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| INDUSTRY Automobile stocks lead post-budget rally Auto expo kicks off in Hyderabad Auto dealers federation chief sees racier second-half for the sector Nano buyer raring to get, set, ready go Tata hands over Nano to first three customers Nano passes stringent European crash tests: Report He got Nano car but lost keys! Tata Motors may pay Rs 300 cr for JLR's breach of contract with Ford UK dept under fire for delay in lending to JLR INTERVIEWS/FEATURES GM India launches special edition of Chev Aveo COMMERCIAL VEHICLES CONSTRUCTION & AGRI MACHINERY The two-wheeler replacement mart is one buzzing street | ALLIED INDUSTRIES FINANCE & INSURANCE OIL, LUBRICANTS & ALTERNATIVE FUELS INTERNATIONAL NEWS Renault H1 vehicle sales drop 16.5% ECONOMY & FINANCE Global trends lift Sensex 495 points
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| INDUSTRY Go To Top
New Delhi: In a ruling that would cheer consumers, the Supreme Court has ruled that car manufacturers cannot charge a customer for parts and accessories which they have not provided as it would amount to "unfair trade practices."
AUTOMOBILE STOCKS LEAD POST-BUDGET RALLY Sandeep Singh and Sumant Banerji Hindustan Times
New Delhi: The consumers have already returned but post budget the investor confidence in the automobile sector is back with a bang. Even as the markets remained largely volatile, the auto index grew the fastest since budget and is the only index to grow in double digit.
The roll out of the first Tata Nano on Friday drove the index to its crescendo with it emerging as the best perfoming index in a day for the first time in over two years. The index jumped by 5.2 per cent edging out banking index which grew by 4.8 per cent on Friday.
All the big stocks in the sector witnessed handsome gains. Though Mahindra and Mahindra led the charge, Nano propelled Tata Motors to a gain of 6.7 per cent, one of its best in recent times as also Exide, which is one of the suppliers to it.
The rally is a culmination of the revival in demand that we have been witnessing in the last quarter or so on the back of improved financing by banks especially for cars, said Surjit Arora, auto analyst at Prabhudas Lilladhar Securities. Auto is the biggest domestic consumption story and so even though the valuations look little stretched the growth is there.
Car sales have grown by 4.75 per cent between April and June this year, as against a 1.3 per cent grotwh in 2008-09, but the rebound has been led by two wheelers which grew by 14.48 per cent during the period.
Bajaj Auto which was the hardest hit by the slowdown last year posted impressive results yesterday and that has raised hopes that other companies like Hero Honda, Maruti and TVS would do much better," said an industry insider.
AUTO EXPO KICKS OFF IN HYDERABAD Business Standard (Web Edition)
Chennai/ Hyderabad: The automobile market in the first half of the year grew largely due to the export sales, which has increased by over 24 per cent compared to last year. A slew of incentives in the European countries, including scrapping of old cars and replacing them with fuel-efficient cars, has spurred the export market, according to the Federation of Automobile Dealers Associations president, SP Shaw.
However, there is a need for the government to provide a cushion in the form of incentives to the automobile segment to continue the growth momentum. The growth in the second half of the year would be less than the first half of the year, he said.
Speaking to mediapersons after the inauguration of the International Auto Show, a three-day exhibition which kicked off here on Friday, he said the commercial vehicle market was standstill for sometime and there were no signs of revival in the near future as availability of funds was still a problem.
However, the car market in India is growing at a steady pace and India is now seen as the small car manufacturing hub. This is for the first time that the Auto Show is being held in Hyderabad and 27 dealers were showcasing products of various makes. Beginning this year, the Auto Show would be held annually in Hyderabad. http://www.business-standard.com/india/news/auto-expo-kicks-off-in-hyderabad/364214/
AUTO DEALERS FEDERATION CHIEF SEES RACIER SECOND-HALF FOR THE SECTOR The Hindu Business Line (Web & Print Edition)
Hyderabad: If in the first half of 2009 it registered a six per cent growth over last year, the automotive sector is poised for a better second half, according to Mr S. P. Shah, President of the Federation of Automotive Dealers Associations (FADA).
This confidence stems from the fact that interest rates have come down from the highs of 2008, the market sentiment is better now, the industry has come up with significant number of new models and, lastly, the festive season, known for good sales, that is ahead, he said.
However, he felt that the commercial vehicle sales continue to be a cause for concern; this segment has borne the brunt of the global economic slowdown.
Speaking to newspersons at the Hyderabad International Auto Show 2009 (HIAS), Mr Shah said India has emerged the largest small-car market and is making inroads into the European market, aided by the Continents policy to encourage replacement of old cars. Hyundai and Maruti have been stepping up volumes in Europe each passing month. This trend is likely to continue as more buyers are opting for smaller cars in Europe, he said.
The auto show, to become an annual event, attracted 22 automotive manufacturers, including of motor-cycles. The display included new BMW X6, Tata Nano and Bajaj 220 DTSi. At the Hyderabad International Convention Centre, where the Show is on, vintage cars and bikes held visitor attention. Also at the Show are 25 auto accessory, finance and insurance companies.
New Volvo CARS The Swedish luxury carmaker Volvo hinted at bringing in a couple of more models into India in the next 6-12 months.
Addressing a press conference, the Volvo Car India Marketing Manager, Mr Sudeep Narayan, said the Indian luxury car market has been growing rapidly and Volvo is gearing up to be part of this excitement. These new ones could include a cross over and an S class sedan.
Since the launch of three models in India a year ago, the company now has a dealership network of seven and expects to take this up to 12 by next year. Next in line are dealerships in Ahmedabad and Bangalore. http://www.thehindubusinessline.com/2009/07/18/stories/2009071851280200.htm
NANO BUYER RARING TO GET, SET, READY GO The Hindu Business Line (Web & Print Edition) See similar story in: The Tribune (Web Edition), The Times of India (Web & Print Edition), Rediff India (Web Edition), Yahoo India (Web Edition)
Mumbai: I plan to drive my Nano to the Siddhi Vinayak temple, said an elated Ashok Vichare, the first customer of the long-awaited peoples car from Tata Motors. He got the keys to the Nano on Friday evening from Mr Ratan Tata, Chairman of Tata Sons, at a special function to commemorate the event.
Mr Vichare, a Class-I officer with Mumbai Customs, is to retire in two months. He came with his wife Shaila and daughter Gauri to receive the lunar silver colour luxury version of Nano (the colour was his daughters choice).
The Vichares took an SBI loan to purchase the vehicle. We always hoped we would be among the first one lakh customers, but to come right on top has exceeded our wildest dreams, said Ms Shaila Vichare.
No driving licence The second Nano owner, 29-year-old Ashish Balakrishnan, does not have a driving licence; but that did not deter him from booking the car. The first thing the HDFC banker would like to do is to go for a drive on the recently inaugurated Bandra-Worli sea link except that he will not be behind the wheel. This will have to wait till he gets his driving licence 45 days from now.
When I get married, this car will be the best companion for my wife and me. I decided to go in for an all-cash deal as I am already paying EMI on a home loan, he said. Mr Balakrishnan opted for the top-end Nano sunshine yellow version.
The third customer is stationery product manufacturers Kores India, which opted for a silver colour top-end variant.
Incidentally, another customer who had hit the headlines for booking the Nano was Maruti Bhandary, a shoe repairer who had paid up for the car. Unfortunately, he was not as lucky when it came to getting it on time. He has been intimated that his Nano will be delivered only in early 2011. http://www.thehindubusinessline.com/2009/07/18/stories/2009071851950100.htm http://www.tribuneindia.com/2009/20090718/biz.htm#3 http://in.biz.yahoo.com/090717/139/batwkw.html
TATA HANDS OVER NANO TO FIRST THREE CUSTOMERS The Financial Express (Web & Print Edition)
Mumbai: The real test of Tata Nano has begun, with the company delivering the first three cars to the much awaited customers in Mumbai. On Friday, the company delivered the top variant of Nano to Ashok Raghunath Vichare, a retired customs officer, Ashish Balakrishnan, an employee of HDFC Bank and S.K Thirani, chairman. Kores (India) Ltd. They are amongst the one lakh lucky customers chosen through random selections process of the total 2.03 lakh customers, pan India.
Ratan Tata, chairman, Tata Motors, said, I hope Tata Nano will bring motoring pleasure to those who will be buying their first car as also those who currently own cars but want a modern, contemporary, emission-friendly city car. As planned, Tata Motors has commenced deliveries of the Tata Nano this month to different towns and cities of the country. Despatches to dealerships have begun from the Pantnagar plant, where the car is being produced, in accordance with schedules informed to customers.
Says 30-year old Balakrishnan, I plan to take the car out tomorrow on the Bandra-Worli Sea Link. The cost of the car was the deciding factor for the purchase. Though the car being not available for test drive played a hindrance, I believed in the Tatas and bought the car. Following three deliveries on Friday, the company will be delivering another six cars in the city next week, said Tata Motors' largest dealer in the city.
Tata Motors had planned to manufacture a common man's car in 2003, launched it in 2008 and finally in 2009, handed it over. During its journey from plant to roads, the project witnessed several obstacles. The controversy over the land acquisition forced Ratan Tata to abandon Singur and shift the Nano's production to Gujarat. While the company has begun the delivery of Nano, production capacity still remains a constraint till the Nano mother plant in Sanand in Gujarat commences by this year-end. http://www.financialexpress.com/news/tata-hands-over-nano/490804/
NANO PASSES STRINGENT EUROPEAN CRASH TESTS: REPORT PTI See this story in: The Hindu Business Line (Web & Print Edition), The Tribune (Web Edition), Rediff India (Web Edition), mint (Web & Print Edition), Business Standard (Web & Print Edition)
London: The European version of the world's cheapest car, the Tata Nano, has inched closer to hitting the continent's roads, after having passed a series of stringent crash tests, a media report said on Friday.
Initially, there were concerns that the rudimentary nature of the Nano, priced at about 1,400, might fall short of stringent European safety standards, but these have diminished following its impressive performance at the Motor Industry Research Associa tion last week.
In the presence of an inspector from Britain's Vehicle Certification Authority, India's biggest car manufacturer Tata subjected a European-specification Nano to lateral and frontal impact tests and it successfully passed both of them, 'The Daily Telegrap h' reported.
However, the model has still to be exposed to the full EuroNCAP crash-test regime. But, the car maker believes that it would eventually qualify for a four-star safety rating, the report said.
The Nano is currently sold only in India and is not likely to reach Britain before 2012. Like the original Nano, it will be made in India.
The European version displayed at Geneva motor show in March retains the Indian-market narrow, upright, four-door format, but it's longer, more powerful, safer and also better finished, it said. http://www.thehindubusinessline.com/blnus/14171512.htm http://www.tribuneindia.com/2009/20090718/biz.htm#4 http://business.rediff.com/report/2009/jul/17/tata-nano-passes-stringent-european-crash-tests.htm http://www.livemint.com/2009/07/17153238/Tata8217s-Nano-passes-strin.html http://www.business-standard.com/india/news/nano-passes-euro-level-crash-tests/364265/
HE GOT NANO CAR BUT LOST KEYS! IANS See this story in: The Economic Times (Web Edition), The Times of India (Web Edition)
Mumbai: Ashish Balakrishnan's dream came true and then almost turned into a nightmare Friday evening. He now owns a Nano car but has lost its keys.
At a gala ceremony Tata Motors chairman Ratan Tata handed over the keys of the second Nano car to the 29-year-old bachelor who then said: "There are three things in life which one cherishes - to own a house, buy a car and start a family. For me, the second dream is coming through."
Amit Chakraborty The Telegraph (Web Edition)
Calcutta: Pay a premium, drive away with a Nano. It does not matter if you havent booked one, you can still be among the early birds to own a Nano in the city. A leading used-car dealer in Calcutta has already sold a base model for Rs 1.9 lakh in the grey market whereas the official price is Rs 1.54 lakh. It is not, however, clear how the dealer procured the car as Tata Motors is yet to deliver the vehicles in this part of the country.
While the going premium rate for the base model is nearly 25 per cent, for the air conditioned Nano LX it is 33 per cent. The dealer had put in an insertion in last Sundays dailies that said, Nano first car in town, just drive away.
The base model was sold this week. It is yet to be registered with the regional transport authority. If you are willing to pay Rs 2.40 lakh you can get an LX model next week, the dealer said. The air-conditioned model is officially priced at Rs 1.82 lakh. A Tata Motors corporate relations officer from Mumbai was guarded in his comment saying the company had nothing to do with such grey market deals.
A Tata Motors official in the regional office said the first batch of Nano cars were on their way to the city. However, a date for the formal launch and the delivery of the vehicles are yet to be finalised.
The owner of KB Motors, a leading Tata Motors dealer, said the sale of Nano cars in this way was illegal as the letters clearly mentioned that the allotment was non-transferable. http://www.telegraphindia.com/1090718/jsp/business/story_11252003.jsp
TATA MOTORS MAY PAY RS 300 CR FOR JLR'S BREACH OF CONTRACT WITH FORD Lijee Philip The Economic Times (Web & Print Edition)
Mumbai: Tata Motors has paid a penalty for Jaguar Land Rover's inability to buy the agreed quantum of engine components and certain key raw materials from US-based Ford Motors. The sub-optimal offtake had caused a breach in the supplier's agreement. According to an industry source, the penalty paid last year was around Rs 250-300 crore. A similar amount may have to be paid this year, too.
"We are worried about JLR's earnings given its over dependence on Ford Motors for raw material sourcing," said Mahantesh Sabarad of Centrum Broking in a recent report. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved"
UK DEPT UNDER FIRE FOR DELAY IN LENDING TO JLR S Kalyana Ramanathan Business Standard (Web & Print Edition)
London: The Business & Enterprise Committee in the UK, appointed by the House of Commons to examine the expenditure, administration, and policy of the Department for Business, Enterprise & Regulatory Reform (BERR), has voiced its disappointment over the governments delays in providing support to the cash-strapped Jaguar Land Rover (JLR), the Midlands-based car maker which is now a part of Tata Motors.
In a report submitted by this committee, it said: Despite its strategic importance and although the government considered that Jaguar Land Rover was a top priority, the company told us it had proved impossible to conclude negotiations between the company and BERR about the terms of a guarantee, even though it had already received loan approval from the EIB for a substantial facility, 340 million, against our future technology investments.
All that is under discussion is the governments guarantee. As on 7 July 2009, there has been no indication that there will be such a guarantee: we are astounded that it has taken so long to arrange this, particularly since the support needed is so limited, the committees report said.
Though European Investment Bank (EIB) had approved a loan of 340 million for JLR to invest in green technologies in the first week of April 2009 to help it compete with other major European luxury car makers like BMW and Daimler, JLR has been unable to access this money for want of a guarantee from the UK government. It has been widely reported that the conditions posed by the UK government have been too stringent and may come in the way of smooth operations of the car marker.
Earlier last week, in an exclusive interview to Business Standard, JLRs CEO David Smith said, though he was hopeful of securing this guarantee, the company was willing to do so only on commercial terms and the company will not offer the UK government a berth on its board.
I think we all believe that the government is not very good at running companies. Anything we agree with the government or in fact any other lender should not interfere with our ability to run the company. Any agreement we do reach is commercial and gives us the ability to run the business properly, Smith had said.
Reacting to the committees remonstrance at the governments delay in providing the guarantee, JLR said: We welcome the committees conclusion that the UK industry has strong premium brands which, together with the supply chain, can lead the transition to low carbon vehicles as outlined in the recent NAIGT report. Jaguar Land Rover is playing a full role, investing over 800 million to reduce vehicle CO2 emissions and improve fuel efficiency. The report refers to the delay in drawing down the 340-million European Investment Bank loan for green technologies approved in April, which supports our investment plans. Clearly, we are eager to see this resolved as soon as possible.
Smith was among the experts who gave evidence to the committee. He echoed the sense of urgency expressed in the report.
For a year now, Jaguar Land Rover and other UK automotive exporters have been conducting business in the face of a severe recession that has stalled global economies. I fully support the Business and Enterprise Committees call for urgent action to allow the UK automotive industry to survive this crisis, coupled with a long term strategy to enable motor manufacturing to flourish in the UK. Environmental innovation is absolutely critical to our future and, if we are serious about a low carbon industry in the UK, we are going to have to decide to invest in it now, he said. http://www.business-standard.com/india/news/uk-dept-under-fire-for-delay-in-lending-to-jlr/364264/
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| CARS, SUVs, MUVs Go To Top PTI See this story in: The Economic Times (Web Edition)
Hyderabad: Hyundai Motor India Limited (HML) is revving up the Indian compact car market with a diesel offering of its premium compact hatchback, the i20.
Asian Age (Web & Print Edition) See similar story in: Deccan Chronicle (Web Edition)
Hyderabad: The countrys largest car exporter Hyundai Motors India Limited (HMIL) sees a robust growth in the export segment in the next six months. The companys vice-president (marketing), Mr Arvind Saxena, on Friday said, "We have registered a growth rate of 24 per cent in the first six months of the year. Thanks to the scrap incentives in various European countries, we exported 2,45, 000 units during this period. In the coming six months, we aim to export around 3,00,000 units."
Mr Saxena was speaking at the sidelines of the Hyderabad International Auto Show. Scrap incentive was started in Europe to phase out the old fuel-guzzling and pollution-prone cars. Under this scheme, government gives certain subsidies to a customer if he phases out his old car and buys a new one. Mr Saxena added, "However, we need strong support from the government to take this trend forward. Since, the competition is tough and scrap incentives in the European countries are about to be over. We request the government to put the export segment under the category of focus market scheme and automobile sector under Focus Product Scheme."
The company is mulling an option to set up an engine plant for diesel engines. Mr Saxena said, "Currently, we import diesel engines which costs us dearly. The company is exploring options and a diesel engine plant cannot be ruled out." Asked, whether, the company still plans to shift its i20 export production to Europe, Mr Saxena said, "Yes, we are sincerely thinking about its prospects." http://www.asianage.com/presentation/leftnavigation/news/business/hyundai-sees-robust-export.aspx http://www.deccanchronicle.com/business/hyundai-sees-robust-export-089
GM INDIA LAUNCHES SPECIAL EDITION OF CHEV AVEO PTI See this story in: The Hindu Business Line (Web & Print Edition), Rediff India (Web Edition), Business Standard (Delhi Print Edition), Asian Age (Delhi Print Edition)
New Delhi: Car maker General Motors India on Friday said it has launched special edition of its entry-level sedan Chevrolet Aveo, which will be offered at the same price as the existing version. The Chevrolet Aveo is available in the Indian market with a starting price of Rs 5.97 lakh.
The launch of the special edition of the Chevrolet Aveo is a testament to the importance that GM India attaches to maximising customer satisfaction, General Motors India Vice President, Mr P Balendran said in a statement.
The new edition includes features such as illuminated key cylinder, chrome door handles, rear arm-rest with cup holders and height adjustable driver's seat. GM India is a wholly-owned subsidiary of US-based car maker General Motors, which emerged out of bankruptcy last week. http://www.thehindubusinessline.com/blnus/19171612.htm http://business.rediff.com/report/2009/jul/17/gm-india-launches-special-edition-of-chevrolet-aveo.htm
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| COMMERCIAL VEHICLES Go To Top The Hindu Business Line
Pune: To provide after-market support to tipper customers, located around the Western coal fields, Volvo Trucks India has invested in a modern service and parts dealership in Chandrapur, Maharashtra, which has about 200 Volvo tippers.
Facilities Spread over 5,000 sq ft, the dealership includes a 2,000 sq ft warehouse, overhaul rooms and four workshop bays in addition to inspection pits, washing ramps and tooling rooms, conference rooms, customer lounges, and driver and technician resting bays, an official release said.
According to Mr Somnath Bhattacharjee, President of Volvo Trucks India, the country has a 70 per cent market share in the premium European truck segment. http://www.thehindubusinessline.com/2009/07/18/stories/2009071851101700.htm
PTI See this story in: Business Standard (Web Edition), The Hindu Business Line (Web Edition)
New Delhi: Commercial vehicle manufacturer Tata Motors said on Friday it would announce first quarter results on July 27. The board of directors would meet on July 27 to consider the standalone results for the first quarter ended June 30, for the accounting year 2009-10, Tata Motors said in a filing to the BSE. http://www.business-standard.com/india/news/kirloskar-tata-motors-q1-results/364260/ http://www.thehindubusinessline.com/blnus/26171614.htm
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| TWO-WHEELER EXPORTS CAN SKID INTO RED Pranav Nambiar Daily News & Analysis
Bangalore: Though domestic sales of two-wheelers recorded double-digit growth in the last quarter, exports seem to be skidding off the growth lane.
According to the Society of Indian Automobile Manufacturers (SIAM), domestic sales in the April-June 2009 quarter grew 14% year-on-year (y-o-y) to 21 lakh units, but exports saw a 7% dip to 2.3 lakh units.
While two-wheeler exports grew 23% y-o-y in 2008-09 on the back of robust numbers in the first half of the last fiscal, they struggled to find ground in the second half of 2008-09. "Two-wheeler exports continued to struggle from late last year.
According to N K Rattan, head of marketing & sales at Honda Motorcycle & Scooter India (HMSI), major overseas customers are still feeling the backlash of the slowdown. Rattan said though Indian companies export to some developed European destinations, developing markets are targeted as they have product requirements similar to the domestic market and are largely under penetrated.
Developing nations, including Colombia, Sri Lanka, Nigeria, Philippines and Bangladesh, account for around two-thirds of exports.
In certain cases, the vehicles are modified as per the local requirements of a country. Bajaj has its motorcycle model -- Boxer/CT100 -- exclusively for the export markets. Some companies also cater to the international markets either through overseas subsidiaries and/or JVs having manufacturing units in that country. For instance, TVS and Bajaj have Indonesian subsidiaries.
Another reason for dip in exports is the waning international interest for gearless scooters and mopeds. While gearless scooter exports fell nearly 30% to 25,000 units last fiscal, moped exports dipped around 50% to around 18,000 units during the same period.
According to Sanjay Tripathi, head of product planning and marketing, Yamaha India, expansion of public transport in countries such as Mexico is among some of the other factors that are keeping exports subdued.
A TVS official said that cheaper Chinese bikes could also be leading to lower exports. Industry insiders said that they expect two-wheeler exports to record negative or flattish growth this fiscal. "Exports will be flattish this fiscal, it may be a bit lower in the first few months and then pick up in the second half," said Yamaha's Tripathi. http://www.dnaindia.com/money/report_two-wheeler-exports-can-skid-into-red_1275012
THE TWO-WHEELER REPLACEMENT MART IS ONE BUZZING STREET Neha Rishi Daily News & Analysis
Mumbai: As demand for two-wheelers picks up, registering a growth of almost 2.6% last fiscal, the replacement market -- or the spare parts market -- is also showing a healthy growth.
This business, according to the industry majors, -- Hero Honda, Bajaj Auto and TVS --will grow by 20% during the current fiscal. Around 8 million two-wheelers are expected to be added this fiscal, leading to the growth of the spare parts business, Anil Dua, vice-president (sales and marketing), Hero Honda Motors, said.
"We have retailed 2.5 crore bikes till now and this year we will add another 4 million bikes. The number of two-wheelers on the Indian roads is very large despite a slowdown in the new bike business," Dua said. Hero Honda has close to 4,000 touch-points across the country catering to private garages and the retail segment.
S Sridhar, chief operating officer (two wheelers), Bajaj Auto, said, "After the downturn hit the auto industry, people started maintaining their bikes. As a result, the after-sales service shot up, resulting in an increase in spare part sales." Bajaj Auto earned revenues of Rs 600 crore from spare-part sales alone and is targeting a growth of 18% this fiscal, Sridhar said.
In FY09, Bajaj Auto's domestic spare-part sales grew 18% while exports grew 84% resulting in total growth of 27%. Spare parts now comprise 8% of Bajaj Auto's revenues. "In the annual report, the management highlighted that 70% of two-wheeler servicing post-warranty period happens in neighbourhood private garages. Bajaj is targeting to make its spare parts available in not only the authorised service centres, but also at private garages and spare part shops around the country. Bajaj's spare parts' distribution channel now has 80 distributors who cater to 15,000 retail shops around the country," said an analyst from a leading research firm.
The original equipment manufacturers (OEM) are bullish on the growth of the replacement market despite the new market opening up.
H S Goindi, president (marketing), TVS Motor Company, said, "We earned revenues of Rs 300 crore last year from spare parts, and this segment will continue grow as the number of vehicles on the road are increasing. Besides, the fact that people are conscious of maintaining their bikes, replacement is an important aspect of our business as it brings us decent margins." TVS has 600 dealers and 45 authorised parts stockists.
While it is difficult to ascertain the total size of the replacement market as it is heavily dominated by the unauthorised dealers selling spurious parts, the OEMs are trying to expand their distributors and dealer networks to meet the demand for spare parts and discourage use of spurious parts.
Dua said, "We are supplying spare parts at competitive prices and have made arrangements to legally track down the spurious parts suppliers." According to an analyst, who did not wish to be named, the replacement market will see a steady gradual growth and as long as the new vehicles completely replace the old ones, which is a rare possibility, this market will not shrink. "The question is how fast and how much of the market the OEMs are able to capture and also keep up the rising demand. Another important factor is the correct pricing of spare parts as the spurious products are easily available at a cheaper price," he said.
Fake headache
The replacement market is heavily dominated by the unauthorised dealers selling spurious parts.
The OEMs are trying to expand their network to meet demand for spares. http://www.dnaindia.com/money/report_the-two-wheeler-replacement-mart-is-one-buzzing-street_1275006
BAJAJ RE (DISCOVER)S 100CC SEGMENT SPACE Deccan Herald See this story in: Asian Age, The Statesman, The Financial Express, The Hindu Business Line
Bangalore: After keeping a low profile in the 100cc bike segment for a long time mainly due to low margins, Bajaj Auto on Friday, launched the 100cc variant of Discover, Discover DTS-Si marking its re-entry. http://www.deccanherald.com/content/14296/bajaj-rediscovers-100cc-segment-space.html http://www.asianage.com/presentation/leftnavigation/news/business/bajaj-forays-into-100cc.aspx http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=261278 http://www.thehindubusinessline.com/2009/07/18/stories/2009071851250200.htm
BAJAJ TO ROLL OUT LPG BIKE
Chandigarh: In a first for the Indian market, Bajaj Auto will soon be unveiling a motorcycle which runs on LPG. The mobike is already being tested for its road worthiness in Gujarat.
This was stated by Raul Raj Varma, national sales manager, Bajaj Auto, while addressing mediapersons here on Thursday. He was in town to unveil the new 100 cc Discover DTS-Si bike.
Once the tests are successful, we will be launching the bike commercially across India, though certain hurdles like fuel distribution system (LPG filling stations) will have to be addressed, he said.
Varma said though last year, Bajaj Auto had shown a degrowth of 12 per cent in last fiscal, this year they were hoping to reverse the trend.
We have already launched an upgraded version of Pulsar, besides the new Discover DTS. A new bike will be launched by the end of this year. With these three launches, we will be able to achieve a good growth rate this fiscal, he said.
He said since the growth in motorcycles was only in the rural markets, they were now reaching out to rural areas through their retail financing arm. http://www.tribuneindia.com/2009/20090718/biz.htm#9
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| COMPONENTS Go To Top
Bearing and lubrication systems manufacturer SKF India on Friday reported a decline of 51.78 per cent in its net profit at Rs 17.67 crore for the quarter ended June over the same period last year. The company had a net profit of Rs 36.65 for the same period ended June 2008, SKF India said in a filing to the BSE. http://www.business-standard.com/india/news/sasken-skf-indiaindia-infoline-q1-results/364259/
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| ALLIED INDUSTRY Go To Top The Hindu Business Line See similar story in: The Telegraph
Kolkata: At a time when the global market for industrial batteries has nearly halved leading to the closure of two of the largest battery-makers which were previously controlling 30 per cent of the European market, Exide Industries expects a 20 per cent growth in industrial battery exports in the second quarter (over last year).
The bulk of it is likely to come from export of traction batteries to Germany. Compared to the rest of the Europe, the value realisation is the best in Germany. We were trying to enter the market for last eight months and succeeded recently and we hope that the volumes will pick up in the current quarter, Mr Gautam Chatterjee, Director (Industrial), told Business Line.
Despite a near dry-up of demand from the domestic telecom sector, Exide expects a 16 per cent volume growth in industrial battery sales in July-September compared with the corresponding previous period primarily based on unmanageable demand growth in UPS (uninterrupted power supply) and inverter batteries from commercial establishments.
Australian company Exide is considering various options to bring its Australian industrial battery distributor, Ceil Motive Power Pty Ltd, back on the rails. Exide has a 26 per cent participatory stake in the company at total investment of $(Australian)1 million (Rs 3.5 crore). According to Exide, while the companys bottomline was impacted due to the meltdown, one of the two local promoters now wants to quit the business. We are on the lookout for a local promoter who will be managing the company. We are also open to sell our 26 per cent interest, Mr Chatterjee said.
He, however, said that this has no bearing on Exides export performance in Australia. We recently received demand commitments from a number of local buyers including Toyota, Crown and others, he added.
Auto outlook positive According to Mr. P. K. Kataky, Director (automotive), strong demand from the replacement market will keep the companys automotive battery business on the growth path in the second quarter.
In the original equipment (OE) sector, demand is weak in the truck-bus, tractor, and multi-utility vehicle segments. However, the recent turnaround of the passenger car segment and a robust growth in sales of two-wheelers will contribute to the sales growth of the company. Exide controls 76 per cent of the automobile OE market. There is a de-growth in the OE demand in tractor and heavy commercial vehicle segments compared to last year. The delayed monsoon may further impact the growth prospects of HCV and tractor segments, Mr Kataky said.
Meanwhile, keeping in tune with the interest shown by domestic car-makers to participate in the demonstrative electric car project during the Commonwealth Games 2010, Exide has tied up with Thunder Sky of China for importing Lithium-ion automotive batteries.
Net rises: Exide posted a 49 per cent growth in net profit to Rs 122 crore during the April-June 2009 quarter compared to Rs 82 crore in the corresponding period last year. The higher profits came despite a marginal drop in net sales to Rs 903 crore (Rs 907 crore). Talking to newspersons after the AGM here on Friday, the Managing Director and CEO, Mr T. V. Ramanathan, attributed the first quarters improved margin to several factors such as the sales volume growth in the automotive replacement as well as inverter battery segment, lower lead prices compared to last year, appreciation of rupee against dollar, and higher use of recycled lead.
Mr Ramanathan also announced a Rs 90/110-crore capital expenditure plan for the current year. Exide, according to him, further reduced its dependence on borrowings during the last quarter, the current debt-equity being 0.18:1. http://www.thehindubusinessline.com/2009/07/18/stories/2009071851270200.htm http://www.telegraphindia.com/1090718/jsp/business/story_11252391.jsp
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| FUTURE GENERALI S ENHANCED INSURANCE COVER The Hindu http://www.hindu.com/2009/07/18/stories/2009071851161500.htm
The Financial Express
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| OIL, LUBRICANTS & ALTERNATIVE FUELS Go To Top
See this story in: The Times of India
London: Oil prices rallied on Friday in the wake of positive economic data and earnings results in the United States, the world's biggest energy consuming nation. http://timesofindia.indiatimes.com/NEWS-Business-International-Business-Oil-prices-rally-on-strong-US-data-/articleshow/4790354.cms
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| INTERNATIONAL NEWS Go To Top Bloomberg See this story in: Business Standard
Ingolstadt: Porsche SE, the sports-car maker that may merge with Volkswagen AG, is likely to reach an agreement on a stake sale in a few days, Chief Executive Officer Wendelin Wiedeking said in an interview.
I think all the details, later on within the next days will be resolved, Wiedeking told Bloomberg Television last night when asked whether Porsche will be sold to Volkswagen. Its already on the table, he said in Ingolstadt, Germany, where he attended a 100th anniversary celebration for VWs Audi division. Porsche is also considering an offer by the Qatar Investment Authority to buy a stake in Porsches holding company and options on Volkswagen stock. Stuttgart-based Porsche is considering ways to reduce more than 9 billion ($12.7 billion) in debt after amassing a 51 per cent stake in VW as well as the options for 20 per cent of the Wolfsburg-based carmaker, Europes largest. The most reasonable solution would be that Porsche sells its call options on Volkswagen shares to Qatar and Volkswagen acquires a stake or 100 per cent of Porsches car business, said Juergen Meyer, a portfolio manager at SEB Asset Management in Frankfurt. Such a deal would make Porsche Holding free of debt and still owning 51 per cent plus of Volkswagen shares.
Porsches power struggle with Volkswagen appears to be over, Lower Saxony state Prime Minister Christian Wulff told reporters as he arrived at the Audi event. Wulff said hes very confident of good results from meetings that Porsches and Volkswagens supervisory boards plan on July 23.
The sports-car makers top labour leader said that Volkswagen must double its offer for a 49 per cent stake in Porsches automotive unit. The exact correct price is 7 billion to 8 billion, Uwe Hueck, head of Porsches works council, said in an interview with Germanys ZDF television July 15. The 4 billion will not even suffice. We also need liquidity.
Hueck, who is Porsches deputy chairman, said hes against raiding Volkswagens coffers for the sake of erasing debt. He said the Porsche and Piech families, who control all voting rights on Porsche shares, should take part in a 5 billion capital increase and pave the way for Qatar to buy a stake and the VW options. Wiedeking will remain at the helm for as long as his contract permits, and thats until 2012, Hueck said. German weekly magazine WirtschaftsWoche has reported that the CEO will step down.
Im the chief executive officer, Wiedeking said in Ingolstadt. I bear responsibility for this company and Im feeling happy as a cat in that role. Wiedeking transformed the manufacturer of the 911 and the Cayenne, almost bankrupt when he became CEO in 1993, into the automaker with the industrys highest profit margins. In 2005, he began using cash from the luxury-vehicle business to acquire shares of Volkswagen, a company that builds more cars in a week than Porsche does in a year.
Qatar and the family owners have been asked to participate in a planned 5 billion share sale at Porsche, people familiar with the talks said this week. Qatar may pay 2 billion for a stake, one of the people said.
At the same time, Porsche may hand over the options that can be converted into a 20 per cent stake in VW to Qatar for free, the people have said. Qatar would then pay about 5 billion to banks that sold Porsche the derivatives, they said.
An investment by the Persian Gulf state may give Wiedeking, 56, leverage to negotiate a deal to merge with VW.
The families agreed in May with VW to pursue a merger to create a 10-brand behemoth that would include the Audi luxury division of VW as well as the Seat and Skoda mass-market units. Wulff, the regional government leader, said July 14 that Lower Saxony would welcome Qatar as a third strong shareholder in VW. Lower Saxony is Volkswagens home state and the carmakers second-biggest shareholder, with a 20 per cent stake and the power to veto decisions. http://www.business-standard.com/india/news/sale-imminent-as-vw-feud-nears-end-porsche-ceo/364249/
RENAULT H1 VEHICLE SALES DROP 16.5% AP See this story in: mint
Paris: Carmaker Renault SA said on Friday that vehicle sales fell 16.5% in the first half of the year, a similar rate of decline as the global market, where the economic crisis is ravaging car sales.
Frances second-largest auto maker said it sold 1.106 million cars and light trucks in the first six months of the year, down from 1.326 million a year earlier. In June, the decline was 0.9%. But while the company kept its 3.7% share of the global market, it reported a 0.5 point loss in market share at home in France after a drop in short term leasing sales. Renault gained market share in Germany, Spain and Belgium, but lost in Italy and Britain.
Sales of Renault-branded vehicles fell 21.5%, while sales of low-cost Romanian Dacia brand rose 20.3%. In a statement Friday, the company said that in the first half it had significantly positive cash flow the funds a company is able to generate after maintaining or expanding assets. In February Renault said its single priority for 2009 was to achieve positive cash flow.
The automotive industry is struggling as customers shy away from big-ticket buys, forcing some governments to step in to help stem massive job losses. In the United States, both Chrysler and General Motors are exiting bankruptcy with the federal government as a major shareholder.
Renault, which is getting a 3 billion ($4.24 billion) rescue loan from the French government, is bound by an agreement with President Nicolas Sarkozy not to make forced redundancies in France this year.
Still, CEO Carlos Ghosn has said the payroll will fall by 9,000 to a total of 120,000 this year. That will come from 6,000 voluntary job cuts announced in September and an additional 3,000 positions which will left unfilled as people leave of their own volition. In the first three months of the year, Renaults sales fell 30.8% to 7.1 billion. Full first-half results will be announced 30 July. http://www.livemint.com/2009/07/17131344/Renault-H1-vehicle-sales-drop.html
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| ECONOMY & FINANCE Go To Top The Hindu Business Line
Mumbai: Forex reserves fell by $560 million to touch $263.917 billion for the week ended July 10, according to the latest figures from the Reserve Bank of India. The moderate fall in reserves is mainly on account of currency revaluation, said a forex dealer with a private bank.
This is the second consecutive week that forex reserves have declined. In the earlier week, the foreign exchange reserves had fallen by $107 million to $264.477 billion. In the week under consideration, foreign currency assets fell by $559 to $252.873 billion. Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies such as Euro, Sterling and Yen held in reserves.
Gold and SDRs were unchanged at $9.8 billion and $1 million respectively. The reserve position in the IMF fell by $1 million to $1.243 billion. Next week, the rupee movement will depend on the domestic stock market, the dealer said. The rupee could be under pressure because of month-end demand. It could fall to 48.85-49, the dealer said. http://www.thehindubusinessline.com/2009/07/18/stories/2009071851340600.htm
GLOBAL TRENDS LIFT SENSEX 495 POINTS The Hindu Business Line
Mumbai: The benchmark indices delivered a surprise on Friday closing with gains of more than 3 per cent, as positive developments both in the global and domestic arena boosted investor sentiment.
Short-covering also led to hectic buying across counters, as players did not want to keep their positions open. If overseas markets drive up our market on Monday, investors may have no chance to buy at attractive levels, said a dealer with Asit C Mehta Investment Intermediates.
An opening gain of 75 points for the Sensex gradually swelled to 550 points towards the close of the trading session. It closed up 495 points at 14,745; the Nifty was up 143 points at 4,375.
This the third big gain for the Sensex after the Budget.
This was unexpected; in the morning we had expected only a 100-200 points rally, said the dealer. The financial institutions in the US have come out with good results. News on Chinas higher GDP growth also boosted stocks, he said.
But the rise pushed several retail investors to sell: they sold equities worth Rs 230 crore on the BSE, according to the exchanges provisional data. Whatever you want to sell, sell it, said one investor to another on Dalal Street.
Among the Sensex scrips 27 companies gained while three were losers, among them index heavyweight Reliance Industries which closed marginally lower, at Rs 1933 on BSE. Investors didnt want to take chance with the Supreme Court order on the RIL-RNRL case due on Monday. The scrip also shed open interest in the F&O segment.
New FIIs in The foreign institutional investors (FIIs) were net buyers of equities for Rs 142 crore, combined exchange data showed. The markets were abuzz with news that East Asian or Chinese FIIs were taking positions. The domestic institutional investors were net buyers for Rs. 535 crore.
In the last threedays an East Asia-based FII deployed about half a billion dollars . , Mr Deven Choksey, Managing Director, K R Choksey Shares & Securities Pvt. Ltd. said. http://www.thehindubusinessline.com/2009/07/18/stories/2009071851920100.htm
Last Financial closing
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Sunday, July 19, 2009
Indian Auto Industry Update July 18, 2009
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