| INDUSTRY INTERVIEWS/FEATURES 'JLR to make profits in two years': Ravi Kant CARS, SUVs, MUVs BMW mulls outsourcing hub in India Nissan cuts car prices by Rs 5,000 Volvo cuts prices of sports vehicle XC90 by Rs 4 lakh COMMERCIAL VEHICLES CONSTRUCTION & AGRI MACHINERY Bajaj to launch 100 cc bike on July 27 Vibgyor Group to invest Rs 800 cr in new ventures Turkey to ease two-wheelers' import duty; India to benefit COMPONENTS | ALLIED INDUSTRIES Century Tex restarts tyre yarn plant FINANCE & INSURANCE Bio-diesel unlikely to make headway despite Budget sops INTERNATIONAL NEWS GM sale cleared, path opens to exit bankrupcty Volvo Cars recalls 8,500 green cars China's June auto sales up 36.5 percent ECONOMY & FINANCE Inflation rate stays negative; food still costly India Inc's capex up 21.6% despite slowing profit
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| LIQUIDITY CRUNCH EATS INTO AUTO SUPPLIERS PROFITS: FITCH The Financial Express (Web & Print Edition) New Delhi: Domestic auto suppliers, who had embarked on leveraged acquisitions to augment capacities, have been exposed to a significant liquidity crunch due to the global slowdown and this has taken a toll on their finances, according to Fitch. The agency believes that the impact from auto industry performance in the domestic market could also have an over-reaching impact on the credit profiles of most component manufacturers in India. According to the rating agency, the revenues of Indian auto suppliers could be impacted by the Chapter 11 filing by leading automakers, Chrysler and General Motors. Also, with a large number of global auto suppliers also under bankruptcy, it has resulted in decline in revenue of the country's auto component manufacturers. Hence, there is concern about the prospects for recovery in the auto components sector in the short-term and Fitch continues to maintain a negative outlook on the industry. However, the operations of Indian subsidiaries of global auto suppliers may not be affected as these have been kept out of the reorganisation process, Fitch added. Consequently, while the sector has witnessed cutbacks in capex plans, the non-discretionary capex to support new launches of the original equipment manufacturers and technology upgrades is likely to continue, it says. Furthermore, the reduction in export revenues along with depreciation of the rupee against the US dollar and the yen has led to increased net outflows in servicing foreign currency debt and trade commitments. Another concern highlighted by Fitch concerned the deteriorating working capital situation as a consequence of higher inventories and stretched receivables. The working capital pressures have started to ease with the clearing-off of inventories and improvement in liquidity support from banks and market instruments. Fitch believes that the level of production activity in the auto components industry is essentially going to be guided by the pace of revival in end-consumer sentiment. Fitch notes that cumulative sales of passenger and commercial vehicles remained sluggish during the first half of 2009, though the situation has improved from the levels during July-December 2008. The marginal growth in passenger vehicle sales during 2009 was derived from the semi-urban and rural areas of the country, where spending power is primarily dependent on the monsoon. However, as there are concerns about delays in monsoon and its subsequent impact on agricultural production, it may impact demand for automobiles, Fitch says. http://www.financialexpress.com/news/liquidity-crunch-eats-into-auto-suppliers-profits-fitch/487396/ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INTERVIEWS/FEATURES Go To Top Tata Motors may have shocked the market with a larger-than-expected loss of Rs 2,500 crore on a consolidated basis, but the company is confident of turning things around. Non-executive vice-chairman Ravi Kant told ET NOW, that the company should be back on track soon. Excerpts: withdrew all of a sudden. October-December quarter was bad. Since then month-on-month we have been improving. All the segments have more or less turned back to normalcy, except the heavy-truck segment. It is also improving, but its slow. These are two different entities in two different markets. There can be a lot of diffusion of skills residing in JLR and Tata Motors. We have already begun that in the areas of purchasing, upgrading quality, reliability and workmanship. Over a period of time, both companies will see the value that they can absorb from the other.
Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" 'JLR TO MAKE PROFITS IN TWO YEARS': RAVI KANT See this story in: The Indian Express (Web Edition), Business Standard (Delhi Print Edition) New Delhi: Tata Motors has said its British luxury auto brands Jaguar and Land Rover, which have posted over Rs 1,700 crore annual losses, will turn profitable in two years. Company's Vice-Chairman Ravi Kant said the acquisition of the two marquees was not over-priced. "You can't say that the price we paid for was over-priced. In fact out of USD 2.3 billion that we paid for it, USD 600 million went to the pension fund. So Ford actually got only USD 1.7 billion. So I don't think we over pay for it," Kant told a news channel. He said the two iconic brands would come back on track and would start making profits again within two years. "I am quite sure and very positive that in two years time, when this company starts making profits, then we can have this discussion again and find out whether we over paid for the acquisition of this company," Kant said. JLR was officially launched in India last month. At the end of 2008-09, income from JLR sales stood at Rs 39,270.70 crore, while the loss from its operations (before interest, exceptional items and tax) stood at Rs 1,777.35 crore. Tata Motors too suffered a net loss of Rs 2,505.25 crore in 2008-09 mainly on account of JLR. The Indian auto major had acquired JLR last year for USD 2.3 billion from the US car maker Ford. To fund this, Tata Motors had taken USD three billion bridge loan. http://www.indianexpress.com/news/jlr-to-make-profits-in-two-years/487332/ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CARS, SUVs, MUVs Go To Top The Economic Times (Web & Print Edition) See similar story in: The Hindu Business Line (Web & Print Edition), Hindustan (Web Edition), The Statesman (Web Edition), Rediff India (Web Edition), mint (Web & Print Edition) Kolkata: German auto major BMW may once again look at the possibility of launching its Mini Hatchback in India by December 2009. The Mini would be imported and would carry a price tag of around Rs 20 lakh for the base model. We had shelved plans of launching the mini hatchback last year when the market started turning bad since we saw that the risks involved in launching it were more than the rewards we would be able to reap afterwards. http://www.thehindubusinessline.com/2009/07/10/stories/2009071051600300.htm http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=260483 http://business.rediff.com/report/2009/jul/09/bmw-skeptical-of-launching-mini-in-india.htm http://www.livemint.com/2009/07/09220723/BMW8217s-Mini-not-coming-to.html BMW MULLS OUTSOURCING HUB IN INDIA Deccan Herald (Web Edition) Kolkata: The deal, which is at its final stages, could see India producing BMW components like castings and forgings as per specifications required for BMWs global operations. http://www.deccanherald.com/content/12767/bmw-mulls-outsourcing-hub-india.html NISSAN CUTS CAR PRICES BY RS 5,000 PTI See this story in: The Economic Times (Web Edition), The Hindu Business Line (Web & Print Edition), The Hindu (Web & Print Edition) New Delhi: Car maker Nissan Motor India on Thursday cut the prices of its products by Rs 5,000 following the Budget's proposal to reduce the excise duty on big cars. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://www.thehindubusinessline.com/2009/07/10/stories/2009071051970200.htm http://www.hindu.com/2009/07/10/stories/2009071055421400.htm VOLVO CUTS PRICES OF SPORTS VEHICLE XC90 BY RS 4 LAKH The Economic Times See this story in: The Statesman (Web Edition), The Hindu Business Line (Delhi Print Edition) New Delhi: Luxury car maker Volvo Car India on Thursday said it has cut the prices of its flagship sports utility vehicle XC90 by Rs 4 lakh to boost sales amidst the current economic downturn. The XC90 D5 will now come at Rs 42.5 lakh, while the XC90 32 and XC90 V8 would be available for Rs 43.5 lakh and Rs 49.5 lakh, respectively. "In lieu with current economic scenario and to provide luxury at right price, the prices for the flagship model Volvo XC90 SUV has been reduced by 7-8.5 per cent with effect from July 9," Volvo Car India said in a statement. The company also announced opening of new dealerships at Pune and Chennai, taking the total number of dealerships in the country to seven. "The expansion of our dealer network signals the importance of the Indian market to Volvo Cars. We believe that India holds tremendous potential for our brand and want to make sure that we fully capitalise on the opportunities available...," Volvo Car India MD Paul de Voijs said. Recently, other car makers including Hindustan Motors, Ford India, Honda Siel Cars India and Hyundai Motor India had announced price cuts of Rs 6,000 on some of their models following additional duty excise reduction announced by Finance Minister Pranab Mukherjee during the Budget on July 6. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=260479 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COMMERCIAL VEHICLES Go To Top Shobhana Subramanian Business Standard (Compass) Mumbai: If Ashok Leyland Limited's (ALL) despatches during the June 2009 quarter down by about 58 per cent appeared somewhat weak it was because the management took steps to clear inventories with dealers, reportedly around 3,000 vehicles at the start of the quarter, bringing them down to nearly zero. That done, the company is hoping to grow volumes for trucks in single digits this year, while it has a much higher target of 15-20 per cent for buses. The improved outlook resulted in the stock moving up by 8 per cent on Thursday. Indeed, ALL should not have a problem achieving the targeted volumes for buses having snapped up orders for 4,800 of the 9,500 buses ordered so far under JNNURM, which envisages the modernisation of urban transport. However, industry watchers are circumspect about how many trucks the Hinduja-owned firm can sell this year and believe ALLs volumes would remain flat compared with 2008-09 or even fall somewhat. ALL actually lost market share last year with its key market in the South seeing very weak demand. Revenues this year are expected to be around Rs 6,200 crore over the Rs 5,981 crore posted last year. Flat revenues notwithstanding, there should be a sharp jump in the operating profit margin (opm) this year with an increase of about 250-300 basis points. The expansion would be driven by the sharp fall in the prices of several key inputs such as steel, copper, lead and rubber. Also, prices of vehicles were increased by about 2 per cent recently. Last year, the company posted an opm of 7.8 per cent, down 240 basis points, as a result of which operating profits fell by 40 per cent. The management has also been trying to improve its working capital management and should be able to free up close to Rs 500 crore during the year. What will continue to hurt the bottom line though is the outgo on interest, estimated at close to Rs 100 crore. Thats despite the fact that ALL has pruned its capital expenditure by about Rs 1,000 crore to Rs 2,000 crore to be spent over the next three years. Last year, it spent close to Rs 1,000 crore, most of which went towards setting up the Uttarakhand plant. http://www.business-standard.com/india/news/ashok-leyland-notto-speed/363474/ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONSTRUCTION & AGRI MACHINERY Go To Top | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/3 WHEELERS Go To Top Swaraj Baggonkar Business Standard Mumbai: In the years that the economy boomed and consumers had more money to spend, two-wheeler makers lured buyers with performance and presence. Now, the focus is back on fuel efficiency. Bajaj Auto will launch a 100cc bike, its first in this segment in more than three years, on July 18. Christened Discover 100, it will be priced between Rs 40,000 and Rs 45,000, according to a company executive. After launching the Platina 100, its other 100cc bike, three years ago, the company had announced that no further development would be made in this segment. However, as two-thirds of the Indian two-wheeler market is driven by the 100cc segment, Bajaj has decided to make a re-entry with the Discover 100. The appeal of the bike, according to company executives, will lie in its engine, which is aimed to deliver more than 80 km per litre of petrol under actual riding conditions. The company has pegged the bike as Indias most fuel-efficient 100cc motorcycle. According to industry experts, the Splendor and CD Dawn/Deluxe models from Hero Honda deliver 65-70 km to a litre. However, both models of Hero Honda enjoy the strongest brand recall among two-wheeler buyers. The Discover 100 of Bajaj Auto is looking to challenge the dominance of Hero Honda, which sells almost nine out of every 10 motorcycles in the 100cc segment. With an eye on retaining its leadership on the 7.4 million, domestic two-wheeler market, Hero Honda will revamp its product line-up with nine model launches this year, of which two will be completely new models, while the rest will be face-lifts. Rajiv Bajaj, managing director, Bajaj Auto, said: We have slotted this bike under the long-distance biking category, for its superior mileage, where an average rider rides for 50 km a day. There have been 100cc bikes earlier as well, but somehow we always fell short of the competitors. However, the success of this bike will rely on its fuel efficiency, which will be better than any other Indian bike. Although the bike will play in the economy segment (100cc), it will come at a higher price than other models there, such as its own Platina, priced at Rs 35,000. This will be the companys 10th production model hitting the market. I have always maintained that we will continue to produce 100cc bikes as long as there is demand for it. We had never said we will completely exit a segment which controls two-third of the two-wheeler market, added Bajaj. This new bike will be based on the Discover 135 (a mid-segment 135cc bike) platform, but will have a new DTS-Si engine called version 2.0. Mechanical details like length, width and height of the new bike will be similar to the Discover 135, but new graphics and fascia will separate it from its predecessor. The company is confident of growing its overall sales, including exports, by 14-18 per cent this year to 2.5-2.6 million units, from its last years total of 2.19 million units. Its new two-wheelers and three-wheeler launches are expected to revive growth for it, although most of its profitability is driven by the Pulsar range of premium bikes. We are confident that the current financial year will be the best-ever year for us both in terms of profitability and sales numbers. We will surpass the total of not only last year, when there was a dip of 10 per cent, but the year before that, too, when we sold about 2.45 million units, said Bajaj. http://www.business-standard.com/india/news/fill-it-shut-it-remember-it/363505/ BAJAJ TO LAUNCH 100 CC BIKE ON JULY 27 PTI See this story in: The Economic Times, mint, The Times of India, Hindustan Times, Daily News & Analysis Mumbai: Bajaj Auto on Thursday said it will launch its 100 cc bike named 'Discover' on July 27. Its commercial production will begin on July 17. "Our 100 cc 'Discover' will compete with Splendor and Passion," Bajaj Auto two wheeler CEO, S Sridhar said. http://www.livemint.com/2009/07/09215647/Bajaj-Auto-to-launch-100cc-bik.html http://timesofindia.indiatimes.com/Business/Bajaj-to-drive-100cc-bike-again/articleshow/4760147.cms http://www.dnaindia.com/money/report_bajaj-auto-rediscovers-100cc_1272684 VIBGYOR GROUP TO INVEST RS 800 CR IN NEW VENTURES Virendra Pandit The Hindu Business Line Ahmedabad: The Kolkata-based Vibgyor Group, which recently launched the 100-cc indigenously-made motorcycles with plans to invest Rs 660 crore in automobile business, is now diversifying with investments of Rs 800 crore more in the next two to three years, a company official has said here. We are now planning to set up a cement plant at Badjora in West Bengal and also have plans to diversify into information technology, film-making, real estate, and having our own news channel Key-TV. Together, we would be investing around Rs 800 crore in these initiatives, Mr Mrigen Banerjee, Vice-President, Vibgyor Vehicles, told Business Line after launching the 100-cc motorcycle Gallop in the Gujarat market. The vehicle, endorsed by cricketer Saurav Ganguly, was launched in Kolkata in April and in Lucknow a few days ago. The group would finance its projects through 20 per cent internal accruals and 80 per cent borrowings. Automobile business For film and TV projects, the company has acquired 400 bighas in North Bengal. Mr Banerjee said the Rs 660-crore investment earmarked for automobile business included expenditure at the existing plant at Dhulagori (Howrah),West Bengal, for manufacturing two-wheelers and projects for other motorcycle assembly plants in Lucknow, Hyderabad and Gujarat. The Gujarat plant will have an investment of around Rs 50 crore and provide employment to 1,000 people. The company also plans to set up a PVC pipe plant in Gujarat and enter the real estate business as well here. Gallop, which is priced at Rs 29,990 and has a mileage of 75-80-km a litre is being targeted at the youth and those earning a minimum of Rs 8,000 a month, who constitute nearly a fourth of the 100-cc bike-owners. Of the 100 lakh motorcycles sold annually, the company expects to capture 5 per cent of the market with sales of five lakh bikes by 2011. Its current manufacturing capacity is 300 vehicles a day. It started exporting Gallop to Bangladesh in June. In October, Vibgyor will launch its 150-cc bike Shark and 125-cc bike Hunter. By the end of the current fiscal, Vibgyor will have a 521-strong dealer network and another 1,200 sub-dealers across the country. http://www.thehindubusinessline.com/2009/07/10/stories/2009071051580300.htm TURKEY TO EASE TWO-WHEELERS' IMPORT DUTY; INDIA TO BENEFIT PTI
The Government of Turkey has informed the World Trade Organisation that it has begun the process of reviewing the safeguard measure that was levied against imports of motorcycles (including mopeds) and cycles in 2006. "Imports of the product concerned dropped by 95 per cent in 2007 and by 29 per cent in 2008. Besides, the ratio of imports to domestic production decreased throughout the period the safeguard measure has been applied," Turkey told the WTO, which in turn notified the same to the missions of different countries, including India. As per official figures, India's exports of two-wheelers to Turkey in 2006-07 was worth $5.44 million, which dropped by 27 per cent to $3.94 million the following fiscal. "We hope Turkey will drop the duty after the review," Engineering Export Promotion Council Executive Director R K Maitra added. In 2006, Turkey had initiated safeguard investigations on the imports of certain two-wheelers on grounds that soaring shipments were hurting the domestic industry. In 2003, 2004 and 2005, imports had grown by 464 per cent, 608 per cent and 165 per cent, respectively, according to data provided by the country. http://www.business-standard.com/india/news/turkey-to-ease-two-wheelers/-import-duty-india-to-benefit/67214/on | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COMPONENTS Go To Top R.Y. Narayanan The Hindu Business Line Coimbatore: Relocating the manufacturing facilities of auto component maker Pricol Ltd from Coimbatore district will not only have a serious impact on the future of 130 SSI units (supplying components) in and around Coimbatore, employing around 5,000 workers, but also on the investment psyche in the region itself, according to industry circles. The value of components sourced by Pricol from its vendors in the region is about Rs 260 crore. (Pricols last years turnover was Rs 614 crore and it has plants in Pune, Gurgaon and Pantnagar, apart from three plants in Coimbatore district.) If the relocation becomes a reality, many suppliers would have to relocate to where Pricol shifts its production facilities at a significant cost or hunt for alternative clients, which would be difficult in these times of slowdown. Ms Vanitha Mohan, Executive Director, Pricol, said in the last two years, the company has shifted about 20 per cent of production of critical components to its other facilities. Some facilities shifted Mr Vikram Mohan, Director, said at the behest of some of the vehicle manufacturers, Pricol had moved certain production facilities such as oil pumps out of Coimbatore to Pune and Gurgaon. But the company tries to keep as much production as possible in the Coimbatore units because this is our home base, all our suppliers bases are here, our entire vendors are here. Mr Mohan said the 130 vendors directly employed about 3,500 workers and there were 1,500 indirect employees working for these units. The State Government earned Rs 16 crore last year as sales tax from them. At present, Pricol ships some of the components from here to its other locations at an extremely high logistics cost. The company cannot afford to keep it going for ever, he said. The impact of losing Pricol as a client would be severe since to 75 per cent of the vendors, Pricol is the sole customer. Worrisome trend Mr K. Ilango, President, Coimbatore District Small Industries Association (Codissia), says Pricol is known to take care of its employees and what is happening there is a worrisome trend for all of us and the development is very scary. Mr Jayakumar Ramdass, President, the Southern India Engineering Manufacturers Association (Siema), Coimbatore, said it was not merely the business interest of vendors that was at stake. The future of workers would become uncertain and suppliers of commodities to these vendors would lose a huge chunk of business. http://www.thehindubusinessline.com/2009/07/10/stories/2009071051951700.htm INDIA MOTOR PARTS DECLARES INTERIM DIVIDEND The Hindu Chennai: India Motor Parts & Accessories has informed BSE that the board of directors of the company at its meeting held on Thursday, has recommended an interim dividend of Rs. 12 per share of Rs. 10 face value (120 per cent) for the financial year ended March 31, 2009, on the paid-up capital of Rs. 4.16 crore. http://www.hindu.com/2009/07/10/stories/2009071055401400.htm MHBI UNIT COMES UP AT NALAGARH Nalagarh: MHB Filter India (MHBI) - a joint venture between German original equipment manufacturer Mann+ Hummel Group and global technology supplier Bosch, will ramp up its production capacity to 80 lakh automotive filters by the end of December. The company will begin exports from its facility at Tumkur in Karnataka this year. Talking to TNS here after inaugurating its new manufacturing facility, Josef Parzhuber, chairman of MHBI, said with the commissioning of the companys new facility here the company would be able to produce 80 lakh filters by the end of this year. This year, we hope to manufacture 16 lakh filters in this plant and increase the production at the Tumkur plant from 40 lakh filters to 70 lakh automotive filters, he said. Parzhuber said the automotive filter market in India was estimated to be worth Rs 800 crore. The market is growing rapidly and is expected to double in the next five years. We will be ramping up our production during this time and hope to be amongst the three largest players in the Indian market, he said. He said in order to increase their market share, Mann+ Hummel would be getting in new technology, especially in the injection systems, while Bosch will be using its marketing skills and reach to sell these products. One of the reasons why we have decided to set up a factory in North India is to increase our market reach here. This will also help us save on logistics for our client base in Gurgaon, Delhi and other parts of North India, he said. Parzhuber said that while the Tumkur plant would be primarily manufacturing original equipment, the Nalagarh plant would be manufacturing after market filtration range. http://www.tribuneindia.com/2009/20090710/biz.htm#13 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ALLIED INDUSTRY Go To Top PTI See this story in: Business Standard New Delhi: The government has cleared a Rs 11,000-crore foreign direct investment (FDI) proposal of French tyre giant Michelin to set up a manufacturing facility in Tamil Nadu. The Foreign Investment Promotion Board (FIPB) had cleared the proposal under which Compagnie Financiere Michelin (CFM) plans to set up a wholly-owned subsidiary to make radial tyres, tubes and ancillary tyre-related products at the plant, according to an official release. The company has proposed an investment of Rs 4,000 crore over a period of seven years and intends to make a further infusion of Rs 7,000 crore over a period of three years after the completion of the initial funding, depending on the progress of the project and demand of the tyre market. A Michelin spokesperson said the facility will go on stream within the next three years. The group has decided to invest in a manufacturing facility to produce truck radial and off-the-road tyres in India. Considering the stage of discussions, we hope that this plant will start functioning in three years time, the official added. Michelin considers India as a strategic market and key pillar for its growth in the future, the spokesperson said. The tyre major has formed a new entity Michelin India Tamil Nadu Tyres Pvt Ltd with paid up share capital of Rs 1 lakh. Currently, two individuals Rupa Sarah Jacob and R Ravichandran hold the entire 10,000 shares worth Rs 1 lakh. CFM would now acquire the entire stake and make it a wholly-owned subsidiary of the tyre giant. http://www.business-standard.com/india/news/govt-clears-michelins-rs-11k-cr-fdi-proposal/363512/ CENTURY TEXESUTARTS TYRE YARN PLANT Dow Jones The Hindu Business Line
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| FINANCE & INSURANCE Go To Top | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OIL, LUBRICANTS & ALTERNATIVE FUELS Go To Top PTI See this story in: Financial Express, The Tribune, Daily News & Analysis , The Indian Express, The Telegraph, The Statesman, The Pioneer New Delhi: The government will roll back the Rs 4 a litre hike in petrol prices and Rs 2 a litre increase in diesel rates if international crude oil prices stabilise between $50 and 60 a barrel, oil minister Murli Deora said. Yes, we will cut prices if crude prices stabilise for sometime between $ 50 and 60 per barrel, he said here. The government had last week raised petrol and diesel prices citing spike in international crude oil prices to $70 a barrel. International rates have eased since. The basket of crude oil India buys was at $61.58 a barrel on Wednesday but the average for July was $65.34 per barrel. The July average was certainly lower than $69.12 a barrel average price of Indian basket of crude for June. Deora said the price rise was unavoidable as India was dependent on imported crude oil to meet 75%of its domestic oil needs. Indian Oil, Bharat Petroleum and Hindustan Petroleum were projected to lose Rs 4,870 crore in revenues every month on selling petrol, diesel, domestic LPG and kerosene below the cost. To cover this (revenue loss), the retail prices were required to be increased by Rs 6.94 per litre on petrol, Rs 4.11 a litre on diesel, Rs 96.68 per LPG cylinder and Rs 16.01 per litre on kerosene, Deora said. However, the government increased the price of petrol only by Rs 4 per litre and of diesel by Rs 2 a litre. The price hike had been necessitated as international prices of crude oil had jumped 75% from $40 a barrel in December to $70 per barrel. The monthly revenue loss on sale of petrol and diesel came to Rs 2,800 crore and urgent cash flows were needed to keep the capital expenditure plans on track, Deora said. The price increase will reduce the revenue losses by about Rs 13,000 crore during 2009-10. Even after this increase, oil PSUs are projected to suffer a burden of around Rs 27,000 crore on the sale of petrol and diesel, he said. Deora said the government has not increased the retail price of kerosene and diesel and a projected Rs 30,000 crore subsidy burden would have to be borne by the government on this account. He said since 2003-04, the government has issued oil bonds worth Rs 142,203 crore to oil marketing companies IOC, BPCL and HPCL to keep retail selling prices below the international rates. Upstream firms like ONGC contributed another Rs 101,285 crore while the three retailers absorbed Rs 55,734 crore of losses instead of passing the rise in crude oil prices to consumers. http://www.tribuneindia.com/2009/20090710/biz.htm#9 http://www.dnaindia.com/money/report_government-to-roll-back-fuel-prices-if-crude-rates-dip_1272579 http://www.indianexpress.com/news/govt-to-roll-back-fuel-prices-if-crude-rates-dip/487331/ http://www.telegraphindia.com/1090710/jsp/business/story_11218848.jsp http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=260480 http://www.dailypioneer.com/188088/Govt-to-roll-back-fuel-prices-if-crude-rates-dip.html BIO-DIESEL UNLIKELY TO MAKE HEADWAY DESPITE BUDGET SOPS Manu P. Toms The Hindu Business Line Mumbai: The Budget has had some sops for bio-diesel in terms of complete excise duty exemption for petro-diesel, which is blended with bio-diesel and a slash in Customs duty from 7.5 per cent to 2.5 per cent on its imports. However, in the absence of a clear roadmap for implementation, the Governments attempt to popularise the use of bio-diesel may not bear fruit, according to automobile manufacturers and bio-diesel producers in the country. The Budget announcements should make bio-diesel blending more attractive but implementation is a big question, said Mr Dilip Chenoy, Director General, Society of Indian Automobile Manufacturers (SIAM). Priority list From the viewpoint of automakers and bio-diesel producers, there is again a divergence in their priority list. The former prefer that it be available across the country while bio-diesel producers want auto makers to recommend customers the use of bio-diesel in their vehicles so that they can expand production and dispensing network accordingly. Vehicle manufacturers typically specify the type of fuel and lubricant to be used in their engines to maximise performance and warranty. Most engines in India do not recommend bio-diesel blended fuel up to 20 per cent blend. This will hamper the Governments objective to popularise its use. Engine manufacturers, oil marketing companies and other related agencies need to resolve this issue, said Mr Sandeep Chaturvedi, President, Biodiesel Association of India (BAI). We have always been open to the use of bio-diesel. There is no technological issue as far as vehicle manufacturers are concerned. However, we would like to start with five per cent blend and this should be available on a sustainable basis across the country, said Mr K.K. Gandhi, Executive Director (Technical), SIAM. Availability Availability of bio-diesel is a bigger issue. According to Mr Chaturvedi, of the 1.2 million tonnes installed processing capacity in the country, only five per cent is used. An estimated 55 million hectares of wasteland are available to cultivate jatropha, the main crop from which biodiesel is extracted. However, only a little over one-tenth of this land is being used. Companies such as Tata Motors, Mercedes-Benz and Mahindra & Mahindra have tested bio-diesel in their vehicles. Our vehicles have run over one lakh kilometres on bio-diesel, said Mr Suhas Kadlaskar, Director, Corporate Affairs, Mercedes-Benz. Tata Motors and IndianOil started the use of bio-diesel blended high speed diesel (HSD) on 43 buses in Pune in 2005. Mahindra & Mahindra also has had trials of bio-diesel run sport-utility vehicles and tractors. Nearly 2,000 vehicles, mainly buses and trucks, operate on bio-diesel blended diesel in India. http://www.thehindubusinessline.com/2009/07/10/stories/2009071051500300.htm Reuters See this story in: The Tribune London: Oil reversed early gains and dropped below $60 a barrel on Thursday as a downturn in US equities added to pressure from high US inventories and persistent concerns about the timing of any economic recovery. US light crude for August delivery fell 45 cents to $59.69 a barrel - on course for the seventh straight day of declines. London Brent crude eased 11 cents to $60.32 a barrel. Earlier on Thursday, US crude prices had rebounded as high as $61.62 after a 4-per cent fall on Wednesday that meant oil was more than 15 per cent lower so far in July. http://www.tribuneindia.com/2009/20090710/biz.htm#10 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INTERNATIONAL NEWS Go To Top PTI See this story in: The Economic Times, Business Standard New Delhi: The bankruptcies of leading American car makers Chrysler and General Motors coupled with depreciation of the rupee could adversely impact the prospects of the Indian auto suppliers, says a report. GM SALE CLEARED, PATH OPENS TO EXIT BANKRUPCTY Agencies See this story in: The Economic Times Detroit: The path is now clear for General Motors to leave bankruptcy protection in record time as a leaner company that is better equipped to complete in a brutal global auto market. VOLVO CARS RECALLS 8,500 GREEN CARS AP See this story in: The Economic Times Stockholm: Ford-owned Volvo Cars on Thursday said it is recalling around 8,500 green cars, mainly in Sweden, due to problems with the fuel-pump. Company spokesman Stefan Elfstrom in Goteborg said the recall concerns the Volvo V70 and Volvo S80 models of 2008 and 2009. CHINA'S JUNE AUTO SALES UP 36.5 PERCENT Agencies See this story in: The Economic Times Beijing: China's auto sales soared 36.5 per cent in June from a year earlier to 1.14 million vehicles, boosted by government incentives, an industry group said on Thursday. http://economictimes.indiatimes.com/News/International-Business/Chinas-June-auto-sales-up-365-percent/articleshow/4756944.cms | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ECONOMY & FINANCE Go To Top PTI See this story in: The Hindu Business Line Mumbai: After wide fluctuations, the Bombay Stock Exchange benchmark Sensex on Thursday ended 11 points down amid renewed doubts about the prospects of a swift global economic recovery. The Sensex, which had lost over 400 points in the previous day's tr ading, was down another 11.69 points, or 0.08 per cent, to 13,757.46, after moving between 13,879.18 and 13,643.97. However, the 50-share National Stock Exchange index Nifty edged up by 2.05 point to 3,080.95. It shuttled between 4,114.90 and 4,039.85 points during the day. Investors were more cautious at the beginning of the quarterly results season, and refrained f rom enlarging their positions. A steep fall in consumer durables, capital goods, information technology, bank and realty sector stocks mainly kept the market unpredictable. Moderate gains in stocks of metals, healthcare and FMCG saved the market from a ny major fall. http://www.thehindubusinessline.com/blnus/05091901.htm INFLATION RATE STAYS NEGATIVE; FOOD STILL COSTLY The Hindu Business Line New Delhi: Inflation continued in the negative for the fourth week in succession, even as consumers continue to bear the brunt of high inflation in food products. Food inflation The annual Wholesale Price Index-based inflation rate fell 1.55 per cent for the week ended June 27, compared with the previous weeks annual decline of 1.3 per cent. Inflation in the food index, however, continued at 8.9 per cent for the second week in running, with double digit inflation seen in cereals, pulses, vegetables, tea, sugar, and common salt. According to data released by Ministry of Commerce and Industry, the year-on-year rate of inflation continued negative for the fourth week in succession, ensuring that for the whole month of June 2009, inflation has been below zero. During June 2008, inflation ranged from 11.7 12 per cent. The official WPI for All Commodities for the latest reported week rose by 0.04 per cent to 234.7 points from 234.6 points for the previous week. Fuel and power In primary articles, annual inflation declined to 4.8 per cent in the latest reported week from 5.4 per cent in the previous week, due to the decreased inflation in non-food articles at (-) 3.8 per cent, from (-) 1.9 per cent in the earlier week. Inflation in the other two sub-groups remained stable, recording 8.5 per cent in food articles and 4.4 per cent in minerals. In fuel and power, year-on-year inflation held steady at (-) 12.4 per cent in the current week. In manufactured products, inflation fell to 0.2 per cent in the current week, from 0.5 per cent in the week ended June 20, following lower or stable rates in most sub-groups, except non-metallic mineral products and machinery and machine tools, where negative inflation eased marginally. In the face of the near zero inflation rate in the commodity group, items recording two digit inflation are malt liquor, jute, hemp and mesta textiles and pesticides. For the week ended May 2, the final WPI for All Commodities stood at 233.9 points as compared to 231.6 points and annual rate of inflation based on final index, calculated on point to point basis, stood at 1.48 per cent as compared to 0.48 per cent. http://www.thehindubusinessline.com/2009/07/10/stories/2009071051870700.htm INDIA INC'S CAPEX UP 21.6% DESPITE SLOWING PROFIT BG Shirsat Business Standard Mumbai: India Incs appetite for growth continues unabated, but at a slower pace, with spending on capital expansion and investments rising a healthy 21.6 per cent in the financial year 2008-09, compared with 38.5 per cent in 2007-08. In absolute terms, capex spending has risen by Rs 228,000 crore, despite declining profits and a 37 per cent decline in fund flow from financial markets in 2008-09. The capital-intensive sectors of India Inc do not find the current environment a deterrent to push ongoing expansion and so they continue with capex plans. The study looks at 323 listed companies whose capex spending data for 2008-09 is available. The sample is reasonably representative, as it accounts for half of the capex spent by the corporate sector in 2007-08. The automobile sector leads the growth rate chart with a 66 per cent rise in capex spending, thanks to Tata Motors which invested Rs 12,336 crore for acquiring Jaguar Land Rover. Oil and gas led the growth in absolute terms, accounting for a fourth (Rs 56,529 crore) of total capital spending. Reliance Industries leads, spending Rs 36,927 crore, mostly for expansion of oil & gas and the petrochemical business. The telecom sector continues its expansion drive, with Bharti Airtel, Idea Cellular and Reliance Communication (RCom) together investing Rs 39,480 crore (up 43.7 per cent) on expansion of mobile, broadband and wireless services. RCom spent Rs 13,390 crore more on wireless services and around Rs 5,000 crore on global and broadband services. Bharti spent Rs 8,533 crore and Idea spent Rs 6,800 crore on mobile services. The companies thrust on generating power for captive consumption and for distribution increased substantially, with an investment rise of Rs 22,633 crore or 44.2 per cent. NTPC, Tata Power and Reliance Infra, as well as steel and infrastructure firms such as Jindal Steel & Power, GMR Infra, GVK Power & Infra and Lanco Infratech are putting fresh capital in power projects. The capital goods and engineering sector pumped in Rs 21,172 crore (up 38.8 per cent), with Larsen & Toubro and Jaiprakash Associates investing Rs 9,000 crore each. With rising demand and prices, cement firms, including Grasim, UltraTech Cement, Dalmia Cement and Binani Cement, together spent Rs 7,015 crore on expansion of capacity. The consumer goods companies, including Hindustan Unilever and ITC, have pumped fresh capital in personal care and FMCG products. Automobiles, auto ancillaries, mineral, pharma, sugar and textiles firms have not done appreciable capital expansion. According to Nomura Financial Advisory and Securities India, though the global sectors, such as steel, petrochemicals and metals, form a large percentage of the capex, these sectors will see slowdown in capex spending when global overcapacity emerges. Cement, autos, and shipping, among others, will also witness reduced capex, going forward. There are several large projects in Indias oil & gas (especially in the refining area) sector, which are near to completion and given the current environment, we believe investment in this sector will be cut. The capex boom of the past three years has been a bit different from the mid-90s expansion. The mid-90s capex cycle was driven largely by domestic capacity creation, this time capital was spent on a combination of domestic capacity creation and domestic and overseas acquisitions. In fact, mergers and overseas acquisitions hit record levels in 2007-08. http://www.business-standard.com/india/news/india-incs-capex216-despite-slowing-profit/363510/ Last Financial closing
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