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INDUSTRY Mitsui Lines wins deal to transport Nissan cars Assam proposes cess on motor vehicle registration INTERVIEWS/FEATURES Auto capacity glut to persist for some years Ford small car set to hit Indian roads by early 10 COMMERCIAL VEHICLES 2/3 WHEELERS TVS Motor hopes to gain from lower working capital COMPONENTS Motherson Sumi Q4 net dips 64% on shrinking sales, forex losses SKF offers lubrication systems expertise under one brand | ALLIED INDUSTRIES FINANCE & INSURANCE LUBRICANTS & ALTERNATIVE FUELS INTERNATIONAL NEWS Porsche rejects VW merger offer: spokesman Aston Martin to sell redesigned Toyota iQ in Europe ECONOMY & FINANCE Sensex ends flat in choppy trade
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INDUSTRY Go To Top The Statesman (Web Edition) New Delhi: The department of heavy industry (DHI) has proposed setting up of a National Automotive Design Institute (NADI) in response to the countrys growing automobile sector and to enhance the sector's competitiveness. Described often as a sunrise industry, Indias auto sector has seen an overall average growth rate of approximately 15 per cent over the last five years. The country is ranked the worlds second-largest manufacturer of two-wheelers and ninth-largest car manufacturer. The worlds largest manufacturer of two-wheelers is also operating from India. For the Indian auto industry to grow and become truly globally competitive, it is essential that adequate investment takes place in R&D and auto designing. The Indian automotive industry achieved a turnover of Rs 2,21,507 crore in the financial year 2007-08 and about Rs 2,19,000 crore in the financial year 2008-09.
According to the heavy industry and public enterprises minister Mr Vilasrao Deshmukh, the NADI would be an important initiative as the designing capabilities within the country are limited and the automobile manufacturers are outsourcing from international design centres.
The setting up of an indigenous auto designing capabilities through NADI is, therefore, essential for the growth of the Indian auto industry, he said. http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=259674 MITSUI LINES WINS DEAL TO TRANSPORT NISSAN CARS P. Manoj Mint (Web & Print Edition) Bangalore: Japanese transporter Mitsui OSK Lines Ltd has won a contract for moving cars for export from a new Nissan Motor Co. Ltd plant. The factory, being set up at Oragadam near Chennai in Tamil Nadu, is expected to start production in early 2010, while exports, mainly to Europe, are scheduled for late that year. The contract includes transporting the vehicles to a port and yard operations at the port such as storage and preparation for loading, Akimitsu Ashida, president, Mitsui OSK Lines, said in a statement on Monday. He did not mention the contracts value. In October, Nissan Motor India Pvt. Ltd, had signed an agreement with Union government-owned Ennore Port Ltd near Chennai to export through it automobiles manufactured at the Oragadam plant. A month later, Mitsui OSK Lines set up MOL Auto Logistics (India) Pvt. Ltd, a wholly owned auto logistics unit, to tap the domestic auto market and car exports. It will provide inland transportation services by car trailers, as well as export related port services for finished cars. Indias vehicle exports are poised to increase in the future and MOL Auto Logistics will offer a full line-up of inland transport and export-related port services for finished vehicles, Ashida said in the statement. These contracts should lead to ocean shipping in the future, he added. In May, NYK Line (India) Ltd, the India unit of Nippon Yusen Kabushiki Kaisha Ltd, Japans biggest shipping firm by fleet size and revenues, entered into a 50:50 joint venture with state-owned Container Corp. of India Ltd to transport automobiles over rail. Global vehicle carrier specialists such as Hoegh Autoliners AS and Wallenius Wilhelmsen Logistics AS have also entered Indias auto logistics market by starting shipping services or setting up dedicated automobile terminals at ports to tap the countrys automobile exports. http://www.livemint.com/2009/06/29213137/Mitsui-Lines-wins-deal-to-tran.html ASSAM PROPOSES CESS ON MOTOR VEHICLE REGISTRATION PTI See this story in: The Hindu Business Line (Web Edition) Guwahati: The Assam government on Monday proposed 1 per cent cess on motor vehicle registration tax, rationalisation of entry tax and reduction of VAT to 4 per cent from 12.5 per cent on certain items in its Budget 2010. The Chief Minister Mr Tarun Gogoi, who also holds the finance portfolio, while presenting the Rs 4,615.11-crore deficit Budget in the Assembly, said the state would incur a deficit of Rs 8,368.74 crore. This together with the opening deficit of Rs 968.95 crore for the year, would lead to an estimated closing deficit of Rs 9337.69 crore. However, I propose to utilise Rs 4,722.58 crore from our deposits with the Reserve Bank of India, he said. Hence, the budget deficit at the end of the current financial year is estimated to be Rs 4615.11 crore, he said. To offset the low crude oil prices adversely affecting the state's revenue collection, he proposed 1 per cent cess on tax on registration of both personal and commercial vehicles to create a Road Safety Fund to bring awareness among all, particularly chi ldren, elderly and drivers. Entry Tax on various items, particularly industrial raw material, plant and machinery, was rationalised keeping two slabs of 4 per cent and 2 per cent doing away with all higher tax rates, the Chief Minister said. The government slashed VAT rates on some essential items such as some medical items, certain electrical items, tarpaulin and canvas, plywood, and furnace oil. Also natural gas rate was cut to 12 per cent from 20 per cent. http://www.thehindubusinessline.com/blnus/27291607.htm | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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CARS, SUVs, MUVs Go To Top PTI See this story in: The Hindu Business Line (Web Edition), The Pioneer (Web & Print Edition), mint (Web & Print Edition), The Financial Express (Delhi Print Edition) New Delhi: Passenger vehicle sales are expected to nearly double by 2014 from the current 18.9 lakh units, mainly driven by anticipated economic growth fuelling the aspirational lifestyles of consumers. According to global consultant Ernst & Young (E&Y), the total sales of passenger vehicles are expected to touch 37.5 lakh units within next five years witnessing an annual growth of 12 per cent. While domestic market is expected to contribute 27.5 lakh units to the total tally, the remaining would come from exports, an E&Y report said. "Economic growth with changing demographics and aspirational lifestyles are the main drivers for the growth in domestic market, supported by government support in the form of reduced excise duties, concessions on cleaner fuels and the ongoing improvement in highways,'' it added. The study further said stimulus packages would prevent the market from a free fall and the benefits are expected to continue till assurance of sustenance of manufacturers is established. Taking note of the changing scenario of the Indian auto industry, the consultant said the entry of ultra low-cost cars, like Nano, would increase the penetration level from the existing nine cars per 1,000 persons. http://www.thehindubusinessline.com/blnus/03291860.htm http://www.dailypioneer.com/185932/Passenger-vehicle-sales-to-touch-375-lakh-units.html http://www.livemint.com/2009/06/29151232/Passenger-vehicle-sales-to-tou.html AUTO CAPACITY GLUT TO PERSIST FOR SOME YEARS Samar Srivastava Mint (Web & Print Edition) New Delhi: Excess production capacity, a problem that crept into the Indian auto industry in the last year, is likely to persist well into the future, a new study by consultancy Ernst and Young shows. As a result, car makers doing business in India would have to put up with depressed margins and lower profits than what they have so far been used to. The report, which has analysed and forecast demand for only passenger vehicles, predicts that India would be capable of producing 5.4 million cars a year in 2014 compared with a market size of between 3.51 million and 4.8 million units. Car makers usually make decisions on capacity additions two-three years in advance, based on future projections for market growth. They had, up till now, been accurate with their growth assessments. Car sales in India increased at an average annual rate of 17% between fiscal 2003 and 2008, largely in line with capacity additions during those years. That declined sharply in fiscal 2009 when the industry grew by a mere 0.13% to 1.89 million units from the previous year, as the countrys economic growth slowed in the face of global recession. Meanwhile, capacity additions continued unabated. For instance, General Motors Corp.s Indian subsidiary inaugurated a 140,000 units a year plant at Talegaon near Pune. Also near Pune, Volkswagen India Pvt. Ltd added a 210,000 units a year plant in February. Some of this capacity could service exports, which accounted for 18% of total production in India last fiscal. A significant part of the new capacity additions would be with an export focus, said Joseph George, an analyst at BNP Paribas Securities Ltd. This would definitely rise in the next few years. At present, car companies in India make use of 65% of installed capacitymarginally higher than the global average of 64%Ernst and Young said. But this rate varies widely among individual companies. Some such as market leader Maruti Suzuki India Ltd used 83% of its installed base of a million units, the report said; Fiat India Automobiles Pvt. Ltds utilization was at a low 9%. Already under-utilized plants have resulted in some auto companies pulling back on their expansion plans. In the past six months, the Indian units of Toyota Motor Corp. and Honda Motor Co. have said they will put expansion plans on hold. http://www.livemint.com/2009/06/29223326/Auto-capacity-glut-to-persist.html FORD SMALL CAR SET TO HIT INDIAN ROADS BY EARLY 10 Shweta Bhanot The Financial Express (Web & Print Edition) Mumbai: Ford India has started testing prototypes of its small car, which it says is on track and will be hitting the Indian roads early 2010. The small car is expected to have a localisation of around 85% from the start to production stage. Around 300 prototypes of the small car are already on the road for testing, said Michael Boneham, president and managing director, Ford India. He added that the car is predominantly designed for the Indian market and will be exported to other markets after its launch in the country. It (small car) is from the common global platform with design inputs from Europe and Australia, while contributions from Indian suppliers, he said. Further, the car will have petrol and diesel engine options. We are looking at sub-1.2 petrol and sub-1.5 diesel engines for the car, he added. The company is currently producing around 60,000 (1.4-litre Duratorq) diesel engines at its engine plant near Chennai, which it said will be ramped up to 2.5 lakh, including both petrol and diesel engines, by this year end. These will also be exported from India to Asia Pacific and Africa, he said. All of the diesel engines for Ikon, Fiesta and Fusion are locally produced. Till now, the company has made an investment of around $900 million in the country. This includes $500 million for the new engine plant, the upcoming small car project and ramping up of the vehicle assembling capacity from 1 lakh units to 2 lakh. Indicating that the launch of the small car will be the dawn of new era for the brand in the country, Boneham said, The company plans to be a major player in the small car market in the country, which occupies 70% of the automotive sales. At the same time, we plan to offer products in other segments as well in a bid to keep our customers engaged throughout the upgrading cycle. Ford sells Ikon, Fiesta, Fusion and Endeavour in India. It sold 30,000 units last year and is looking at achieving a similar target this year. http://www.financialexpress.com/news/ford-small-car-set-to-hit-indian-roads-by-early-10/482875/ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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CONSTRUCTION & AGRI MACHINERY Go To Top Tushar Pawar Business Standard Mumbai/ Nashik: JCB India Ltd, the earthmoving and construction equipment manufacturing company, is eyeing a 20 per cent year-on-year growth in sales over the next five years. The company has also opened its new dealership facility in Nashik spread over 29,480 sft. JCB India has three manufacturing facilities in the country - one at Ballabgarh in Haryana and two plants in Pune. The company recently doubled the capacity of its Ballabgarh plant (near Faridabad) from 50 backhoe loaders a day at an investment of Rs 300 crore. We have just doubled the manufacturing capacity of our Ballabgarh plant. Right now, we are in the process of utilising the capacity. The companys sales were affected last year (2008) due to the slowdown. Infrastructure is a long-term process, its not an annual. We expect a 20 per cent year-on-year growth in sales over the next five years, Vipin Sondhi, managing director & CEO, JCB India Ltd, told Business Standard after the opening of its dealership facility here. JCB India sold 13,460 equipment in the calendar year 2008, as against 17,192 units in 2007. The company registered a turnover of Rs 3,000 crore in 2008, compared with Rs 3,450 crore in 2007. The company currently has 48 dealers and 320 outlets across the country. JCB India has a 53 per cent market share in the domestic construction equipment segment. http://www.business-standard.com/india/news/jcb-india-eyes-20-growth-annually/362435/ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/3 WHEELERS Go To Top Sindhu Bhattacharya Daily News & Analysis New Delhi: Bajaj Auto is looking at new product launches and improvement in the overall market sentiment for two-wheelers to stage a sales recovery this year. But the company appears to have less faith in the performance of three- and four-wheeler segments. Which is perhaps why it has further postponed the launch of 'Lite' range of four-wheeled commercial vehicles (passenger and cargo) to 2011, saying these are being redesigned to "sharpen competitive positioning". Also, it is yet to form any joint venture with the Renault-Nissan combine for an Ultra Low Cost (ULC) car project and has seen market share erosion in the three-wheeler space (at a faster clip than three-wheeler market decline) also in 2008-09. The good news is that despite falling overall domestic sales, Bajaj continued to maintain healthy operating margins last fiscal, which rose to 15.2% in the fourth quarter as percentage of net sales. Also, a robust 25% growth in two- and three-wheeler exports So, what lies ahead for Bajaj in 2009-10? According to the company's latest annual report, chairman Rahul Bajaj is confident of an overall sales recovery this year, but has cautioned that sales would still not reach the 2006-07 levels. During the year ended March 31, total sales fell 22.4% to 1.42 million vehicles while in 2007-08 the decline has been 10%. However, volumes had risen by 19% in 2006-07. In a bid to strengthen its product lineup, Bajaj has already launched the Pulsar 220, upgraded the existing 150 and 180 cc models besides unveiling the successful XCD 135 earlier this year. On the anvil is another, brand new, 135 cc bike to strengthen the company's position in the executive segment of motorcycles and a new version of the 'Avenger'. The company has also announced the launch of the "most fuel efficient" two-wheeler on Indian roads soon. Then, Bajaj is also taking several steps to consolidate its international operations. It has already spent Rs 140 crore to raise its equity in Europe's second-largest sport motorcycle manufacturer, KTM Power Sports AG, to 31.72%. Now, although any further stake increase in KTM is not being considered, Bajaj is planning to soon start assembling completely knocked-down parts in its Indonesian operations. The Indonesian subsidiary currently assembles and markets Pulsar and the XCD models in the country. Bajaj will move into assembling of completely knocked-down parts in the latter half of 2009-10, to avail of lower duties and also expand its product portfolio there. Also, the company is expanding its spare parts business, which generated Rs 588 crore in revenue last fiscal from domestic operations alone. http://www.dnaindia.com/money/report_bajaj-bets-on-sales-recovery-this-fiscal_1269589 Sindhu Bhattacharya Daily News & Analysis New Delhi: Bajaj Auto recorded a steep decline in domestic sales of entry-level bikes last fiscal and this led to the company's overall sales falling, too. In the third quarter of 2008-09, sales in the entry level fell from a monthly average of 49,807 units to 17,147 units - a 66% decline over two successive quarters. Though the executive and deluxe segment sales also declined in Q3, the fall was nowhere as sharp as in the entry level segment. Chairman Rahul Bajaj says in the company's latest Annual Report, "the silver lining is that since Platina is a low-margin product, this substantial fall in growth has not proportionately reduced Bajaj Auto's operating Ebidta margins...With financing support from Bajaj Auto Finance, we expect to at least hold on to the average monthly volumes of 2008-09 in the entry level." http://www.dnaindia.com/money/report_entry-level-bike-sales-skid_1269590 Asian Age Mumbai: The electric bike (e-bike) segment has seen a rapid growth where the local governments have offered subsidies against the states that are charging a value added tax of 12 per cent. Disclosing this, Mr Sohinder Gill, the president of Society of Indian Electric Vehicle Manufacturers, said: "For e-bikes, there is a zero per cent VAT in Delhi. The Delhi government also offers a 15 per cent subsidy it pays 15 per cent of e-bikes cost to the manufacturer. As a result, more than 30 per cent of the e-bikes produced were sold in Delhi itself in 2008-09." If other state governments also offer subsidies then the Delhi experience can be replicated in other cities across India, he added. During 2007-08, e-bikes the sales volumes were 85,000 and grew by about 29 per cent to 1,10,000 in 2008-09. The e-bike manufacturers were expecting more growth in the background of the economic slowdown, as e-bikes are not only cheaper but save a lot on fuel cost. Mr Gill said: "Though its mandatory for all states to bring down the VAT to four per cent, some of the states have not done so." http://www.asianage.com/presentation/leftnavigation/news/business/subsidies-fuel-e-bike-sales.aspx TVS MOTOR HOPES TO GAIN FROM LOWER WORKING CAPITAL The Hindu Business Line Chennai: A near-doubling of interest costs ate into the 2008-09 profits of TVS Motor Company, but the company sees reasons to believe that the current year would see no repeat of that. Interest costs were Rs 55 crore. Even allowing that the previous years interest charges of Rs 2.19 crore were net of a foreign exchange restatement gain of Rs 27 crore, the burden of financial costs on 2008-09 profit was heavy. Net profit declined by 2 per cent to Rs 31 crore last year even while the topline grew 14 per cent. TVS Motors Executive Vice-President Finance, Mr S.G. Murali, says the company could breathe easy this year, because, apart from the general reduction in interest rates in the market, the companys efforts towards compression of working capital has paid off. Focus on topline He told Business Line that Rs 80 crore would be released from reduction in working capital a considerable help in bringing down interest burden. This came about by streamlining supply chain and reducing inventory. The focus will be on improving the topline substantially, Mr Murali said. New product launches and softening commodity prices will help improve performance. TVS Motor has been witnessing growth in sales for April and May. It launched a larger capacity Apache motorcycle earlier this month in the premium segment. It has also re-launched its major 2009 offering, the Flame motorcycle, under the brand name Flame SR 125. A new motorcycle and a scooter are expected to be launched within the next few months. http://www.thehindubusinessline.com/2009/06/30/stories/2009063051100200.htm | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MOTHERSON SUMI SYSTEMS SALES UP 28% AT RS 2596 CR The Economic Times New Delhi: Motherson Sumi Systems Ltd (MSSL), the flagship company of Samvardhana Motherson Group, on Monday reported total consolidated sales of Rs 2,596 crore for FY09, an increase of 28% as compared to Rs 2,028 crore in FY08. The consolidated net profit was at Rs 176 crore. The EPS for the year was Rs 4.96. The board of directors has recommended a dividend of 135%. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" MOTHERSON SUMI Q4 NET DIPS 64% ON SHRINKING SALES, FOREX LOSSES The Hindu Business Line See similar story in: mint New Delhi: Motherson Sumi Systems Ltd on Monday posted a decline in net profit and sales for the fourth quarter of the fiscal and the full year. Its consolidated sales and profit improved owing to its presence in diversified global markets. The company standalone net profit for the fourth quarter declined 64 per cent to Rs 16.06 crore (Rs 44.71 crore). For the entire year, profit after tax declined by 45 per cent to Rs 69.54 crore (Rs 128.19 crore). The drop in standalone profits was because of shrinking domestic market sales and foreign exchange losses of Rs 24.92 crore. The companys net sales for the fourth quarter fell 16.40 per cent to Rs 317.26 crore (Rs 379.50 crore). During the year ended March 31, the companys net sales were Rs 1,294.94 crore against Rs 1,303.10 crore in the previous fiscal. In India the market was hit. But we improved our content/car by increasing the number of components we supply through our overseas subsidiaries. This has resulted in a better performance in our consolidated results, said Mr Pankaj Mittal, President and COO of the company. Consolidated profit for the quarter almost doubled to Rs 123.06 crore (Rs 61.79 crore.) For the whole year, profits recorded a 26 per cent increase to Rs 221 crore from Rs 174.83 crore. Net sales increased to Rs 826.56 crore (Rs 586.70 crore) during the quarter. For the year, net sales were up by 28 per cent to Rs 2,595.64 crore (Rs 2,028.12 crore). The company has recommended a dividend of Rs 1.35 a share (135 per cent). The companys shares closed 11.6 per cent up on the NSE on Monday at Rs 74.80. http://www.thehindubusinessline.com/2009/06/30/stories/2009063052130300.htm http://www.livemint.com/2009/06/29161840/Motherson-Sumi-Q4-net-profit-r.html SKF OFFERS LUBRICATION SYSTEMS EXPERTISE UNDER ONE BRAND PTI See this story in: The Hindu Business Line Mumbai: SKF, a global provider of bearings, seals and related products and services, on Monday said it would now offer expertise in lubrication systems under the brand name of SKF Lubrication Systems. Beginning July 1, Willy Vogel AG will operate under the name of SKF Lubrication Systems, a press release issued here said. All lubrication systems, engineered solutions and services will now be offered under the SKF brand only, instead of the presently dual branded SKF Vogel. The SKF group acquired Willy Vogel AG, a leading company in lubrication technology space, in 2004. For customers, this will result in direct access to SKF's complete range of products, solutions and services, the release said. It will also provide a highly-efficient service-level, from initial consultation to final delivery, the release added. SKF India Managing Director, Mr Rakesh Makhija said the acquisition of Willy Vogel AG was strategically important to SKF's objective of having a leading role in all its technology platforms. Customers can now rely on standard lubrication systems, customised units and complete solutions integrating bearings, lubrication and sealing, he added. http://www.thehindubusinessline.com/blnus/02291613.htm SUPRAJIT TO SET UP NEW FACILITY IN HARIDWAR The Hindu Business Line Bangalore: Suprajit Engineering, leading automobiles cables manufacturing company, will be investing Rs 15 crore, which will include setting up a new facility at Haridwar in Uttarakhand to initially cater to its major customer, Hero Honda. The new plant, set up at a cost of Rs 10 crore, will start commercial production in January. The company also plans to improve production efficiencies and capacity in its other facilities. Dividend Suprajit has declared a dividend of Rs 1.25 for FY 2008-09, in addition to an interim dividend of Rs 1. Mr Ajith Kumar Rai, Vice-Chairman and Managing Director said the company posted a net profit of Rs 3.58 crore during the quarter ended March, against a net loss of Rs 1.35 crore for the corresponding period in 2008. The improved finances were due to an increase in net sales by nine per cent despite the automobile sector being one of the worst affected sectors by the economic slowdown. Net profit During the full year, Suprajit posted a net profit of Rs 11.62 crore against Rs 4.88 crore for the corresponding period last year. The companys income also grew 16 per cent to Rs 181.5 crore during the year from Rs 156.7 crore in the previous year. Mr Rai said the results, defying the dismal economic situation was due to a combination of factors, which included price revision, lower commodity prices and better cost efficiencies. The company had raised its price by about 7-8 per cent during the year. http://www.thehindubusinessline.com/2009/06/30/stories/2009063052110300.htm KARNATAKA INVITES BOSCH TO SET UP FINISHING SCHOOL Chethan Kumar Deccan Herald Bangalore: Sources from Karnataka Udyoga Mitra revealed that in one such initiative Minister for Large & Medium Industries Murugesh R Nirani, on Sunday, suggested Bosch Group to assist the State to set up a finishing school for technical trainning. http://www.deccanherald.com/content/10799/state-invites-bosch-set-up.html | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ALLIED INDUSTRY Go To Top Nandini Sen Gupta & Anuradha Himatsingka Kolkata-Based Pawan Ruia Group has put in a proposal to take over the ailing state-owned Tyre Corporation of India (TCIL), which is up for sale. The group has a history of buying out distressed tyre companies including Dunlop, Falcon and Monotona. TCIL is likely to be valued under Rs 200 crore, a figure arrived at by the government in FY01. Speaking to ET NOW, Ruia group chairman Pawan Kumar Ruia said: We are keenly interested in taking over Tyre Corporation. If an acquisition is not possible, we are willing to even have a joint venture. He added the group would like to reopen TCILs Kankinara plant in West Bengal and use it for contract manufacturing to service its export orders. Already, the group sources 20 tonne a day from TCIL, which is one-third of its 65 tonne-a-day capacity. Mr Ruia said TCILs West Bengal facilities have a geographical synergy with the groups tyre flagship Dunlops Sahagunj plant. He added the groups experience in acquiring distressed units will help turn around TCIL. While Mr Ruia did not reveal the valuation, he added TCILs price tag may not be anywhere near the figure arrived at nine years ago. In the interim, the government has sold some of the companys land on the Eastern Bypass, he said. TCILs turnover is estimated to be Rs 128 crore in FY08. The government has already pumped in over Rs 90 crore in budgetary support into the ailing tyre company. Currently a BIFR case, Tyre Corporations disinvestment is subject to some procedural clearances. The Kolkata-based Ruia group shot into the limelight with its takeover of the ailing Jessop and later, Dunlop India. The group took over Dunlop in an overseas deal in December 2005. Dunlop has two manufacturing facilities at Ambattur (near Chennai) and Sahaganj (near Kolkata) with a combined capacity to process 180 tonne of rubber every day. The Chennai unit has been shut for a while and there are reports that the workers may be offered a severance package and the plant shut down. However, there is no official word on this. Dunlops product mix ranges from tyres for aircraft to industrial, commercial and agricultural vehicles. The Sahagunj plant is facing labour unrest, but production is scheduled to start soon. The Ruia Group took over Falcon Tyres in 2005 and de-bottlenecked its production capacity. Falcon now has a technology partnership with Japanese tyre major Sumitomo Rubber Industries and enjoys nearly 30% market share in its segment. Its total capacity has doubled from 375,000 to 750,000 units a month. Falcon now has supply tie-ups with Hero Honda, Bajaj and other vehicle makers and markets its tyres under the Dunlop brand. Its plant is located in Mysore. Falcon reported a turnover of Rs 56.6 crore in 2008-09 against Rs 49.5 crore in the previous year. Subsequent to the acquisition of Dunlop and Falcon Tyres in December 2005, the group increased its presence in the tyre industry by buying Monotona Tyres in January 2007. Monotona has state-of-the-art manufacturing capabilities for a wide variety of sizes of nylon bias tyres and butyl tubes and has been supplying its products to several large OEMs in the two-wheeler segment under the brand name RACER. Monotona has also established a large export market, especially for LCV and threewheeler tyres. Monotona has its plant at Wada, 100 km from Mumbai, where it has a capacity of 250,000 tyres and 400,000 tubes per month. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" PTI See this story in: Asian Age, Deccan Chronicle New Delhi: The finance ministrys department of revenue (DoR) is understood to have given its clearance to an investment proposal worth Rs 11,000-crore by French tyre giant Michelin to set up a manufacturing facility in Tamil Nadu. However, it could not be confirmed whether the Foreign Investment Promotion Board (FIPB) has given its final approval to the proposal. According to informed sources, DoR has given a "no objection" to the proposal under which Compagnie Financiere Michelin (CFM) plans to set up a wholly-owned subsidiary to make radial tyres, tubes and ancillary tyre related products at the facility. The company has proposed investment Rs 4,000 crore over a period of seven years and intends to make a further infusion of Rs 7,000 crore over a period of three years, after the completion of the initial funding depending on the progress of the project and demands of the tyre market, sources said. DoRs gave its "no objection" to the proposal which was to be taken up by FIPB at its scheduled meeting on June 19. When contacted, a Michelin spokesperson said the facility will go on stream within next three years. "The group has decided to invest in a manufacturing facility to produce truck radial and off-the-road tyres in India. Considering the stage of discussions, we hope that this plant will start functioning in three years time," the French tyre makers official added. Michelin considers India as a strategic market and key pillar for its growth in the future, the spokesperson said. http://www.asianage.com/presentation/leftnavigation/news/business/michelin http://www.deccanchronicle.com/business/michelin??s-tn-plan-gets-nod-454 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCE & INSURANCE Go To Top Chanchal Pal Chauhan New Delhi: Declining interest rates and easy availability of credit have increased the number of cars sold through loans by 15% in the past six months. Around 70% of new cars sold now are financed through loans compared with 55% a year ago, when loans became unattractive due to high interest rates and a credit crunch. The major push has come from PSU banks such as State Bank of India, the countrys largest bank, which has emerged as the second-largest disburser in the car finance business after HDFC Bank. PSU banks are offering car loans at 10% against while private banks like HDFC, ICICI and Kotak Mahindra are offering them at 11.5-13%. Hyundai Motor India senior vice-president (sales & marketing) Arvind Saxena said, Its a big positive development. Easier finance will expand the car market and generate fresh demand. We are expecting healthy increase in car sales in the next few months. In 2007, when the interest rate were in single digits, over 80% cars sold were financed and led to rapid growth in car sales. Bankers say customers are milking the rapid fall in interest rates over the past six months and making fewer cash down purchases. Though India was not impacted by the global economic downturn, the general improvement in sentiment has boosted the retail finance market. The low interest rate has prompted customers to go for loans instead of cash deals, said HDFC Bank executive vice-president for auto loans, Ashok Khanna. According to five bankers and financiers ET spoke with, the percentage of cars sold on loans is likely to go back to the peak 80% after the Budget. We have eased lending norms and almost doubled the dispersal funds for auto. There has been a huge rush of customers opting for the 10% fixed rate on auto loan, a senior executive of SBI Bank said, requesting anonymity. This change comes almost a year after the government eased lending norms and pumped liquidity in the market to stimulate demand. Car sales grew 3.29% to 2.16 lakh units in April-May period over last year and the growth is likely to increase with several banks likely to drop interest rates in the near future. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LUBRICANTS & ALTERNATIVE FUELS Go To Top PTI See this story in: The Statesman New Delhi: India's crude oil production fell by 4.3 per cent in May due to a decline in output at Oil and Natural Gas Corporation, the nation's largest producer. Crude oil production at 2.78 million tons in May was 4.3 per cent lower than 2.9 million tons in the same month a year ago, according to the data released by the petroleum ministry. ONGC output fell by six per cent to 2.06 million tons as its prime Mumbai High offshore fields produced 1.43 million tons of oil against 1.52 million tons in the corresponding month of the previous year.
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INTERNATIONAL NEWS Go To Top Reuters See this story in: The Economic Times Ford Motor expects its US sales for June will decline by less than 20 per cent, giving it a higher share of the largest auto market amid early signs that demand has begun to stabilize, an executive said Monday. PORSCHE REJECTS VW MERGER OFFER: SPOKESMAN AFP See this story in: Hindustan Times, Deccan Herald, The Times of India Frankfurt: Porsche, the heavily indebted maker of German luxury sports cars, rejected on Monday a merger offer by Volkswagen, Europe's biggest car maker. "There is an offer by Volkswagen. For us it is not a practical way," a Porsche spokesman told AFP. In the event of a merger, a credit worth 10.75 billion euros (15 billion dollars) agreed to by a consortium of banks in favour of Porsche would have to be renegotiated "right away," he added. A press report said over the weekend that VW had presented a merger proposition to Porsche which would proceed via cross shareholdings, with VW taking a stake of 49.9 per cent in Porsche. Porsche currently owns 51 per cent of the shares in VW. The plan "was transmitted to Wolfgang Porsche last week," but "it has not been brought to the attention of the Porsche board," the spokesman said. Relations between the two car makers have deteriorated in recent weeks, as well as between the owners of Porsche, the Porsche and Piech families. Ferdinand Piech, head of the VW supervisory board, and his cousin Wolfgang Porsche disagree on how to get Porsche out of the financial dead-end it finds itself in since buying a majority of VW's shares. The move was in large part responsible for Porsche's current debt of around nine billion euros. http://www.deccanherald.com/content/10795/porsche-says-no-volkswagen.html http://timesofindia.indiatimes.com/Business/Porsche-rejects-VW-merger-offer/articleshow/4716849.cms ASTON MARTIN TO SELL REDESIGNED TOYOTA IQ IN EUROPE AFP See this story in: mint Tokyo: British luxury sports car maker Aston Martin plans to sell a redesigned version of Toyota Motors iQ ultra-compact car in Europe, the two companies announced Monday. Aston Martin, whose cars have been driven by royals and James Bond, said that the vehicle, to be called the Cygnet, would be a new luxury commuter concept. Much work is still required, but I am confident that this project could become reality in the not too distant future, Aston Martin chief executive Ulrich Bez said in a statement. This concept akin to an exclusive tender to a luxury yacht will allow us to apply Aston Martin design language, craftsmanship and brand values to a completely new segment of the market. Toyota, the worlds largest automaker, will supply the vehicle to Aston Martin through its Belgium-based subsidiary Toyota Motor Europe NV/SA. The Japanese maker said it would also introduce a new, sporty version of the four-seater iQ, as well as models aimed at women and young drivers. http://www.livemint.com/2009/06/29143003/Aston-Martin-to-sell-redesigne.html | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ECONOMY & FINANCE Go To Top The Hindu Business Line Mumbai: The rupee was flat on Monday in a range-bound market. The domestic currency opened at 48.06 and strengthened to touch an intra-day high of 47.95. It weakened to touch an intra-day low of 48.26, before closing at 48.10, unchanged from the previous close. The rupee gained in the first-half of trade as exporters sold dollars, said a dealer with a private bank. However, month-end dollar demand from importers exerted pressure on the rupee. The market is witnessing muted volumes ahead of the Budget and the announcement of the US payroll data, the dealer added. In the overseas markets, the dollar strengthened against the euro and the pound initially but weakened sharply against the euro in the second half of trade. It was flat against the yen and swiss franc. In the forward premia market, the six-month premium closed marginally higher at 2.75 per cent (2.7 per cent) and the one-year closed at 2.45 per cent (2.4 per cent). http://www.thehindubusinessline.com/2009/06/30/stories/2009063051600601.htm SENSEX ENDS FLAT IN CHOPPY TRADE PTI See this story in: The Hindu Business Line Mumbai: The benchmark Sensex of BSE erased early gains to close moderately higher by 21 points on Monday on alternate bouts of buying and selling days ahead of the Budget. The Bombay Stock Exchange barometer closed at 14,785.74 points, a gain of 21.10 points over the previous close. At its intra-day high, the 30-share index fell short of only 45 points to touch the 15,000 level. The wide-based National Stock Exchange index Nifty edged up by 15.45 points to close at 4,390.95 points. It crossed 4,439 points level during the day. Market men said buying was largely confined to fundamentally strong stocks on expectations of a higher expenditure on infrastructure and some tax benefit in the upcoming Budget. They said every down-trend was checked as investors remained buyers in fundamentally strong shares available at existing lower levels. The buying activity was restricted as market participants adopted wait-and-watch policy, they added. The upsurge was led by metal producers after copper in Shanghai climbed for a fifth day. Sterlite Industries, one of the biggest copper producers, shot up by 5.66 per cent to Rs 646.70 after the metal gained on optimism that demand may be picking up as g lobal stockpiles decline. http://www.thehindubusinessline.com/blnus/05291901.htm Last Financial closing
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