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| INDUSTRY Nano bookings to soothe Tata Motors funding woes Little Nano carries huge ad burden on its back Nano effect: April to see car firms vie to woo customers Vehicle will benefit rural India: Experts Tata Sky offers discount on new connection to Nano buyers Aggressive Nano sales key to profits 300,000 bookings = Rs2,850 cr in cheap funds for Tata Motors Tata Motors to set up permanent facility at Pantnagar JLR may get Rs 2,100 cr to work on emission control 250 cities to have CNG-run vehicles by 2018 INTERVIEWS/FEATURES CARS, SUVs, MUVs COMMERCIAL VEHICLES Ashok Leyland develops Hythane engines CONSTRUCTION & AGRI MACHINERY Suzuki sells over 50 units of Rs 12 lakh bikes in 4 months | ALLIED INDUSTRIES SBI sees tremendous response for Nano Third-party insurance has led to rise in claims: SC LUBRICANTS & ALTERNATIVE FUELS INTERNATIONAL NEWS GM begins white-collar layoffs with 160 pink slips ECONOMY & FINANCE Sensex surrenders sharp initial gains Economy will rebound in 6-7 months: PM
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| INDUSTRY Go To Top Priyanka Vyas The Hindu Business Line (Web & Print Edition) New Delhi: The Society of Indian Automobile Manufacturers Association will start pilot tests of hydrogen blended compressed natural gas fuel vehicles in one to two months. Tata Motors, Mahindra, Ashok Leyland, Bajaj and Eicher commercial vehicles will be tested on the Delhi-Faridabad road across a stretch of 50,000 km. Indian Oil Corporation has set up a hydrogen station to conduct the trial tests. Our pilot project with Indian Oil Corporation to test hydrogen blend CNG vehicles is on track. We expect the trials to begin in a month or two, Mr Dilip Chenoy, Director-General, SIAM, said on the sidelines of a natural gas vehicles event here. Trying combinations SIAM has completed the initial trials on Ashok Leyland, Mahindra and Bajaj commercial vehicles, to run on a hydrogen blended CNG fuel. The industry association indicated that in one or two months, it was likely to finish the initial trials of varying blends of hydrogen and CNG even for Tata Motors light commercial vehicle and Eicher. In the first phase, SIAM has tested the feasibility of hydrogen with CNG from 5 per cent to 30 per cent. Based on the pilot trials that will begin shortly, auto companies will recommend the uniform standard that can be implemented for blending hydrogen. After the pilot tests on road, we will be able to know the level of hydrogen that can be blended on all vehicles to give optimum performance, said a senior official at SIAM who heads technical policy issues. There are around 7 lakh vehicles that run on CNG and 400 retail outlets to cater to them. The Chairman of the Petroleum and Natural Gas Regulatory Board, Mr L. Mansingh, said there will be 84 geographical areas with CNG outlets by 2011. Of this, the number of cities where the availability of CNG would be increased will touch 64. In the remaining 22 cities it will be operational. By 2013, the coverage of cities under CNG will go up to 125 cities and by 2018, we expect the number to double. http://www.thehindubusinessline.com/2009/03/25/stories/2009032551280200.htm NANO BOOKINGS TO SOOTHE TATA MOTORS FUNDING WOES Reuters See this story in: The Economic Times (Web Edition), The Financial Express (Web Edition), The Indian Express (Web Edition), Hindustan Times (Web & Print Edition) Mumbai: Tata Motors looks set to harness massive demand for its Nano, the world cheapest car, helping it raise funds to cover bridge loans for last years purchase of the luxury Jaguar and Land Rover brands. Big Deposit Demand is expected to far exceed 100,000, which will give the company a short-term float over the period its bridge loans fall due. Tata Motors can hold the deposits of unsuccessful applicants, who elect not to remain in the queue, for up to three months after the booking period closes and has said it will put the deposit money to use. http://economictimes.indiatimes.com/News/News-By-Industry/Auto/Automobiles/ http://www.financialexpress.com/news/nano-bookings-to-ease-tatas-funding-woes/438457/ http://www.indianexpress.com/news/nano-bookings-to-ease-tatas-funding-woes/438457/0 http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName= http://www.livemint.com/2009/03/24173731/Nano-bookings-to-soothe-Tata-M.html LITTLE NANO CARRIES HUGE AD BURDEN ON ITS BACK Ratna Bhusan & Nandini Sen Gupta The Economic Times (Web & Print Edition) New Delhi: The Rs 1-lakh car will not have a very Nano ad budget. According to officials in the ad industry, Tata Motors will spend around Rs 10-12 crore in the first couple of months on the just-launched Nano. Of course, ad spends have seen a mark down from 2007 levels with small car brands seeing a 20-25% cut. Overall the three big car companies Maruti, Hyundai and Tata Motors spend Rs 120-150 crore in a year. But car companies are known to make a big splash at the time of the launch to create a buzz around the brand and rev up launch excitement. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://economictimes.indiatimes.com/News/News-By-Industry/Auto Neha Rishi Daily News & Analysis (Web Edition) Mumbai: With the launch of Tata Nano, the Mumbai Taximen's Union is back with its plea for a quota of Nano for taxi trade in the city. In a letter (dated January 23, 2008) addressed to Tata Motors managing director AL Quadros, general secretary, taximen's union, said: "Tata Motors will be launching Nano, which is said to be one of the cheapest cars and fuel efficient too. The taxi operators affiliated to the union are interested in purchasing the car to replace the existing taxis." However, a Tata Motors spokesperson dismissed the plea of the union saying, "We will not look into the taxi space with regard to Nano. If Nano goes through the black market and is used as a taxi, there is nothing much the company can do. But we believe that the allotments we will make are for the genuine buyers and not the ones who will sell it in the black market at a premium or use it as a taxi." Mumbai has about 55,000 taxis, of which 51,500 are Premier Padminis. About 4,500 are cool cabs and majority of them are Indica, Omni, WagonR and Alto. For any car to be approved as a taxi, the Original Equipment Manufacturer (OEM) has to apply to the Road Transport Office (RTO) in order to get the vehicle registered as a taxi. This holds true even if the car has to be sold through an unorganised channel. Since Tata Motors has denied entry of Nano in the taxi space, they will not apply to the RTO, thus scrapping the chances of the car being used as a taxi through the unorganised channel. Quadros added that the existing cars are using CNG and if the Nano would have been approved as a taxi by the Tatas and the transport authorities, then operators would want to use CNG on Nano since it is economical, which will ultimately help in reducing taxi fares. The taximen's union, in the letter had also requested Tata Motors to send their sales representatives so as to provide more information. Despite their plea being rejected by Tata Motors, Quadros maintains that he will continue to persuade the company with the union's demand. http://www.dnaindia.com/report.asp?newsid=1242350 NANO EFFECT: APRIL TO SEE CAR FIRMS VIE TO WOO CUSTOMERS Yogima Seth, Shweta Bhanot The Financial Express (Web & Print Edition) Mumbai/New Delhi: Come April and the Indian automobile industry may see companies vying hard for potential customers which could again lead to a price war, this time owing to the small wonder Tata Motors Nano. With bookings for the Nano scheduled for April 9-25 (possibly the only booking period for the year, considering the company is strapped on the supply side), experts and analysts feel that it is the time other players in the small car segment will want to focus on offers (discounts and incentives) to keep sales afloat, at least in the near future. Further, the dealers will look at on the spot offers to attract customers. According to industry experts, once the Nano hits the roads, the new as well as used car market for small cars will take a dip, both terms of prices and sales. Since all bookings will happen in the month of April, all car manufacturers might look at bigger schemes and discounts during this period to draw potential customers into their fold, said an analyst, adding that discounts could range Rs 20,000-30,000 on certain cars, over and above existing offers. Ratan N Tata, chairman, Tata Motors, had, on a similar question regarding the expected price war in the market due to Nano, said on Monday, There will be some reaction from the other small car manufacturers. Industry watchers also feel that companies like Hyundai may look at bringing cheaper variants of existing models; the company may reduce the engine size of Santro from 1,000 cc to 800 cc to make it more affordable. Abdul Majeed, auto analyst and partner, PricewaterhouseCoopers (PwC), said that the price war will not only be confined to four-wheelers, but will also extend to two-wheelers. The Nano episode will make original equipment manufacturers (OEMs) jump in on board, either with similar products or lower prices on existing vehicles to stay competitive, he said. The fact that a sizeable number of potential two-wheeler buyers, close to 40-50% in case of B and C-class towns, may shift to Nano in the long run will result in a change in strategy of all manufacturers, he added. However, the Nanos capacity constraints, product report and after sales service will also play a role in determining the impact of the car on the auto industry. The Nano will definitely eat away the entry-level market, but the actual impact will be felt once it on the road and driven around in the city, said, Mohit Dubey, chief executive officer, Carwale. He, however, said that prices and sales of used cars may dip around 25%. For instance, a 2007 Maruti 800 model may cost around Rs 1.2 lakh and a 2006 model of Hyundai Santro may cost around Rs 2.2 lakh in the used car market. A Mumbai-based Hyundai dealer said, The long waiting period for Nano is the biggest drawback the Tatas have; that gives us an upper hand. He said that the most affected will be Maruti 800 and Maruti Alto and not Hyundai cars, which are in a completely different segment.... VEHICLE WILL BENEFIT RURAL INDIA: EXPERTS Ninad Siddhaye Daily News & Analysis (Web Edition) Mumbai: With Nano billed as a people's car, city transport experts are divided on the benefits or pain that will be caused by it on the streets. Though the consensus is that the car will add pressure on the already congested roads, experts also say it will benefit rural India. Additional metropolitan commissioner ofMMRDA, Milind Mhaiskar, said: "Though it is a fact that the entry of Nano in metro cities will put pressure on the already stretched infrastructure, one has to understand that the car can boost the rural economy," he said. Saying that Nano is a good compact car, transport expert Ashok Datar said traffic restrain is a better solution compared to simply criticising the Nano."It is a fact that more bikers in the city will want to own a Nano, which may put pressure on roads. Instead of taking steps such as banning their entry, authorities should change rules related to road tax. At present, a car owner pays barely Rs140 as road tax, which should be increased," Datar said. "Rural areas are set to benefit from the tiny car. Wherever there are no issues of parking, Nano will be popular," said an MMRDA official. http://www.dnaindia.com/report.asp?newsid=1242354 TATA SKY OFFERS DISCOUNT ON NEW CONNECTION TO NANO BUYERS PTI See this story in: mint (Web Edition), The Hindu Business Line (Delhi Print Edition), The Hindu (Delhi Print Edition) New Delhi: Riding on the Nano wave, Direct-to-Home major Tata Sky on Tuesday announced a promotional scheme for consumers booking the peoples car, offering a 20% discount on a new connection. As part of the exclusive offer, consumers can now avail a special 20% discount (about Rs300) on a new connection on submission of their booking proof for Tata Nano at any authorised dealer, Tata Sky said in a statement. The launch of Nano is one of the biggest historic events in the auto industry. Now, the customers have a way to enjoy the benefits of Nano and Tata Sky through a single offer, Tata Sky chief marketing officer Vikram Mehra said. The Nano customers will also get a discount of Rs500 on installation and the offer will be on from 9 April, 2009 to 14 May, 2009, it said. http://www.livemint.com/2009/03/24171507/Tata-Sky-offers-discount-on-ne.html AGGRESSIVE NANO SALES KEY TO PROFITS Shally Seth and Samar Srivastava mint (Web & Print Edition) Mumbai: If engineering the Nano was a tough task for Tata Motors Ltd, making money on the low-cost car promises to be even harder. A low-margin, low-cost carthe Nano is priced between Rs1.23 lakh and Rs1.72 lakh in New Delhimeans that the company will have to sell substantial numbers simply to recoup its capital. A day after the cars launch, analysts tracking the company didnt seem impressed. Nor were the markets. Shares of Tata Motors ended the day at Rs162.05 each, down 4%, on the Bombay Stock Exchange, erasing all the gains it made on Monday when the pricing of the Nano had been announced late evening, after market hours. The bourses benchmark Sensex index ended up 0.5% to close at 9,471.04. Twenty-one of the 31 analysts tracking the company reaffirmed their sell rating, according to data compiled by Bloomberg. We do not envisage near-term positives for the company from the launch of the Nano, wrote analysts Amit Kasat and Rohan Korde in a research report put out by Anand Rathi Securities Ltd on Tuesday. They point to the low selling point of the car and low margins as key negativesmaking it that much more difficult to recover the little over Rs2,000 crore spent by Tata Motors in developing the Nano. Also See Uphill Task (PDF) One auto industry expert said if that amount was considered on a fully accounted basis, including cost of capital, Tata Motors would need to sell four to five million cars by the sixth year of operation, or fiscal 2015, for the Nano project to break even or start making profits for the company. This car has shown the world how to think differently in designing a car and its amazing this has come from an OEM (original equipment manufacturer) that didnt even make cars 10 years ago but we dont know if this is the best thing for Tata Motors, said Vikas Sehgal, a partner in the automotive practice at consultancy firm Booz and Co. Sehgals calculations hinge on assumptions including a 12% cost of capital and Rs10,000, equivalent to about 6.67%, average net profit margins on each Nano sold. Analysts typically expect margins for the car to be between those of a two-wheeler and a small car. To put the break-even target numbers in perspective, India sells 2.3 million cars a year domestically and exports some 200,000 a year. Tata Motors recently had its debt downgraded by rating agency Standard and Poors which resulted in a rise in its cost of capital presently estimated at over 12%. The company is paying 11.5% on money raised through fixed deposits to refinance loans taken for its acquisition of Jaguar and Land Rover. However, without taking the cost of capital into account and a healthier profit margin, Tata Motors could achieve operating profits much earlier, other analysts According to Mahantesh Sabarad, an analyst at Centrum Broking Pvt. Ltd, Tata Motors will have to sell 600,000 units before it makes a cash profit, defined as earnings before interest, tax, depreciation and amortization. The first profit after tax would be made only after 800,000 vehicles are sold, he added. He agreed that project break-even would need selling a few million Nanos. The estimate by JM Financial Institutional Securities Pvt. Ltd, according to its analyst Vijay Sarthy, was lower: Tata Motors would need to sell 250,000 cars on an annualized basis to break even, he said. Break-even until fiscal 2012 could likely take place on total sales of one million units, he estimated. A call to a Tata Motors spokesman was not replied to and the company had not responded to an email sent early afternoon asking for comment. The Nano project is not just commercially viable but very profitable, Ravi Kant, managing director at Tata Motors, had insisted while addressing reporters before the unveiling of the car at the Parsi Gymkhana in Mumbai on Monday. Some experts said the market Nano was aiming at could not be exactly viewed through the perspective of current day car demand in the country. Some expect the Nano to do well in rural areas, particularly among two-wheeler owners who aim to buy a car. Pradeep Lokhande, promoter of Rural Relations, a rural marketing firm, says that with motorbikes and cellphones becoming status symbols in rural India, the Nano is well placed to make a headway. He cites the example of Satara, a district in Maharashtra, that has close to 115,000 motorcycles. I foresee as many as 30% of these bike users graduating to a car like the Nano. Theyre impulsive buyers, he said. Abhijeet Naik, an analyst with CLSA Asia Pacific Markets, wrote on Tuesday that the demand for the Nano could be huge and will be tempered only by how many cars Tata Motors can produce. There are 75 million two-wheelers on Indias roads, most of whose owners want to upgrade to a car but cannot afford one right now. This, we believe, will be the main target segment for the Nano and dont rule out an immediate multi-million unit market size, he wrote. Still, industry experts pointed to the risks ahead for Tata Motors with the Nano. If, for instance, Sarthy said, commodity prices strengthen, Tata Motors would find it difficult to retain the price and remain profitable. Steel prices have declined 15% in January from Rs39/kg in March 2008, aluminium prices are down to Rs99/kg from Rs133/kg in the same period and copper down to Rs186/kg from Rs346/kg. Without quoting them by name, Boozs Sehgal said competitive options before rivals such as MarutiSuzuki India Ltd and Hyundai Motors India Ltd had strengthened given that the price differential between air conditioned versions of the Nano and, say, a Maruti 800 were as slim as Rs50,000. Tatas rivals just have to reduce prices of their entry products by about Rs20,000 to present a prospective Nano buyer a competitive option. The quality of the Nanowhose warranty on parts such as the engine and transmission expire, at 24,000km versus the typical 50,000km for other carswill also be closely watched, Sehgal predicted. This, he said, would decide the resale value of the new Tata car and, in turn, affect demand. http://www.livemint.com/2009/03/25000952/Aggressive-Nano-sales-key-to-p.html?pg=2 300,000 BOOKINGS = RS2,850 CR IN CHEAP FUNDS FOR TATA MOTORS Sudha Menon and Mobis Philipose mint (Web & Print Edition) Mumbai: By fixing the Tata Nanos booking amount at about 80% of the purchase price across its three models, Tata Motors Ltd has found the most cost-effective way of financing a large part of the project cost, provided the consumer response is overwhelming. Based on even a conservative estimate of 300,000 applications, and all for the base model, Mint calculations show that Tata Motors will get Rs2,850 crore cheap money. The firm has so far spent at least Rs2,000 crore on the Nano. The company plans to allot 100,000 cars in the first phase. Those who will not get the car in that phase will have the option of keeping the booking amount with the company and waiting further for delivery. The booking amount for the base model is Rs95,000. Assuming that all the bookings are for this model, the successful 100,000 applicants who get allotment in the first phase would have deposited Rs950 crore in April. Deliveries would commence by July and it would be a while before monthly deliveries ramp up to even 3,500. According to at least three vendors who spoke to Mint on condition of anonymity, the Pantnagar factory in Uttarakhand is not expected to reach its peak capacity of 3,500 cars till at least July. In other words, a large part of the Rs950 crore that the firm receives will remain with it for a considerable period before deliveries are completed. Vendors are expecting at least 300,000 applications. Assuming that the balance 200,000 applicants retain their bookings, that would result in a cash inflow of another Rs1,900 crore for Tata Motors. Indeed, this is not free money. Tata Motors will give 8.5% interest on any deposit that lies with it for over a year and 8.75% for deposits above two years. This is, however, much cheaper than what it had paid for the fixed deposits that it recently raised from retail investorsabout 10.5% for one year and 11.5% for three years. It has raised Rs1,300 crore from a public issue. If Tata Motors is able to raise these funds at 8.5-8.75% through the Nano bookings, it would result in interest cost savings of about Rs55 crore. Finally, the cost of the booking formRs300will fetch the company another Rs9 crore, provided there are 300,000 applications. The booking amount will ease pressure on the companys working capital requirement for the next four months. Its a clever move by the company and one that will save them from raising expensive money in the debt market, said an analyst with First Global Securities Ltd. They can use it to partly pay their outstanding debt, which stood at Rs13,500 crore in third quarter of fiscal 2009. http://www.livemint.com/2009/03/25004843/300000-bookings--Rs2850-cr.html TATA MOTORS TO SET UP PERMANENT FACILITY AT PANTNAGAR PTI See this story in: The Hindu Business Line (Web Edition), The Tribune (Web Edition), mint (Web Edition) Dehra Dun: Tata Motors has agreed to set up a permanent unit for manufacturing the Nano, the world's cheapest car, at Pantnagar in Uttarakhand, a top official of the state government said on Tuesday. On the request of the state government, Tata Motors has agreed to convert its interim Nano arrangement into permanent one at Pantnagar, Principal Secretary (Industries) Mr P C Sharma told. Through the sale of Nano car and other commercial vehicles which are being manufactured at Pantnagar by Tata Motors, the state government would earn a revenue of Rs 200 crore through Value Added Tax, the official said. Tata Motors has also launched a distribution company - Tata Motors Distribution Companies Ltd - at Pantnagar industrial area to sell the Nano, he said. When contacted, a Tata Motors spokesperson said the company has launched the distribution company for the sale of Nano as well as other auto brands. Tata Motors was given more than 100 acres of prime land by the state government at Pantnagar for setting up its manufacturing facility. Last year, the company got 20 acres of land from the state government for the distribution company as well as 45 acres of additional land for the expansion purpose at Pantnagar. http://www.thehindubusinessline.com/blnus/02241922.htm http://www.tribuneindia.com/2009/20090325/biz.htm#6 http://www.livemint.com/2009/03/24192000/Tata-Motors-to-set-up-permanen.html The Tribune (Web Edition) Washington: The launch of Indias small car Tata Nano made big news in the US with top publications from Time magazine to the New York Times giving the story a big splash. After a series of setbacks, Tata Motors announces that its much-anticipated Nano is ready, said the CNN listing its story Worlds cheapest car ... again as Todays top video. In an article titled The world's cheapest car debuts in India, Time magazine related the story of a six-year quest by Tata Motors, India's largest automaker, to develop a car for the common man costing less than Rs.100, 000 (about $2,000), roughly the same price as a motorcycle. The New York Times in its Wheels - The nuts and bolts of whatever moves you column said: Nano has been nicknamed The Peoples Car because its starting price will make it accessible to more Indians than any other new car on the market. The Washington Post carried a news agency story noting the Tata Motors Nano will hit Indian roads in July and, with demand set to far outstrip supply. http://www.tribuneindia.com/2009/20090325/biz.htm#7
S Kalyana Ramanahtan Business Standard (Web Edition) London: Luxembourg-based European Investment Bank (EIB) is considering a 275 million (Rs 2,100 crore) loan to the Tata group-owned Jaguar Land Rover that will part-fund the groups proposed 550 million (Rs 4,200 crore) research and development work at reducing the CO2 emission from its future products. This comes under the category of a supporting loan that the European automotive industry gets to produce vehicles that are environment friendly. The UK government provides guarantee for loans that EIB gives to the automotive sector for work to reduce emissions. This package, nnounced by the UK government earlier this year, included loans up to 1.3 billion from EIB and another 1 billion from the UK government. Earlier this month, JLR received the UK government approval for a grant of 27 million (Rs 192 crore) for producing a new eco-friendly car based on Land Rovers LRX Concept, which was first showcased at the 2008 edition of the Geneva Motor Show. The EIB said, The project will contribute to the increase of the promoters knowledge and know-how in development of technology for small hybrid powertrains and new lightweight vehicle architecture. The project aims at a very significant reduction in fuel consumption of the promoters (JLRs) future range of vehicles; it is expected to bring about positive environmental results. The completion of this project will assist the promoter to comply with the upcoming European CO2 emission requirements. The bank said the support would be focused on the development of new engines designed to meet the CO2 emission targets set by the EU Commission, particularly the development of smaller diesel engines, the development of micro-hybrid and full hybrid downsized drive trains. The EIB is also considering a 370 million loan to Japanese car maker Nissan to part-finance a similar project in the companys facilities in the UK and Spain. Nissan has estimated the total cost of its project at 920 million. A JLR spokesperson said the likely date of formal approval from EIB was not known yet. http://www.business-standard.com/india/news/jlr-may-get-rs-2100-cr-to- 250 CITIES TO HAVE CNG-RUN VEHICLES BY 2018 PTI See this story in: The Hindu Business Line (Web Edition), The Hindu (Web Edition) New Delhi: The number of cities, where vehicles ply on CNG will increase more than eight times from current 30 to 250 by 2018, oil regulator said on Tuesday CNG run vehicles have risen by nearly 200,000 in past one year to 650,000, Petroleum and Natu ral Gas Regulatory Board (PNGRB) Chairman Mr L Mansingh said at the NGV India 2009 conference here. Compressed natural gas (CNG) is currently available as auto fuel in 30 cities. By 2011, we would have 84 geographical areas (cities) with authorised city gas operators. CNG (retailing) would be operational in 64 cities and would be under implementation in remaining 22, he said. PNGRB is in the process of authorising entities for setting up city gas distribution (CGD) projects entailing retailing CNG to automobiles and piped natural gas to households, in batches. It by this month end would issue authorisation for five cities, he said. The authorised entities will rise to 125 by 2013 and will double to 250 by 2018. Of these, 200 cities would have operational CNG dispensing facilities, he said. If all the vehicles in the country are to be converted into CNG, we would need 65 million s tandard cubic metres per day (mmscmd), Mr Mansingh said. http://www.thehindubusinessline.com/blnus/14241422.htm http://www.hindu.com/2009/03/25/stories/2009032556531800.htm | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INTERVIEWS/FEATURES Go To Top New Delhi: It signals a major jump in the global acceptance of India as a hub for small cars, but maintaining this will require a lot more including, for starters, large production volumes. India has emerged as an attractive hub for making compact cars - the Nano means the world will now accept Indias expertise in design values and frugal engineering: Jagdish Khattar, Chairman & Managing Director, Carnation Auto The Nano promises to provide a safe and environment-friendly mode of transport to a large segment of the population who, till now, did not have that option. This will give a major fillip to the Indian automobile industry. Despite liberalisation during the last decade, the penetration of automobiles in India has just reached about seven per thousand people, compared to double digits in even Sri Lanka and Pakistan. It was in early 1980s, when the Maruti 800 was launched, that we saw the first major peoples car, giving customers an alternative to choose from apart from the Ambassador and Padmini. That car not only exceeded its objective but also brought about a major change in the manufacturing sector as a whole. With the launch of the Nano we will experience many new important facets. It is now well-accepted that India has emerged as an attractive hub for the manufacturing of compact cars. But with the launch of the Nano, the world will also accept Indias competence in design values and frugal engineering. The world will also accept the capabilities of the component manufacturers who have developed the parts at low prices. India could now start supplying to the automobile plants of the major international car manufacturers abroad. So what does Nano mean to the economy at large? Employment opportunities to millions in this era of recession not only in manufacturing but in sales, service, finance, insurance etc. A boost to the rural economy because this car, along with improved roads, will help increase mobility. Empowerment and liberation of women in smaller towns. In India over 300,000 auto rickshaws are sold in a year for about the same price as the Nano. The Nano is a substitute for public transport which is safer, far more environment-friendly and convenient. Some argue that the introduction of the Nano may further congest cities further. While this possibility cant be ignored, one should not favour restricting its sales. The Central and state governments are trying their best to improve the road network and connectivity. What is also required is an efficient and cost-effective option in public transport. As the Nano customer-profile includes current two-wheeler owners, the state agencies should take proactive actions to ensure that they are trained on issues pertaining to proper driving skills and road safety. The management of Tata Motors, I am sure, would have worked out their strategies to meet the challenges of sales and after-sales. The first is to meet the high demand that is likely to get created. As there would be many first-time customers, the sales force will have to advise them on issues like running and maintenance of the car. A service network with a much bigger spread would also be needed. Since two-wheeler owners are used to getting 60-70 km per litre, as compared to the Nanos 20+, the cost of ownership of a Nano is likely to be far higher than that of a two-wheeler two-wheelers also have many neighbourhood workshops. The proposed rural marketing will also require a network that is as near the customer as possible. This is a big achievement but the auto market has been changing over the years anyway. To sustain this requires production volumes, great after-sales and product-acceptance: Rakesh Batra, Partner, Ernst & Young In a sense, Tata Motors has already changed the face of the Indian automobile industry by developing a product that no manufacturer has so far been able to do across the world. This is an achievement of Indian innovation at its best across design, engineering, manufacturing and the supply base. Time magazine has listed the Nano in the dozen most important cars in the world since 1908. The Indian automobile industry has clearly established its place as the ultra-low cost car centre globally and the Nano is likely to spur greater activity in the years to come. Truly, an innovation of this enormity should get the success it deserves. That said, the face of the Indian automobile market has been changing over the years and will change once again after the Nano. We will have a whole new set of customers, both in urban and rural areas, for whom a car will symbolise a dream that can be realised. Car-ownership is considered to be a symbol of economic progress and is therefore very high on a consumers aspirational list of products. Given the sizeable Indian population and the low cost of owning and using the Nano, the car is likely to attract a large cross-section of potential customers, many of them first-time car-owners. As the market expands further, prices of small used-cars will fall, a trend we are already witnessing with declines of around 35 per cent, making affordability still higher. The Nano could also have an impact on vehicles used for passenger transportation, particularly three-wheelers which, in some cases, cost more than the Nano. The latter presents a viable alternative with greater driver- and passenger-comfort, and protection from the vagaries of the weather. The Tata Ace, which was launched in 2005, managed to change the dynamics of the three-wheeler transportation market. Vehicle distribution, sales and service may also see changes in the post-Nano world. Keeping in line with its ultra-low-cost positioning, there will be a need to keep marketing and distribution costs significantly lower. Tata Motors has already begun using internet marketing through social networking websites and is potentially considering online sales. One day, in the not very distant future, you may be able to order the car online and track the progress of your order through manufacturing and delivery to a local dealer or retailer. While these are some of the changes which will impact the Indian auto market, they will certainly not happen overnight. Beyond the initial buzz and the excitement around the launch, it will take some time for sufficient volumes to be produced and sold this could take anywhere up to around 2-3 years. Further, the Indian consumer is very discerning and the product and after-sales service quality will need to live up to the consumers expectations for the Nano to be successful. http://www.business-standard.com/india/news//willnano-change-indias-auto-industry//352825/
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| TOYOTA KIRLOSKAR EXPECTS SALES TO BOUNCE BACK IN H2 The Hindu Business Line (Web & Print Edition) Bangalore: Toyota Kirloskar expects sales for the current year to bounce back to around the same level as in 2007, but remains cautious about the first half of the year. The Deputy Managing Director, Mr Sandeep Singh, told newspersons, after the launch of Express Maintenance Service at one of its dealerships, that compared with the fourth quarter of 2008 (October-December, 2008), sales during the first quarter of 2009 had grown 20 per cent. Inventory levels He said inventory levels had gone down to about 10 days from the earlier level of about 30 days, which indicated that the automobile industry was showing some signs of revival. Mr Singh said he expected the car major to end the current year with sales of around 54,000, around the same level as that of 2007. Sales during the first half may not be that good, but we expect better sales during the second half, he said. In 2008, Toyota Kirloskar sold about 52,000 units, which was 6 per cent less than the previous year. Express Maintenance Service Toyota Kirloskars Managing Director, Mr Hiroshi Nakagawa, said the company will extend the Express Maintenance Service for the compact car as well. He said by the end of this year, 45 dealers will offer such a service, which provides a one-hour periodic maintenance service. The company expects to have a network of about 155 dealerships by the time the compact car is launched in end 2010. The Express Maintenance Service provides maintenance service to all Toyota models and is offered at the same price as the normal service. It reduces the servicing time of a vehicle from the existing 17 hours to 60 minutes by eliminating stagnation time between processes. The new service is part of the Toyota Customer Service Marketing advanced programme which was introduced globally in 2001. The programme removes wastage from the system by redesigning the layout of the maintenance bays, to ensure that no time is lost searching for equipment. Each bay for performing express service costs about Rs 5 lakh and the number of vehicles that can be serviced a day can go up to about 16, from the earlier level of four. http://www.thehindubusinessline.com/2009/03/25/stories/2009032551310200.htm | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DELAY IN BAJAJ'S LCV LAUNCH LIKELY Lijee Philip & Gouri Agtey Athale The Economic Times (Web & Print Edition) Mumbai/ Pune: The launch of Bajaj Autos ultra light commercial vehicle is understood to be postponed following the delay in its engineering and design, said a person familiar with the development. While company officials insisted that the project was on schedule, several vendors ET spoke to said the project has been delayed. ASHOK LEYLAND DEVELOPS HYTHANE ENGINES PTI See this story in: The Hindu Business Line (Web Edition), mint (Web & Print Edition) New Delhi: Hinduja flagship company Ashok Leyland on Tuesday said it has developed hythane engines to power its buses, in association with Australia's Eden Energy. The hythane engines are powered by a fuel which is a mix of CNG and hydrogen (usually 20 per cent hydrogen by volume). We have been testing these engines at our Chennai facility,'' said Mr S Yoganandam, Senior Manager (Alternate Fuels Product Development), Ashok Leyland. The six-cylinder, 6-litre engine is compliant with Bharat Stage IV em ission norms and application of these engines to buses is at an advanced stage at Ashok Leyland, he added. http://www.thehindubusinessline.com/blnus/02241630.htm http://www.livemint.com/2009/03/24160922/Ashok-Leyland-develops-hythane.html | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONSTRUCTION & AGRI MACHINERY Go To Top | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/3 WHEELERS Go To Top Yogima Seth The Financial Express New Delhi: The global economic downturn has now impacted the export of two wheelers from India. Falling demand of motorcycles in developed countries in Latin America has resulted in a decline of over 9% in export of two wheelers from the country in February. This, incidentally, is the first dip this financial year. According to the Society of Indian Automobile Manufacturers, total export of two-wheelers from India came down from 80,550 units in February last year to 72,510 units in February this year, a dip of 9.98%. Bajaj Auto, the largest exporter of two-wheelers from India, posted a decline of 18.83% in exports at 41,312 units in February this year, compared to 50,894 units in February 2008. Hero Honda registered a decline of 36.86% in exports at 6,177 units, vis--vis 9,783 units in February last year. Even India Yamaha Motor posted a 41.34% dip in exports at 2,357 units, as compared to 4,018 units during the same month last year. The global downturn started showing its impact on the Indian economy since December. Since public transport in developed countries is good, people are preferring it over having their own vehicles, said Sanjay Tripathi, division head (product planning), India Yamaha Motor. According to Tripathi, the company had exported 50,000 bikes in 2008. This year, it is looking at lower number, around 30,000-35,000. Apart from the low off take because of the credit squeeze, a lot of clearance of the inventory is happening now. Consequently, after 10 months of healthy growth, two-wheeler exports have come down in February, said Abdul Majeed, auto analyst and partner, Price Waterhouse. He added that the next six months will be difficult for all players. Anticipating good demand around Christmas and New Year, dealers across the globe had build up stocks in October and November. Consequently, exports from India grew by 51.16% in November last year, the highest in this financial year, at 89,245 units as compared to 59,041 units in November 2007. The February export numbers are a reflection of the lag effect, after the huge inventory build up at the dealer level in overseas markets, explained Vaishali Jajoo, senior auto analyst, Angel Broking. http://www.financialexpress.com/news/feb-bike-exports-dip-10/438601/ SUZUKI SELLS OVER 50 UNITS OF RS 12 LAKH BIKES Agencies See this story in: The Financial Express, The Hindu Business Line, Mint New Delhi: Nano may be hogging the limelight but Japan's Suzuki is quietly smiling having sold over 50 units of the bike, each priced 12 times the Rs one lakh 'People's Car' from the Tatas' stable. The bikes -- Hayabusa and Intruder -- are powered by engines that are up to three times more powerful than the Nano. While Hayabusa is powered by a 1,340cc engine, Intruder has a 1,783cc V-twin engine in contrast to Nano's 623 cc engine. Besides attracting common biking enthusiasts, the company has also succeeded in luring Bollywood actor John Abraham to buy a fresh Hayabusa. "These bikes are for those people who have money and also enjoy biking. We have got good response and sold 51 units so far in the country," Suzuki Motorcycle India Pvt Ltd (SMIPL) Vice President (Sales & Marketing) Atul Gupta said. The company has sold 23 units of Hayabusa and 28 units of Intruder in Delhi, Bangalore, Pune and Mumbai, he added. SMIPL, the Indian subsidiary of the Japanese major, had launched the two bikes in November last year and both were priced at Rs 12.5 lakh (ex-showroom, Delhi). Asked about the customers, who have bought the products, Gupta said: "One of our proud customers of the bikes is actor John Abraham. He owns a Hayabusa." The company had set a target to sell a total of about 300 units of the two bikes in a year. When asked if the launch of Nano would affect the sales of the company's commuter segment bikes Gupta said, "Not at all. Mileage is very important to customers and our bikes run about 70 km per litre, while Nano will cover only 25 km." Cost of ownership in Nano is also almost three times than buying a Suzuki motorcycle, he added. In the National Capital, the price of Suzuki's 125cc motorcycle Zeus starts from Rs 42,393 (ex-showroom), while Nano will be available from Rs 1.23 lakh (ex-showroom). Suzuki, which re-entered India in 2006 with the launch of the two bikes after breaking off from a join venture with TVS Motor Company in 2000, is looking to launch at least two models every year. It is also expanding its production capacity to 2.5 lakh units per annum by April, 2009, with an additional investment of Rs 150 crore, which would also take care of new product launches. So far it has invested Rs 400 crore in the country. http://www.financialexpress.com/news/suzuki-sells-over-50-units-of-rs-12-lakh-bikes/438434/ http://www.thehindubusinessline.com/blnus/02241720.htm http://www.livemint.com/2009/03/24164732/Suzuki-sells-over-50-units-of.html MAHINDRA EYES FULL PIE IN 2-WHEELER BIZ Swaraj Baggonkar & Ishita Russell Business Standard Mumbai/New Delhi: Almost a year after Indias premier tractor and utility vehicles maker, Mahindra & Mahindra (M&M), announced the acquisition of Kinetic Motors, it has put up a blueprint to enter every key segment of the two-wheeler market. The Mumbai-based company will take on Hero Honda, Bajaj Auto and Honda Motorcycles and Scooters India (HMSI) and will have models in the 100cc, 125cc and 150cc mobike segments, and also in the ungeared low and high-powered scooter segments. Hero Honda has a 60 per cent share of the motorcycle segment, while HMSI commands 58 per cent of the scooter market. At a press conference, Anand Mahindra, vice-chairman and managing director, M&M, said: Our two-wheeler project is complete; we have already begun marketing the fleet in Bangalore. When asked what two-wheeler products will roll out, Mahindra replied, Youll be able to see it soon. The company is planning to leverage the research and development (R&D) strength of Engines Engineering Srl, an Italian engine and design company it bought last year. The company specialises in developing small yet powerful and fuel-efficient engines for motorcycles. The idea is to establish M&M in the two-wheeler segment through transfer of technical know how. In addition, SYM, the Taiwanese two-wheeler company, which has agreed to extend its tie-up to M&M after the Kinetic takeover, will also help provide technology, perhaps more for the gearless scooters segment. Our ultimate goal is to be in every segment of the two-wheeler industry and this will be achieved through the strong R&D support M&M currently has. We want to be in the big engine segment of motorcycles, as well as in the smaller entry-level scooters, said a source from Mahindra Two Wheelers. The company is reportedly developing a 650cc-750cc petrol-fired engine with the help of the Italian company. However, it has refused to give details. M&M currently sells only a gearless scooter called Flyte. This product, originally built by SYM, has been altered by M&M to suit the Indian consumer. Its sales have more than doubled after the Kinetic takeover. M&M currently sells 3,500-4,500 units of the scooter a month, as against the 1,500-2,000 units sold earlier. According to sources, demand for the scooter has been growing 50-70 per cent every month, mainly on account of improved marketing techniques. Freshly developed products by the company may see co-branding of Mahindra Kinetic, as both companies enjoy a strong brand value. M&M had earlier bought the business assets of the then loss-making Kinetic Motor Co, run by the Pune-based Firodia family, for Rs 110 crore. M&M holds 80 per cent in the new entity, while the balance is held by Kinetic. http://www.business-standard.com/india/news/mahindra-eyes-full-pie-in-2-wheeler-biz/352863/ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COMPONENTS Go To Top The Economic Times See similar story in: Daily News & Analysis, Business Standard Mumbai: Tata AutoComp Systems (TACO) has been a significant contributor in engineering, design and supply of components for Nano. The company had supplied plastics bumpers, dashboard, cockpit (front console), door handles, door & pillar trims, air vents and many powertrain plastic components, stated an official release. http://www.dnaindia.com/report.asp?newsid=1242194 http://www.business-standard.com/india/news//controlling-nano/s-cost-waschallenge//57254/on | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ALLIED INDUSTRY Go To Top | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FINANCE & INSURANCE Go To Top Khyati Dharamsi Daily News & Analysis Mumbai: The cheapest car in the country may not be the cheapest in terms of insurance premium. Insurers and brokers say the insurance cover for the smallest car, Tata Nano (623 cc), will be priced on a par with the existing cars in the sub-1,000cc space, such as Maruti 800 (796 cc), Alto (796 cc), Omni (796 cc), A-Star (998 cc) and Chevrolet Spark (995 cc). "Pricing of insurance cover may be currently at par with similar models and may be altered later, depending on the profile of buyers, cost of spare parts and the claims figures," says Vijay Kumar, head - motor insurance at Bajaj Allianz General Insurance. "There are no special instructions from insurance companies for Nano, which tells us that the same premium rates charged for any other car below the 1,000 cc range may be applicable," says Rahul Agarwal, chief executive officer of Optima Insurance Brokers. This means Tata Nano buyers would be paying the same premium for the car insurance cover that is charged for 800 cc vehicles, which is around Rs 2,400 or 2% of the price of the car. But why would the insurer charge the same premium for a 623 cc car that he is charging for the higher engine capacity cars? Shouldn't the premium be lesser? To understand the answer one would need to understand the components of a car insurance premium first. Car insurance has to be renewed at the end of each year. Among other things, the insurer estimates the amount that would have to be paid for the car damaged by the policyholder in case of an accident. This is called third party insurance. Insurance experts say that in case of Nano, though the cost of damage repairs for the policyholder's car may be lower than for the Maruti 800, the third party insurance (insurance cost for opposite party's damaged vehicle) cost may remain fixed.
"Even as values (car prices) go down, the repair costs remain the same. The labour costs for garage and insurance companies' claim handling costs remain the same," says Yashish Dahiya, chief executive officer and co-founder of Policybazaar, an online insurance seller. So, though Nano costs Rs 1 lakh less than its closest competitor, the insurance company cannot reduce the salary of a person handling claims process for Nano cars and the garage owner cannot do the same with his staff. Hence, insurers would deduct that amount from the car insurance policyholder's premium. For all that, however, some companies may price the insurance cover for Nano at a discount to sub-1,000 cc car insurance as the general insurance market has entered the phase of freedom from fixed pricing model. In this detariff regime, insurers are offering a huge discount to the earlier premium, just to attract customers. Given the lower engine capacity, the premium may be at a discount of 10-20% of what is charged for vehicles below 1,000 cc, says an official of a public sector general insurance company. However, insurance companies agree that pricing of the insurance cover is not possible until the pricing of the parts is not made public and they see the claims figures. Companies are also looking out for the frequency of the car delivery, whether the car would be in driven in rural or urban areas and whether the second lot of Nano will be priced at the same level of Rs 1.34-1.85 lakh. Sustaining sub-1,000 cc premium rates would be difficult for insurers and the premium rates would be altered later, feel experts. "After the launch, the insurance premium for Nano would be increased very soon as companies will realise that the repair charges of Nano will be similar to that of other cars, even though the vehicle's engine capacity is below 800 cc," says Agarwal of Optima Insurance. "Also, there will be a lot of theft claims as there is demand for the vehicle and it is easy to dispose of. This might push up the premium later." http://www.dnaindia.com/report.asp?newsid=1242299 SBI SEES TREMENDOUS RESPONSE FOR NANO PTI See this story in: The Times of India Mumbai: Bookings for Rs 1 lakh Nano car by the Tata Motors are pouring in from all parts of the country as the sole booking agent SBI on Tuesday said it has distributed lakhs of applications for the world's cheapest car. http://timesofindia.indiatimes.com/articleshow/4310947.cms THIRD-PARTY INSURANCE HAS LED TO RISE IN CLAIMS: SC Dhananjay Mahapatra The Times of India
When there was no third-party insurance, it was the owner of the vehicle who was liable to compensate the accident victims and hence, used to hotly contest claim petitions before the Motor Accident Tribunals. But, now the vehicle owners take no pains to contest claim petitions being aware that whatever be the compensation amount it would finally be borne by the insurance company providing the third party cover. This has given rise to an unholy nexus for claiming compensations, felt a Bench comprising Justices R V Raveendran and H L Dattu. Judicial notice can be taken of the fact that there have been several false claims by claimants in collusion with the owners, said Justice Raveendran writing the judgment. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LUBRICANTS & ALTERNATIVE FUELS Go To Top OIL PRICES DIP AFTER STRIKING FOUR-MONTH HIGHS AFP See this story in: The Times of India London: Oil prices slid Tuesday on profit-taking after hitting four-month peaks on news of the US government's massive plan to clear toxic assets from bank balance sheets. http://timesofindia.indiatimes.com/Business/Oil-prices-dip-after-striking-four-month-highs/articleshow/4308322.cms | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INTERNATIONAL NEWS Go To Top Agencies See this story in: The Economic Times Stockholm: Sales of heavy trucks in Europe are set to drop 40 per cent in 2009, but demand globally is expected to recover before the end of the year, the head of Swedish truck maker Volvo said on Tuesday. http://economictimes.indiatimes.com/News/International-Business/Volvo-boss-sees- GM BEGINS WHITE-COLLAR LAYOFFS WITH 160 PINK SLIPS Agencies See this story in: The Economic Times Detroit: General Motors Corp. starts laying off white-collar workers as part of its restructuring plan, with 160 people losing jobs at its technical center in Warren, Michigan. http://economictimes.indiatimes.com/News/International-Business/GM-begins-white- TOYOTA, HONDA CUT AUTO OUTPUT
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| ECONOMY & FINANCE Go To Top PTI See this story in: The Times of India Mumbai: In tandem with local equity markets amid month-end dollar demand, the Indian rupee washed off its initial gains and ended lower by 25 paise to 50.70/71 against the greenback. SENSEX SURRENDERS SHARP INITIAL GAINS PTI See this story in: The Hindu Business Line Mumbai: The Sensex, which was up by nearly 275 points in intra-day trade to more than a one-month high on firm global cues, cooled off after mid-session, still showing a rise of 47 points. The Bombay Stock Exchange 30-share barometer opened firm and improved further to more than a one-month high of 9,699.00 on firm global cues as Wall Street yesterday surged nearly 7 per cent after the Obama administration detailed a plan to rid bank balance sheets of toxic assets. Brokers said the markets across the globe seem to have welcomed a US public-private sector programme to help the ailing banking system recover from massive losses suffered in the US real estate meltdown. However, profit-booking ahead of the expiry of March contracts on Thursday pulled it down to settle the day at 9,471.04, still exhibiting a rise of 47.02 points or 0.50 per cent over the previous close. Yesterday, the Sensex registered its biggest single-day gain of 457.34 points in the current calendar year. The broad-based 50-issue Nifty of the National Stock Exchange, however, ended flat at 2,938.70 from the last close of 2,939.90. ECONOMY WILL REBOUND IN 6-7 MONTHS: PM Agencies See this story in: The Financial Express New Delhi: With farmers incomes' increasing despite inflation nearing zero, Prime Minister Manmohan Singh on Tuesday exuded confidence that the economy would revive in a big way in 6-7 months as the stimulus packages work their way through the system in and demand expands. "I am confident that because of the stimulus that our government has announced, later by (Finance Minister) Pranab Mukherjee, in the next six to seven months the revival of the Indian economy should take place in big way," the Prime Minister said on the occasion of releasing the manifesto of the Congress. The Government announced stimulus packages in December and January, cutting excise duty by four per cent, increasing public expenditure and giving more leeway to infrastructure finance company IIFCL to raise tax-free bonds. Later, the Finance Minister announced a further two per cent cut in excise duty and also service tax, among other stimulus measures. Singh said inflation has declined sharply due to a fall in energy prices, but food prices have not fallen as the Government sought to increase incomes in rural areas. "Farmers have never been given such increases in terms of procurement prices as in the last five years of the UPA Government," he said. http://www.financialexpress.com/news/economy-will-rebound-in-67-months-pm/438397/
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