, vice-president, marketing (sales) of GM. For instance, the VAT rate on cars in New Delhi is 12.5 per cent, while in other states, it is 15 per cent.
Large exporters, like Hyundai, want the Budget to provide export sops. They say the Budget could include small cars in the focus product scheme for exporters.
Auto parts manufacturers say the import duty for certain components stands at 7. 5 per cent. This has to be raised to the general taxation rate of 10 per cent, said Jayant Davar, MD of Sandhar Technologies. Davar said the Budget could provide incentives such as tax holidays and lower tax rates to promote auto ancillary manufacturing parks.
In an effort to promote domestic R&D in the auto industry, the government had earlier proposed 150 per cent weighted deduction on R&D investments by companies. This is effective till 2011. This benefit has to be given for a period of 5-10 years, which will help automobile manufacturers plan their investments, said Venu Srinivasan, CMD of TVS Motors and the current president of the CII. http://www.business-standard.com/india/news/auto-industry-wants-sops-for-cvs-exports/361027/
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| CONSTRUCTION & AGRI MACHINERY Go To Top - - - - - | |
| 2/3 WHEELERS Go To Top - - - - - | |
| COMPONENTS Go To Top BUMPY RIDE OVERSEAS FOR AUTO COMPONENTS COS Priyanka Vyas The Hindu Business Line
New Delhi: Top Indian auto component suppliers who have acquired large number of plants in the Europe and US are struggling to keep their operations viable in the current downturn.
Capacity utilisation at their overseas units has plummeted by 50 per cent following a slump in vehicle sales in these markets. This is forcing companies to opt for multiple options including closing their overseas plants, retrenching workers, reducing fixed costs or shifting to manufacturing of high value products.
Amtek Auto, which has six plants overseas, plans to consolidate business by keeping two plants operational and relocating production of others to India. Our sales are down by 40-45 per cent. We have six plants outside the country. We plan to reduce it to two plants, mainly in the UK. We are also considering shifting our US plant to India by relocating the entire plant and machinery, a company official at Amtek Auto told Business Line. The company has also retrenched 350-400 of its workforce from a total staff of 1,000 at these locations.
Sona Okegawa, which acquired Thyssenkrupps precision forging business last year to become the worlds largest player, is also looking at lowering its fixed costs including manpower and working days.
Capacity utilisation is down by 50 per cent. People costs are a huge component and we are working on reducing fixed costs, including reduced number of work hours and some manpower rationalisation , said Dr Surinder Kapur, Chairman of the Sona Group, in an e-mail response.
Mahindra Systech in a presentation to analysts indicated that it was rationalising its manpower costs by 35 per cent at Mahindra Forgings, Europe. It had closed its Walsall Stokes plant in UK. Its strategy is to move to high margin products and shift the low margin parts from its European forgings plant to its domestic facility.
Motherson Sumi Systems, which earns 50 per cent of its revenues from the overseas market following the Visiocorps acquisition, is planning to decrease the production outsourced to other vendors.
For certain components such as moulding parts, we plan to utilise our in-house capacities instead of outsourcing it to other suppliers, said Mr G. N. Gauba, Chief Financial Officer. http://www.thehindubusinessline.com/2009/06/15/stories/2009061551460100.htm
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| ALLIED INDUSTRY Go To Top DOMESTIC BATTERY MAKERS GEAR UP TO ENTER THE LITHIUM SPACE Danny Goodman Business Standard (June 14)
New Delhi: Automobile battery manufacturers such as Amara Raja, Exide Batteries, Eveready Industries and Indocel Technologies are firming up plans to set up lithium battery manufacturing plants in the country.
Lithium batteries are the latest in electric vehicle technology. These environment-friendly batteries take less time to charge and offer longer driving range than conventional lead-acid batteries. Domestic battery majors which do not have lithium technology patents are planning to set up manufacturing plants either by picking up stakes in or entering into joint ventures with foreign players.
In addition, even automobile manufacturers such as Tata Motors are foraying into lithium battery manufacturing. In 2008, the company, which manufactures the Indica Vista car, had bought a 50.3 per cent stake in Norways Miljo Grenland for Rs 9.40 crore. Miljo, which specialises in developing new technologies for electric vehicles, will manufacture state-of-the-art super polymer lithium batteries for Tata Motors. In fact, Tata Motors has plans to launch its electric Indica in Norway this year.
Eveready Industries, which manufactures torches and batteries, is also gearing up to enter the lithium battery space. This year, the company bought an 80 per cent stake in Frances Uniross SA for Rs 60 crore. Uniross manufactures rechargeable batteries. Uniross has a host of rechargeable battery technologies revolving around cadmium, nickel and lithium. Currently, Uniross lithium battery technology is used to power electric bicycles in Europe. Yes, there s a demand for lithium batteries in the auto industry. We can comment on our plans for the auto industry later, Eveready Industries CMD Deepak Khaitan told Business Standard.
Amara Raja Batteries (ARB), which manufactures batteries for the automobile and industrial segments, has an equity and technology partnership with US-based Johnson Controls. The US firm owns 26 per cent of ARB. We can access Johnsons advanced lithium technology for the automobile industry in the future. Currently, our plans are at the exploratory stage, said Vijayanand S, head of engineering, ARB.
Sources said even Exide Industries the largest automobile battery manufacturer in the country is gearing up to enter the lithium battery space. However, when contacted, a spokesperson for the company declined to comment.
Multiple patents appear to be a major hurdle to clear before domestic companies could start manufacturing lithium batteries. Every component of the lithium battery carries a patent. Which means, raw materials (speciality chemicals) inside a lithium battery cannot be easily replicated. Perhaps one solution is to find substitutes, but thats difficult, said Dr Hari Prasad Bellie, managing director of Indo cel Technologies, which supplies batteries to the Reva electric car.
An imported lithium battery used in the latest Reva car costs around Rs 3 lakh. Even if one were to import the parts (used in the lithium battery) and assemble it here... one can save around 10 per cent of the total cost.
Thus, the actual cost savings can be calculated only when royalty issues on the battery are known, Bellie said, adding that the 30 per cent import duty on lithium batteries can also be saved.
Dr Mathew Abraham, general manager (alternative fuel & advanced technologies) of Mahindra & Mahindra, said: The other problem is scale. Both in domestic and overseas markets, the population of electric and hybrid vehicles is small compared to vehicles that run on traditional fuels. But thats changing with more governments promoting usage of green vehicles.
It all depends on government policies. Should the government accede to our requirements for tax breaks and concessions on electric vehicles, we expect the population of electric vehicles to grow, said Sohinder Gill, CEO, Hero Electric. Electric two-wheelers currently constitute less than 1 per cent of the total two-wheeler segment in the country. Gill estimates this share to grow to 9 per cent in the next five years. Currently, about 1,000 electric cars ply on Indian roads.
With car companies such as Maruti Suzuki and Tata Motors gearing up to showcase their electric vehicles at the Commonwealth Games in 2010, awareness about electric vehicles would increase. This, in turn, would boost direct purchases of electric four-wheelers, said auto analysts. http://www.business-standard.com/india/news/domestic-battery-makers-gearto-enterlithium-space/361014/
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| FINANCE & INSURANCE Go To Top - - - - - | |
| LUBRICANTS & ALTERNATIVE FUELS Go To Top - - - - - | |
| INTERNATIONAL NEWS Go To Top AUTOMOBILE INDUSTRY SHUTDOWNS HIT MANUFACTURING SECTOR IN US Bloomberg The Financial Express
Reports on manufacturing and housing this week will probably offer evidence that the recession- stricken U.S. economy is within months of hitting bottom, economists said. A 1% drop in industrial production in May, based on the median of 68 estimates in a Bloomberg News survey, was due mainly to auto-industry shutdowns that swamped gains elsewhere, analysts said. Other reports may show builders began work on more houses as sales steadied and consumer prices rose.
The fallout from bankruptcies at Chrysler LLC and General Motors Corp. is likely to reverberate through the industry and the economy in coming months, even as other areas stabilize. Plunging home prices, near-record low mortgage rates and tax credits for first-time buyers may help bring an end to the worst residential construction slump in seven decades.
With Chrysler closing and GM downsizing, its going to be pretty ugly, said Joel Naroff, president of Naroff Economic Advisors in Holland, Pennsylvania. Still, were in the process of hitting the trough of the recession, which we'll probably see within the next few months.
A decrease in the Federal Reserves production figures, due June 16, would be the 16th in the last 17 months. The report is also projected to show the proportion of plant capacity in use probably dropped to 68.4%, the lowest since records began in 1967, according to the survey median. Chrysler shut all its plants on May 1 to clear as many unsold vehicles as possible from dealer lots while it restructures. The sale of most of Chryslers assets to a group led by Fiat SpA was completed last week.
NEARLY ALL DEALERS AGREE TO WORK WITH NEW GM: CEO Reuters See this story in: Business Standard (June 14)
Washington: Virtually all dealers asked to do business with the new General Motors Corp after bankruptcy have agreed to do so, while the automaker will work through the weekend to weigh appeals from those that are being cut loose, the company's chief executive said on Friday.
Some 96 percent of 3,500 dealerships GM wants to retain have agreed verbally or in writing to work with the automaker and 90 percent of those whose franchises are ending have signed or verbally agreed to wind-down terms, GM CEO Fritz Henderson told a House of Representatives subcommittee.
The dealerships with which GM wants to maintain a relationship had until Friday to accept terms that the automaker said were aimed at streamlining its distribution and sales network and increasing market share.
"Our dealership consolidation is not just about saving money, but about creating opportunity and revenue growth," Henderson said, adding it received 856 appeals from dealerships facing termination and reversed closure decisions for 45.
TOYOTA WELL POSITIONED FOR AUTO RECOVERY- BARRON'S Reuters See this story in: The Economic Times
New York: Japanese automaker Toyota Motor Corp is well positioned for any industry recovery and to take advantage of the General Motors Corp's woes, and could see its American Depository Shares (ADRs) rise significantly, according to a report in Barron's. http://economictimes.indiatimes.com/News/International-Business/Toyota-well-positioned-for-auto-recovery--Barrons/articleshow/4655902.cms
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| ECONOMY & FINANCE Go To Top "ECONOMY TO GROW BY 8.5%; GOVT BORROWING A WORRY" PTI See this story in: The Hindu Business Line, The Tribune, Hindustan Times New Delhi: ICICI Bank Chairman, Mr K V Kamath on Sunday said that the Indian economy could grow by 8.5 per cent in current fiscal, but warned the government against massive borrowing and said this would obstruct banks from lowering lending rates.
Advising the government to look for alternative sources for raising funds to pursue its employment and rural economy programmes, which he termed as a must for high growth, Mr Kamath said, I think we have hit the road at a pace where we can aspire for 8. 5 per cent growth in not a difficult way.
At the same time, he cautioned that the government's massive borrowing programme was putting pressure on the market by keeping interest rates high.
What is required from the government at this point of time is an articulation of thought as how this gap (between public spending programmes and required funds) will be bridged and the government has several ways in which it can bridge the gap, Mr Kama th said.
Elaborating on the alternative sources of funds, Mr Kamath said, For example, it could (selectively) divest (in PSUs), it could offload spectrum.
I am reasonably sure they are thinking about this (alternative mechanism of resource generation). All they need to do is to articulate to the markets so that it could pull up the market, the ICICI Bank Chairman said. http://www.thehindubusinessline.com/blnus/01141206.htm http://www.tribuneindia.com/2009/20090615/biz.htm#4 http://www.hindustantimes.com/Redir.aspx?ID=e1efcf36-8744-4de0-8746-41db69987957&SectionName=BusinessSectionPage
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