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| INDUSTRY INTERVIEWS/FEATURES Tata Fiat JV posts Rs305 cr loss in FY09 Hyundai suffers losses due to strike Ford launch new version COMMERCIAL VEHICLES CONSTRUCTION & AGRI MACHINERY Hero Honda gains from lower costs, tax sops | ALLIED INDUSTRIES OIL, LUBRICANTS & ALTERNATIVE FUELS Oil falls below $67 on econ woes; US crude stocks up INTERNATIONAL NEWS Daimler posts $1.51 bn loss in second quarter Peugeot Citroen reports 962 million euros H1 loss Japanese carmakers defy downturn ECONOMY & FINANCE Sensex closes 158 points lower Economy to maintain 6.7% growth rate: Pranab
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| INDUSTRY Go To Top The Economic Times (Web & Print Edition) See this story in: The Hindu Business Line (Web & Print Edition), The Times of India (Web Edition), Rediff India (Web Edition), mint (Web & Print Edition), The Economic Times (Web Edition), Business Standard (Web & Print Edition)
Mumbai: Jaguar Land Rover (JLR), the marque brands acquired by Tata Motors from the Ford Motor Company in June 2008 needs cost reduction and reduction of development and productionising time as the global recessionary trends have seen a sharp fall in luxury vehicle sales. http://www.thehindubusinessline.com/2009/07/30/stories/2009073051372000.htm http://www.thehindubusinessline.com/blnus/02291615.htm http://www.livemint.com/2009/07/29154850/JLR-for-light-weight-bodies-to.html http://www.business-standard.com/india/news/jlr-needs-/major/-cost-cuts/365347/
PTI See this story in: Asian Age (Web & Print Edition), The Indian Express (Web Edition)
Mumbai: Dismissing doubts about the utility of the Jaguar and Land Rover acquisition, the Tata Group chairman, Mr Ratan Tata, on Wednesday said that it is a "very worthwhile strategic" move that will bring in considerable technology and global presence.
"I strongly feel that in later years we can look back at the JLR acquisition and say to ourselves that this was a very worthwhile strategic acquisition and the one which has brought us considerable technology and global presence," he was quoted as saying in the annual report of Tata Motors.
Tatas bought UK-based Jaguar and Land Rover last year for $2.3 billion. But soon, the global recession badly hit car sales.
"Sales of Jaguar and Land Rover brands declined by 20 per cent and 51 per cent, respectively from October 2008 to March 2009 compared to the corresponding period in the previous year as the demand for premium vehicles declined," the report observed. Meanwhile, Tata Steel has recorded a 47 per cent dip in standalone net profit for the quarter ended June 30 and hoped for an improved show in coming quarters.
The company had clocked Rs 1,488 crore net profit for the quarter ended June 30, 2008 as against Rs 790 crore in the first quarter of the current fiscal.
The company sold 1.41 million tonne of the alloy in the first quarter of fiscal 2010 as compared to 1.15 million tonne a year-ago period, but total income de-clined to Rs 5,661.89 crore during the quarter from Rs 6,165.14 crore in the same period last year. http://www.asianage.com/presentation/leftnavigation/news/business/tata-defends-jlr-buyout.aspx http://www.indianexpress.com/news/jlr-was-a-worthwhile-acquisition-tata/495607/
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| CARS, SUVs, MUVs Go To Top Manu P. Toms The Hindu Business Line (Web & Print Edition)
Mumbai: Political instability, slow economic growth and flooding of used cars have hit the business of Indian carmakers in South Asia. As a result, growth in exports to Nepal, Sri Lanka, Bangladesh and Bhutan is much lower than actual potential, say industry representatives.
Mahindra & Mahindra, for instance, sells around 3,000 vehicles annually in these markets, but now believes that the recent global financial crisis has put a dampener on sales, especially in Sri Lanka.
The challenge in these countries has largely to do with politics and economics. While political instability has impacted business, in Sri Lanka and Bangladesh, the policy of allowing used cars is a hindrance to new vehicle sales from India. A higher tariff structure, especially for passenger vehicles, is another bottleneck, Mr P.N. Shah, Executive Vice-President, International Operations, M&M, told Business Line.
Potential Not everyone is complaining though. Fiat India Automobile sees an opportunity in markets such as Bangladesh, which is dominated by used-car imports from Japan and Singapore.
Due to the high appreciation of the yen and the dollar, these imports have become very expensive. Cars from India are cheaper due to the rupee trade with Nepal and Bhutan. The exchange rate (with the rupee) does not fluctuate and this is an advantage, said Mr Rajeev Kapoor, Chief Executive Officer.
Fiat plans to export cars to Nepal, Sri Lanka and Bhutan. One major city in each country contributes up to 70-80 per cent of the business, be it Kathmandu, Colombo or Thimpu (Bhutan).
Market players Indian carmakers are major players in these markets, which are characterised by marginal volumes, sometimes even smaller than a metro in India. Tata Motors is the market leader in commercial vehicles in Nepal, Bangladesh, Bhutan and Sri Lanka (where it has been exporting since 1962). It recently appointed a distributor in the left-hand drive market of Afghanistan.
Now that the civil war in Sri Lanka is over, the country holds some promise. The same is the case with Bangladesh and Nepal where things are looking up, said Mr Jnaneswar Sen, Vice-President, Marketing, Honda Siel Cars India. The company sold 68 cars in the South-Asian neighbourhood last year but saw volumes crash this year. Sales, this far, are only two cars. http://www.thehindubusinessline.com/2009/07/30/stories/2009073052171400.htm
Shally Seth mint (Web & Print Edition)
Mumbai: Carmaker Fiat Automobiles India Ltd, a joint venture between Tata Motors Ltd and Italys Fiat SpA, reported a loss of Rs305 crore for fiscal 2008-09 on higher expenses and costs, but expects to break even in 2011-12 on demand for new models.
In the previous year, the firm posted a loss of Rs44 crore, but only for the three months ended 31 March 2008.
Rajeev Kapoor, president and chief executive, Fiat Automobiles India, said the recent launch of the Grande Punto had ushered the company into the competitive compact car segment.
After the launch of the Punto, we have moved into the high-volume segment. We are aiming at localising the car by 85% by December. This will enhance our profitability, said Kapoor.
The joint venture was formed in December 2007 for making Fiat and Tata branded products, engines and gears.
It reported manufacturing and other expenses of Rs565.51 crore in fiscal 2009, against Rs44.66 crore in the previous year.
What is worrisome is (the) companys reserves and surplus that continues to be negative despite an infusion of Rs180 crore each by the partners,said Mahantesh Sabarad, an analyst at Centrum Broking Ltd.
He expects Fiat Automobiles India to break even in another year, provided its revenue grows at double the pace of the Rs390 crore the company posted for 2008-09.
Fiat launched the Grande Punto in June and sold 1,500 units in its first month. Kapoor expects the volumes to have increased in July and sees it eventually stabilizing at 2,000 units a month.
Sales of the Linea, Fiats sedan, have declined to a monthly average of 1,000 units from at least 1,500 units when it launched in India earlier this year.
Kapoor said this was primarily because people prefer compact cars over sedans.
At least 75% of the cars sold in India are compact cars. http://www.livemint.com/2009/07/29224312/Tata-Fiat-JV-posts-Rs305-cr-lo.html?h=A4
HYUNDAI SUFFERS LOSSES DUE TO STRIKE PTI See this story in: The Hindu Business Line (Web Edition), mint (Web Edition)
New Delhi: The country's second-largest carmaker, Hyundai Motor India, on Wednesday said that it has suffered production loss to the tune of 1,800 units due to the five-day strike at its facility near Chennai and plans to recover the losses by working ex tra on the coming weekend. While Plant II functioned normally during the strike, production was affected in Plant I. We had a loss of around 1,800 units due to the strike,'' said Mr Heung Soo Lheem, Managing Director and CEO, Hyundai Motor India.
The company is planning to keep the Plant I working on the coming Sunday to recover the loss, he added. He said the company has a daily total production capacity of 2,000 units from the two plants, with Plant I accounting for 1,000 units. While Plant I operates in three shifts, the second plant has two shifts,'' said Mr Lheem. Meanwhile, a senior Hyundai Motor India official said that production loss due to the strike has been of 3,000 units and among the affected models are Santro, Accent, Getz and i20.
Our initial production target for July was 45,000 units. Now it will be down to around 42,000 units, although we hope to recover the numbers soon,'' the official said, adding that the delivery of vehicles will not be affected. A section of workers of H yundai Motor at the Irungattukottai plant called off their strike yesterday after a wage settlement agreement was signed between the employees and the management. http://www.thehindubusinessline.com/blnus/02291730.htm http://www.livemint.com/2009/07/29175712/Hyundai-suffers-losses-of-180.html
See this story in: The Statesman (Web Edition)
New Delhi: Car maker Ford India has launched an advanced version of its mid-size sedan Fiesta, priced between Rs 6.99 lakh and Rs 7.99 lakh (ex-showroom, Delhi). http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=262811
HONDA MOTOR DRIVES INTO $79 MN Q1 PROFIT PTI See this story in: Hindustan Times Tokyo/New Delhi: Japanese auto maker Honda Motors has managed to stay in the black, posting a profit of just 7.5 billion yen (about $79 million) for the three months ended on June 30, 2009.
Tackling tough economic conditions and falling sales, the car maker's first quarter consolidated net income plunged 96 per cent to 7.5 million yen. In the year-ago period, the auto major had a consolidated net income of 173.3 million yen, it said in a statement on Wednesday.
Noting an increased sales of motorcycles in the first quarter in India and Vietnam, the company said the Indian market for two-wheelers has started to expand. Net sales and other operating revenues tumbled to two trillion yen for the June quarter as compared to 2.87 trillion in the same period last year.
Honda said the 30 per cent decline in consolidated net sales and other operating revenue was primarily due to decreased revenue in the automobile business and unfavorable currency translation.
The company's motorcycle unit sales touched 2,252 thousand units, a fall of 17.1 per cent as compared to the year-ago period.
"The market in Vietnam continues to expand... The Indian market that had retracted started to expand (in the first quarter)," the statement noted. http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=
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| COMMERCIAL VEHICLES Go To Top M. Ramesh The Hindu Business Line (Web Edition)
Chennai: Armed with funds from the Jawaharlal Nehru National Urban Renewal Mission, the various State road transport undertakings in Tamil Nadu are on a buying spree. On July 1, orders were placed for 1,500 semi-low floor buses, worth about Rs 300 crore. Ashok Leyland got orders for 1,000 buses, Tata Motors for 500.
Now, the nodal agency for the centralised purchases for the TN STUs, Institute of Road Transport (IRT) will finalise another order for 100 air-conditioned buses next week. The Institute has put out another tender for the buying 1,500 LED destination display boards, valued at about Rs 25 crore. These are modern boards that gives the bus number, route and name of the stopping on their electronic displays.
Bids for led displays The tender is good news for Chennai, where about 300 buses have the LED displays, on trial basis. According to Mr P. Rajan, Additional Director (Purchase), IRT, 900 of the 1,500 units under purchase are meant for the buses of Chennai Metropolitan Transport Corporation. The other 600 are to be equally divided between Coimbatore and Madurai. The funding for the LED displays also comes from JNNURM.
Outside the JNNURM-funded purchase programme, the IRT has floated a tender calling for the supply of some 60,000 tyres worth about Rs 36 crore, which closes on August 4. Another tender for supply of lubricants worth about Rs 25 crore closes on August 8. Mr Rajan told Business Line on Wednesday that within the next fortnight, IRT will finalise orders for the purchase of 1,400 bus chassis. This could be worth another Rs 300 crore. Thus, between JNNURM and otherwise, the TN STUs will buy at least 3,000 new buses this year.
Asked if IRT also buys spare parts for the TN fleet, Mr Rajan said that spare parts are centrally purchased by the Association of State Road Transport Undertakings, New Delhi.
IRT is mandated with the task of purchasing items such as chassis, lubricants, rubber materials including tyres and bus tickets, he said. http://www.thehindubusinessline.com/2009/07/30/stories/2009073051482300.htm
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| CONSTRUCTION & AGRI MACHINERY Go To Top | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/3 WHEELERS Go To Top The Financial Express See this story in: Business Standard, The Hindu Business Line, The Economic Times, The Indian Express, Hindustan Times, The Pioneer, Daily News & Analysis, Yahoo India, The Times of India, mint
New Delhi: On the back of the highest ever quarterly two-wheeler sales in its history, Hero Honda Motors on Wednesday posted a 83% jump in its net profit during the April-June period at Rs 500.11 crore as against Rs 272.87 crore in the corresponding quarter of the last financial year. This is the highest-ever quarterly profit posted by it.
Hero Honda, the countrys largest two-wheeler manufacturer, reported a 34% increase in total turnover (net sales and other operating incomes) during the period at Rs 3822.44 crore as compared to Rs 2851.04 crore during the same quarter of the previous financial year. The company recorded an EBIDTA margin of 17% in the first quarter vis--vis 12.23% in the same period of the last year.
Earlier, the country's second largest two wheeler manufacturer and Hero Honda's closest rival, Baja Auto, had reported a 67% jump in its net profit at Rs 293 crore. Bajaj's total income was up 1.4% at Rs 2,338 crore.
We're delighted to report our best quarter ever, with the highest revenue and earnings in Hero Honda's history. Our ongoing focus on continuous innovation in every sphere of our business and fiscal discipline has allowed us to leverage our double-digit sales growth into robust earnings for the quarter. Our operating performance is excellent at both the top and bottom lines. Our balance sheet and liquidity position give us agility and flexibility in today's weakened global economy and turbulent financial markets," Pawan Munjal, MD and CEO, Hero Honda Motors, said in a statement.
Sales increased by 25% in the April-June quarter at 11,18,987 units as against 8,94,244 units in the corresponding quarter last year. "With over a 59% market-share in the domestic motorcycle market and sales of over a million units in the quarter, the robust top line growth has largely contributed to the strong bottom line performance. Several other key factors such as cost rationalisation across the board, softening of commodity prices, and tax benefits also contributed to the bottom line," the company said in a statement. The current quarter reflects a substantial tax benefit accrued on account of the company's full utilisation of the tax benefits available for the Haridwar plant, which resulted in bringing down the overall effective tax rate, it added.
According to Hero Honda, while most of its recent launches, such as Passion Pro, Splendor NXG self-start, the special edition Hunk, the new Pleasure, in addition to the trusted Splendor+ and Passion Plus, have been share-and-volume drivers for the company, the Hunk and the CBZ X-treme have continued to help build on the company's steadily growing share in the premium segment. Shares of Hero Honda closed down 2.03% at Rs 1639.80 on the BSE. http://www.financialexpress.com/news/hero-honda-profit-accelerates-83/495687/2 http://www.business-standard.com/india/news/hero-honda-profit-zooms-to-rs-500-cr/365348/ http://www.thehindubusinessline.com/blnus/26291722.htm http://www.indianexpress.com/news/hero-honda-june-quarter-net-up-83-pct/495615/ http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=Business http://www.dailypioneer.com/192426/Corporate-Result.html http://www.dnaindia.com/money/report_record-q1-gives-hero-honda-a-flying-start_1278259 http://in.biz.yahoo.com/090729/137/batyqf.html http://www.livemint.com/2009/07/29231449/Hero-Honda-net-up-83-on-susta.html?h=B
HERO HONDA GAINS FROM LOWER COSTS, TAX SOPS Mobis Philipose and Ravi Krishnan mint
The first quarter net profit of Rs500 crore posted by Hero Honda Motors Ltd has been better-than-expected. While this is higher than the Rs463 crore consensus estimate of analysts polled by Bloomberg, it hasnt come as a surprise. After all, other auto firms such as Bajaj Auto Ltd and Tata Motors Ltd also beat expectations this season, and that too by much wider margins. The auto industry has benefited from lenders loosening their purse strings and commodity prices softening.
Although Hero Honda hasnt beaten estimates by a wide margin, it is still the preferred stock in the two-wheeler space because of its consistent performance. The company has an edge over its competitors thanks to its decision to focus on rural sales. Since rural consumers dont depend on financing schemes, the company was able to ride out the lack of consumer financing options and avoid a dip in sales. In the first quarter this fiscal, Hero Honda dispatched more than one million vehicles, a first for the firm, as volumes grew 25%.
Hero Honda has pruned costs thanks to its factory in Haridwar, Uttarakhand. Analysts estimate at least a quarter of Hero Hondas motorcycles are manufactured at Haridwar. In the last June quarter, this was about 5%. Thanks to various incentives such as an excise tax waiver for 10 years, income-tax exemption and an investment subsidy at this plant, the firms sales net realizations and profitability are much higher. On a per unit basis, average realizations grew 7.1% to Rs34,058 per unit.
Raw material savings also were better than expected, especially with a steeper fall in aluminium prices, say analysts. Two-wheelers use more aluminium (as a percentage of total metal used) than four-wheelers. Raw material costs as a ratio of net sales fell to 67.6% last quarter compared with 72.5% in the year-ago period. Consequently, operating profit almost doubled to Rs604 crore and operating margin rose by 5.1 percentage points.
It will be difficult to sustain such high growth rates. Hero Honda sells 60% of its vehicles in rural India, a segment that depends on the monsoon. Despite a late surge in July, rains are 19% below normal and have delayed sowing in several areas. And competition in the urban segment is expected to get tougher with new vehicle launches from peers and easier financing. With the firm now valued at 19 times estimated 2009-10 profit, further upside may be limited. http://www.livemint.com/2009/07/29222027/Hero-Honda-gains-from-lower-co.html
HERO HONDA: AN OUTSTANDING PERFORMANCE Shobhana Subramanian Business Standard (The Compass)
Mumbai: In whats supposed to be a challenging environment, Hero Honda has turned in a superb set of numbers for the June 2009 quarter. Its not just that volumes were up 25 per cent; realisations have been strong because revenues have risen 34 per cent year-on-year to Rs 3,811 crore. In the just preceding March 2009 quarter, revenues had increased by 22 per cent.
The combination of a strong top line and easing commodity prices have helped push up operating profit margins by nearly 500 basis points year-on-year, driving up the operating profit by a remarkable 87 per cent and the profit after tax by 83 per cent. Sequentially, margins have risen by 220 basis point. The company had ended 2008-09 with the market share in motorcycles of 57 per cent which has gone up further to 59 per cent. Hero Honda appears to have cashed in on the wedding season it has traditionally done well during that season especially in rural markets where it has a very strong presence. With such a firm grip on the market, especially in the 100cc entry segment, Bajaj Auto will find it hard to make a mark with its new 100cc launch.
Of course, the entry of Honda Motorcycles and Scooters India (HMSI), into this space, couldpose some problems for Hero Honda but thats still some time away. In the meantime, going by the momentum in the June quarter, volumes in the current year could go up by at least 12-13 per cent; last year on a smaller base, they grew by 12 per cent. Hero Honda depends less on financing schemes to sell its bikes than some of its competitors and going by the June quarter numbers, it has pricing power too. Which means revenues could increase by at least 20 per cent over the Rs 12,319 crore posted last year.
With operating profit margins expected to sustain at levels of 16.5 per cent and tax benefits net profits could rise by about 50 per cent, say analysts. Among the top performers in 2008, the stock has risen 102 per cent since the start of the year, compared with a gain for the Sensex of about 50 per cent. At Rs 1,640, the stock trades at around 16.5 times estimated 2009-10 earnings and is attractively valued. http://www.business-standard.com/india/news/hero-honda-an-outstanding-performance/365371/
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| COMPONENTS Go To Top The Hindu Bangalore: Bosch Power Tools India, part of the 45 billion euro Bosch Group, launched here on Wednesday a range of cordless power tools, powered by lithium ion batteries developed in-house. Kannada film actor Puneeth Rajkumar released the power tools and demonstrated how they could be used.
R. Pandey, Regional Sales Director, Bosch Power Tools India, told reporters that Bosch Power Tools had worldwide sales of 3.15 billion euro with a year-on-year growth of 3.3 per cent last year. This was in a year when growth shrunk in the North American and Europe markets, made up by better growth in Asia Pacific. Almost 35 per cent of sales was from products less than two years old.
Over a 12 month period, 100 new products and upgrades were introduced into the market. The global market for power tools was estimated at $9 billion and Bosch could claim a major share. A 6 per cent growth could be expected this year with India continuing with a double digit growth.
The cordless tools are designed to be lightweight, with long battery life between recharges and coated with durashield material to withstand the shock when dropped from heights at construction sites, he said.
They could be used for both indoor and outdoor work. The power tools can be used in segments such as automotive, construction, manufacturing, electrical, electronics and interiors. http://www.hindu.com/2009/07/30/stories/2009073056191800.htm
CUMMINS INDIA Q1 NET AT RS 89 CR PTI See this story in: The Hindu Business Line
Mumbai: Engine manufacturer Cummins India on Wednesday reported a net profit of Rs 89.66 crore for the first quarter ended June 30, while the same was at Rs 88.24 crore during the corresponding period a year earlier.
Due to the scheme of merger of Cummins Sales & Services India Ltd (CSS) and Cummins Auto Services Ltd (CASL) with the company, the figures of June quarter are not comparable with those of the corresponding previous period, Cummins India said in a filing to the BSE.
Total income stood at Rs 656.04 crore for the quarter ended June, 2009, whereas the same was Rs 744.70 crore of the same period last fiscal. http://www.thehindubusinessline.com/blnus/26291720.htm
HINDUJA FOUNDRIES NET LOSS AT RS 10 CR
As part of its modernisation drive, the company will invest Rs 16 crore this year to revamp its Ennore facility to enhance productivity. Besides, the company is currently in the process of installing automated core package at the Sriperumbudur plant which will see its capacity increase to 72,000 tonnes from 50,000 tonnes a year over the next two years, he said.
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| FINANCE & INSURANCE Go To Top PTI See this story in: The Hindu Business Line, The Tribune
New Delhi: Auto maker Tata Motors on Wednesday announced that it has entered into an understanding with public sector lender State Bank of Hyderabad for financing of Fiat cars available through the Tata-Fiat dealer network.
Under the agreement customers can avail loans of up to 85 per cent of the on-road price'' for a tenure ranging up to 7 years at an interest of 10.25-10.75 per cent annually for Fiat brands including Linea, Palio Stile and Grande Punto, Tata Motors said in a statement. This facility will be available at all the branches of State Bank of Hyderabad (except service branches) and the 100 sales touch points of Tata-Fiat distribution network, the company added. http://www.thehindubusinessline.com/blnus/02291205.htm http://www.tribuneindia.com/2009/20090730/biz.htm
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| OIL, LUBRICANTS & ALTERNATIVE FUELS Go To Top The Hindu Business Line
The company plans to add 50,000 new PNG connections in the current financial year. IGL has already tied up its future gas requirements by signing gas sale agreements with GAIL and BPCL and is in the process of signing agreement with Reliance for KG basin gas. IGL has chalked out an expansion programme. http://www.thehindubusinessline.com/2009/07/30/stories/2009073051052300.htm
OIL FALLS BELOW $67 ON ECON WOES; US CRUDE STOCKS UP
See this story in: The Times of India
Singapore: Oil slid below $67 a barrel on Wednesday, extending losses from the more than $1 retreat the day before, on renewed concerns over the US economy after a drop in consumer confidence and bearish API crude data. The American Petroleum Institute (API) reported that US crude oil stockpiles jumped 4.1 million barrels last week, countering analysts' expectations for a 1.3 million-barrel draw, as imports rose and refiners slowed their processing rates. http://timesofindia.indiatimes.com/NEWS/Business/International-Business/Oil-falls-below-67-on-econ-woes-US-crude-stocks-up/articleshow/4832580.cms
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| INTERNATIONAL NEWS Go To Top Bloomberg See this story in: The Economic Times
Paris/Tokyo: Automakers may be getting past the worst of the slump after PSA Peugeot Citroen said it generated cash in the first half and Daimler, Honda Motor and Nissan Motor posted better-than-expected quarterly results. will expand capacity in the country to 600,000 vehicles from 360,000, buoyed by 5 billion yuan ($732 million) of investment.
DAIMLER POSTS $1.51 BN LOSS IN SECOND QUARTER Agencies See this story in: The Economic Times
Berlin: Germany's Daimler AG said on Wednesday that it lost euro1.06 billion ($1.51 bn) in the second quarter as the recession hurt car and truck sales and the company took charges related to its stake in Chrysler. But the company saw signs of a turnaround and its shares rose.
Stuttgart-based Daimler, whose brands include Mercedes-Benz, Maybach and Smart, said sales across all of its units, including luxury cars, vans, trucks and buses slid 31 percent in second quarter compared to last year with just 391,500 sold worldwide.
PEUGEOT CITROEN REPORTS 962 MILLION EUROS H1 LOSS AP See this story in: mint
Paris: Automaker PSA Peugeot Citroen on Wednesday posted a 962 million ($1.37 billion) net loss in the first half as the global economic crisis continued to ravage car sales and said it doesnt expect the European car market to recover before the end of next year.
The loss compares to a 733 million profit a year earlier.
The maker of the Peugeot 207 and Citroens C4 Picasso said it expects to remain loss-making this year, after already losing 343 million in 2008. The company is shedding jobs and replaced its chief executive in March in a desperate bid to face off the wost crisis the car industry has faced in decades.
The first half results reflect the impact of adverse conditions in the European markets, which were only partially mitigated by the benefits from performance action plans and new model launches, CEO Philippe Varin said in a statement.
The former steel industry executive took over from Christian Streiff after reports that Streiff had lost the confidence of the Peugeot family, the companys founder and largest shareholder.
Frances largest auto maker said incentives for scrapping old cars for new, less-polluting models in some European countries gave a needed boost to lagging car sales and led to increased production in May and June.
European manufacturers group ACEA reported a 2.4% rise in European car sales in June, the first increase after 14 months of falling sales, thanks to government cash-for-clunkers handouts.
It said sales at Europes top seller Volkswagen AG rose 9.5%, while Italys Fiat SpA saw a 11.7% gain as its cheaper small cars sold strongly. Peugeot Citroen sales increased 4.4%, Ford Motor Co. rose 2.2% and Renault was up 3.4%.
Peugeot Citroen repeated a 23 June warning that it expects to record a recurring operating loss this year of between 1 billion and 2 billion.
It expects the European automotive market will decline by around 12% this year, with a 7% drop in the second half.
Recovery should take place toward the end of 2010, Varin said.
In the first half, the recurring operating loss was 826 million compared with a profit of 1.115 billion in the same period of 2008.
Revenues fell 21.8% to 23.497 billion from 30.066 billion a year earlier.
Peugeot Citroens automotive division and car parts supplier Faurecia were hardest hit, whereas the Banque PSA Finance arm has shown good resilience, the company said.
The company said it spent 294 million in the first half on restructuring charges mainly from its voluntary redundancy plan.
The carmaker plans to cut 11,000 jobs this year, after losing 18,000 jobs about 10% of the work force since the start of its turnaround plan two years ago. http://www.livemint.com/2009/07/29160021/Peugeot-Citroen-reports-962-mi.html?h=B
JAPANESE CARMAKERS DEFY DOWNTURN Reuters See this story in: The Economic Times
Tokyo/Frankfurt: Japanese car manufacturers unexpectedly posted profits on Wednesday and Mercedes-maker Daimler forecast improving performance this year but clear signs of sustained recovery for the world's battered auto sector remained elusive. Global automakers have seen sales crumble in the past 12 months due to economic downturn and tight credit markets that have already driven US rivals General Motors and Chrysler to bankruptcy and restructuring. "Conditions remain extremely severe in the auto market," Honda Executive Vice President Koichi Kondo told a news conference. France's PSA Peugeot Citroen generated positive free cash flow of 467 million in the first half, thanks to sharp cuts in vehicle stocks. But free cash flow would be negative in the second half, as no more stock cuts could be made, finance chief Frederic Saint-Geours told a news conference. And UK-based car dealer Inchcape beat analysts' forecasts with a H1 underlying profit of 65.4 million pounds, 58% lower year-on-year. Honda turned a profit of 25.2 billion yen, down 88%, as car sales tumbled and raised its full-year forecast as it said it expected sales to improve. Nissan, held 44% by France's Renault, posted a similar fall of 86% to a profit of 11.6 billion yen, as cost cuts mitigated the effects of falling sales and a stronger yen. It highlighted some bright signs on the sales front -- particularly strong growth in China -- but said it did not see a convincing recovery in global car demand, and repeated its full-year forecast of an operating loss of 100 billion yen. Honda's shares closed up 1.1%. Nissan shares had closed up 0.8% before its results were released. At Daimler, Chrysler-related expenses of 387 million euros along with 217 million in restructuring charges at its trucks division weighed on results but the group managed to increase its cash cushion. "The figures were better than the consensus. Particularly the free cash flow is better than expected. That's the key point," said UniCredit analyst Georg Stuerzer. Daimler shares were up 5.18% at 1201 GMT. The German group generated positive free cash flow in its industrial business of 1.4 billion euro amid a sharp 34% cut in Mercedes production.
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| ECONOMY & FINANCE Go To Top The Hindu Business Line
Mumbai: The rupee opened lower as the dollar gained against most major currencies in the overseas market and weakened during the day tracking the negative equity indices and on month-end demand. The rupee opened at 48.32 and closed at 48.42, about 20 paise lower than the previous close of 48.20/21. During the day it touched a low of 48.51. The rupee touched the days low when the Sensex lost by about 400 points. The rupee recovered towards close as the Sensex gained, said a forex dealer with a public sector bank. Month-end demand also contributed towards the rupees weakening, he added. The forwards premia were in a very narrow range, as there is hardly any trading, the dealer said. The six-month closed at 2.25 per cent (2.3 per cent) and the one-year was unchanged at 2.17 per cent. http://www.thehindubusinessline.com/2009/07/30/stories/2009073051650600.htm
SENSEX CLOSES 158 POINTS LOWER PTI See this story in: The Hindu Business Line
Mumbai: The Bombay Stock Exchange benchmark index Sensex plunged sharply and dipped below 15,000 points level in afternoon trade losing over 440 points after funds indulged in covering their pending positions ahead of the expiry of July month contract in the derivative segment.
However, towards close the Sensex recovered some ground but still closed in red at 15,173.46 points, down by 158.46 points. It ended yesterday at 15,331.94.
Meanwhile, the National Stock Exchange index Nifty down by 50.60 points to 4,513.50 points. Stocks of realty, power, banking, FMCG and metal sectors, which had risen sharply in the recent run-up, succumbed to profit-taking, pulling the Sensex down at open.
Marketmen said emergence of profit-booking by major players, including foreign funds, at existing higher levels led to fall in equities. Waning market momentum across Asia and weak results from Reliance Industries and Hindustan Unilever also hit the sentiment, they added. http://www.thehindubusinessline.com/blnus/05291901.htm
ECONOMY TO MAINTAIN 6.7% GROWTH RATE: PRANAB PTI See this story in: The Hindu Business Line
New Delhi: The economy is expected to maintain a growth rate of 6.7 per cent in 2009-10, same as last fiscal, as some signs of pick-up are visible, the Finance Minister, Mr Pranab Mukherjee on Wednesday said.
We have ended 2008-09 at 6.7 per cent. I do hope, this level of growth, we will be able to maintain (in 2009-10),'' he said while commending the Finance Bill in the Rajya Sabha. He said although some signs of recovery are visible, it is too early to po int out that whether they would be steady.
Mr Mukherjee hoped the stimulus, both in terms of financial concessions, fiscal policy and the monetary measures announced by the RBI, will have its desired impact**. The Finance Minister said the early signs of improvement in the Indian economy are se en despite no big recovery visible in the global economy. He said trillions of dollars would have been injected in Europe and North America. But there is no immediate restoration of the (global) economy,'' he added. http://www.thehindubusinessline.com/blnus/14291445.htm
Last Financial closing
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Wednesday, July 29, 2009
Indian Auto Industry Update July 30, 2009
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