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| INDUSTRY HEC signs MoU with Benxi for special torpedo cars INTERVIEWS/FEATURES CARS, SUVs, MUVs Toyota to launch new Camry in India next week BMW hopes to buck slump, eyes 3k cars this year COMMERCIAL VEHICLES CONSTRUCTION & AGRI MACHINERY COMPONENTS
| ALLIED INDUSTRIES Natural rubber output may dip 2.3 per cent globally Global buys strengthen Apollo Tyres Ceat targets growth rate of 20% Falcon Tyres plans to raise Rs 100 cr for expansion FINANCE & INSURANCE JD Power auto insurance provider satisfaction study OIL, LUBRICANTS & ALTERNATIVE FUELS Maharashtra Govt firm on not waiving VAT on CNG Oil falls below $65 on build in US crude stocks Fiat skids into Q2 loss of euro 168 mn Hyundai to invest $3.3 bn in eco projects Porsche, VW to fix tax liability issue | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INDUSTRY Go To Top PTI
"Several customers who were selected for the delivery of the Nano earlier are getting their orders cancelled saying they cannot wait for months to get their car," Rajan Katyal of Garyson Motors, a dealer of Tata Motors in Ludhiana said.
So far, 10 customers have cancelled their bookings for the Nano, Garyson Motors said.
"Almost 5 to 8 of our customers have cancelled their bookings who were scheduled to get the delivery in the mid of next year," Chandigarh-based Tata Motors dealer Joshi Auto zone's Sales Manager Gaurav Mishra said "I always wanted to own the Nano, which carries a price tag of Rs 1 lakh...That is why I have booked the car...But when I came to know through the allotment letter that the car will be delivered by February 2010... I decided to cancel the booking as I cannot wait for such a long time to own the car," said Janak Raj Sachdeva of Ludhiana.
Sachdeva has even agreed to forego the interest portion, which he had to bear after getting the car financed.
Dada Motors' Managing Director Rishi Dada, however, said that not everybody is withdrawing their applications, "but a few are because of the long gap between booking and delivery".
In addition to it, some of the customers whose names did not figure in the list of the first 100,000 allottees are also not in favour of retaining their applications, he said
Tata Motors had announced the selection of the first 100,000 owners of the Nano out of over 2 lakh applications.
The delivery of the vehicle has started from July and the first 100,000 deliveries are expected to be completed by the last quarter of 2010.
HEC SIGNS MOU WITH BENXI FOR SPECIAL TORPEDO CARS Navtan Kumar The Economic Times (Web Edition)
Ranchi: Heavy Engineering Corporation (HEC) has signed an MoU with Chinese company Benxi for manufacturing special torpedo cars, which are used for carrying hot metal in steel plants. According to an official, as per the MoU, the Benxi will provide the technical knowhow while Ranchi-based HEC will do the manufacturing part. A team of our officials, Anil Sinha and M.M. Prasad, are in China, where they signed the MoU with the company, the official said. http://economictimes.indiatimes.com/News/News-By-Industry/Auto/HEC-signs-MoU-with-Benxi-for-special-torpedo-cars/articleshow/4808980.cms
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| INTERVIEWS/FEATURES Go To Top The exterior design is not particularly flashy-stylish. But the square-jawed looks underscore the big Toyota's tough credentials. The gigantic grille is matched with huge headlamps which, apart from giving the front a sense of proportion, function very well.
The lofty driving position in the Land Cruiser is amazing.
The car doesn't fall short of quality materials and equipment. There's a fabulous touch screen and the climate control as well as the audio system is very sophisticated.
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| CARS, SUVs, MUVs Go To Top Murali Gopalan The Hindu Business Line (Web & Print Edition)
Ford sees India as a critical strategy for Asia-Pacific. We want to set up core manufacturing centres around the region and have significant investments in China, Thailand (for another small car), India and South Africa because we see opportunities in these four countries, Mr Michael Boneham, President and Managing Director, Ford India, told Business Line.
Codenamed B 517, the small car for India has had critical engineering and design inputs in Europe and Australia. It is something that is brand new for India and Ford will be seen as a very serious player as we move forward, he added.
The car will service markets in the Asia-Pacific region (from India) though decisions on specific countries will be made only after assessing its potential and relevance in each of them. The objective is to generate good economies of scale.
Global platform Ford is going in for a global platform strategy. Vehicles you see here will be the same ones (you see) in Europe, Australia, US and India so long as it means good business sense for each country. This small car is a start in that direction, Mr Boneham said. Equally, engines will be an important part of the international business and Ford believes that India has unique strengths to offer. We will be the low displacement engine supplier of choice for Ford in the Asia-Pacific and Africa regions. That will give us economies of scale and is good news from the viewpoint of costs and the local supply base, he said.
Localisation Localisation has been accorded top priority. Assembly of diesel engines has kicked off in the Chennai plant and plans are underway to include the petrol option too, which is currently sourced from AVTEC, the powertrain business of Hindustan Motors. We need a powertrain facility in-house because it is core competency and boils down to costs and volumes. The capacity planned for petrol and diesel engines is 250,000 units annually both here and overseas, he said.
The small car is critical to Ford because it is part of the largest selling segment in India, which accounts for over 70 per cent of sales. Unlike other niche product segments, which are susceptible to the vagaries of the economy, the small car category is quite insulated.
Small is hard to beat The small car is really our key strategy to start us moving forward. It marks our first, serious foray into a segment where a majority of Indians purchase their vehicle in the initial phase, Mr Boneham said.
Ford India has also factored in lessons from the Ikon and Fiesta. One of the things I was concerned about when I took over was the perception, which was not necessarily a reality, on the cost of ownership with Ford cars.
We were being seen as an expensive brand and, therefore, worked very hard for the last 18 months on the new car using the best benchmarks from competition, he added. Critics have constantly flayed Fords lacklustre approach to product development in India. Mr Boneham reiterated that all this was a thing of the past and that there would be a lot more action from the company in the coming years.
The key is we have the cash and are in a stronger position to go through these difficult times. We also have a plan and are sticking to it. The impact of the issues in the US has not changed our strategies for investments in India, he added.
The company has already announced that $500 million will be earmarked for a new engine plant as well as upgrading capacity at the car plant with a lot more automation and multi-flexible assembly lines for a range of cars. http://www.thehindubusinessline.com/2009/07/23/stories/2009072350560300.htm
TOYOTA TO LAUNCH NEW CAMRY IN INDIA NEXT WEEK PTI See this story in: The Economic Times (Web & Print Edition), The Hindu Business Line (Web Edition), The Statesman (Web Edition), Hindustan Times (Web Edition), The Financial Express (Delhi Print Edition)
New Delhi: The world's largest carmaker, Toyota, will launch a new edition of its luxury sedan Camry in the Indian market next week to revitalize the sales of the model. http://www.thehindubusinessline.com/blnus/14221706.htm http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=261880
BMW HOPES TO BUCK SLUMP, EYES 3K CARS THIS YEAR Priyanka Akhouri The Financial Express (Web & Print Edition)
Mumbai: BMW has been successful in selling 1,747 cars in the first six months of 2009 in the Indian market, economic slowdown notwithstanding. This has increased the companys car sales by 12% as compared to the same period last year. Encouraged by the companys performance in the first half of 2009, BMW targets to sell 3,000 cars this year-end as compared to 2,908 sold in 2008. Peter Kronschnabl, president, BMW India said, We are on track for our car sales planned this year. Recession did affect us but we took measures such as avoiding cash discounts and used tailor-made solutions for customers.
While early 2009 saw the launch of three cars, BMW 7 Series, BMW X3 and BMW X6, BMW Z4, the two-seater roadster, is scheduled to be launched in October 2009. The car will be priced between Rs 50-60 lakh. The introduction of new models has had a positive impact on the performance of the company in the Indian market. While X6 is the first SUV coupe available in the world, we believe that latest launch of the other cars was mainly done for shaping up the BMW brand. We were able to increase our sales and with the Indian market environment easing up, we hope the second half of 2009 to be a turning point for us. For the Indian market, the saloon-shape luxury cars work well for the Indian roads, said Kronschnabl. In the range of luxury cars, the company is targeting around 30-50 cars in India.
With 13 dealers in the Indian market, the company is currently working on dealership expansion plans starting September 2009 across the markets of Ludhiana, Bhubaneshwar, Jaipur and Coimbatore. Kronschnabl said, All our dealers will be in the tier II cities and we will have 10 new dealers by 2010 end. While all BMW products are imported, the company so far has does not intend to have any assembly plans for its cars in India. http://www.financialexpress.com/news/bmw-hopes-to-buck-slump-eyes-3k-cars-this-year/492765/
The Economic Times, Zigwheels
Futuristic has been the continuing theme on most new Honda models, and the Jazz continues in the same vein. What is special and unique about the styling however are the unconventional proportions that the car carries, and pulls off with style and aplomb. The tiny hood makes the car look larger than it is, but proportions are taken care of by the rakish windscreen that is almost in line with the bonnet. The creases on the sides are jazzy, to say the least, and the rear end is neat and uncluttered. Remember the astonishment when the jazz virtuoso managed to fit in a million notes within that one downbeat? The Jazz stuns you with its flexibility of space in a strikingly similar manner, revealing how skill and wit can be put to use to liberate the sort of space almost unthinkable of in a hatchback. But before we get to the magic seating however, let me describe the view from the driver's seat.
In a short, it is massive. The large windscreen and its interplay with the positioning of the front seats is ingenious, and clearly the designers of this car have paid a lot of attention towards ensuring that the driver's view is not inhibited. While the strong and wide A-pillar makes for a sturdy design, the swanky quarter window at the front makes sure that the driver does not miss the odd pothole or oncoming vehicles from the right. And then we have the much touted 'magic seats'. At their root is a reworked fuel tank system that has been placed bang under the rear seats, which liberates an amazing amount of space in the back. These rear seats can be folded over in different ways - the lower part can be folded upwards to create height, or the complete bench can be folded down to go level with the boot, making enough space to accommodate an entire jazz quartet, as Adil would put it. When news first broke that Honda had purposely built 1.2-litre iVTEC mill for the Indian Jazz, we had our reservations. Would the Jazz also suffer from under-empowerment like the other new hatches? Hardly! In traditional iVTEC fashion, the engine is revvy and full of energy, and smart valve gimmickry offers the car good driveability in the city too. We're spoilt silly by the great diesel hatchbacks that have come to inundate our streets, but as far as petrol hatches go the Jazz has to have one of the most competent engines of the lot.
Other mechanicals on the car are at least as competent - the controls are smooth and precise, and definitely deserving an honourable mention is the stunning gearbox. Slick and precise, a large part of the feel-good factor of the car comes from the gear shifting experience. Given that the car has a peaky powerband, you need to use the gearbox quite a lot, and for once that is not a bad thing. Ride quality is supple, and the shock absorbers are very well damped. This translates into the real world as a comfortable ride over all sorts of surfaces, even the expressway concrete. The car does lose its composure a little once subjected to Punelevel potholes though, but through small bumps here and there, the car carries through untroubled. We still remember the furor that the Jazz caused on our website thanks to its pricing. MRP still takes top reference spot, but as much as we deny it, there's more to a car than just its price. Aspirations and expectations apart, what exercises most strength over pricing is competition. Which brings me to my question - What else challenges the Jazz? The Hyundai i20 is the closest competitor offering similar performance, space and packaging, but it comes close on the price front too. The Skoda Fabia 1.2 petrol has been discontinued, and even the 1.4 petrol scores over these two only in terms of build quality and potential handling, rendered useless by the underpowered engine.
Unless competition really threatens the Jazz, Honda frankly can demand any price that suits it with no consideration to what the street expects. Those are the rules that the market plays by. And going by the bookings of the Jazz, the fact is set to prove itself - 3,500 cars booked within the first month. Clearly, there are enough who think the car offers good value for the stuff that it comes with. Just like the form of music, the Jazz is an expensive past time, not for the real blue collar sorts, but does offer an equally rich and enriching experience to those who're up for it. Mere mortals like you and me may not be able to afford it, but really, is that the car's fault? Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
Adil Jal Darukhanawala The Economic Times, Zigwheels
Indian utility vehicle major Mahindra & Mahindra just got a shot in the arm when one of its Scorpio pick-ups did the unthinkable take third place in the production category of the tough Rally dos Sertoes in Brazil, racing against the might of the Mitsubishis, Fords and Chevrolets. What is most heartening about this result was that it wasnt a planned event or even a factory effort but the initiative of long time Brazilian motoring enthusiast Ricardo Augusto de Souza Campos, better known in the South American motor sport fraternity simply as Rasc.
Rasc wanted to do something different with his 16-year old son RASC Campos, better known as Rasquinho, and so he purchased a Mahindra pick-up from Govesa Mahindra, the firms dealer in Brasilia. A veteran of over 25 years of motor sport in Brazil, he has seen action not just in circuit racing (where he was Brazilian champion in the Speed 1600 series) but since 1990 had turned his hand to rallies, taking part in the tough Brazilian events in all forms of machinery, latterly trucks. Rasc founded the Jeep Club of Brasilia (his home town) and so it was not lost on him that Mahindra vehicles have descended from this great brand. The Rally dos Sertoes was the one event where success had eluded him in conventional vehicles and so this year he decided to attempt the unthinkable with a vehicle which was largely simple yet unproven in competition. Govesa Mahindra helped Rasc with service support and the makings of this effort saw Mahindra by Bramont step in with sponsorship. The Rally dos Sertoes is one of the toughest events in the world, second its said after the mighty Dakar (run this year in South America if youd care to recollect) and this year it was run over 11 days, the first and the last were promotional super specials. The 5045 km long event featured a total of 2605km of competitive stages between Goiania and Natal. A total of 128 vehicles took the start and among them were 66 cars and seven trucks while the rest were motorcycles and quads.
It was a result which stumped everyone in the event but then Rasc and Rasquinho were counting on the rugged build of the Mahindra to counter the firepower of the competition from Japan and the U.S. The vehicle was prepared almost entirely to stock standard specifications apart from the mandatory safety and structural modifications demanded by the regulations. An FIA safety roll-cage was fitted as were special rally seats. There was a snorkel air intake, a sump and transmission guard, a plastic windshield, electrical safety gear plus also a full complement of navigation and rally aids along with radio and GPS systems. The chassis was strengthened at key points as demanded by the regulations and the only change from the standard spec was the fitment of rally shock absorbers which the T2 regs permitted. There was also a larger 220-litre fuel tank mounted in the load bed and overall the turnout of the vehicle was resplendent in its red and white livery. Maybe with this result, expect Mahindra by Bramont to think about an entry in the 2010 edition of the Dakar in January since from this year on, the great African rally raid classic is now run in, wait for it, South America! It just could be the first ever Indian vehicle ever in a world championship rally raid! Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
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| COMMERCIAL VEHICLES Go To Top Business Standard (Web Edition) See this story in: The Economic Times (Web Edition), The Financial Express (Delhi Print Edition)
Kolkata: Utility vehicle maker Mahindra & Mahindra(M&M) is banking on leveraging its popular Bolero brand to expand its presence in the pick-up segment, where it is currently the market leader with an 85 per cent market share.
It launched the Bolero Maxi Truck with a one-tonne payload for the style conscious customer. The rural customer is increasingly becoming more and more style and comfort conscious, and we have used the look of the Bolero to give this pick-up truck a more stylish look, said Mahesh Kulkarni, general manager, marketing, automotive sector,M&M. He added that the Bolero had sold over 56,000 vehicles last year.
The small pick-up segment is clocking a compounded annual growth rate of 25 per cent and currently has a market size of 1.1 lakh vehicles per annum. M&M enjoys a 20 per cent market share in this segment which is dominated by the Tata Ace. We have placed this vehicle above the Ace and positioned it as a premium pick up that uses micro-hybrid technology and is also competitively priced at Rs 3.49 lakh ex-showroom in Kolkata, Kulkarni said. It will also provide a fuel efficiency of 15 kilometer to a litre which is comparable to the Ace.
M&M is the market leader in the large pick-up segment with an 85 per cent share, while it has a 30 per cent share of the three-wheeler commercial vehicle segment. The company enjoyed an overall market share of 85 per cent in the pick-up segment, Kulkarni claimed. It has grown by 26 per cent in first quarter of the current fiscal in the pick-up segment as against an industry average of 18-20 per cent growth. The company plans to sell around 600-700 vehicles per month in eastern India. It sells around 2000 Maxi trucks per month across India now. http://economictimes.indiatimes.com/News/News-By-Industry/Auto/Mahindra-Mahindra-to-focus-on-rural-markets-to-boost-sales/articleshow/4808628.cms
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| 2/3 WHEELERS Go To Top Adil Jal Darukhanawala The Economic Times, Zigwheels
July 17 was a very significant day in the Indian automotive industry. At about the same time Ratan Tata was handing over the very first Tata Nano to its buyer in Mumbai, a significant ceremony was underway at the Bajaj Auto facility at Chakan near Pune. Doing the honours there was none other than the man who had spearheaded the nuclear tests at Pokhran II, Dr Rajagopala Chidambaram. The symbolism and the significance may not have been apparent to many but trust me, the two events are clearly very much interlinked however, not in a manner the majority can comprehend. The very fact that the world's cheapest car went on sale was great but the motorcycle brigade has hit back in a most telling manner with a vehicle that is priced for just one third of what the cheapest base version of the Nano retails for but also delivers probably the best fuel efficiency in India, if not the world. Operating costs, initial outlay and top notch tech just right for the 100cc segmenters is what one Discovers of the new bike from Bajaj Auto. What is important about this bike is the company's avowed objectives to raise the threshold of expectancy from a bike for those who only see the term "100cc" and not much else. Making a difference in the 100cc class was what Bajaj is finally offering and what we are sure to experience is nothing short of a seismic shift in the largest selling bike segment in the country. The new Discover 100 sports the look of the best selling Discover which has done well in 125cc and 135cc displacements (to the tune of over 2.2 million bikes sold and counting) but underneath the sheet metal and plastic is an allnew frame and of course an all new high tech engine which the company is pinning its hopes on to doing the deal against the best selling Splendor and Passion duo from Hero Honda. We'll get to the engine last but there is more to moving the segment than just the engine alone and here you can focus on the large wheelbase chassis, a very comfortable and relaxed riding stance with a long dual seat, Nitrox rear suspension, alloy wheels, revised new telescopic forks up front, revised front headlamp and tail lamp plus the best cycle parts to complete the dynamic package. And then there is the heart of the matter - an all new from the ground-up 100cc single cylinder ohc engine sporting version 2.0 of the DTS-Si top end. This comes with an electric start and five-speed gearbox as original equipment - ingredients which are absent from the 100cc class among many others. However what is truly of import is the strong driveability this DTS-Si 2.0 engine is able to dish out. Low and mid-range torque is the bread and butter of this class of bike and the Discover 100 is expected to change all the rules of the game here. Also given the work done by Joseph Abraham's team on the powerplant, this engine has delivered impressive fuel efficiency figures and comes with an 89kmpl IDC reading which is the highest from any bike in this class. A fuel efficiency almost 20 per cent better than rivals is what Bajaj Auto claims for this new product and we should Discover that as soon as we get to test ride it in the coming week.
What completes this comprehensively equipped package is a stonking price tag of Rs 40,000/00 (ex-showroom, all over India). With the dynamic capability plus the comfort and safety from its chassis fitted with the best suspenders in the business, the long legged capability of such a bike will set new standards in the commuter segment. The great amount of work done on reducing NVH (noise, vibration and harshness) levels will further enhance the feel good factor and when the drive and the torque kicks in with resultant fuel efficiency, it will help keep those smiles going on for long, long, long and even longer! Surely this is a major tectonic shift in the Indian motorcycle world which no one would have anticipated. Fitting that none other than Dr R Chidamabaram hit the ignition button to launch this new world beater. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
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| COMPONENTS Go To Top Business Standard See similar story in: The Hindu Business Line
Chennai: Coimbatore-based Shanthi Gears, which had declared lock-out in all its six plants, has resumed operation from following normal situation, the company informed the Bombay Stock Exchange.
The company had declared lockout on July 20, 2009, to ensure safety of its properties and employees. The Rs 253-crore industrial gears and machine tools manufacturer has six plants, which include a foundry division and a machine shop. It employs around 800 people. According to sources, the company had terminated around 200 apprentice workers in the last six months since its order book had shrunk due to the economic slowdown. This had resulted in labour problems and a couple of days ago, there was an incident of stone throwing on its bus.
On Tuesday, workers of the company staged a demonstration in front of the Centre of Indian Trade Unions (CITU) office in Coimbatore urging the union not to interfere in the labour issues of the company.
The lockout came at a time when the company is planning to restructure its operation and its promoters led by P Subramanian is looking at selling their 44.7 per cent stake. The promoters have held talks with both domestic and international players including Suzlon-owned Hansen Transmissions, which makes gear box for wind turbines. However, according to reports, the talks have not yielded any results due to high valuation. http://www.business-standard.com/india/news/shanthi-gears-resumes-operations/364596/ http://www.thehindubusinessline.com/2009/07/23/stories/2009072351410200.htm
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| ALLIED INDUSTRY Go To Top Sohini Das & Ishita Ayan Dutt Business Standard
Kolkata: Indian steel has begun to find favour with foreign car makers gearing up to increase localisation in a bid to pare costs and beat currency blues. Honda Siel Cars India is planning to source steel from India for its local operations and is in talks with Tata Steel. A Tata Steel spokesperson confirmed that the companies were in discussions.
Currently, Honda sources steel plates from Thailand for its Greater Noida facility. Honda models, like the City and Civic, have 74 per cent localisation, while the newly launched hatchback, Jazz, has 77 per cent local content.
We are looking at increasing localisation in popular high-volume models like the City, where it could go up to around 80 per cent, a Honda spokesperson said.
She added that Honda required a specific grade of steel for its Advanced Compatibility Engineering Body (ACE) and G-CON (G-Force Control) technology that provides high integrity survival in case of crashes. This light-weight yet highly tensile variety of steel was not available in sufficient quantities in India, the company said.
Another car major, Ford India, has plans to increase its steel sourcing to nearly five times from the current levels of 20 kilotonnes, as it enters the volume segment with the small car slated for launch in the first half of 2010. It currently sources automotive cold-rolled (CR) & hot-rolled (HR) grades from Tata Steel.
Tata Steel is also a vendor for Maruti, Hyundai, Nissan and Volkswagen. Not surprisingly, more than 55 per cent of the steel makers ongoing expansion would be in the flat products, used by the automobile sector, by 2010-11.
For the steelmakers, gaining acceptance from the car makers is a move up the quality ladder. Not just Tata Steel, JSW Steel and Essar Steel have also got approvals from some of the MNC car companies and are awaiting approvals from others.
Vikram Amin, executive director (sales & marketing), Essar Steel, said: All our efforts are directed towards becoming a preferred steel supplier to the auto industry Auto grade steel is a focus area for Essar Steel. Currently, 20-25 per cent of Essars total production is sold to the auto industry. Newer grades are being developed to meet the discerning demand of this industry. Essar Steel has an umbrella agreement with Kobe Steel, Japan to develop steel of speciality grade for the auto industry.
In order to cater to JIT (just in time) delivery needs of the auto industry, Essar Steel has set up service centres in three auto hubs Pune, Chennai and Bahadurgarh. JSW Steel has a technical tie-up with ThyssenKrupp of Germany for high-end cold-rolled steel. The company set up a 1-million-tonne cold-rolled mill last year, which has been ramped up by 70 per cent.
Jayant Acharya, director (sales & marketing), JSW Steel, said the norms were stringent and approvals took time. Our facility is geared for auto steel, he said.
Talking on cost advantage of sourcing the commodity locally, Sandip Sanyal, executive director (operations), Ford India, said: Steel is a dynamic commodity and its difficult to quantify cost advantages as it is based on global trends. However, the key advantages, of local sourcing would be reduction of levels in the value chain and minimising exposure to foreign exchange fluctuations.
Toyota Kirloskar Motors, a joint venture between Toyota Motor Corporation of Japan and Kirloskar Group, confirmed that it sourced around 70-75 per cent of its net steel requirement as it helped avoid exchange rate fluctuations. http://www.business-standard.com/india/news/steel-cos-gaincar-makers/-bid-to-localise/364667/
NATURAL RUBBER OUTPUT MAY DIP 2.3 PER CENT GLOBALLY George Joseph Business Standard
Kochi: The global output of natural rubber (NR) may decline 2.3 per cent during the current year, according to the International Rubber Study Group (IRSG). According to the groups projections, the total global production this year will be 9.65 million tonnes as against 9.88 million tonnes in 2008. Last year, the production had risen 1.8 per cent from 9.71 million tonnes in 2007.
Parallel to the decline in production, consumption is estimated to be down by 5.1 per cent to 9.2 million tonnes. The slowdown in production and consumption is attributed mainly to the current global economic turmoil that also engulfed rubber-based industries such as tyre producers. In 2008, consumption had fallen 1.6 per cent to 9.73 million tonnes, from 9.89 million tonnes in 2007.
China recorded 0.4 per cent increase in consumption to 2.56 million tonnes, the highest in 2008, followed by the US with 1.04 million tonnes (2.3 per cent higher). Consumption in India grew 3.5 per cent. The country consumed 881,000 tonnes natural rubber in 2008 as against 851,000 tonnes in 2007.
Japan registered a drop of 1 per cent in consumption to 878,000 tonnes while Korea recorded the sharpest decline of 5 per cent to 358,000 tonnes last year.
On the production front, India, Thailand, Vietnam and Sri Lanka recorded an increase while China, Indonesia and Malaysia reported a sharp decline.
Meanwhile, the steep rise in price of crude oil badly affected production of synthetic rubber (SR) in 2008. Total production was 12.82 million tonnes last year, down by 4.6 per cent, as against 13.44 million tonnes in 2007.
The global average price of RSS-3, the benchmark grade, increased to Rs 103.79 a kg last year while the domestic average price was Rs 101.1 a kg.
GLOBAL BUYS STRENGTHEN APOLLO TYRES The Hindu Business Line See similar story in: The Hindu
Speaking at a press conference in Kochi, Mr Onkar S. Kanwar, Chairman of Apollo Tyres, said that the global acquisitions have given the company a decisive edge to leverage international markets.
The acquisition of the European specialty tyre manufacturer has strengthened its R&D capabilities, which the company will leverage in its India and South Africa operations. Similarly, the IT skills of the Indian company will be integrated into its operations in the Netherlands and South Africa, generating better operational efficiency and productivity. The company will also be able to better tap economies of scale and efficiency in the procurement of such raw materials as chemicals and natural and synthetic rubber from the global markets.
Marketing would also become more efficient with the diverse range of products the company has to offer.
Michelin lowers stake Our New Delhi Bureau reports: French tyre maker Michelin has further reduced its holding in Apollo Tyres by selling another 2.98 per cent stake. Apollo Tyres informed the stock exchanges on Wednesday that Michelin sold 15 million shares it held and now has 4.99 per cent stake in the company. In the beginning of June, The French tyre maker had offloaded 3.3 per cent in Delhi-based tyre maker for a reported Rs 50 crore through open market sales.
Michelin had acquired a 14.9 per cent stake in Apollo Tyres for about Rs 130 crore in early 2004 through a preferential allotment. The two companies had formed a joint venture, which did not take off. In the last two years, Michelin has been selling its stake in Apollo through open market transactions. http://www.thehindubusinessline.com/2009/07/23/stories/2009072351500200.htm http://www.hindu.com/2009/07/23/stories/2009072356381600.htm
CEAT TARGETS GROWTH RATE OF 20% Sumantra B. Barooah
Ceat had earlier sold 7 acres at the site for Rs130 crore. Ceat plans to expand capacity and become the countrys second or third biggest tyre maker, where it is now No. 4. To reach that goal, it plans to grow at a rate of 20% every year, outpacing the tyre markets growth of around 8%. Its plans also include setting up of new projects. Half the investments required for the projects will be through internal accruals.
Ceat will start production at its plant in Halol, Gujarat, next year, Choudhry said. Between Halol and some of the new programmes we are talking about, the total programme will come up to about Rs750 crore in the near future, subject to the approval. For that we will have to borrow Rs350 crore, Choudhry said. Ceat has debt of around Rs400 crore on its books.
While organic growth is the strategy for its domestic business, Ceat is looking at acquisitions to expand abroad. Choudhry said there are offers already from a few geographies.
Offers are generally (in) Europe. There are also possibilities in Asia. And also some smaller units in US are there, but we have to have a proper due diligence before we can think about anything. he said. http://www.livemint.com/2009/07/22222500/Ceat-targets-growth-rate-of-20.html
FALCON TYRES PLANS TO RAISE RS 100 CR FOR EXPANSION The Hindu Business Line
Kolkata: Falcon Tyres, a major manufacturer of two-wheeler tyres, plans to raise Rs 100 crore through private placement of shares to finance expansion plan and to bring down the promoters shareholding below 75 per cent to remain listed. The company is listed on BSE.
We are in the process of preparing our presentation and hope to be through with the placement within the next two months, Mr Pawan Kumar Ruia, Chairman, Falcon Tyres, told Business Line.
According to him, the promoters stake in the company went up to 86 per cent following the recently concluded open offer requiring either a public issue or private placement. We are planning Rs 300 crore of investments to nearly double the capacity of Mysore plant to 14 lakh pieces a month. We have tied up Rs 100-crore loan from a nationalised bank, another Rs 100 crore is expected to be tied up soon and the balance is proposed to be raised through equity route, Mr Ruia said.
Falcon produces 7.5 lakh tyres a month. Of this, approximately 4.5 lakh tyres are sold as OE primarily to Hero Honda and Bajaj, another 2.5 lakh tyres in the replacement market under Dunlop brand and the balance exported to countries such as Brazil, the UAE and Bangladesh. Exports are not made under any brand name.
The production is slated to go up to nine lakh tyres a month shortly. We are hopeful to complete the expansion to 14 lakh tyres by 2010-11, he said. Falcon witnessed more than double the topline growth in the last four years. We expect to clock further growth in this fiscal, Mr Ruia added. http://www.thehindubusinessline.com/2009/07/23/stories/2009072350570300.htm
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| FINANCE & INSURANCE Go To Top The Hindu Business Line
Mumbai: Shriram Transport Finance Company plans to raise Rs 500 crore through a non-convertible debenture (NCD) issue, with an option to retain over-subscription of up to Rs 500 crore.
The issue opens on July 27 and closes on August 14. The issue offers an interest rate of 10.75 per cent to 11.50 per cent.
The tenure of the NCDs will be three and five years and offer the investors five options. The company plans to use the money raised through the issuance of NCDs for the companys lending business, to meet working capital requirements, to repay existing loans and for meeting capital expenditure, said Mr R. Sridhar, Managing Director, STFC. The minimum application size is Rs 10,000.
ICICI Securities, Kotak Mahindra Capital Company, Enam Securities Pvt Ltd and A.K. Capital Services Ltd are the lead managers to the issue.
The company plans to raise Rs 8,000-9,000 crore in the financial year 2009-10 through various instruments. It raised Rs 2,500 crore in the first quarter of this fiscal. The NCD issue has received an AA+ rating from CARE and AA from Fitch. The company is also exploring the possibility of foraying into construction equipment financing. http://www.thehindubusinessline.com/2009/07/23/stories/2009072351920600.htm
JD POWER AUTO INSURANCE PROVIDER SATISFACTION STUDY Varad More The Economic Times, Zigwheels
In a one of its kind survey held in the country, JD Power ranked different automobile insurance companies in India based on the level of satisfaction among auto insurance policy holders' experiences with their primary automobile insurers. The study was based on various parameters like interaction, claims, product/policy offerings, renewal, and purchase of policy, billing and payment procedures and premium / price of coverage offered.
The top rank was awarded to ICICI Lombard which scored 775 points on a scale of 1,000 points, thanks to the company's brilliant performance under the following three parameters - product/policy purchase experience, product/policy offerings and premium/price for the coverage offered. Close on its heels was Oriental Insurance Company with a total of 772 points. One of the revealing and heartening facts of the study was the thumping presence of PSUs in the top five despite the aggressive marketing of private sector entities. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
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| OIL, LUBRICANTS & ALTERNATIVE FUELS Go To Top The Hindu Business Line
New Delhi: After seeing a decline for over six months, domestic crude oil production rose 4.1 per cent in June against the same month last year. Natural gas production saw a surge of 36.3 per cent during the month.
The boost in natural gas production was due to production from Reliance Industries Ltds east coast block and coal bed methane output in West Bengal. The gain in crude oil production was propelled by increase in output from fields operated by private/joint venture explorers.
According to an official data released by the Petroleum Ministry, domestic crude output stood at 2.75 million tonne in June (2.645 mt same month last year). Production by private/joint venture companies went up by 70.4 per cent to 4,36,000 tonne in June. Public sector explorer ONGCs output declined by 3.5 per cent to 2.026 mt. Output at ONGCs Mumbai high fields, which accounts for half of the countrys annual oil production, fell by 3.8 per cent to 1.407 mt, according to the data. Natural gas output increased 36.3 per cent to 3.588 billion cubic metres (2.632 billion cubic metre). RIL has started producing gas from its east-coast offshore fields since April.
The domestic refiners processed 3.7 per cent less crude in June. This was mainly on account of refinery shutdowns for maintenance. According to the data, refiners processed 13.15 mt of crude oil into fuels (13.65 mt).
Indian Oil Corporation processed 5.7 per cent less. Reliance Industries Ltd, from its first refinery in Jamnagar, reported a 10.3 per cent decrease in production. Essar Oil Ltd reported a 19.7 per cent increase in production.
The 17 public sector refineries and two private sector refiners did 109.1 per cent of capacity utilisation. http://www.thehindubusinessline.com/2009/07/23/stories/2009072351631000.htm
MAHARASHTRA GOVT FIRM ON NOT WAIVING VAT ON CNG Rahul Wadke The Hindu Business Line
Mumbai: The Maharashtra Government is in no mood to accede to the demand of the taxi and auto-rickshaw unions to waive the 14 per cent value-added tax (VAT) on compressed natural gas (CNG).
The unions have been seeking its removal so that they can cushion the recent price hike on CNG. Mahanagar Gas, the nodal CNG supplier for Mumbai region, had increased its price from Rs 21.70 to Rs 24.65 per kg on July 18.
Fare hike Sources said that if the State Government gave into such demands, it would set a dangerous precedent. Incidentally, the demand for a fare hike is under consideration but no decision has been taken yet.
On Tuesday, the cabbies also staged a sit-down protest against the price hike at the Mahanagar Gas corporate office and submitted their list of demands to the management. Mr A. L. Quadros, General Secretary of the Mumbai Taximen Union, told Business Line that unless the State Government granted VAT exemption on CNG or increased the minimum fare from Rs 13 to Rs 15 coupled with a hike for every additional kilometre from Rs 8 to Rs 9, about 55,000 taxi men would go on strike from August 1. As a shareholder in Mahanagar Gas, the Government should ask the organisation to scale down prices. If Indraprastha Gas, the CNG supplier in New Delhi, can get exemption on VAT, why cant Mahanagar Gas get the same? he asked.
Auto-rickshaw union Even as the Taximen Union is gearing up for the strike, the Mumbai Autorickshaw Union (one of the largest of its kind in the Mumbai metropolitan region with a 40,000-strong membership) has not yet given a similar call yet.
Mr Shankar Salvi, General Secretary of the union, said that the decision on a strike would only be taken by July 26. We also want removal of VAT or an increase in the minimum fare from Rs 9 to Rs 12. In addition, the fare for every additional kilometre should be hiked from Rs 5 to Rs 7, he said.
Mahanagar Gas spokesperson, Mr S. N. Suri, said that there would be no rollback on the price of CNG. In view of the increase in operational cost, the company has been forced to increase the price, that too after four years. Our business would, otherwise, not be viable, he said. http://www.thehindubusinessline.com/2009/07/23/stories/2009072351331900.htm
OIL FALLS BELOW $65 ON BUILD IN US CRUDE STOCKS
See this story in: The Times of India
London: Oil fell below $65 a barrel on Wednesday after data showing an unexpected rise in U.S. crude stocks suggested demand in the world's top energy consumer was still weak. http://timesofindia.indiatimes.com/NEWS/Business/International-Business/Oil-falls-below-65-on-build-in-US-crude-stocks-/articleshow/4807904.cms
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| GM GLOBAL SALES RISE IN SECOND QUARTER AFP/ PTI Business Standard
Washington: General Motors (GM) said its global sales rose 20 per cent in a quarter-over-quarter basis to 1.94 million vehicles in the three months to June 30, led by growth in Asia.
The leading US automaker, which emerged from bankruptcy this month under a government-backed plan, said the second-quarter sales figure was down 15 per cent from the same period a year ago.
GM sales outside the United States grew to 72 per cent of total sales from 65 per cent a year ago. "We are moving quickly to respond to new market opportunities around the globe and meeting customer needs with fuel-efficient products that offer advanced technology, compelling designs and great value," said Jonathan Browning, vice-president for global sales, service and marketing, General Motors.
GM said its Asia Pacific regional sales were up 38 per cent compared with a year ago, including the Wuling brand, a joint venture of GM and Shanghai Automotive Industry Corporation.
GM's North American sales fell 32 per cent compared with a year ago in the quarter but US sales rose 31 per cent from the first quarter. Sales were off 20.1 per cent in Europe from a year ago and 20.8 per cent in Latin America. http://www.business-standard.com/india/news/gm-global-sales-rise-in-second-quarter/68602/on
FIAT SKIDS INTO Q2 LOSS OF EURO 168 MN PTI See this story in: Business Standard (Web Edition), The Financial Express
Milan/New Delhi: Italian car maker Fiat reported a net loss of euro 168 million for the second quarter ended June, primarily hit by weak truck and construction equipment sales.
The auto maker had a net profit of euro 604 million in the same period a year ago, it said in a statement. Revenues plunged 22.5 per cent to euro 13.2 billion in the latest quarter. In the comparable period, the same stood at euro 17.02 billion.
"...Truck market and the construction equipment business will continue to suffer depressed demand for the major portion of the year, with signs of recovery only visible in the fourth quarter," the firm said.
During the second quarter, Fiat's net industrial debt declined by more than euro 800 million mainly on account of reduction in working capital, among others. In automobiles segment, the revenues fell 11.1 per cent to euro 6.9 billion due to the significant contraction in the global automotive market.
About one-third of the revenue decline was due to unfavourable exchange rate movements, it added. For passenger cars, Fiat delivered a total of 5,14,600 units during the quarter, representing a 1.3 per cent drop over the year-ago period. http://www.business-standard.com/india/news/fiat-skids-into-q2-losseuro-168-mn/68604/on http://www.financialexpress.com/news/fiat-q2-profit-at-440-m-cuts-debt/492800/
HYUNDAI TO INVEST $3.3 BN IN ECO PROJECTS See this story in: The Indian Express Seoul: Hyundai Motor Group, the world's No. 5 automaker, said on Wednesday it plans to invest 4.1 trillion won ($3.3 billion) in developing eco-friendly cars and reducing carbon dioxide by 2013. The plan came after Samsung Electronics Co Ltd announced a 5.4 trillion won investment plan in green research and development and facilities. http://www.indianexpress.com/news/hyundai-to-invest-3.3-bn-in-eco-projects/492601/
Reuters See this story in: The Economic Times
Berlin: Canadas Magna is still Germanys preferred bidder for carmaker Opel, a government spokesman said on Wednesday ahead of a meeting with General Motors representatives to discuss the takeover offers.
PORSCHE, VW TO FIX TAX LIABILITY ISSUE Reuters See this story in: The Economic Times
Frankfurt: Several outcomes remained possible to a power struggle pitting Porsche against Volkswagen a day ahead of an expected showdown between the car makers rival factions, people familiar with the matter said.
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| ECONOMY & FINANCE Go To Top The Hindu Business Line
Mumbai: The rupee fell by around 10 paise against the greenback on Wednesday as persistent dollar demand from banks exerted pressure on the domestic currency. The rupee opened at 48.38 and strengthened to touch an intra-day high of 48.29. It then weakened to 48.62, before closing at 48.51, against the previous close of 48.42/43. The rupee opened with a positive gap on the back of positive equity indices. But dollar buying by public sector banks for their corporate clients exerted pressure on the rupee, said a dealer with a private bank. In the overseas markets, the dollar was volatile against other major currencies. In the forward premia market, the six month ended marginally higher at 2.39 per cent (2.36 per cent) and the one-year was at 2.24 (2.22 per cent). http://www.thehindubusinessline.com/2009/07/23/stories/2009072351890600.htm
PTI See this story in: The Hindu Business Line
Mumbai: The BSE Sensex on Wednesday fell 219 points and ended below 15,000 due to weak European cues amid encouraging first-quarter corporate earnings. Wiping out initial sharp gains of nearly 307 points, the Bombay Stock Exchange 30-share barometer turned negative and settled the day at 14,843.12, netting a loss of 219.37 points or 1.46 per cent from previous close.
Good first-quarter results by India's electric equipment maker BHEL and the third-largest software exporter Wipro did not impact the market. IT major Wipro reported 11.86 per cent increase in consolidated net profit at Rs 1,015.50 crore for the first quarter ended June 30, 2009.
European markets and US index futures were trading in the red this afternoon, adversely affecting market sentiment.
Investors preferred to book profits at higher levels as the market surged sharply over the last five days.
The Sensex rose from the intra-day low of 13,219.99 on July 13 to 15,191 on July 20, registering a rise of about 2,000 points or 15 per cent in five days after over 100 companies reported significant growth in Q1 net profits. Foreign institutional investors too were net sellers to the tune of Rs 250.86 crore in equity on the BSE and NSE on July 21, according to provisional data. http://www.thehindubusinessline.com/blnus/05221901.htm
Last Financial closing
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Wednesday, July 22, 2009
Indian Auto Industry Update July 23, 2009
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