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INDUSTRY Cash crunch won't affect our R&D: JLR chief INTERVIEWS/FEATURES CARS, SUVs, MUVs Maruti Suzuki launches new Grand Vitara COMMERCIAL VEHICLES Ashok Leyland to hive off design engineering unit Volvo Trucks bags order for 125 vehicles JNNURM deadline for CV purchase may be extended CONSTRUCTION & AGRI MACHINERY E-bike maker Kabirdass files for IPO COMPONENTS | ALLIED INDUSTRIES LUBRICANTS & ALTERNATIVE FUELS HPCL Visakha refinery set to produce Euro-compliant products INTERNATIONAL NEWS Sensex surges over 250 pts on soft Rail Budget Railways spot early signs of economic recovery
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INDUSTRY Go To Top PTI See this story in: The Economic Times (Web & Print Edition), The Hindu Business Line (Web Edition), The Tribune (Web Edition), The Statesman (Web Edition), Deccan Herald (Web Edition), The Times of India (Web Edition) Abuja/Nigeria: Tata Motors, India's largest auto maker, will introduce its small car Nano--considered the world's cheapest--in Nigeria within next 18 months, ahead of its planned launch in Europe. http://www.thehindubusinessline.com/blnus/02031401.htm http://www.tribuneindia.com/2009/20090704/biz.htm#8 http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=260018 http://www.deccanherald.com/content/11527/tata-motors-drive-nano-africa.html http://timesofindia.indiatimes.com/Business/Tatas-Nano-in-Nigeria-by-2010/articleshow/4733081.cms CASH CRUNCH WON'T AFFECT OUR R&D: JLR CHIEF Swaraj Baggonkar Business Standard (Web & Print Edition) Mumbai: Jaguar and Land Rover (JLR), the two British marquee brands reeling under financial stress, will be able to keep their research and development (R&D) programme largely on schedule for the time being, thanks to timely support from its parent company Tata Motors. Both Jaguar and Land Rover have huge funding requirements, which are essential for updating technology, while providing necessary support to future product development. Stricter emission norms, which are expected to come into force in 2012, will also pose a challenge. Tata Motors has so far injected over 800 million (nearly Rs 6,300 crore) as direct financial aid into the two brands for meeting working capital requirements and also to fund R&D processes. Prior to the JLR acquisition, the annual bill on R&D for both the brands stood at 400 million (about Rs 3,200 crore). This is about five times the annual R&D expenditure of Rs 550-600 crore at Tata Motors. David Smith, chief executive, Jaguar and Land Rover, said: The 340-million (about Rs 2,700-crore) loan from the European Investment Bank (EIB) is for the long term, to be spread over the next 18 months. Our R&D expenditure, including the LRX concept, will not be stuck because of the loan. Tata Motors has got an approval from the EIB for a loan of 340 million, but a mandatory guarantee from the UK government or any private bank is pending. This amount will be used to support JLRs development of sustainable technologies. JLR is currently in the middle of an 800-million (nearly Rs 6,300-crore) investment programme to develop new environmental technologies, which is ongoing, replied Don Hume, director corporate and government affairs, Jaguar Land Rover to a Business Standard questionnaire. Jaguar Land Rover is also working with suppliers, government agencies and universities on a range of future technologies, including hybrid electric vehicles, flywheel energy capture, range extended plug-in hybrid electric vehicles and recycled aluminium, he further added. Expectedly, the gap between the cost of developing a model for Jaguar or Land Rover and a Tata Motors model is huge. To better illustrate this, consider the fact that the expenditure involved for developing a single model of Land Rover was almost twice the amount that was required by Tata Motors to develop the Indica Vista. In fact, Land Rover is pumping in about 400 million (around Rs 3,200 crore) for developing an all-new model on the LRX Concept platform, whereas Tata Motors incurred an investment of about Rs 1,700 crore on developing the Indica Vista. The LRX Concept, a cross-over between a coupe and a sports utility vehicle, was first showcased at last years Detroit Motor Show and will subsequently go into production in due course of time. Apart from the LRX, the development of a military vehicle from Land Rover and a hybrid Jaguar is also underway. The UK government has already granted 27 million (about Rs 200 crore) to Land Rover for the production of the all-new LRX, which will also be the smallest, lightest and most fuel-efficient Land Rover yet. The model also aims to meet the stricter emission norms. The new emission norms, which are set to kick in by 2012 across the European Union, requires new cars to pull down CO2 emissions by 19 per cent. The European Commission wants to reduce the emission from around 160gms per km to 130gms per km by 2012. The LRX Concept demonstrates our intent to reduce tailpipe emissions with a forecast capability of achieving 120gms per km and 60 miles per gallon (100km/4.7litres, or about 21 km a litre of diesel) with a hybrid diesel powertrain. Land Rover has cut levels with each successive model and is developing technologies, including hybrids and lightweight material, to make further improvements, stated the reply from JLR. http://www.business-standard.com/india/news/cash-crunch-wont-affect-our-rd-jlr-chief/362895/
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CARS, SUVs, MUVs Go To Top Lijee Philip The Economic Times (Web Edition) Mumbai: Consumers have begun coming back to car showrooms following the recent cut in interest rates, say top industry officials. But manufacturers say a further excise cut would fuel faster growth in the coming months. New launches in the mass segment and focus on rural markets are expected to drive growth for car companies, currently grappling with single digit growth rates. Maruti Suzuki, Hyundai, General Motors, Honda and Toyota have managed to record steady sales growth, thanks to new launches. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" MARUTI SUZUKI LAUNCHES NEW GRAND VITARA New Delhi: The country's largest carmaker Maruti Suzuki India has launched an advanced version of its sports utility vehicle Grand Vitara, priced at Rs 16.67 lakh-Rs 17.97 lakh (ex-showroom, Delhi).
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COMMERCIAL VEHICLES Go To Top The Hindu Business Line (Web & Print Edition) See this story in: The Economic Times (Delhi Print Edition), Business Standard (Delhi Print Edition) Chennai: Ashok Leylands sales have doubled in June when compared with that of its sales in May. However, June sales this year is 44 per cent down over that in June 2008. For the April-June 2009 quarter, the sales were down 58 per cent to 7,698 units from 18,425 units in the corresponding period last year. A company press shows that the month-on-month growth is supported by domestic and export markets and across all its segments of medium and heavy commercial vehicles and light commercial vehicles. The total sales of medium and heavy commercial vehicle in June in the domestic market were 3,433 against 6,362 in June 2008, with export market sales at 407 (672). In the light commercial vehicle segment, the company sold 50 units (73) in the domestic market and exported 81 units (37). http://www.thehindubusinessline.com/2009/07/04/stories/2009070450941500.htm ASHOK LEYLAND TO HIVE OFF DESIGN ENGINEERING UNIT IANS See this story in: Hindustan Times, Deccan Herald Chennai: India's second largest commercial vehicle manufacturer Ashok Leyland is looking to spin off its design engineering unit Defiance Technologies into a group company, Defiance Tech Ltd, an official has said. Defiance Technologies offers virtual engineering services, ranging from basic design to high-end predictive analysis for auto makers. "The idea is to have related services under one company. The demerger will happen after discussions on the modalities and valuation as Ashok Leyland is a listed company," a company official, who did not want to be named, told IANS. The company would offer its design services under "a single face and brand", which is Defiance, the official said. Post-restructuring, Defiance Tech would undertake a major expansion drive, including entering technology-enabled manufacturing and enterprise solutions areas. Defiance Technologies was formerly Ashley Design and Engineering Services, but was rebranded after Ashok Leyland acquired US-based company Defiance Testing and Engineering in 2007 for around $15 million. V Sumantran, a senior official of the Hinduja group that owns Ashok Leyland, said Defiance Tech has now grown as a "significant global player" in automotive testing and engineering services. "We will now go beyond engineering to technology-enabled manufacturing and enterprise solutions and also serve customers in sectors like aerospace, defence and general manufacturing," Sumantran, executive vice-chairman of Hinduja Automotive Ltd, told reporters in Chennai on Thursday. Apart from enlarging its service offering and the verticals it would service, Defiance Tech is also expanding its geographical presence to new regions like Europe, the Middle East and Asia Pacific Region, company chief executive Subu D Subramanian said. Defiance Tech is currently present in India and the US. Subramanian said the company would increase its headcount by 4,000 to 5,000 over the next three years. http://www.deccanherald.com/content/11526/ashok-leyland-hive-off-design.html VOLVO TRUCKS BAGS ORDER FOR 125 VEHICLES The Hindu Business Line (Web & Print Edition) See similar story in: mint (Web & Print Edition) Bangalore: Volvo Trucks in India has secured an order for 125 trucks which is its biggest order since it was established in the country 10 years ago. A press statement from Volvo Trucks said the Hyderabad-based Vijay Leasing Company has placed an order for 125 Volvo FM trucks. These trucks will be for use in coal and steel mines in southern India. Vijay Leasing already owns 108 Volvo trucks. A company spokesperson declined to give details about the value of the order. Volvo has over 55 customers in the country and has so far sold 5,500 trucks in India, which is the worlds fourth largest truck market. The market size of the premium European market in India in which Volvo has a presence is about 1,500 trucks a year. In India, Volvo Trucks belongs to the premium segment and has secured a place as the leading manufacturer in terms of safety and environmental responsibility, said Mr Pr stberg, member of Volvos Group Executive Management and President of Trucks Asia. He said he is cautiously optimistic about the Indian truck market and views the order as a sign that the vehicle market in India may be on the rise. We are observing positive signs of a recovery regarding light trucks and buses. In terms of heavy trucks, the market is still declining but at a slower rate, Mr Ostberg said. The sale is being conducted through VE Commercial Vehicles, which was a joint venture launched in 2008 between Volvo and Eicher Motors. VE Commercial Vehicles comprises Eicher Motors trucks and buses, and the Volvo Groups truck sales and service network for trucks and buses. http://www.thehindubusinessline.com/2009/07/04/stories/2009070450921500.htm http://www.livemint.com/2009/07/03234850/Volvo-gets-order-for-125-truck.html JNNURM DEADLINE FOR CV PURCHASE MAY BE EXTENDED Chanchal Pal Chauhan The Economic Times (Delhi Print Edition) New Delhi: The governments stimulus package for the revival of the commercial vehicles industry has failed to meet the deadline, June 30, as the state governments could order only about 60% of the sanctioned 15,260 buses due to general elections and procedural delays within the states. The buses, which will cost the exchequer Rs 5,000 crore, were sanctioned under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) for modernising public transport in 58 cities. Senior officials of the ministry of urban development have said that they are considering extension of the scheme by a few months to allow state governments avail the sanctioned funds. The remaining statesUttarakhand, Tripura, Rajasthan, Punjab, Orissa, Mizoram, Madhya Pradesh, Himachal Pradesh, Haryana and Delhiare yet to place their orders to replace their existing public transport fleet with new buses. Sales in the commercial vehicles segment have failed to pick up despite the governments stimulus package that included reducing excise duty, raising depreciation on all trucks to 50% from 15% and a grant of Rs 5,000 crore under JNNURM for purchase of new buses. Truck and bus sales declined 33% to 1.48 lakh vehicles in 2008-09, and the fall intensified as sales dropped 40% year-on-year to 23,204 vehicles during April-May 2009, not helped by the fact that not a single bus has been delivered under the JNNURM order. The bigger order for 5,000 buses has been bagged by Tata Motors, the largest commercial vehicles maker in the country, followed by Ashok Leyland. We have an order of about 3,500 buses of different sizes. These are for fullybuilt, full-length and mini buses with both low floor and semi-low floor specifications. Anticipating the orders, we are increasing our production to deliver these buses within 4-6 months, a senior executive at Ashok Leyland said on condition of anonymity. Besides these top two commercial vehicles makers, supply orders have been bagged by the Indian subsidiary of Swedish bus maker Volvo which will supply vehicles to Navi Mumbai Municipal Corporation. The ministry of urban development had drafted the scheme to provide financial assistance to states governments and their local bodies like municipal corporations to modernise their public transport with new buses. This order for 15,260 buses is the largest in the country, where about 35,000 buses are sold every year. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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2/3 WHEELERS Go To Top Agencies See this story in: The Economic Times Milan: Italian auto company Piaggio, manufacturer of the iconic Vespa scooter, is to start production in India as part of plans to expand its operations on Asian markets, the company said on Friday. E-BIKE MAKER KABIRDASS FILES FOR IPO Pranav Nambiar Daily News & Analysis Bangalore: Electric scooters-maker Kabirdass Motors, seeking clearance from Sebi for an initial public offering in August, plans a pan-India presence post the fund-raising. The group company of Chennai-based auto component player Best Cast IT Ltd is looking to raise around Rs 62 crore. "We will use the IPO money as well as funds provided by our parent company to expand pan-India. We aim to open 250 sales outlets in the next 3 years," said managing director Murali Kabirdass. The company has 30-odd outlets across Karnataka, Tamil Nadu and Andhra Pradesh.
Since its incorporation over 2 years back, Kabirdass has sold around 2,000 units of its five electric scooter models under the brand name of Xite. Four of its models can run up to 25 km per hour, while one can go up to 70 kmph. "Our R&D team is working to build more powerful scooters. Also, we are building higher capacity scooters that can ride up to 200 km on a single charge from the current 70 km," added Kabirdass. Kabirdass said that the vehicle is targeted at college students, senior citizens, and housewives. "With the rising cost of fuel and the ever-increasing pollution levels these environment-friendly vehicles are becoming popular," he added. To make its mark in newer markets, the company is earmarking around Rs 25 crore for branding and promotions. It's also in talks with a European company to work on its designs to suit requirements of all kinds of buyers. There are around 60-odd electric scooters manufacturers in the country, many of whom are smaller players who import most of their parts from China. Around 10,000-12,000 units of these scooters are sold in month in India. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LABOUR STRIFE MAY FORCE PRICOL TO SHIFT PLANTS OUT OF COIMBATORE The Hindu Business Line Coimbatore: Auto component manufacturer Pricol Ltd may be forced to move its production lines out of Coimbatore district if the labour unrest at its three plants continues for another six months. The labour problem had aggravated the production loss caused by the recession and for the first time in three decades, the company posted a loss of about Rs 30 crore during last financial year. It also skipped payment of dividend to the shareholders. Speaking to newsmen here on Friday, Ms Vanitha Mohan, Executive Director, said the labour problem, arising out of the managements refusal to engage with two unions associated with Marxist-Leninist ideologies, had cost the company dear in the past two years. The company, which was clocking an annual growth of 15-20 per cent, should have ideally been an Rs 800-crore company this year but Pricol has stagnated. In 2008-09, Pricols turnover was Rs 614 crore and net loss was Rs 30 crore. She said this has resulted in the company losing customer confidence and some of the OE customers have warned that if the company engages with a Communist union, we wont have confidence that your labour relationship would be good in the long term. Some of the large players in the auto industry want Pricol to either find a solution by easing the two unions out or move all the lines to Pune or Manesar, where Pricol has got spare capacity. Ms Mohan categorically said this is (the facilities in Coimbatore district) our parent organisation and we do not want to move out of Coimbatore. But if the threat of strike looms large, then the customers get nervous. Mr Vikram Mohan, Director, said some of the OE manufacturers, to whom Pricol was the single source for certain component supplies, have developed additional sources of supply as they were concerned about supply disruption. He pointed out that Pricol could not afford to lose business from the auto majors in the country. He said the three plants, which are witnessing varying degrees of labour problems, were working only at a third of their capacity whereas its other plants at Pune and Manesar functioned at 70-80 per cent capacity utilisation. While part of the reason for lower capacity in Coimbatore plants was due to recession, an equally compelling reason was the labour unrest. The companys plants in Maharashtra, Haryana and Uttarakand had extremely conducive labour relationship. The three units in Coimbatore accounted for about 50 per cent of Pricols turnover.Asked how long the Pricol management would wait before taking a call on shifting the production facility, he said if there was no amicable solution in the next six months, we have to start weighing our alternatives because our cash flows will not permit us to survive beyond that. Ms Mohan said while the management was open to the idea of holding talks with the workers, it was against holding negotiations with the two unions that were loyal to an outfit that has been outlawed by the Central Government. Pricol paid wages that were higher than the benchmark figures and even during the time of unrest, it did not retrench any worker (other than for violence related reasons) or resort to lay offs to reduce operational costs. http://www.thehindubusinessline.com/2009/07/04/stories/2009070450871500.htm FEV SETS UP ENGINE DEVELOPMENT CENTRE IN INDIA The Hindu Business Line Pune: The German engineering service supplier FEV Motorentechnik GmbH has set up a technical centre for the development of engines and vehicles at Talegaon under the aegis of its wholly-owned subsidiary FEV India Pvt Ltd. Prof Stefan Pischinger, Chairman and CEO, FEV Group, said that the company, which works for major car and engine manufacturers worldwide, will be in power train development, vehicle integration and electric test systems in India. The main task of the technical centre will be a complete engine development from concept to production, a process that takes three years, he said, adding chassis development and engine testing would also be undertaken. The Talegaon facility also houses six test benches, which can expanded to 18. FEV will develop both auto and non-auto engines, and brought hybrid technology to India with the diesel-electric engine for the Mahindra Scorpio. We have received another large contract to develop a hybrid vehicle, and are also developing an upgraded Alco engine for locomotives for the Indian Railways, Prof Pischinger said. This, FEVs fifth technical centre worldwide, has been set up with a financial outlay of Rs 35 crore. It will cater to both the domestic market as well overseas markets. The number of engineers employed here will touch 70 by the year end. FEV has had a presence in India for the last three years and registered a turnover of Rs 60 crore an annum. With the setting up of the new Centre, higher revenue is expected and come to the Indian arm. http://www.thehindubusinessline.com/2009/07/04/stories/2009070451731700.htm | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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FINANCE & INSURANCE Go To Top Priyanka Vyas The Hindu Business Line New Delhi: Faced with stiff competition from public sector banks, Non-Banking Finance Companies (NBFCs) have been forced to lower their rates on vehicle finance. In the past month or so, NBFCs have brought down interest rates by 100-200 basis points or one-two percentage points, say industry officials. The vehicle financing arms of Tata Motors and Bajaj are also providing interest subvention schemes or cash-back up to a certain amount of the disbursed loan if the customer does not default on monthly instalments. Industry officials say the gap between them and private financiers is now down 100-150 basis points from the 200-300 basis points. Increasing competition Car financing is difficult as competition from public sector banks is increasing. Our rates are now between 12 and 14 per cent, said Mr Ravi Todi, Joint Managing Director at Magma Fincorp. We have reduced interest rates between 100 and 200 basis points from May-end to June. Earlier our rates were 14-15 per cent. Now they are 12.50-13 per cent. Our own ability to raise money has been quite good, said Mr Ramesh Iyer, Managing Director, Mahindra Finance. Interest rates of the vehicle financing arms of Tata Motors have also dropped up to 300 basis points in the last two-three months, according to officials at dealerships. A spokesperson for Tata Motors Finance did not reveal the reduction in the interest rates despite repeated queries from Business Line. But dealership sources say that the prevailing rates are now 12.50 per cent from the earlier 15-16 per cent. We are running a scheme under which we give back customer 2 per cent of the disbursed loan amount back if there is no default on a single equated monthly instalment in the past three years. On four years, the cash-back is 2.5 per cent and five years 3 per cent, said an official with Tata Motors Finance at one of the dealerships. According to Mr Milind Bade, General Manager (Marketing) at Bajaj Auto, its financing arm has for a week now been offering an interest subvention of 6 per cent on its motorcycle XCD. In April, it launched a scheme of 10 per cent rate on models such as Pulsar 150 and 180 cc for almost two months. We come out with select schemes on certain products. It helps to pre-pone sales and a competitive rate acts as an enabler, he said. http://www.thehindubusinessline.com/2009/07/04/stories/2009070450640600.htm | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LUBRICANTS & ALTERNATIVE FUELS Go To Top Sanjay Jog The Financial Express Mumbai: The government's decision to hike auto fuel prices has evoked mixed reactions. Various analysts have claimed the decision will boost Oil & Natural Gas Corporation (ONGC) profit but oil marketing companies (OMCs) will continue to incur losses. However, Morgan Stanley estimates impact on wholesale price inflation will be about 45 basis points. The price increase will have a direct impact of about 21 basis points on wholesale price inflation, which was at -1.14% year-on-year during the week ending June 13. This price rise could have a cascading impact of approximately the same magnitude that could be felt in the next 3-4 months. On the other hand, Citigroup said given that petrol and diesel have a weight of 2.9% in the WPI, the fuel price hike would have a 30 basis point on inflation. It expects inflation to cross 4% levels by year end. On rates, bond yields are likely to stay in the 6%-7% range due to the RBI's continued participation in the borrowing programme. The 6-9% hike in auto fuel prices is the first rise since June 2008. The price hike has come after hefty losses on gasoline and diesel marketing throughout June 2009. Auto fuels are still subsidised even after the price increase. Merrill Lynch said the auto fuel price hike will mean lower subsidy for ONGC and boost its profit while. The total subsidy burden for the country will fall by $4 billion on an annualised basis from $9.4 billion previously to $5.4 billion, assuming crude oil prices average about $70 per barrel for 2009-10. However, Goldman Sachs believes that if upstream companies are asked to bear the entire subsidy for cooking fuels, it would be a major negative surprise for ONGC. The upstream subsidy payout has been lower than cooking fuel losses in all the years so far. It remains skeptical on whether the government would allow ONGC to make more profit at the cost of oil bonds. According to Morgan Stanley, upstream companies--ONGC and GAIL India would be positively impacted as they have to share a lower subsidy burden since the overall subsidy in the system reduces. As far as downstream companies (HPCL, BPCL, IOC) are concerned, it estimates that they would reduce losses on sales of petrol and diesel to Rs 0.5/litre ($1.0/bbl) on petrol and Rs 0.25/litre ($0.9/bbl) on diesel sales. They were earning Rs 4.5/litre and Re 2.25/litre on petrol and diesel, respectively, before the price hike. However, losses on sales of kerosene and LPG would still continue. On the other hand, Goldman Sachs said fuel prices hike was a surprise but it indicates no reform and no oil bonds. It is unlikely that government will go in for decontrol now. According to Morgan Stanley, the new government had promised to take steps toward decontrol of fuel prices in a hundred days after coming into power. The government has taken the first step in 45 days toward decontrol; however, the uncertainty on regulations still prevails as the government has not yet revealed the subsidy-sharing formula. HPCL VISAKHA REFINERY SET TO PRODUCE EURO-COMPLIANT PRODUCTS The Hindu Business Line Visakhapatnam: The Visakha refinery of Hindustan Petroleum Corporation Ltd (HPCL) is gearing up to offer Euro-III and Euro-IV compliant products by April 2010, according to Mr P.A.B. Raju, Executive Director. At a press conference, he said HPCL had spent Rs 2,500 crore for the clean fuels projects to produce petrol compliant with the stringent Euro standards and we will be able to supply such products in Hyderabad and Visakhapatnam by April. The project is in advanced stages of implementation. He said the refinery had achieved crude throughput of over nine million tonnes during 2008-09, even though its capacity was only 7.5 million tonnes. It also produced the highest-ever 3,40,000 tonnes of bitumen during the year and it had processed 20 different types of crude during the year. The first consignment of Reliance crude from the Krishna-Godavari basin was processed during the year. We are expecting to process new crude from Rajasthan by September this year, Mr Raju said. LPG storage facility He said the refinery had completed 10 million hours of safe operations and all measures were being taken to ensure the safety of the plant. The refinery had built a mounded storage facility for LPG at Rs 120 crore and it may be commissioned in three months. This would enhance LPG safety substantially. The HPCL was also storing LPG in an underground cavern. Single buoy mooring The refinery was setting up a single buoy mooring (SBM) at Rs 500 crore to receive very large crude carriers and economise on freight charges. The SBM would be ready by March 2010, he said. The refinery was also setting up a diesel hydro-treating plant at Rs 3,000 crore for de-sulphurisation of HSD to meet Euro-IV requirements. Answering a question on the proposed expansion of the refinerys capacity, Mr Raju said that for the time being the focus was not on expansion, but consolidation and product quality improvement. We have not given up on the expansion proposal. But it will be taken up after sometime, he clarified. On when HPCL would take up construction of the petrochemical complex for which 1,400 acres had been allotted by the State Government in the special economic zone at Atchyutapuram in Vizag district, he said the economic recession had hit the project, as it was capital-intensive. It is a good project, but the time is not opportune for taking it up. It may take some time, he explained. Mr Raju said HPCL had taken 300 acres from the Visakhapatnam port for taking up various works. Of this, 120 acres had been allotted for building a new marketing terminal for its products. It may be ready by 2011, he added. http://www.thehindubusinessline.com/2009/07/04/stories/2009070451511700.htm | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INTERNATIONAL NEWS Go To Top AP See this story in: Hindustan Times A lawyer for GM warned the court that the only alternative to GMs plan would be a liquidation of the companys assets that would have horrific consequences for everyone involved. Attorney Harvey Miller said the government is committed to cutting off funding to GM if the sale is not approved by July 10. That followed testimony on Wednesday from a member of President Barack Obamas automotive task force who indicated the government has no plans to continue funding GM past next on Friday if the sale is not approved by then. Some parties objecting to the sale argued in court that the Obama administration wont allow GM to fail. Essentially the objectors are asking you to play Russian roulette, Miller told Gerber, adding that ignoring the deadline puts the futures of GMs employees, retirees, and creditors all at risk. GMs government-backed plan for a quick exit from bankruptcy protection hinges on the sale of most of its assets to a new entity, allowing the automaker to leave behind many of the costs and liabilities that have made it unprofitable. The Detroit car makers on June 1 filing for bankruptcy protection was the fourth-largest in US history. Harry Wilson, the task force member that testified on Wednesday, said a quick sale is needed, because the government cannot keep sinking billions in tax dollars into the company for an open-ended period of time with no guarantee of success. But on Thursday, Michael Richman, an attorney for a trio of bondholders opposed to GMs plan, told Gerber to call the governments bluff and require GM to restructure itself under bankruptcy protection instead of approving the quick sale of its assets. This would allow the bondholders to negotiate for more in exchange for the debt they hold, he said. Richman said that while the company may be powerless to fight the governments demands, the court can push back to protect the interests of all the companys stakeholders. The trio of bondholders Richman represents hold just a fraction of GMs unsecured debt. One of the members bought his bonds for just 2 cents on the dollar, while the other two spent no more than 20 cents on the dollar for theirs. Miller contended that with the government unwilling to provide funding for a restructuring and no other lenders out there to take their place, the sale plan is GMs only option for survival. He also said an extended stay under court protection hurts GMs ability to attract and keep customers. Richman countered that GMs sales for June, though down about 30 percent, were slightly better than the company expected. Hundreds of parties, including bondholders, unions, state officials, consumer groups and individuals, have filed objections to the sale, threatening to hold up the process. Last month, numerous objections also dragged out rival Chrysler LLCs sale hearing for three days before it was approved by the bankruptcy judge in that case. A group of the automakers bondholders and consumer groups also appealed the sale all the way to the Supreme Court before it ultimately went through and the automaker emerged from court oversight as a new company. As part of the sale plan reached with the auto task force, the US government will get a 60 per cent stake in the new GM in exchange for whats expected to eventually total nearly $50 billion in aid. The Canadian government, which has also contributed billions in aid, will get a 12.5 per cent stake while the United Auto Workers union will take a 17.5 per cent share to fund its health care obligations. Unsecured bondholders receive the remaining 10 per cent. Existing GM shareholders are expected to be wiped out. The remaining pieces of the company, including some closed plants, will become the Old GM and will be liquidated. GM hopes to emerge as a leaner company, less burdened by debt and labor costs as it faces a severe recession that has sapped car and truck sales. Automakers have continued to see sales tumble in the first half of this year. http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=BusinessSectionPage&id=69118abb-0e27-4cc4-abfb-17e3dae6eb17&Headline=GM+awaits+judge%e2%80%99s+ruling+on+sale+plan
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ECONOMY & FINANCE Go To Top The Hindu Business Line Mumbai: Foreign exchange reserves increased by $932 million to $264.584 billion for the week ended June 26, according to figures released in the Reserve Bank of Indias weekly statistical supplement. For the week ended June 19, the reserves expanded by $8 million to $263.652 billion. The reserves are up for the third consecutive week. In the week under consideration, the foreign currency assets increased by $924 million to $253.732 billion. Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies. With an improvement in overall sentiment, there was FII inflow into the country, said a dealer with a private bank. Gold reserves and SDRs remained unchanged at $9.604 billion and $1 million respectively. The reserve position in the IMF increased by $8 million to $1.24 billion. http://www.thehindubusinessline.com/2009/07/04/stories/2009070450690600.htm SENSEX SURGES OVER 250 PTS ON SOFT RAIL BUDGET PTI See this story in: The Hindu Business Line Mumbai: Trading sentiment turned bullish on the Bombay Stock Exchange as the BSE Sensex surged over 250 points in pre-close trading on Friday following a soft Rail Budget amid market participants covering their short pending positions. The Sensex, which remained range-bound in early trade, shot up by 254.56, or 1.74 per cent, closed at 14,913.05 as the Railway Budget kept freight rates and rail fares unchanged. The upsurge was backed by banking and heavy machinery stocks such as HDFC Bank, ICICI Bank and Larsen and Toubro. Similarly, the 50-stock National Stock Exchange index Nifty shot up 75.40 points, 1.73 per cent, to close at 4,424.25. Marketmen said the Railway Budget was in line with market expectations. They said in view of rising trends, brokers were forced to cover their pending short positions created in the last few bearish sessions. http://www.thehindubusinessline.com/blnus/05031901.htm RAILWAYS SPOT EARLY SIGNS OF ECONOMIC RECOVERY PTI See this story in: The Hindu Business Line New Delhi: Spotting early signs of economic revival, the Indian Railways have kept an ambitious revenue targets of Rs 88,419 crore for 2009-10, reflecting an increase of Rs 8,557 crore on the actual realisation in the previous year. In the first quarter (April-June) of the current fiscal, the freight growth was over five per cent. In June itself, it was as much as nine per cent... Prospects are very good. There are signs of economy looking up, Railway Board Member (Traffic) Shri P rakash said. He said the revenue projections for 2009-10 both on account of freight and passenger earnings were not unrealistic. The second half of the 2008-09 saw a decline with the result that the freight target of 850 million tonnes was missed, he said. However, it would not be an easy journey for the Railways in the current year. The year 2009-10 imposes greater challenges, Railway Board Chairman Mr S S Khurana said. The railways get bulk of revenue from the freight traffic which was impacted by the slowdown in the Indian economy on global financial concerns. In reduction of the 'tatkal' charges, the railways are betting on increased volume of business through the sp ot reservation of seats. Mr Prakash said that the tatkal accounted for 12 per cent of total reservation. With reduced charges, we hope to earn more, he said. http://www.thehindubusinessline.com/blnus/31031920.htm Last Financial closing
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Friday, July 3, 2009
Indian Auto Industry Update July 04, 2009
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