Indian Auto Industry Update March 20, 2009

 

 

 

INDIAN AUTOMOBILE INDUSTRY Friday March 20, 2009 Daily Updates on: Aviation...Insurance...Banking...Metal & Minerals...Infrastructure....Energy
INDUSTRY Jaguar tops dependability chart in US Indo-Italian venture to tap auto logistics market Auto company to pay over Rs 5L to consumer INTERVIEWS/FEATURES Peoples car, an idea whose time has come: Ratan Tata CARS, SUVs, MUVs Maruti competes with world leaders at Dhaka motor show Maruti Suzuki: sales momentum to continue GM will launch Rs 4-lakh small car BMW cuts boardroom salary 40% Reva may set up manufacturing plant in the US SUV from Mercedes Mercedes to enter used car market COMMERCIAL VEHICLES Merc plan to push bus sales Swaraj Mazda to raise Rs 80 crore via rights CONSTRUCTION & AGRI MACHINERY 2/3 WHEELERS Yamaha's India sales plan hits roadblock Award for TVS COMPONENTS Auto component manufacturers to benefit from Centres move to fund bus purchase	ALLIED INDUSTRIES FY09 natural rubber output estimate down Apollo Tyres gets nod for buyback "We've just won the Volkswagen order": Vice-Chairman, Apollo Tyre Dunlop union leaders to go on indefinite fast FINANCE & INSURANCE Govt issues draft guidelines for auto loan disbursals Basel II rules to make fund raising tough Hyundai and Canara Bank sign MOU for retail financing Tata Motors ties up with Indian Bank for retail finance Crisil downgrades M&Ms rating LUBRICANTS & ALTERNATIVE FUELS Crude back to above $49 INTERNATIONAL NEWS US doles out $5 bn bailout for auto suppliers Toyota to halve recruitment in 2009: Report ECONOMY & FINANCE Rupee gains sharply as $ slides on Fed debt buyback plan Sensex ends marginally higher in volatile session Inflation plummets to 0.44% Economy to improve from mid FY10: Rangarajan
INDUSTRY                                                                                                                                  Go To Top JAGUAR TOPS DEPENDABILITY CHART IN US PTI See this story in: Business Standard (Web Edition), The Economic Times (Web & Print Edition), Daily News & Analysis (Web Edition)   New York: Tata Motors-owned Jaguar has emerged as the most dependable vehicle marque along with the Buick in the US market, according to a study by JD Power and Associates.   According to the J D Power and Associates 2009 Vehicle Dependability Study, which focused on problems experienced by original owners of three-year-old vehicles (2006 model-year vehicles), Jaguar moved up nine positions from No. 10 in the 2008 study, while the Buick ranked No. 6 in the same year, toppling Toyota's Lexus.   "Buick has ranked among the top 10 nameplates each year since the study was last redesigned in 2003, while Jaguar has moved rapidly up the rankings," Vice-President J D Power and Associates (Automotive Research) David Sargent said. http://www.business-standard.com/india/news/jaguar-tops-dependability-chart-in-us/56984/on http://economictimes.indiatimes.com/News/News-By-Industry/Auto/Jaguar-Buick-dethrone-Lexus-in-reliability-study/articleshow/4288732.cms http://www.dnaindia.com/report.asp?newsid=1240769   Go To Top     INDO-ITALIAN VENTURE TO TAP AUTO LOGISTICS MARKET The Hindu Business Line (Web & Print Edition)   New Delhi: Pallia Transport has formed a joint-venture with Italian logistics firm Gruppo Mercurio SPA (GM SPA). The joint venture Mercurio Pallia Logistics will provide logistics services to automotive companies. It will procure about 100 trailers over the next one year and has already placed orders for 20 trailers with Tata Motors. GM SPA, an 130-million company, will bring in its expertise in stockyard management, pre-delivery inspection and other value additions, said Mr Vipul Nanda, Managing Director, Mercurio Pallia. It aims to offer auto-makers end-to-end logistics services between India and Europe.   The Indian automotive logistics players usually offer services between factories and dealers. The joint vrnture will provide value-added services to the Indian auto logistics market, which is roughly Rs 2,000 crore annually, Mr Nanda said. We will increase our existing business in car transportation with automobile companies including Maruti, Mahindra and Mahindra, Tata Motors, Hyundai, General Motors and Honda. We are doing a feasibility study for car transportation in rail wagons, he said. http://www.thehindubusinessline.com/2009/03/20/stories/2009032050691500.htm   Go To Top     AUTO COMPANY TO PAY OVER RS 5L TO CONSUMER The Times of India (Web & Print Edition)   New Delhi: Imagine taking your brand new car to the garage over and over again. In the case of an automobile manufacturer selling a defective car to its consumer, the state consumer commission has come down heavily on Tata Engineering and Locomotive Co Ltd directing it to pay one Sunil Bhasin a lump sum amount of Rs 5 lakh along with Rs 25,000 as compensation for the mental harassment and added expenses he incurred for maintaining the car. The complainant in this case had purchased a Tata Indica car from a dealer in 2000. Just a few months later he discovered several manufacturing, mechanical and electrical defects in the car and had to take it to the garage on 30 to 40 occasions. Bhasin alleged that special features like URO-II pollution free, less consumption of fuel, good air-conditioning system, advertised in a big way by the company, which wooed him to buy car were more of a publicity stunt by the manufacturers. Meanwhile, in its defence, the automobile company pleaded the car had met with an accident and the complainant deliberately concealed the job cards since the warranty clause specifically provided that the warranty would come to an end in case of an accident. The company also claimed the car had already run 80,000 kms clearly showing the vehicle did not have any manufacturing defect. The commission, however, quashed this plea and noted that the special features so advertised proved to be a complete failure. It said the car had a high pollution level, the engine was defective, and it was not fuel efficient. Moreover, the vehicle, whose A/C system was defective, rattled on slight rough roads and wobbled at high speed. The car was reportedly taken to the workshop innumerable times between June 2000 and September 2001. "Hence, the false and misleading information on the quality and standard of the vehicle was nothing but complete deception and fraud upon the consumer by the manufacturer, and amounts to deficiency in service,'' observed Justice J D Kapoor. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://timesofindia.indiatimes.com/Cities/Auto-company-to-pay-over-Rs-5L-to-consumer/articleshow/4289263.cms  Go To Top
INTERVIEWS/FEATURES                                                                                                     Go To Top PEOPLES CAR, AN IDEA WHOSE TIME HAS COME: RATAN TATA The Times of India If you think Tata Motors just has the Nano up its long sleeve, be prepared to be dazzled. Indias largest automotive player hasnt let the recent financial slowdown blunt its vision or its hunger to excel in a rapidly evolving global automotive scenario. Proof of this came straight from the man who has been steering Indias most respected business house into an automotive powerhouse. Adil Jal Darukhanawala, editor-in-chief of The Times of Indias ZigWheels.com, engaged Ratan Tata, chairman of Tata Motors, in a free-wheeling discussion on cars and projects beyond the Nano on the sidelines of the Geneva Motor Show. And if you are a petrol-head, dont just drool on Jags and Alfa Romeos but be prepared for Maseratis and Ferraris and even more powerful variants on the Nano theme. Seems Tatas grand auto-nomic strategy is finally beginning to pan out. Excerpts: TOI: The Tata Nano is finally set to drive down Indian roads. What would be the next challenge, once it is launched on March 23? Ratan Tata: I think the next challenge would be to live up to peoples aspirations. To make the experience of buying, owning, servicing and supporting the Nano different from what you might have experienced. At the same time, the challenge will also be to have people understand that the Nano is not a Honda, not a Toyota. It is a low-cost car and while there might not be any deficiencies, it might have some lack of refinement which will go with a low-cost product, but surely wont be a deficiency as such. I dont think theres been a car in India thats planned to be produced in this kind of volume. It is, therefore, important for us to maintain a sustained quality from our suppliers and our own ability to meet product standards. All these issues should be very challenging. Knowing that Telco had tried to do a peoples car in the 1960s but had to wait till two decades plus for the Indica and now the Nano to give Indians a genuine home-built product, do you sense that you would have loved to do the Nano earlier or is this the right time? I dont know because I believe everything you do has its place in time. So in the 60s, an idea of a peoples car would probably have been different from what it is. Technologies were different, it is a difficult thing for me to answer. At that time in the 60s, talking about a peoples car would have been something that is alien to the marketplace. You can have a peoples car that can be done with confidence. So this car is each new product has its place and time. Rajiv Dube, president, passenger cars, Tata Motors, mentioned at the launch of the Xenon that Tata Motors is suffering from a problem of plentyI am of course referring to the sustained new model excitement, and its a good problem to have in these days. Yes, but it also has its challenges and we need to handle them well. So that is a big challenge and I hope we can live up to the expectation. Is the Tata-Fiat partnership doing well? Yes it is. Its doing what its set up to do, and perhaps a little more. We are very happy with the relationship. Its a relationship thats not treading in rhythmic reversals. Its a very open relationship based on what were trying to do. Is it a possibility that you could pick and choose technologies available with your partner which you still might not have in the Tata Motors portfolio? Or is it something where you still have to go about trying to licence that technology? Naturally, the agreement doesnt visualize gratis transfer of technology or products, but it does envisage the sharing of those openly. So we would expect that if there was some powertrain we thought would work well with our products we would certainly ask our partner and see whether it makes sense to do that given the transfer rights and licensing fees. Likewise, Sergio (Marchionne) has always made it very clear that he would like Tata Motors to be his preferred development partner and in that way we could share platforms and technology and also manufacturing practices. So the way we think, everything that Tata Motors makes and sells could be developed with Fiat. Let me bring up the subject of Pininfarina in which Tata Motors has a small stake. Having seen Tata Motors work with so many big names in product design and development, is this tieup with Pininfarina a harbinger of change as many think it would be the sole font of design for you on a regular basis from now on? Or would you still farm out design to others like I.DE.A. and Bertone who did the Indica and the new world truck cab respectively? Very difficult to say because we have multiple sources of development. We have our own internal design group which I think has done a very admirable job, but lacks experience which we will gain over time. We also support a group of designers who were in I.DE.A. but they left and we have funded them and supported them and they do work for us on various projects. Supporting this is our own technical centre in the UK which is not exactly a design centre but is used more for packaging and engineering. And we will have a relationship with Pininfarina or with Italdesign or whoever else it might be. So I think that design is an open issue and there is no exclusivity. The Prima is a fine example of what you always dreamed of having a large saloon for India. Will it see the light of day as a series produced automobile? Yes, we are striving to do just that. There is no way we could do a large luxury car given our brand, our expertise and also low volumes. However, we could indeed develop a high-end saloon for India which is sleek yet robustly engineered. Extending this line of thought, we could also contemplate a high spec version for Europe which could be built in Europe and equipped with a degree of luxury and refinement which the market expects. Tata Motors has been showing concepts at Geneva regularly, especially the Aria coupe. However, this is the first time that I have heard of an edict from your end that says the company should only show cars which have a production possibility. I think that edict was there three years ago. We were showing a lot of concept cars. I stopped that and said I will not allow any concept cars to be there unless they have production capabilities. So the X-over which you had shown a couple of years ago would see the light of day as a series-production automobile? Yes thats right. In fact, it is in the final phase of product development right now. And also, of course, the Nano Europa? Yes this is something we are developing. A slightly more powerful, better-equipped version to meet European regulations. It will, however, come at a higher price than the Indian version, yet will be competitively priced for Europe. What does one expect the Nano Europa to pack in? It will have a larger engine, better interiors with leather trim, a superior exterior finish, come with CVT transmission probably and have ABS and ESP as standard. It is still some time away. Our plan is to have it ready by 2011. Let me touch a bit on Jaguar and Land-Rover. Many in India are passionate about them primarily because they have such a fantastic motorsport heritage. However, in recent years the lack of a sports car, say in the mould of a modern day E-Type, in the Jaguar portfolio confounds many. Given your own passion for high performance cars, let me ask you as to how far ahead is Jaguar on a sports car? Weve started work on a car which will be a roadster of the type Jaguar was known fora two-seat roadster. This car is in the early stages of design sign-off, but Im highly excited about what I see. So I take it that the market will be too and that we can deliver a car that will be faithful to Jaguars heritage. What about JaguarLand Rover coming to India? And how are you geared towards that, as far as the distribution channel is concerned? That could be your biggest challenge I think previously, like any other brand, Jaguar and Land Rover havent had maybe a single importer in the country and therefore not very much money was spent on promoting the brands or doing much distribution. We hope to take over the distribution of both the brands. Were going to have showrooms, service facilities and we will set up a proper channel to handle these brands. Would this take the shape of a separate channel away from the Tata Motors effort? It may or may not. If we look at our product range, we will say that we have SUVs, we have city cars. If you look at our ties with Fiat, in the course of time we will also represent Alfa followed by Maserati and eventually also Ferrari. So we may have multiple brands in the same showroom or we may have multiple brands in different showrooms, but theyll still all be part of Tata Motors. You among all Indian companies are really pushing the envelope on alternate fuels and the ecological side of things. Where do you see yourself hitting pay dirt with cars like the first Indica electric car, that you say will go on sale in a years time. For them, infrastructure and other technologies would they really manifest themselves in India in the short term. You know, I think just like you may say you need a small car or a big-sized car, different segments of the Indian public in different geographies will have different needs or preferences. Theres no doubt that bio-fuels at some point or flex-fuels are going to be the way the cars are going to be driven. So we should be able to develop cars that will be flex-fuelled. Thus, ethanol will be one of the biofuels that some of our cars would cater to using an E85 gasoline flex fuel base to begin with. There will be a segment that will look at electric cars. We are not into hybrids, so we will not look at them, as yet. However, we are indeed looking at electric cars and the Indica we have here should be ready to sell in Europe from the next year. We are also looking whether it will make sense to get into battery manufacture, say lithium ion batteries and in course of time well take a business decision on that. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"  Go To Top
CARS, SUVs, MUVs                                                                                                                Go To Top MARUTI COMPETES WITH WORLD LEADERS AT DHAKA MOTOR SHOW Hindustan Times (Web Edition)   Dhaka: India's Maruti is on display along with major global vehicle makers at the Dhaka motor show, hoping to increase its share in Bangladesh's tiny auto market. Car sales registered a 15 per cent rise from 3,500-4,000 in 2007 to 4000-4,500 during 2008.   Despite global economic gloom seemingly depressing the local market of brand new cars, automobile dealers are importing new models and making vigorous marketing drives to keep up sales, New Age newspaper said.   The four-day Lucas Dhaka Motor Show was opened by Commerce Minister Faruk Khan who said Bangladesh's automobile market "has become very vibrant in recent years". He suggested that automobile businessmen and the government should think how Bangladesh's own car industry and brands could be developed. As of now, the Bangladesh auto market is dominated by re-conditioned cars, mostly Toyota.   Toyota, Hyundai, BMW, Nissan, besides car-makers from China and Malaysia are among the participants who have put up new models on show at over 250 booths. http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName= BusinessSectionPage&id=a33a8b5f-4d8c-4cca-90e7-26a044d187f2&Headline=Maruti+competes+with+world+leaders+at+Dhaka+motor+show   Go To Top     MARUTI SUZUKI: SALES MOMENTUM TO CONTINUE NewsWire18 See this story in:  mint (Web & Print Edition)   New Delhi: The countrys largest carmaker by volume, Maruti Suzuki India Ltd, expects sales growth momentum it witnessed in February to continue this month, Mayank Pareek, executive officer-marketing and sales, told NewsWire18 on Thursday.   Its (sales) still good so far this month...the growth is continuing, Pareek said. In February, the company had witnessed a 24% year-on-year surge in sales to 79,190 cars. We expect the sales growth to be similar this month, Pareek said. In March 2008, the companys sales were 70,296 units. http://www.livemint.com/2009/03/19214232/Corporate--8216Citigroup-d.html   Go To Top     GM WILL LAUNCH RS 4-LAKH SMALL CAR Sutanuka Ghosal The Economic Times (Web & Print Edition)   Kolkata: Riding on the success of its small car brands, Spark and U-VA, General Motors   (GM) will launch another small car priced at Rs 4 lakh by the end of calendar 2009. This new global product from the GM stable will have a 50% indigenisation component. In India, GM plans to grow through introduction of new products at regular intervals. The company, which has announced plans to introduce its compact sedanChevrolet Cruzin the second half of calendar 2009, is likely to be roughly priced at Rs 12 lakh to Rs 14 lakh. Talking to ET, GM India vice president (VSSM) Ankush Arora said: In 2009, we had planned to launch three products. Weve already launched the Captiva automatic. The two other cars will be launched in the second half of 2009. We are also looking to rationlise versions under a certain product category. Incidentally, in 2008, GM India had clocked a sales of 65,700 units against a targeted 74,000 units. US parent GM Inc has invested over $300 million in its second new greenfield manufacturing facility at Talegaon, Maharshtra which has an initial capacity of 140,000 vehicles per annum, which can be scaled up significantly with rising market demand. Expenditure for setting up new product lines will be met through internal accruals of GMs India operations. The new products will be manufactured at our new plant at Talegaon as well as in our old plant at Halol in Gujarat, Mr Arora said. GM India has not yet kept a sales target for calendar 2009. The first two months of 2009 have shown a recovery in automobile sales. If the economy continues to fare well, sales will grow. Lowering of interest rates on auto loans will also give sales a further boost. We are still eyeing to capture 10% of the countrys passenger car vehciles by 2010, he added. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://economictimes.indiatimes.com/News-by-Industry/GM-to-launch-Rs-4-lakh-small-car/articleshow/4289913.cms   Go To Top     BMW CUTS BOARDROOM SALARY 40% Hindustan Times (Delhi Print Edition)   Mumbai: BMW is slashing boardroom pay by 40%, executive pay by a third and employee wages and salaries by 10% in an effort to preserve cash and retain its independence in the current savage car-market downturn.   Go To Top     REVA MAY SET UP MANUFACTURING PLANT IN THE US Jaishankar Jayaramiah The Financial Express (Web & Print Edition)   Bangalore: It seems American president Barack Obama's call on protecting environment in the US has started paying dividends, as Reva Electric Car Company (RECC), an India-based global electric car major, is weighing options to set up its manufacturing facility in the US.   If this happens, Reva will have a rare merit of foraying into the US during the current economic slowdown, when several other major players across sectors are shutting operations and cutting workforce in India and the US.   "Things have been changing during the past three-six months in the US on environmental front. Owing to positive (environment related) policies in Europe and the US, we are definitely reviewing possibilities of looking at operations in both these regions," said Chetan Kumaar Maini, deputy chairman and chief technical officer of Reva.   "It's premature to disclose anything in this connection," he noted, adding, "some of the state governments in the US have approached us to set up operations there. We are reviewing several options because Reva has a strong technology and we have more experience globally than any one else."   Obama has announced his government's interest in encouraging eco-friendly developments including green cars. He wants to see one-million electric and plug-in cars on Amercia's highways by 2015.   With the US planning for eco-friendly policies, Reva also plans to roll out specific models for the US. Maini said, "We have to change the product for the US market and that will take some time. But, we do believe that in the long term, we would like to be in the US market."   Reva cars are already more popular in the overseas market, primarily in the UK, than in India. Of the total 3,000 vehicles sold so far, Maini said around 1,000 cars are plying on UK roads. Every year, the company registers 50:50 sales in the domestic and overseas market, he added.   According to a Mumbai-based auto analyst, fund raising may not be a problem for the company, if it has plans to set up operations in the US. This is because it has excellent reputation with global investors, with proven track record in the growing environment-related business segment.   The company attracted $20 million in investment from Washington DC-based Global Environmental Fund (GEF) and San Francisco-headquartered Draper Fisher Jurveston (DFJ) in 2006 to expand its production facility locally and markets globally.   Currently, only a few electric car players are competing in the global market. Among them,... India's Reva, Elbil Norge of Norway, France-based Aixam that sells its car under the brand of NICE in the UK, EFFEDI of Italy and EuAuto of Hong Kong have a major chunk in the global 'affordable' electric-driven small / mini car business.... http://www.financialexpress.com/news/reva-may-set-up-manufacturing-plant-in-the-us/436751/2   Go To Top     SUV FROM MERCEDES The Hindu (Web Edition) See similar story in: Deccan Herald (Web Edition)   Kochi: Mercedes-Benz India on Thursday presented its M-Class in Kochi. The SUV is available two variants one featuring a high-torque diesel engine and another powered by a high-output gasoline engine. ML 350 is priced at Rs.53.77 lakh (ex-showroom) and ML 320 is priced at Rs.54 lakh, a press release issued here said. http://www.hindu.com/2009/03/20/stories/2009032056441700.htm http://deccanherald.com/Content/Mar202009/business20090319125122.asp   Go To Top     MERCEDES TO ENTER USED CAR MARKET The Economic Times (Web Edition) See similar story in: The Hindu Business Line (Web & Print Edition)   Kolkata: Mercedes-Benz India is entering the used car space and is also looking to launch long distance inter-city buses to take on the likes of Volvo.   "The used car segment is not organised in India. Currently, dealers out of their own interest sell used Mercedes vehicles. As an organisation Mercedes, has globally started the business actively under which we have a standard global used car programme. As part of global programme, it will also be launched in India soon," said Debasish Mitra, head of marketing and sales, Mercedes-Benz India. He was talking to reporters on the sidelines of a press conference to launch of a new Mercedes M-Class in Kolkata on Thursday. "Mercedes-Benz India has sold about 17,000 cars from the time it set up shop in India. However, estimates are that nearly 25,000 cars have been bought till date in India, as close to 8000 cars were imported into India before Mercedes-Benz set up shop," said Mr Manas Dewan, general manager, corporate communications at Mercedes-Benz India. Mr Dewan was also in town to launch the M-Class. "We are working to launch the used car programme in India. It will be launched by December 2009," said Mr Mitra. On launching inter-city buses, Mr Dewan said: "Mercedes-Benz India has launched buses suited for intra-city services, by way of Mercedes-Benz intra-city luxury coaches. We are doing a market survey on the demand for such buses. This will be followed by designing buses for Indian road conditions. The idea is to transport passengers to another city so that they arrive there fresh, with minimal exhaustion." Speaking on dealer networks, Mr Mitra said: "The dealers have committed a total investment of Rs 150 crore to ramp up infrastructure in 2009. Despite a sagging economy, the luxury car segment in India did not suffer much. However, finance have been a problem and that has affected sales to an extent." http://economictimes.indiatimes.com/News/News-By-Industry/Auto/Automobiles /Mercedes-to-enter-used-car-market/articleshow/4288641.cms http://www.thehindubusinessline.com/2009/03/20/stories/2009032051050200.htm  Go To Top
COMMERCIAL VEHICLES                                                                                                 Go To Top MERC PLAN TO PUSH BUS SALES The Telegraph (Web Edition)   Calcutta: Mercedes-Benz India is planning to tie up with state transport undertakings to sell low-floor buses. The company started rolling out buses last year.   After launching inter-city luxury coaches, we are now looking at other segments such as intra-city luxury buses, low-floor city buses and three-axle buses, Manas Dewan, GM (corporate communications) of Mercedes-Benz India, said at the launch of the SUV M-Class in the city.  The company is conducting a study on the suitability of its buses for cities and may refurbish them to suit customer needs, Dewan said.   Mercedes has sold around 25 buses to inter-city operators. Volvo, its main competitor, has sold its air-conditioned buses to some state bodies.  On the used-car business, Debashish Mitra, director (sales and marketing), said, We are working on a plan for a global model for pre-owned Mercedes cars. Sources say Mercedes-Benz is likely to start the business this year itself. Mitra said the company hoped to maintain its growth rate in India in 2009. Mercedes-Benz India sold 3,625 cars last year.   GM Spark General Motors India, which unveiled the Spark Muzic special edition in the city, hopes to maintain the growth momentum this year. Last year, the company registered a 114 per cent growth in Spark sales. GM plans to manufacture only 1,500 units of the Spark Muzic in India, said Ankus Arora, vice-president (marketing, sales, aftersales) of GM India. The special edition cars will be available in March and April only and are targeted at the youth.   The car comes with features such as a double DIN audio head unit with a hi-fidelity 4-speaker system and a sports seat fabric. The exterior of the car has graphics. http://www.telegraphindia.com/1090320/jsp/business/story_10697254.jsp   Go To Top     SWARAJ MAZDA TO RAISE RS 80 CRORE VIA RIGHTS PTI See this story in: The Hindu Business Line (Web Edition)   Mumbai: Automobile manufacturer Swaraj Mazda on Thursday said it will raise Rs 80 crore by issuing shares on rights basis to existing shareholders.   The company's board has approved the raising of up to Rs 80 crore through rights issue, Swaraj Mazda said in a filing to the Bombay Stock Exchange. The shares of Swaraj Mazda were trading at Rs 127, up 1.20 per cent on the BSE. http://www.thehindubusinessline.com/blnus/02191606.htm  Go To Top
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2/3 WHEELERS                                                                                                                      Go To Top YAMAHA'S INDIA SALES PLAN HITS ROADBLOCK PTI See this story in:  Business Standard, Mint, The Hindu Business Line   New Delhi: Japanese two-wheeler major Yamaha's plans to transfer its Indian sales business to a new entity India Yamaha Motor Pvt Ltd (IYMPL) have hit a hurdle, with the industry ministry opposing the companys proposal to import products. IYMPL is a wholly-owned subsidiary of Yamaha Motor Co.   Highly-placed sources said the Foreign Investment Promotion Board (FIPB) has deferred a decision on the proposal in its recent meeting, after the industry ministry said IYMPL should not be allowed to import since that would lead to retail trading, which does not conform to FDI policy.   Asked about the development, a senior IYMPL official said: "FIPB had asked for some clarifications and we have given them. The proposal will be approved in the next meeting of FIPB." http://www.business-standard.com/india/news/yamaha/s-india-sales-plan-hits-roadblock/352388/ http://www.livemint.com/2009/03/19144441/Yamaha8217s-sales-plans-in.html http://www.thehindubusinessline.com/blnus/14191506.htm   Go To Top     AWARD FOR TVS The Hindu   Kochi: TVS Motor Company has won the 2009 Progressive Manufacturer 100 (PM 100) award for end-to-end automation of the entire business process of its lubricant brand, TVS TRU4. Instituted by the US-based Managing Automation Media, the awards programme is designed to support and reflect the extensive drive by manufacturers across the globe, according to a press release. http://www.hindu.com/2009/03/20/stories/2009032056491700.htm  Go To Top
COMPONENTS                                                                                                                      Go To Top AUTO COMPONENT MANUFACTURERS TO BENEFIT FROM CENTRES MOVE TO FUND BUS PURCHASE T. Murrali The Hindu Business Line   Chennai: The recent announcement by the Centre to procure 15,000 buses worth Rs 4,800 crore under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) has given a leg up to auto component manufacturers also. State transport undertakings will buy the buses for 63 identified cities. As of about 45 cities have sent proposals and based on that the Government is working on the allocation of funds. Eventually, orders will be distributed among vehicle manufacturers.   Though all vendors supplying to commercial vehicle manufacturers will benefit due to the sudden spurt in volumes, manufacturers of air suspension, seats and air conditioners will be significant beneficiaries of the programme. This is because about 20 per cent of the total are air-conditioned and low floor buses and the rest are semi-low floor and semi-luxury buses. Moreover, coach builders will benefit since all the vehicles to be sold under this programme have to be fully-built buses.   Ashok Leyland, Tata Motors and Volvo India will be the major suppliers. The first two are tipped to get most of the orders due to the availability of the variety and capability to supply in those volumes. For Volvo, any additional business will be a boost, because the Swedish major has always been in a small volume, niche segment. In the calendar year 2008, Volvo sold 440 buses, twice as much as in the previous year. Since most of the orders have to be executed by June, potential suppliers are bustling with activity.   The vehicle manufacturers have their own or associate coach building companies such as Irizar-TVS in Tiruchi for Ashok Leyland, Tata Marcopolo in Dharwar for Tata Motors and Azad in Bangalore for Volvo India. The vehicle manufacturers are expected to use the facilities of other builders also. This is because while the vehicle manufacturers have capacity to churn out enough numbers of chassis, their in-house coach building capacity is limited. Shot in the arm The Hosur-based Harita Seating Systems Ltd is one of the leading bus seat manufacturers in the country, having about 20 per cent market share. It hopes to get a substantial share of the new orders, says the companys President, Mr S. Thiagarajan. This is because it makes about 70 varieties of seats for buses. The company has capacity to make about 30 bus sets a day at its plants in Hosur, Pune and Chennai, which can be increased to 50. The project is a shot in the arm as it has come when at a time when the commercial vehicle segment is down, he adds.   The Managing Director of Pinnacle Industries, Mr Sudhir Mehta, said, We expect JNNURM order to benefit our sales. The company has capacity to supply seats for about 2,000 buses a month at its Pithampur and Chakan plants.   Various plants Wheels India is gearing up its production of air suspension. Currently, they are being made at Chennai, but for reasons of capacity and logistics, the company is putting up an assembly line at Rampur, Uttar Pradesh.   The President of Irizar-TVS, Mr N. Subramanian, said the company will close this fiscal by building 1,350 buses against 1,400 units last year. The three-way joint venture of Ashok Leyland, TVS and Irizar builds buses for most of the vehicle manufacturers. It is gearing up to increase its capacity marginally to build up to 250 buses a month. Other coach builders have also been gearing up to support the demand. http://www.thehindubusinessline.com/2009/03/20/stories/2009032051120200.htm  Go To Top
ALLIED INDUSTRY                                                                                                               Go To Top FY09 NATURAL RUBBER OUTPUT ESTIMATE DOWN Reuters See this story in: The Financial Express, Business Standard   Mumbai: Indias revised natural rubber production in the current fiscal is seen marginally down to 8,59,000 tonne from the earlier estimate of 8,61,000 tonne due to dry weather and the resultant lower yields, a top official said.   The production figures have been further revised as a dry spell in the months between December to February have further hit natural rubber production, Sajen Peter, chairman of the Rubber Board told Reuters.   The Rubber Board had in January revised the estimates to 8,61,000 tonne due to slowing demand. The total production last fiscal stood at 825,345 tonne. India, the worlds fourth largest rubber producer, sees natural rubber consumption to slightly improve to 8,65,000 tonne in 2008-09 from the previous estimate of 8,62,000 tonne.   Overall consumption has taken a hit due to the ongoing economic slowdown but there has been some revival in demand from tyre makers since February and hence the estimates have been revised upwards, Peter said.   Consumption this fiscal is expected to see a very marginal increase from 8,61,455 tonne in the same period a year-ago as domestic consumption has come down in both the tyre and the non-tyre segments despite a sharp fall in prices.   From August 2008, the automotive sector, which accounts for a major portion of consumption in the country, has reflected the impact of the ensuing global economic recession, he said.   The board sees FY10 natural rubber production at 8,67,000 tonne and expects consumption to touch 8,75,000 tonne.   The yields are seen going up to 1,873 kg per hectare next fiscal from the current 1,855 kg but the prevailing low prices can adversely affect estimates, he said. The carryover stocks at the end of March 2009 is expected to be 1,95,000 tonne compared with 1,64,280 tonne the previous fiscal.   Slackening demand from the main consumers have pushed down prices close to 30% from a year-ago, data with the Rubber Board showed.   Prices of the most traded RSS-4 grade (ribbed smoked sheet) at the Kottayam market have fallen to Rs 69 per kg at the end of February from Rs 96.85 in the same period a year-ago. http://www.financialexpress.com/news/fy09-natural-rubber-output-estimate-down/436789/   Go To Top     APOLLO TYRES GETS NOD FOR BUYBACK The Hindu Business Line See similar story in: The Tribune, The Statesman, mint   New Delhi: Apollo Tyres Board has approved the companys proposal to buy a minimum of 67 lakh shares at a maximum price of Rs 25 a share. The maximum amount which the company is permitted to buy is up to Rs 122 crore. This means that the company can buy 4.88 crore shares from the open market.   Currently, the promoters stake is 39.35 per cent. But if the promoters buy shares to the maximum limit, then their stake could increase to 43.56 per cent.   A company statement quoted Mr Onkar S. Kanwar, Chairman and Managing Director, Apollo Tyres as, This is an opportunity for us to enhance value for our shareholders. In the present context, we feel that the prevailing shares quotes are under priced and do not reflect the true value of the company, both for the short and the long-term. The company said that it had submitted the buyback proposal to the SEBI and was awaiting its final approval. http://www.thehindubusinessline.com/2009/03/20/stories/2009032051491000.htm http://www.tribuneindia.com/2009/20090320/biz.htm http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=247609 http://www.livemint.com/2009/03/19151209/Apollo-Tyres-to-buy-back-Rs122.html   Go To Top     "WE'VE JUST WON THE VOLKSWAGEN ORDER": NEERAJ R S KANWAR, VICE-CHAIRMAN, APOLLO TYRE Surajeet Das Gupta & Danny Goodman Business Standard   New Delhi: It controls a little under a fourth of the domestic market in terms of value, and is now making aggressive forays into the global one it bought over Dunlops facilities in South Africa last year and is working on a greenfield project in Hungary to supply the European market. A start has already been made by winning a prestigious contract with Volkswagen (VW) for its Polo models in India next year. Surajeet Das Gupta and Danny Goodman spoke to Apollo Tyres Vice-Chairman and Joint Managing Director Neeraj R S Kanwar on the companys global foray and its plans to compete with global majors whore slowly increasing their share of the local market as well. Excerpts: How do you see yourself carving out a place in the global market that is dominated by the big boys like Michelin and Pirelli? The top players operate in the 1820-billion (Rs 124,200-138,000 crore) market (Michelin and Pirelli), the middle-tier is the 4-7-billion level (Continental, Sumitomo, Yokohoma) and then theres the 1-4-billion level which is where players like us are positioning ourselves. The top players corner about 75 per cent of the market, they are much more efficient, have deep pockets and huge R&D spends Michelin, for instance, spends around 800 million on R&D. But were making inroads. We were the only Indian company to be invited to the Volkswagen vendor-meet at their Wolfsburg HQ. We have an order to supply tyres for Polo in India in 2010. Negotiations are on to see if we can supply to other markets as well. Four years ago, they were closed to the idea of buying from us, theyre open to partnering with us. Weve also moved up the technology ladder we can also supply to VW from our South African plants.  Weve tied up with universities in Germany for R&D and are getting experienced hands from overseas. The German technology centre will help us. We have hired research talent from Dunlop Europe who bring tremendous expertise on tyres. In South Africa, we are already competing with MNCs like Continental, Bridgestone, Dunlop and Yokohoma. In Europe, we will be competing with them. International competition is not new to us. We are the top exporter of passenger radials from India. And the greenfield project in Hungary Weve had to put the manufacturing facility on hold due to political and other reasons but our marketing initiatives are on track. Weve set up a R&D facility in Russelsheim, Frankfurt which is Opels village. This is the European tyre technology centre for Apollo, from where we will service Europe. In Germany and across Europe, well be using the Apollo brandname in South Africa, we use the Regal brandname.  We are currently present in Europe as a niche player. Once the economy picks up, well consider commissioning the manufacturing facility in Hungary and serve Europe. The strategy is to get Europe right. Given the current problems in the US, I think its good to stay out of that market which is also very price-sensitive.  Weve set aside Rs 3,000 crore for Hungary and a new Chennai manufacturing plant. Once the economy picks up, well begin building these plants. For me, its important to keep domestic markets healthy and then explore the overseas markets. Also its good to maintain our leadership position in India.   Any plans to enter China?   For that, I have to produce there and its not easy. But China cant be ignored.  Dont global auto majors prefer to deal with their global tyre vendors?   Global players who have a relationship with OEMs surely have an advantage. But at the end of the day, if you can give the right quality at the right price, you win. Since labour and manufacturing costs in India are lower than those in Europe, we give a good price.  Also, we have an established distribution and servicing network in India. Look at the automotive component manufacturers. All of them are setting up bases in India so that they can service their clients better.  So youre re-orienting the way tyres are sold domestically? At the end of the day, its the same whether you buy a fridge or a car. I tell my employees that theyre no longer making tyres, theyre servicing a customer who needs a tyre to reduce noise in his/her vehicle, or to improve fuel efficiency. You must understand what s/he wants and the service s/he requires the pricing strategy is so volatile that there is very little differentiation here. We attend to customer complaints within a day while the competition takes 5 to 8 days earlier, it was 4-5 days for us. Even in South Africa, we respond in two and a half days.  We have opened a chain of retail stores. These will give a totally new experience when you buy tyres. Yesterday, it was the unorganised dealer who helped you. A lady can walk into a retail store of Apollo and get the tyres changed over a cup of coffee. At the retail shop, you may be interested in buying our alloy wheels which were launched recently. So it is the retail experience that matters.  To sell truck radials, I do concept-selling to customers. After all you are paying 30 per cent more, so we have set up a dedicated team which trains truckers on how to fit the tyre and get the best out of it. They sit with truck drivers, ride on trips and educate them. Its all about concept-selling.   How do global majors being here with their own manufacturing strategies affect you?   Were cheaper by 5-6 per cent while they score on manufacturing efficiency. Once they start manufacturing, we have no choice but to get as efficient. I see it as an opportunity. In the 1990s, we were totally an after-market player. We are 80 per cent after-market and 20 per cent OEMs in the truck industry. In the car segment its 50: 50. In the niche off-the-road segment, there are only three top players internationally Goodyear, Bridgestone and Michelin. Weve set up a facility for this in Baroda in partnership with BEML and Coal India to manufacture these huge 35/57/61-inch tyres which could cost anywhere between Rs 815 lakh.  Did producing for the Nano pose a challenge since costs were a big consideration here?   Our goal was to make a tyre that was 25 per cent cheaper. We put together a team in Chennai. They looked at various ways of reducing costs like using minimal manpower, usage of various substitute materials, and so on. Eventually we met the target.  http://www.business-standard.com/india/news//"we/ve-just-wonvolkswagen-order/"/352363/   Go To Top     DUNLOP UNION LEADERS TO GO ON INDEFINITE FAST The Hindu Business Line   Chennai: The union leaders and office bearers of the Dunlop Factory Employees Union at Ambattur are to go on an indefinite fast from Friday demanding final settlement for the workers. According to the union leaders, the workers have been agitated over the prolonged delay in the Dunlop India management settling the workers dues. The management had asked the 734 workers to not report for duty from October 2008. They had agreed with the union to finalise a settlement by March this year to pay the workers and terminate their services.   Settlement talks However, despite several rounds of discussions between the management and the DFEU, there has been no consensus on the issue. Last week the Dunlop Chairman, Mr P.K. Ruia, and the DFEU leaders including its President, Mr A. Krishnaswamy, and the General Secretary, Mr D. Devanathan, held the final round of discussions, but the talks were inconclusive, according to the union.   The union has been demanding a final settlement of about Rs 5 lakh a worker. However, the management has maintained that it was not for a lump sum settlement, but that the payment would have to be related to earlier settlements last year it paid 180 workers around Rs 1.30 lakh through an early retirement scheme. According to Mr Devanathan, the workers have decided to intensify their agitation. The management which had agreed to pay the workers Rs 2,700 a month as an interim wage pending a final settlement has not paid this amount in the last four months, he said. http://www.thehindubusinessline.com/2009/03/20/stories/2009032050831700.htm  Go To Top
FINANCE & INSURANCE                                                                                                  Go To Top GOVT ISSUES DRAFT GUIDELINES FOR AUTO LOAN DISBURSALS K. Giriprakash The Hindu Business Line   Bangalore: The Department of Banking, Ministry of Finance, has come out with draft guidelines for banks on disbursing auto loans, which includes terms for repossession of vehicles. Sources close to the Department of Banking told Business Line that the fresh guidelines are now with the Indian Banks Association (IBA) and Finance Industry Development Council (FIDC), a regulatory body for non-banking finance companies, and that they are expected to take a decision on following the guideline shortly.   Sources also said that the Government might seek advice from the Election Commission on whether the announcement of these guidelines by banks violates the model code of conduct. As part of the guidelines, banks will have to incorporate new clauses in the application forms itself, the sources add. These norms include issues such as rights and responsibilities of customers and clauses on repossession of vehicles. It also includes strict norms to be followed for hiring recovery agents who will get the required training before they can start dealing with customers.   A monitoring cell will be set up to track the performance of the recovery agents and there will be rules on the process to be followed for issuing notices to the customers who default on repaying loan. The guideline also spells out methods to be followed for recovery of vehicles as well as their resale.   The guideline has separate classification for wilful defaulters, for those who have defaulted without their knowledge and for those who have defaulted because they cannot pay back the loan. The draft guidelines follow discussions by a committee formed by the government under the chairmanship of Mr Amitabh Verma, Joint Secretary (Banking), to hold talks with top officials of various banks as well as with officials of Society of Indian Automobile Manufacturers (SIAM) and Finance Industry Development Council. This was followed with a meeting in early March.   Repossession The officials are understood to have stressed on the significance of formulating guidelines based on the issues relating to repossession of cars in case of defaults as well as the legal hassles involved when cheques bounce. These were some of the key factors leading to a sharp fall in the number of auto loans being offered.   Sources said that apart from lesser loans being disbursed, the quantum of funding too has decreased considerably. SIAM Director General, Mr Dilip Chenoy, said that the rate of loan disbursement should increase once the banks adopt these guidelines. http://www.thehindubusinessline.com/2009/03/20/stories/2009032051730600.htm   Go To Top      BASEL II RULES TO MAKE FUND RAISING TOUGH Chanchal Pal Chauhan & Ravi Teja Sharma The Economic Times New Delhi: Raising funds could become difficult with new lending regulations for banks, popularly known as Basel II norms, coming into practice from April 1 this year.   The worst affected would be the small and medium scale enterprises with shorter business cycles and limited means. From next month, all business units irrespective of size will need to take ratings for their enterprises to secure working capital, loans and other funds from banks. These ratings will be granted by professional agencies, which will allow banks to determine the risk involved in any business unit to proportionate the cost of funds (interest charged on loans).   Unlike in the past, where banks determined their cost of funds through various company instruments like balance sheet and assets companies, ratings alone will become the sole criteria for extending finances. Companies, already facing a liquidity crunch in the economic slowdown, say these norms would pose further problems.   Hyundai Motor India senior vicepresident (sales & marketing) Arvind Saxena said, These are hard times for the automobile industry. Basel II norms could raise the cost of funds for many automobile dealers and vendors who have higher risk profile. With rapid changes in market conditions they may be charged a higher rate of interest or may have to increase their asset base to meet their liquidity needs.   Companies will now need to take a professional approach to develop sound financial practices and structures to get good compliance on ratings which will be moderated regularly. Banks will assess the risk before extending any funds. Though it will align companies to global financial conditions, but we are expecting a initial spurt in the cost of funds, GN Gauba, chief financial officer of auto component maker Motherson Sumi Systems, said.   Banks would be offering substantially lower rate of interest to companies with low-credit risk, which can bring the interest charged on loans down by up to 3-5% lower. The new norms will impact transparency into the financial system and help us to assess the credit risk profile of all businesses. The cost of funds will come down substantially for financially prudent companies, a senior executive of HDFC Bank, said.   Companies have already started taking ratings to meet the deadline. Material handling player, Tecpro Systems, has got its banking rating done from Crisil and got a P1 rating. It works with SBI extensively and because of the good credit rating, the banker is getting a 60% weightage benefit with RBI. This means the bank has to put in lesser reserves with RBI when they lend to Tecpro. The bank, in turn, will pass on the benefit to the company. We are getting a minor benefit in cost of money. The interest rate benefit because of the rating is around 1.5%, Techpros CFO Kulbhushan Arora said.   In the case of Emco Transformers, rating agency CARE has assigned A+ rating to Emcos long-term bank facilities and a rating of PR1 for short-term bank facilities. According to CARE, facilities with an A+ rating are considered to offer adequate safety for timely servicing of debt obligations and carry low credit risk while a rating of PR1 indicates the facility would have a strong capacity for timely payment of short-term debt obligations and carries lowest credit risk. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"   Go To Top      HYUNDAI AND CANARA BANK SIGN MOU FOR RETAIL FINANCING Agencies See this story in: The Financial Express   New Delhi: Hyundai Motor India Ltd, the second largest car manufacturer and the largest passenger car exporter, in a bid to enhance finance option for its customers, signed a memorandum of Understanding (MOU) with Canara Bank, a major public sector bank in Bengaluru. This partnership will prove helpful in augmenting the business at a time when the auto industry is facing a major slowdown.   With more than hundred years of its proud existence Canara Bank has a wide network of over 2700 branches and ATMs across the country. With its widely acclaimed customer centric approach it has built up a strong customer base of over 33 millions. This association with HMIL will help both the partners to reach out to wider market and make auto loans convenient and easy for prospective car owners.   Speaking on the occasion, Arvind Saxena, Sr. Vice President, Marketing & Sales, HMIL, said, "We are glad to partner with Canara Bank as we see it as value addition for our customers. In the current scenario, we consider it as a welcome move as there is a need for increased financing options and rationalized interest rates for the benefit of our customers. Canara Bank is known for its initiatives with its competitive products and the wide reach it has is sure to broaden the choice for customers seeking finance options. We on our part want to give our customers the best experience, not only while driving our cars, but also when buying them."   The two partners will utilize and leverage each other's strengths to cross sell Hyundai vehicles and the bank's car loans and schemes. The bank will provide competitive interest rate and increased convenience and accessibility to their customers.   Hyundai Motor India Ltd, already enjoys a strong presence in both the metro and the mini-metro markets with a complete stable of products starting with compacts to premium luxury cars and SUV's. Through this strategic tie-up with Canara Bank, the company seeks to further strengthen its position across all major markets and focus on a major retail expansion drive. http://www.financialexpress.com/news/hyundai-and-canara-bank-sign-mou- for-retail-financing/436602/   Go To Top     TATA MOTORS TIES UP WITH INDIAN BANK FOR RETAIL FINANCE Agencies See this story in: The Financial Express, The Hindu Business Line, mint   New Delhi: India's largest auto maker, Tata Motors, on Thursday said it has tied up with public sector lender Indian Bank for providing financing facilities to its passenger vehicle customers.   "In order to provide an added facility of car finance to its customers, Tata Motors has entered into an understanding with Indian bank for financing its range of passenger vehicles," the company said in a statement.   As per the agreement, financing facilities would be available at 1,575 branches of the lender and 470 sales touch points of the auto major across the country, it added. At present Indian Bank offers car loans up to 85 per cent of on-road price for tenure up to seven years at an interest rate of 11.5 per cent per annum. http://www.financialexpress.com/news/tata-motors-ties-up-with-indian-bank-for-retail-finance/436532/ http://www.thehindubusinessline.com/blnus/02191560.htm http://www.livemint.com/2009/03/19134613/Tata-Motors-ties-up-with-India.html   Go To Top     CRISIL DOWNGRADES M&MS RATING Business Standard   Crisil has downgraded its rating on Mahindra & Mahindras (M&Ms) long-term bank facilities to AA/Negative from AA/Negative. The downgrade reflects the impact of the weakening business environment on revenues and profitability of automotive and tractor business, said the rating agency. It also factors in the rise in overall debt.  Go To Top
LUBRICANTS & ALTERNATIVE FUELS                                                                      Go To Top CRUDE BACK TO ABOVE $49 Agencies See this story in: The Hindu Business Line   Singapore: Oil prices rebounded in Asian trade on Thursday from the previous days fall following a strong increase in US energy stocks, dealers point out. New York's main contract, light sweet crude for April delivery rose 99 cents to $49.13. Brent North Sea crude April gained 89 cents to $48.55.   Oil prices fell yesterday after a weekly US government energy report showed the country's crude oil stocks grew by two million barrels in the week ending March 13, double the consensus forecast. http://www.thehindubusinessline.com/blnus/10191050.htm  Go To Top
INTERNATIONAL NEWS                                                                                               Go To Top US DOLES OUT $5 BN BAILOUT FOR AUTO SUPPLIERS PTI See this story in:  Daily News & Analysis, The Indian Express Washington: The US administration on Thursday announced a five-billion dollar bailout package for the auto components suppliers in its bid to ensure continued supply of parts and products to the battered carmakers in the country.   Announcing the new program, the US Department of the Treasury said that it is aimed "to help stabilise the auto supply base and restore credit flows in a critical sector of the American economy." The Treasury said that the president's Task Force on the Auto Industry continues to review restructuring plans submitted by General Motors and Chrysler. In the meantime, this Auto Supplier Support Program would provide up to five billion dollars in financing, giving suppliers the confidence they need to continue shipping parts, pay their employees and continue their operations, it added.   Auto suppliers had sought a government aid of up to 25 billion dollar to fight the crisis being faced by the US auto industry. "As rising unemployment and contracting credit continue to threaten economic recovery, today's announcement will support an industry employing more than 500,000 American workers across the country," Treasury said. http://www.dnaindia.com/report.asp?newsid=1240728 http://www.indianexpress.com/news/us-auto-suppliers-to-get-5-bn-in-aid/436774/   Go To Top     TOYOTA TO HALVE RECRUITMENT IN 2009: REPORT AFP See this story in: The Times of India, The Tribune, mint   Tokyo: Toyota Motor Corp. plans to halve recruitment of full-time workers in the next fiscal year starting in April to around 1,800 employees, the Nikkei business newspaper reported Thursday. The hiring cut is aimed at reducing personnel costs to deal with falling earnings at the nation's top automaker, which is suffering from a slump in global sales, the report said, quoting unnamed sources. It will be the first time in seven years that the major Japanese automaker hires fewer than 2,000 full-time employees, and compares to about 3,600 full-time workers Toyota is taking on this financial year, the Nikkei said. Toyota has also slashed thousands of temporary jobs as it braces for its first ever loss. http://timesofindia.indiatimes.com/Business/International-Business/Toyota-to-halve-recruitment-in-2009-Report-/articleshow/4285150.cms http://www.tribuneindia.com/2009/20090320/biz.htm  http://www.livemint.com/2009/03/19121244/Toyota-to-halve-recruitment-in.html  Go To Top
ECONOMY & FINANCE                                                                                                   Go To Top   RUPEE GAINS SHARPLY AS $ SLIDES ON FED DEBT BUYBACK PLAN The Hindu Business Line   Mumbai: The rupee staged a sharp recovery against the dollar on Thursday, appreciating by around 92 paise, riding on the greenbacks weakness in the overseas markets. The dollar has fallen sharply against the pound and the euro after the US Federal Reserve said it will buy back $300 billion worth longer-term US treasury securities, said currency traders.  On Wednesday, the Federal Reserve had said it would buy back US government debt over the next six months in an effort to boost the money supply. The US central bank also plans to purchase an additional $750 billion of agency mortgage-backed securities, taking the total purchases to $1.25 trillion this year. The Fed said it will maintain the target range for the federal funds rate at 0 to 0.25 per cent.   The Fed move would lead to increased dollar supply. This would, in turn, lead to weakness in the value of the dollar against other global currencies, said forex dealers. The measures taken by the Fed point to a faster recovery and highlight the political will of the US government. The move would help the stock markets recover, said Mr J. Moses Harding, Head-Global Markets Group, IndusInd Bank.   On Thursday, the domestic currency opened at 51.05 and touched an intra-day low of 51.11. It then strengthened against the greenback to touch an intra-day high of 50.30, before closing at 50.38, up 92 paise from Wednesdays close of 51.30. Once the rupee opened at the 51-level, which itself was higher from the earlier close, the momentum was in the favour of the domestic currency, leading to the sharp rise, said Mr K. Harihar, Treasury Head, Development Credit Bank.   Exiting positions Big corporate houses were seen selling dollars in the forex market, which propped up the rupee, said a dealer with a private bank. There was also unwinding of long-dollar positions in the non-deliverable forward markets, as the participants were seen exiting their positions, the dealer said.   The dollar inflow into the country is likely to increase as the Securities Exchange Board of India has allocated investment limits in corporate debt to the 24 foreign institutional investors to the tune of Rs 29,350 crore, Mr Harding said. The rupee has been on a depreciating trend from the last week of February, going past 52 levels. In the past week, the rupee has recovered on the back of dollar inflows. In the forward premia market, the six-month premium closed higher at 4.18 per cent (3.19 per cent) and the one-year closed at 3.14 per cent (2.89 per cent). http://www.thehindubusinessline.com/2009/03/20/stories/2009032051900100.htm   Go To Top     SENSEX ENDS MARGINALLY HIGHER IN VOLATILE SESSION The Hindu Business Line   Mumbai: The stock market on Thursday was volatile moving back and forth during the current trading session. Finally, the indices managed to close above the yesterdays closing level. The index closed at 9,001.75, up by 25.07 points. Similarly, the S&P CNX Nifty closed at 2,807.15, up by 12.45 points.   Earlier, the Sensex opened firm and rallied to an intraday high of 9,806.77 but immediately gave up gains following profit taking by traders and investors and touched a low of 8,900.39. However, some sudden spurt in share prices was seen toward the last hour of trading session and the market jumped back into green. Global equity markets showed some signs of weakness in Thursday's trading. http://www.thehindubusinessline.com/blnus/05191901.htm   Go To Top     INFLATION PLUMMETS TO 0.44% The Hindu Business Line   New Delhi: The annual Wholesale Price Index-based inflation inched closer to zero in the first week of March, setting the stage for the Reserve Bank of India to cut interest rates further to prop up growth. Despite the decline in the headline inflation estimate to a three-decade low of 0.44 per cent, food products inflation continues to rule high and hurt at the consumer-level. The latest Consumer Price Index for Industrial Workers, to be released on Friday, is expected to be around 10.4 per cent.   According to data released by the Ministry of Commerce and Industry here on Thursday, the annual WPI inflation rose 0.44 per cent for the week ended March 7, sharply lower than the previous weeks annual rise of 2.43 per cent. Inflation was recorded at 7.78 per cent a year ago and the sharp dip in the latest reported week has been partially attributed to the base effect coming into play.  The drop of 199 basis points in the latest WPI inflation estimate is the steepest since the week ended November 1, 2008. There is no record of inflation dipping this low since 1977-78, according to Government estimates. The sharp fall in headline inflation during the latest reported week was on account of an across-the-board dip in inflation levels. In primary articles, the year-on-year inflation dipped to 4.4 per cent for the latest reported week, against 5.8 per cent the previous week. In food articles, inflation fell to 7.4 per cent after being stable at 8.3 per cent in the previous two weeks. Cereals, pulses, salt, milk and sugar, however, clocked high relatively year-on-year inflation rates.   In the fuel and power group, inflation dipped further to clock minus 6 per cent versus minus 5.1 per cent in the earlier week. In manufactured products, inflation rate decreased to 1.3 per cent in the current week, from 4 per cent last week. Inflation in most sub-groups declined or remained steady relative to rates recorded in the previous week. Deflationary phase?   Data released by the Finance Ministry on the contribution of broad commodity groups to the year-on-year inflation during the latest week show that primary articles contributed 227 per cent to inflation, a quadrupling of its share from 56 per cent in the previous week. In manufactured products, the contribution to inflation was 166 per cent in the week under reference, from 90 per cent in the previous week. The fuels group, on the other hand, showed a negative contribution at (-) 289 per cent against (-) 46 per cent the previous week, registering a six-fold drop.   Even as analysts predict that inflation is likely to turn negative starting April and could remain so until the end of 2009, the Government, on its part, allayed fears that the economy could be entering a deflationary phase. I do not see any sign of deflation right now. Probably, the decline in inflation is more due to higher base last year than any significant drop in prices, the Cabinet Secretary, Mr K.M. Chandrasekhar, told presspersons on the sidelines of an event here.   The International Monetary Fund, earlier this week, said that India should rely more on monetary policy to support the economy as high public debt makes fiscal efforts difficult. The RBI had, on March 4, cut its key repo rate to an all-time low of 5 per cent, having pruned it by 400 basis points since October. http://www.thehindubusinessline.com/2009/03/20/stories/2009032051890100.htm   Go To Top     ECONOMY TO IMPROVE FROM MID FY10: RANGARAJAN Business Standard   Expressing optimism over the current downturn in the country, former Reserve Bank of India (RBI) chief C Rangarajan said here that the Indian economy will see improvement from middle of FY10.   On his visit to the Entrepreneurship Development of Institute to inaugurate the Eighth Biennial Conference on Contemporary Issues in Entrepreneurship Research, Rangarajan said, Our economy will see improvement from second half of FY10 and will recover fully in FY11. Talking about how the recession abroad is having an adverse effect on the countrys exports of goods and services, Rangarajan suggested that the current account deficit in 2008-09 could be taken to around 2 per cent of GDP.   The decline in growth rate in exports will strongly affect some sectors where exports constitute a significant proportion of the total production such as textiles, automobile components, gems and jewellery, he added. When asked about the decline in inflation, Rangarajan said, We might see a further decline in inflation. In 2-3 months, the year-on-year inflation may come down to zero. While the consumer price index (CPI) is running high, the wholesale price index (WPI) is not reflective of CPI.   However, substantial decline in WPI can be seen in near future. Commenting on possible impact on the economy post-elections, Rangarajan pointed out that additional expenditure will be incurred which might increase the fiscal deficit. We should ensure fiscal deficit begins to drop by 2010-11. The interest payment in proportion to revenue by the government may rise as a consequence to fiscal deficit. Consequently, level of borrowing will also rise and the interest rates may not remain low, added Rangarajan.   On possible steps that can be taken by the new government, Rangarajan said, The new government should redistribute expenditure in favour of sectors like automobile components and textiles. Also, expenditure for 2009-10 is 6 per cent higher than the revised estimates. Therefore, the government should ensure that these expenditure are actually incurred. http://www.business-standard.com/india/news/economy-to-improvemid-fy10-rangarajan/352406/  Go To Top   Last Financial closing   Sensex 9001.75 US$ spot Rs.50.39 US$ Y.95.6051 US$ 6 months Rs.51.52 Yen Rs.0.53 Euro spot Rs.68.02 LIBOR 6 months % Call % GOI sec. 10 years - - - -     Aluminium (per kg) Rs. Aluminium Ingot Rs. Copper (per kg) Rs. Gold (10gm) Rs.15.185 Lead (per kg) Rs. Mild Steel Ingots (Mumbai) Rs. Nickel (per kg) Rs. Nickel Cathode Rs. Silver (1kg) Rs. Sponge Iron (per tonne) Rs.15850.00 Steel Flat (per tonne ) Rs.28910.00 Steel Long GVD (per tonne) Rs.23615.00 Steel Long BVN (per tonne) Rs.23170.00 Tin (per kg) Rs. Zinc (per kg) Rs. Zinc Ingot Rs.- - - -     Crude Oil (WTI) $- - - - Crude Oil (Brent) $48.27     Automobile Scip on BSE Face Value (Rs) Last traded Value (Rs) Apollo Tyres 1 18.25 Asahi Ind 1 35.75 Amara Raja B 2 34.60 Ashok Leyland 1 17.70 Bajaj Auto 10 562.95 Bharat Forge 2 91.75 Denso 10 33.05 Eicher Ltd 10 - - - - Eicher Motor 10 208.70 Escorts 10 37.75 Exide Ind 1 40 Force Motors 10 67.75 Gabriel India 1 6.75 Hero Honda 2 1009 Hind Motors 10 11.70 Hi-Tech Gear 10 34.65 Jay. Bh. Maruti 5 22.80 Jamna Auto 10 9.71 JK Tyres & Inds 10 33 Kinetic Motors 10 6.95 Kinetic Engg 10 - - - - KOEL 2 - - - - Kirloskar Br: 2 69.15 LML Ltd 10 6.05 L&T 2 609.55 Lumax Ind 10 64.05 Lumax Tech 10 15.90 M&M 10 355.15 Maruti Suzuki 5 730.20 Motherson SS 1 63.65 Minda Inds 10 88.95 MRF 10 1632.75 MICO 10 - - - - Omax Auto 10 17.05 Perfect Circle - - - - - - - - - - Rico Auto 1 8.45 Sona Koyo St 2 6.25 SKF Bearing 10 - - - - SRF 10 74.10 Swaraj Mazda 10 125.20 Tata Motors 10 171.60 TVS Motor 1 20.35 Metals Scrip on BSE Face Value(Rs) Last traded Value (Rs) Bhushan Steel 10 326.35 Essar Steel 10 - - - - Hindalco 1 45.05 Hind Zinc 10 406.95 Ispat Inds 10 9.81 Jindal Iron 10 - - - - Jindal Stain 2 - - - - Jindal Steel 5 1149.60 National Aluminium 10 227.70 SAIL 10 85.80 TISCO 10 173.20 Visa Steel 1 15.50

 

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