Indian Automotive Industry News

INDUSTRY
RURAL MARKETS DRIVE UP CAR SALES IN JUNE QUARTER


New Delhi: Car sales grew 8.3% in June, aided by rising demand in semi-urban and rural markets, lower interest rates on auto loans and huge monsoon discounts offered by manufacturers. However, sale of commercial vehicles continued to decline, affected by a demand slump triggered by the economic downturn. According to monthly data released by Society of Indian Automobile Manufacturers (SIAM), 1,40,000 vehicles were sold in June. Two-wheeler sales posted a 17.44% growth to 7,06,000 units in June over the year-ago period. Truck and bus sales dropped 13% to 36,193 units in the same period. Sales momentum is expected to continue on the back of new car and bike launches. Hyundai has launched new variants of its i20 hatchback, Maruti launched the Ritz hatchback, Fiat has launched two new cars, the Punto hatchback and the Linea sedan, and Honda has launched the Jazz which made a debut few weeks ago. The new cars grew the market. With the i20s diesel variant, we expect to double monthly sales to 4,000 units per month, Hyundai senior vice-president (marketing & sales) Arvind Saxena said. During the first quarter of the current fiscal, vehicle production rose 9.5% to 30.69 lakh vehicles while domestic sales surged faster by 11.24% to 27.40 lakh vehicles. Auto analysts tracking the sector predict strong demand for cars and two-wheelers. Crisils research head Sachin Mathur said sale of passenger vehicles (cars and two-wheelers) in the country could post high single-digit growth, adding strong demand for India-made cars in Europe and other markets could push sales growth to double digits. Truck sales may continue to plunge as no real demand is being generated from the industrial sector and the domestic freight market is still negative. We do not expect a revival in this segment and sales may continue to be sluggish in the next quarter, he said. Sale of commercial vehicles fell by 13% in the first quarter of the financial year to 96,835 vehicles, while the heavy trucks segment, a barometer of economic activity, fell at a steeper 36% to 31,381 units during the period.
This segment continues to remain a challenge as sales are not picking up despite numerous stimulus packages from the government. With the new re-possession norms for financing new vehicles likely to be enforced and easier flow of credit to the segment, we expect some positive upswing in the next few months, SIAM director general Dilip Chenoy said. The government has initiated a series of steps to revive demand.especially for heavy trucks. It has set up a special purpose vehicle to increase funding of new trucks, while the depreciation rate (net value of the product) calculated on new vehicles has been increased to 50% from the earlier 15% under a series of stimulus packages. These steps and a lower base of sales in the second half of FY08 is likely to bring commercial vehicle sales into positive territory.
Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved"
http://economictimes.indiatimes.com/Rural-markets-drive-up-car-sales-in-June-quarter/articleshow/4755114.cms
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CARS, 2-WHEELERS SALES SHIFT GEARS IN JUNEThe Hindu Business Line (Web & Print Edition)See similar story in: The Indian Express (Web & Print Edition), mint (Web & Print Edition), The Financial Express (Web & Print Edition), The Times of India (Web & Print Edition), The Telegraph (Web Edition), Yahoo India (Web Edition), Rediff India (Web Edition), The Statesman (Web Edition), The Pioneer (Web & Print Edition)

New Delhi: Passenger cars sales were on a fast track in June recording a 7.8 per cent growth at 1.07 lakh units. This is the highest growth after February in the domestic market.

The growth in sales has come from recently launched models such as the Maruti Ritz, Fiat Grande Punto and Honda Jazz.

Falling interest rates of public sector banks such as State Bank of India has also helped gain momentum in the market. The two-wheeler industry also saw its best month in terms of sales growth after July 2008. Sales grew by 17 per cent to 7.06 lakh units.

Seven out of 13 auto makers saw their passenger car sales go up in June against the same month last year. Marutis sales were up 11.7 per cent at 54,693 units.

Hyundai Motors sold 5 per cent more last month at 23,103 units. Tata Motors sales increased by 3 per cent. Honda and Fiat saw a healthy increase in their sales numbers with new models.

The growth in passenger car sales is happening with new model launches. The commercial vehicle and some segments in the three-wheelers will be negative in the first half of the year. But may be in the second half of the year there could be some growth due to the very low base of last year in that period, said Mr Dilip Chenoy, Director General, Society of Indian Automobile Manufacturers, releasing the sales report.
For medium and heavy commercial vehicles, the low freight and slowing industrial production reflected in the monthly sales numbers.

Truck, bus sales fall
The combined sales of both trucks and buses fell by 31 per cent to 15,659 units. Goods carrier was the only segment which turned out to be an exception, lifting the overall sales of light commercial vehicles. Tata Motors and Mahindras sales boosted light commercial vehicle sales to 20,534 units a growth of 10 per cent over the same month a year ago.
Overall, this category declined by 12.51 per cent to 36,193 units.

Commercial vehicles sales are showing improving month-on-month basis even though it is negative (on a yearly basis). In two-wheelers and cars there is a focus on rural markets which is resulting in good sales, said Mr S.P. Shah, President of the Federation of Automobile Dealers.

In two-wheelers, Hero Honda and Honda Motorcycles contributed to the overall sales growth.

Scooters sales also rose to 1.11 lakh units, a 24 per cent increase over the same period last year. Motorcycle sales were up 16.23 per cent at 5.50 lakh units. http://www.thehindubusinessline.com/2009/07/09/stories/2009070952020300.htmhttp://www.indianexpress.com/news/car-sales-up-7.81-in-june-bikes-jump-16.23/486647/ http://www.livemint.com/2009/07/08115948/Car-sales-rise-78-fueled-by.htmlhttp://www.financialexpress.com/news/passenger-car-sales-accelerate-8-in-june/486833/http://timesofindia.indiatimes.com/Business/Auto-sales-increase-14-in-June/articleshow/4755398.cmshttp://www.telegraphindia.com/1090709/jsp/business/story_11214903.jsphttp://in.biz.yahoo.com/090708/50/batusp.htmlhttp://business.rediff.com/report/2009/jul/08/car-bike-sales-rise-in-june.htmhttp://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=260394http://www.dailypioneer.com/187885/Car-sales-continue-to-rise.html
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RS 20,000 CR AUTO INVESTMENTS AHEAD
Sindhu Bhattacharya
Daily News & Analysis (Web Edition)

New Delhi: An incremental Rs 20,000 crore investment is expected in the Indian automobile sector in the next 18-22 months.

This, despite the current economic slowdown and possible rethink by some global investors on making huge commitments to the Indian market just yet.

According to figures made available by the Society of Indian Automobile Manufacturers (SIAM), many big-ticket expansion projects are going on stream between now and March 2011.

Bajaj Auto is expanding its two-wheeler manufacturing capacity besides investing in four wheelers; Mahindra & Mahindra, Tata Motors (the Nano plant at Sanand); Honda Motorcycle & Scooter India is getting into the 100 cc motorcycle market and expanding capacity for the purpose.

Then, Andhra Pradesh's MLR Motors is expected to begin its small car project in collaboration with an Italian partner; Daimler if firm on investments in India despite the Hero Group breaking away from a proposed joint venture for commercial vehicles, Piaggio which has already announced plans to enter two-wheeler space and Toyota which has already announced a second small car project in India.

In addition to these investments, at least two internationally known passenger car makers as well as an American superbike brand are among the investors which have lined up for taking part in the Indian growth story.

Besides, French car maker PSA Peugeot Citroen is expected to announce its Indian manufacturing and sourcing plans by September this year.

But wouldn't further capacity creation add to the industry's woes? Already, a back of the envelope estimate pegs passenger car overcapacity to be at least 20% and sales have not exactly been spectacular over the last few months. Even the export front has been a huge disappointment, with first quarter exports growing by just 1.32%!

Siam secretary general Dilip Chenoy points said the government's determination to make India a small car hub needs further fiscal incentives. "Almost all of the committed investments in the automobile sector have come in and more international companies are willing to come to India despite the global scenario....but for the small car hub dream to take shape, the Government will have to provide more incentives".
http://www.dnaindia.com/money/report_rs-20000-cr-auto-investments-ahead_1272391
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SEVEN MONTHS ON, SINGUR LIVES ON HOPE FOR TATA JOBS
Sohini Das & Ishita Ayan Dutt
Business Standard (Web & Print Edition)

Kolkata/singur: Eighteen-year old Snehasis Ghosh wanted to become a supervisor at the Nano plant in Singur. That ambition will never be fulfilled, courtesy Mamata Banerjee, but all may not be lost for Ghosh.

Seven months after Tata Motors pulled out of Singur, residents in this sleepy little town, 40 km from Kolkata, are now living on another hope Tata jobs.

Ghosh is one of the 62 Singur residents who will appear for the National Council of
Vocational Training (NCVT) certification next month, after completing a one-year practical training at the Tata Motors plant in Pune. Thats in keeping with Tata Group Chairman Ratan Tatas promise that, while he was being forced to move the Nano project out of Singur, the group would continue to train over 450 people 267 of them local residents selected by Tata Motors.

While the first batch of 62 is ready for the NCVT certification exam, the others are still undergoing training at the companys plants in Pune, Jamshedpur, Pantnagar, and 70-80 dealerships. Quite a few of them are from the local industrial training institutes (ITIs). Under the NCVT rules, after completion of an ITI course, a person has to undergo practical training in his trade in an industry for at least a year. Their efforts would have gone waste had Tata decided not to keep his promise.

Tata Motors, in fact, has been spending Rs 7,000-8,000 per trainee per month for the last six to eight months. This takes care of a monthly Rs 1,700 stipend and boarding costs.
Ghosh was in Class XI studying science when Tata Motors started setting up the factory at Singur, but his parents convinced him that a Tata Motors job was the better option. A job in the Singur plant is no longer possible, but I am hoping to get a job with the group in some other plant, Ghosh says.

There are many others like him. Amit Karmakar has been trained across Tata Motors plants in Pune and Pantnagar, and a dealership in Gurgaon. He is awaiting news from Tata Motors about his exam date and is hoping that NCVT will get him a job somewhere.

However, there is no clarity whether people like Ghosh and Karmakar would be employed by Tata Motors a commitment the company had steered clear from even when it announced the Singur project. A Tata Motors spokesperson did not want to share details on the issue.

The fact is that Tata Motors is at least ensuring that these trainees are employable. The country is woefully short of specialised technical talent. There are 4,500 state-run technical institutes littered across India, but most of their curricula is out of sync with the automobile industrys needs.

But that is small consolation for quite a few in Singur. Lob Kumar Ghosh, for example, says the Tata pullout from Singur means his son, Suranjan, currently undergoing training at the Pune plant, will not get a job. No Tata, no job, says the Ghosh senior. Suranjan will come back in August and be a burden on me. I had given land for the project in the hope that my son will get a job. My hopes have been dashed.

When Tata Motors announced the small car project in May 2006, it promised to employ 2,000 people directly initially. The project was expected to create employment in excess of 10,000 jobs among vendors and service providers in the vicinity of the plant.

Ghosh and many others in Singur are angry with the West Bengal government for its inability to retain the project probably one of the reasons why the CPI(M) lost the Hooghly Lok Sabha seat, which includes Singur.
http://www.business-standard.com/india/news/seven-months-on-singur-liveshope-for-tata-jobs/363375/ Go To Top

INTERVIEWS/FEATURES Go To TopAUTO INDUSTRY HEADS EAST The Economic Times, Zigwheels
Big Auto's collapse in its home market of the US has been grabbing the headlines and the question for Indian buyers is on the continuing viability of their operations here. These questions remain despite officials of the India operations of these companies reassuring the market that they continue unaffected.
However, Vikas Sehgal, partner, Booz and Co, a management consultancy, maintained that India and GM India cannot remain insulated from global events. The fallout will be felt here, he said. He added that the US $1 trillion automotive industry is expected to emerge completely changed once the global economy emerges from its current slowdown.

"In the US and Europe, GM and Chrysler, both of who went in for bankruptcy protection, could lose market shares to the Japanese and Korean manufacturers. If the market shares of the US auto companies fall below optimal levels, their long term survival could come into question. Automobile manufacturers and their suppliers need scale," Mr Sehgal noted.
He went on to say, "Postbankruptcy, General Motors may lose its position in the top three even top five global rankings. The likelihood is that Volkswagen, Toyota, Renault-Nissan, Ford and even Hyundai may surpass it. In such a scenario, GM will have to focus on markets it considers strategically critical, which are North America and China. Brazil and Australia will get rudimentary support. India, which is at best a marginal market for GM, will suffer," Mr Sehgal said.
He added that GM India has a pipeline of products for the next 18 months. Since GM has received US federal government funds, it cannot use them to support overseas operations. Hence, the options for GM in India are to narrow its focus on a few select auto segments. This would mean it brings in products from other markets which require minimal local customisation and homologation. It might also need to consider a shared dealer network so that its dealers remain viable, use its Halol (Gujarat) and Talegaon (Maharashtra) plants for exports or become a contract manufacturer at these locations.
Other issues that the global economic slowdown have raised for the automobile industry are overcapacity and Mr Sehgal was categorical that it would be better to mothball capacities. "Decisions on running plants should not be made on the basis of sunk costs (for capacities created)," he added.
Another feature of the current situation is that the balance of power for the automotive industry has shifted eastwards, to Europe and on to Korea and Japan.
"This eastward shift in OE and suppliers positions them well in the global automotive market. China is now the world's biggest automobile market and the likes of Hyundai (Korea), Denso (Japan) and Conti (Europe) are emerging as the largest suppliers. Hyundai has a policy of selling the same car globally, which gives it a lead over the others. This has implications for Indian OEMs like Maruti Suzuki and Tata Motors," Mr Sehgal said.
Although China has emerged as the world's number one automobile market, Mr Sehgal was categorical that its automobile industry thrives mainly because of government subsidies.
Consolidation is likely to happen around the world, including in China where it could lead to smaller car makers getting acquired by other Chinese companies, leaving two, perhaps four, companies with viable scale. A scenario somewhat similar to India, where some Indian brands could get acquired by global companies.
Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" Go To Top

CARS, SUVs, MUVs Go To Top
MARUTI SUZUKI ADDS MORE MUSCLE TO THE GRAND VITARA
Abhishek Nigam
The Economic Times, Zigwheels

MUL has launched the Vitara with an all new heart. The popular SUV now comes with a 2.4 litre VVT engine that delivers a maximum power of 163.5 bhp @ 6000 rpm and a torque of 225 NM @ 4000 rpm and delivers a balanced mix of power and efficiency. The Vitara now also features permanent 4WD which ensures effective control across terrains. Disc brakes in the rear wheels, that ensure superior braking, provide additional safety dimension to the Grand Vitara 2.4.
On the inside, the interior display in the car has been enhanced with a new Multi Information Display (MID) providing easy to read accurate vehicle information like cruising range, average speed and instantaneous fuel consumption, along with low-fuel warning. All these add up to enhanced user convenience and driving comfort. A centre speaker coupled with a 6-CD changer brings in a surround-sound effect. Improved acoustics and a redesigned power train helps in lower noise, vibration, and harshness levels. A sliding centreconsole armrest adds to passenger comfort.
On the outside the stylish new front grille and front bumper gives the Grand Vitara a sleeker look while the 17 inch alloy wheels add to the beefier look.
The all new Vitara will be available in two variants, a 5-speed manual and a 4-speed auto and will be priced at Rs.16.67 lakh and Rs.17.97 lakh exshowroom Delhi respectively.
Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
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HYUNDAI GOES AUTOMATICALLY DIESEL!
The Economic Times, Zigwheels

When the i20 was introduced amidst the celebrations of the New Year seven months back, it was one of the most anticipated launches of recent times. The 1.2 Kappa petrol mill dished out 86 PS of power - pretty impressive - but under the 1066kg body weight and 114 Nm torque it seemed to bog down a bit. And then there was the small matter of the sub-14 kmpl fuel efficiency that had a lot of people saying they'd rather wait for a diesel version of the i20 to be launched. Those of our tons of readers who were disappointed that Hyundai had debuted the fabulous i20 with the same 1.2 litre engine from the smaller i10 Kappa and felt that it was grossly underpowered, rejoice! The Koreans have just brought out the much-awaited diesel variant of the big hatch and guess what - it's very good!
Surprisingly, coming from Hyundai, the i20 Diesel isn't all about power and performance - it's actually more about class, refinement and driveability. Looking back at the Getz CRDi that the Korean manufacturer launched a few years back, many expected the same engine to find its way into the i20's engine bay. While the Getz' powerplant, shared by the Verna was quite simply put - mental, the i20 isn't quite as brutal. Top culprit for that is that what's under the bonnet of the i20 Diesel is an allnew engine - currently being imported from Hyundai's facilities abroad. This car uses a 1396cc common rail oil burner that is good for 90 PS of power. But where the whole difference kicks in with respect to the 1.2 i20 is in the torque figures. With 220Nm of torque, the i20 Diesel is the torque-iest diesel hatchback available in India at the moment. Now that does transform into some pretty sprightly performance and though we haven't given the car the instrumented treatment yet, we reckon it should put down some very respectable 0-100km/h times. Of course, if you're looking for the kind of pinned-inthe-seats acceleration you got from the Getz CRDi, you're going to be disappointed. The i20 will give figures close enough though and at the same time it won't scare the rest of the passengers either.

Hyundai were kind enough to offer ZigWheels an exclusive drive of the i20 Diesel and we came back pretty impressed. The turbo kicks in at around 1900rpm but it's not a drastic intrusion like on other cars like the Swift DDiS. The i20's turbocharger intervenes gradually - with the engine giving enough grunt even before it starts to spool. That makes this engine very driveable coupled with some well matched gear ratios on the 5-speed manual transmission which means this car will appeal to one and all in the family right from the throttle happy teenager to calm and sedate grand dad - and that really is the key USP to the i20 Diesel. Hyundai seems to have done a great job with fuel efficiency too with the i20 Diesel's fuel gauge needle barely dropping during the course of our 100-odd km drive.
The alloy-wheeled Asta variant will also come standard with meaty 14-inch alloy wheels sporting beefy 185/65 R14 Apollo Accelere rubber while the lower spec Magna variant will make do with 175/70 R14 tyres on steel rims. The i20 has always been a great handling car and the diesel variant is no different - owing to the common suspension setup with its petrol counterparts. In fact, with the added power and torque the i20 Diesel is an even bigger pleasure to drive than the 1.2 and considering that the bigger 1.4 Gamma gasoline engined car will be available with only an automatic gearbox for now, that means the i20 Diesel is the hatch to buy.
Visually, there's almost nothing on the outside that'll tell you that this car has a diesel engine. All over the car looks exactly the same as its petrol counterpart except for the chunky CRDi badge on the lower left corner of its tail gate. Crank the ignition and it still doesn't give away its oil burner roots - the 1.4 CRDi mill is that refined. It's only at higher revs that you really begin to hear and make out that this car is powered by a diesel unit.
Compare it to other diesel powered hatchbacks - namely the Suzuki Swift DDiS, Tata Indica Vista, Skoda Fabia and the Fiat Punto and instantly the Hyundai i20 seems to offer more value. It looks great, is spacious enough to fit in a family of five, handles precisely, is very driveable and now performs well too. It may seem a tad expensive at first glance with a Rs 6.2 lakh price tag for the Magna and Rs 6.8 lakh for the Asta (exshowroom Delhi), but considering the equipment it comes with as standard, it actually is very good value for money. The i20 now offers the widest range of options for customers to choose from - right from petrol and diesel engines to cubic capacities to manual and automatic gearboxes. The Suzuki Swift now seems to be under great threat with the advent of the i20 Diesel and if that wasn't enough Hyundai has launched the 1.4 Gamma petrol i20 as well. Watch out for the complete road test of the i20 Diesel soon on ZigWheels.
Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
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HYUNDAI REDUCES PRICES OF SONATABusiness Standard (Delhi Print Edition)

The countrys second largest car manufacturer and the largest passenger care exporter announced that it would pass on the full benefits of the additional duty of excise reduction announced by the finance minister in the recent Budget. Hyundai Motor India offers a full range of cars starting from the entry-level compact Santro to the premium luxury sedan the Sonata Transform.
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MERCEDES BENZ C-CLASS The Economic Times, Zigwheels

Mercedes-Benz launched the much awaited C-class in India in 2008. The car was already expected to be a stunner as seen in international markets and sure enough, set the sales chart on fire the moment it was launched. Design wise, the new car was a welcome change from the soft roundish lines of the old car. The new car is bigger and looks sharp with strong straight lines and bulging wheel arches giving it a bold look as well. Step inside the new 'C' and the first thing to come to notice is the quality of the interiors.

Everything has a nice feel to it although the design still feels conservative compared to the Audi or the BMW. Thanks to better packaging there is also more legroom and the car is now more spacious than its predecessor. Under the hood the 2.2 litre turbocharged common-rail diesel puts out 170 PS @ 3700 rpm and a chunky 410 Nm of torque at 2000 rpm. All these figures relate to some very good performance on the road making the C a spirited performer. On the handling front the new C offers a lot more driver involvement thanks to the 52.5/47.5 front/rear weight distribution. The overall grip levels and composure of the car is brilliant and there are only a handful of cars that match up to the new C. With clean cut styling, more space and a brilliant drive the new Cclass is just what the doctor ordered!
Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
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SUV PRICES REDUCED
The Hindu (Web & Print Edition)

New Delhi: Following excise duty cut on big cars and sports utility vehicles (SUVs) announced by Finance Minister Pranab Mukherjee in his budget proposals, automobile manufacturers have started reducing the prices of their vehicles. Hyundai Motor India on Wednesday said its premium sedan Sonata Transform (petrol), powered by a 2.4 litre engine, will be cheaper by Rs. 5,852 at Rs. 13.84 lakh (ex-showroom, Delhi). Similarly, Honda Siel Cars India has decided to reduce the prices of its two models premium sedan Accord and SUV CR-V by Rs. 5,000, with immediate effect.
Hindustan Motors Ltd (HML), which sells various models of Japanese automaker Mitsubishi, has also cut Pajero, Outlander and Montero prices by Rs. 6,000.
http://www.hindu.com/2009/07/09/stories/2009070961081700.htm
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COMMERCIAL VEHICLES Go To TopM&M PLANS TO ROLL OUT DIESEL TRUCKS IN US
Lijee Philip
The Economic Times (Web & Print Edition)

Mumbai: Utility and tractor major Mahindra & Mahindra is stepping up plans to launch diesel-powered pick-up trucks in the US, even as global carmakers such as Honda, Toyota, Nissan and Ford have put similar pick-up launches in the US, on hold. People connected with the development said the Mumbai-based company wants to cash in on the opportunity created by the disinterest of global majors, by competitively pricing its products in the American market, which is slowly limping back after getting mauled in the slowdown. Global carmakers had put off showcasing their diesel products, after the credit squeeze seen post the Lehman Brothers collapse, and also because of the shift in focus with the launch of alternate-powered vehicles such as hybrid cars. By December 2009, M&M plans to launch the diesel-powered two-door and four-door pick-up trucks. While there are no concrete plans to launch the hybrids, the Scorpio will be launched a year later.
M&M is yet to decide on the pricing, production targets and advertising spends for the US market. Stringent emission norms is forcing M&M to reconfigure the vehicles it proposes to launch in the highly-competitive US market, said those connected with the project. The auto major will initially start pick-up operations and those of SUVs through the completely-built-unit route followed by the completely-knocked-down route. The SUV will be based on the Scorpio platform, but will be completely redesigned for the US market and badged differently, said sources. The company intends to start local assembly operations when volumes start picking up. However, it isnt yet clear how M&M intends to market its products. As the companys diesel-powered pick-ups had slow sales in South Africa, where they were launched in 2006. Compared to that, US is a mature market and consumer behaviour will tend to be markedly different, said one analyst who tracks M&M. The company has tied up with US biggest vehicle distributor Global Vehicles to sell the brand, which in turn, has appointed around 263 dealers. As the US is a brand-conscious market and M&M is little-known there, the company will initially target the vehicles at the green consumers, tractor customers and the Indian expatriates in the US. M&M has CKD plants in Brazil and Egypt. It has a presence through the CBU route in Australia, South and Central America.
Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved"
http://economictimes.indiatimes.com/Auto-biggies-loss-may-be-MMs-gain/articleshow/4755216.cms Go To Top

CONSTRUCTION & AGRI MACHINERY Go To Top- - - - -
2/3 WHEELERS Go To TopTWO-WHEELERS BRING CHEER TO AUTO SALES IN JUNE
Business Standard

New Delhi: Auto sales for the month of June grew by 14.26 per cent over the same month a year earlier, according to a report released by the Society of Indian Automobile Manufacturers (Siam).

The growth posted in May was 8.86 per cent, suggesting an acceleration in sales coming mainly from motorcycles, light commercial vehicles (LCV) and passenger cars. The sales growth in June is impressive if one has to factor the slowdown in the overall economy and the negative sentiments currently prevailing, says Vaishali Jajoo, an analyst at Mumbai-based Angel Broking.

Sales of passenger vehicles, comprising cars and utility vehicles on a year to year basis, grew by 8.29 per cent in June, motorcycles grew by 16.23 per cent and LCVs grew by about 10 per cent. Only sales of medium and heavy commercial vehicles (M&HCV) dipped by 31 per cent.

Jajoo says on a month on month basis (growth trend witnessed between May and June this year), positive signs have been witnessed in the M&HCV segment. This segment, which is dependent on GDP growth, grew 28.55 per cent, selling 15,659 units compared to May this year, which suggests a demand pick up. However, R Seshasayee, managing director, Ashok Leyland, expects real demand for commercial vehicles to set in the second half of the year.

Auto sales for the first quarter ending June grew by 11.24 per cent, in which the industry sold 2.7 million vehicles. Last year, the growth for the same quarter was about 8 per cent. On the back of the three stimulus packages announced since December 2008, new launches of vehicles, stimuli like the 6th Pay Commission, which made people buy cars, and teaser interest rates on vehicle loans announced by leading PSU banks, the auto industry grew in double digits, says Dilip Chenoy, director-general of Siam.

However, Chenoy is cautious on the forecast for the remaining three quarters for the financial year ending March 2010. Sales recovery for the coming months depends largely on the monsoons which could work in both ways, especially in rural areas, where sales could either rise or fall. Commodity prices, real GDP growth, interest rates, and liquidity will also determine sales. Our growth projections for the whole year, which was based on the stimulus packages, among other factors, remain the same. We have not changed the outlook.

Sales for passenger vehicles for the AprilJune quarter grew by about 4 per cent over what was witnessed for the same period last year. Last year, car sales grew by 15 per cent for the same period. Industry executives say one reason for this sales dip comes from poor performance of the utility vehicle segment, which posted a negative growth of 7 per cent. The excise duty of 20 per cent, plus the additional duty of about Rs 15,000, is hampering sales of utility vehicles, which is largely used by the common man, says an industry executive.

While sales of M&HCVs dipped by about 36 per cent, sales of three-wheelers grew by 7 per cent for the April-June quarter. The three-wheeler segment grew on the back of robust demand for passenger goods three-wheelers from the rural market for public transportation.

Analysts say the increased allocations in the Union Budget for the rural economy through NREGS, overall growth in GDP growth, spending from the JNNURM projects, good monsoon in the coming months, and repossession norms, which should be announced shortly, will help the auto industry to post continued growth.
http://www.business-standard.com/india/news/two-wheelers-bring-cheer-to-auto-sales-in-june/363403/
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"THE LACK OF RETAIL FINANCE IS A HINDRANCE TO SALES": HS GOINDI, PRESIDENT, MARKETING, TVS MOTOR
The Financial Express

Fresh from the successful launch of the Apache RTR 180 and the Flame SR125, TVS Motor Company is looking to establish itself as a serious contender in the competitive and rapidly evolving performance bike segment in India. The company posted 5% growth in May 2009, registering total two-wheeler sales of 1,18,574 units against 1,12,770 units in the corresponding period of the previous year. The ongoing economic slowdown in some countries continues to affect its exports, which registered sales of 11,135 units of two-wheelers in May 2009 against 14,071 units in the corresponding period of the previous year. The company, however, witnessed a growth of 10% in exports over the previous month. In this interview to FEs Malabika Sarkar and Alokananda Chakraborty, HS Goindi, president, marketing, TVS Motor Company, Indias third largest two-wheeler maker, talks about the companys new products and research and development investments. He is hopeful that TVS will record double-digit growth in the current fiscal.

A four-year-old four-wheeler is available at the price of a new motorbike. Where do you see the Indian two-wheeler market going from here?

Used four-wheelers have been around for a while, but have not taken the place and cannot replace a two-wheeler. The two-wheeler rider is predominantly from the middle class who looks for mileage, easy manoeuvrability and low-maintenance costs. The two-wheeler remains as the primary means of personal transportation. While the consumer may use a four-wheeler for the weekend when he takes his family out, his daily mode of transport will remain the two-wheeler.

Two-wheeler sales in the country have been growing this year and the buoyant economic growth is expected to propel growth further. The industry has been clocking growing numbers year-on-year. We expect this growth curve to remain healthy. The operating costs are lower for two-wheelers.

In March 2008, TVS forayed into the three-wheeler market with King, crossing swords with market leader Bajaj Auto. How has TVS measured up to the challenge?

The TVS King has been launched in six of the southern states as of now and has received favourable response from these markets. While the variants launched include the CNG, LPG and petrol in two stroke, we will launch the four-stroke variant soon. The initial response has been encouraging and we are getting enquiries from the states where we havent launched it. We are satisfied with the movement of the product and are looking forward to rolling it out in all states.

The company posted 3% sales growth last fiscal compared to the year before. Are you satisfied with the performance?

Last year was the beginning of a global recession and there was also the problem of credit squeeze with high interest rates.

Despite these deterrents, we have posted an overall growth of 3% over the previous year and attribute this to the various products that we unveiled during the year including a new StaR, Apache and Scooty Streak. We are hopeful that 2010 will bring us better numbers.
How will the two-wheeler market be affected by the slowing down of the agricultural sector? The rural market is said to be quite huge.

The rural sector even has the potential for big volumes. Given the current industry trends, demand from this sector still shows a healthy trend and is expected to continue. In order to capitalise on this sector, we are planning several strategies and are confident of good numbers going ahead.

Has the global slowdown affected TVS prospects and performance in the overseas markets in a significant manner?

The global economic developments during the 2008-09 fiscal have challenged both the manufacturing and the services sectors alike. For TVS Motor Company, however, the decline in exports has been due to the slowdown that some countries are experiencing. However, the effect is not significant.

Two-wheeler marketers have always pointed at the lack of retail financing as a big hindrance to market growth. How serious is the problem and do you see the situation easing in the near future? What are you doing about improving access to financing?
Yes, the lack of retail finance is a hindrance to sales. With more and more banks and financial institutions tightening the norms and lending policies, it is becoming increasingly difficult for people to avail of loans or finance. The situation is not expected to change soon.

TVS has had a problem finding a strong foothold in the premium segment of the two-wheeler market. What are you doing to correct the situation?

Our Apache RTR has been doing consistently well in the premium segment and has been well received by the market. We have launched a higher capacity Apache in the segment so that our customers have more options to choose from.

What does the launch of the Apache RTR 180 mean to the company?

Two-wheelers are more than just a fuel-efficient mode of transport as they were perceived not very long ago. Motorcycles are a means of making a statement by a whole new generation of youngsters.

For TVS, which is known as an engineering company and maker of mass-market products, the Apache RTR 180 is a big leap. As a company, TVS is banking on design and style for future growth. We hope the new Apache RTR 180 will strengthen the position of the company in the premium segment. Performance seekers seek out things such as sporty design, ride dynamics and technology. We hope the new Apache will satisfy the aspirational needs of the consumerperformance, styling, ride handling and stability.

Where do you see the future growth coming fromthe low-end of the two-wheeler market or the premium-end?

Over the last eight years, we have been introducing products targeted at various segments.

We are therefore looking to grow across the spectrum, but the maximum input, as has been for some time now, will be from the economy segment. This is the way the industry has grown for a long time.

Has the twin spark controversy involving Bajaj affected TVS Motors in any wayin terms of business or brand perception?

We wouldnt say it affected us in any major way if you are talking about brand perception. But yes, we did lose out on sales for some months and that is going to show up in our performance for the year.

TVS Motors is investing a lot in R&D. How strong is your research capability and when do you think you will attain international benchmarks in terms of lead time in developing a new product?

TVS Motor Company has a rich talent pool of nearly 500 engineers supported by manufacturing facilities that conform to world standards. Our R&D programme is strong and robust. The Apache and the Flame are regarded as a breakthrough in terms of styling and design as has been acknowledged by industry experts.

Whats your outlook for fiscal 2009-10?

A stable government bodes well for the industry. With signs of the economy slowly getting back on a growth track, we are targeting double-digit growth in the current fiscal and are hopeful of achieving it. New launches planned during the year will contribute largely to this as will market expansion.
http://www.financialexpress.com/news/the-lack-of-retail-finance-is-a-hindrance-to-sales/486344/0
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ANGER MANAGEMENT!
The Economic Times, Zigwheels

Hosur-based TVS Motor Company is back with a bang this time with a betterequipped and all-round motorcycle in the form of the new Apache RTR 180. The Apache has always enjoyed decent fanfollowing and racecredentials, but somehow its track lessons have failed to deliver on the street and the company has been unsuccessful in challenging the might of its arch rival, Bajaj Auto. Let's see if the new Apache RTR 180 delivers all that it promises and lives upto the expectations of its followers.

Never has the Apache RTR appealed to our eyes as much as the bike in white. Very few streetspec bikes can really carry off the angelic-look with conviction. The big 'RTR' logo on the flanks adds a lot of spunk to the bike and goes well with its belligerent stance. The front fork barrels and disc calipers doused in golden paint adds a sophisticated touch to the Apache RTR. An RTR 180 exclusive touch is a sporty rear mudguard holding the numberplate in place and also aluminium foot pegs which are available as an option.
Ergonomics is one thing which TVS really needs to pay attention to the Apache series. The footforward riding posture of the Apache has always played a major spoilsport in enjoying spirited riding. The Apache always had a high-revving motor right from the first model launched in 2006, when it quickly became the most preferred set of wheels for the track as well as for spirited riding. The new RTR 180 carries the same genes but in a much more docile and approachable manner. The 177.4cc single cylinder air-cooled engine is a bored out version of the reliable TVS motor doing duties on the earlier generation Apaches. A wider spectrum of the torque means more grunt and thrust even at lower revs, improving the in town ride ability of the bike.
Apart from the wheelbase and the wheels, there are no major changes made to the double-down tube cradle frame and the RTR 180 retains the same underpinnings as seen on the RTR 160. The older Apache was ultra-flickable into corners but severely lacked mid-corner stability and its tendency to tip over quickly into corners wasn't very pleasant for the street. The new bike feels much more planted on the road, mid-corner and definitely more streetfriendly than ever before.

The Apache RTR 180 might have been our favourite because of its strong racing credentials on the track and its enthusiastic engine waiting to be revved hard, but on the street, the jerky power delivery, twitchy handling and vibrations sure made it a difficult bike to ride around stop and go traffic. This is what has been bettered on the new RTR 180, significantly. The new RTR 180 is more street-friendly and handy, moreover, the motor revs freely upwards of 3,000rpm. The digital instrumentation layout remains same as the RTR 160 but gets a white dial making it more legible than before. With a fuel tank capacity of 16 litres and an overall efficiency of 47.04kmpl, the new RTR offers an impressive tank range of 752km.
Competitive pricing is the key of the new Apache RTR 180. Priced at Rs 63,990/- ex showroom Delhi, the new Apache does offer great value-for-money. Hence, for bikers looking for something that has best of both worlds with classleading features, the new RTR 180 makes a lot of sense. However, the competition is just equally well matched in terms of value-for-money and performance - two key areas that help in making the final purchase decision in this segment. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
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YAMAHA WHIPS UP SOME MORE VISUAL BIKING EXCITEMENT
Adil Jal Darukhanawala
The Economic Times, Zigwheels

Just a week or so after it announced its intention to make track application performance parts for its YZF R15 and FZ16, Yamaha India was at it again on Monday this week with a high power show fronted by none other than Takashi Kajikawa, President and CEO of Yamaha Motor Co. Ltd., Japan.
The occasion to get Kajikawa may have been to inaugurate an additional new facility at its existing Surajpur plant and also to instill more confidence among its dealers. However, what really must have set the tone was to also send a message across to everyone in the Yamaha family and to motorcyclists in the country that this is an all new Yamaha trying to make up not just for lost ground but also not wanting to repeat its mistakes of the past.
This it did by announcing yet one more variant based on its FZ16 series which mimics the large Fazers in Europe, not in displacement but certainly in its looks and overall makeup. Yamaha terms this variant as ideal for two-wheeled touring and while mechanically it doesn't differ from the other FZs, this 153cc single-cylinder bike certainly has the right scaled down looks of the larger 1000cc and 600cc four-cylinder Fazers which are hot sellers in Europe. The adoption of the large squat fairing with the distinctive twin headlamp look sported by the large Yamahas is evident while the small Perspex screen is neatly sculpted in keeping with the overall lines of the needle nose fairing which sweeps itself back to almost the full length of the tank. The riding position has been reconfigured by tweaking the handlebar to endow the rider with a more relaxed posture. Everything else on the Fazer remains the same as on the other bikes in the FZ series (the FZ16 and the FZ-S) and this bike should be in showrooms all over the country within a week. Available in four new colours - electric blue, midnight black, lava red and flaming orange, the bike is priced at Rs 72,000 ex-showroom, Delhi which for a bike of its class might seem pricey. Yamaha however have to be applauded for keeping the enthusiasm bubbling and we certainly see activity from the firm - unlike as in the past - even though the price the biker pays seems to be of a high order.
Yamaha also took the occasion to release its bristling with high tech YZF R15 in four all new colours. This is something which is a refresher trend for a bike which is the costliest from the Indo-Jap bike makers in this country and finally we have this extreme track special machine in colours which hark back to famous Yamaha racing livery sported by the likes of Kenny Roberts and Giacomo Agostini. The yellow, white and black comes closest to the Yamaha America racing colours (though without the black blocks) while the red and white variant was of a type which was a short-lived Yamaha Europe race colour. A blue, white and black turnout was the third livery as on the present day Yamaha race bikes in Europe while the fourth and last model came in all-black with a white band on fairing and tank.
Earlier in the day, Takashi Kajikawa inaugurated the new facility at Yamaha's Surajpur plant. This plant now has a total of three assembly lines and four engine assembly lines, the additional one catering exclusively for its export models. This new plant brings capacity up to 600,000 units annually and Yamaha according to Yukimine Tsuji, CE) & managing director of India Yamaha Motor Pvt. Ltd., this could be further enhanced to make up to a million units per annum. While this may look ambitious at the moment, given Yamaha made 1.5 lakh units in calendar 2008, in the period January to June 2008, the company rode on the success of the FZ16 to post a production figure of 90,000 units. Overall production and sales projections for calendar 2009, we feel could be just about the 200,000 unit mark
Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" Go To Top

COMPONENTS Go To Top- - - - -
ALLIED INDUSTRY Go To Top- - - - -
FINANCE & INSURANCE Go To TopIDBI BANK SECURITISES TATA MOTORS FIN LOANS
Business Standard

Mumbai: In a move to churn its asset portfolio and earn fee-based income, IDBI Bank has securitised the retail loans of Tata Motors Finance worth over Rs 200 crore.
Rating agency Crisil has assigned P1+(so) rating to Series A1 pass-through certificates issued for the deal. These certificates are backed by cash flows from assignment transactions pertaining to retail loan receivables originated by Tata Motors Finance.

Ashok Motwani, general manager, IDBI Bank, said that the lenders exposure to securitised papers at peak was about Rs 6,000 crore. It has sold a rated pool of papers worth around Rs 1,500 crore, while repayments and pre-payments have been close to Rs 3,000 crore.

Now, the lender is left with an exposure of Rs 1,500 crore to the securitised pool. Though public sector bank advances account for 75 per cent of the debt market, they do not securitise their loan portfolio actively, he added.

Indian private and foreign banks operating in the country are active in securitising retail loans as well corporate loans.

Till date, the public sector lender has not securitised loans originating from it. The lender is planning to securities some infrastructure loans too.

The Indian securitisation market constitutes a minuscule part of the overall debt market. The volumes declined to Rs 52,000 crore in 2008-09 from Rs 70,000 crore in 2007-08, Motwani said.

Asset-backed securities (ABS) and collateralised debt obligations (CDO), investment grade securities backed by a pool of bonds, loans and other assets, have a major share in the securitisation market.

A few ABS transactions were downgraded but there have been no defaults in the personal loan segment. A few CDOs have been downgraded and defaults were mainly in originate-to-sell category comprising securitisation transactions with back-to-back arrangement to sell loan. However, defaults in this category are significantly smaller as compared to defaults on bank loans.
http://www.business-standard.com/india/news/idbi-bank-securitises-tata-motors-fin-loans/363330/ Go To Top

OIL, LUBRICANTS & ALTERNATIVE FUELS Go To TopBIODIESEL SECTOR WAITS FOR CLARITY ON BENEFITS FROM DUTY CUT
Kalpana Pathak
Business Standard

Mumbai: The biodiesel industry has welcomed finance ministers move to reduce the customs duty on biodiesel from 7.5 per cent to 2.5 per cent and the duty paid on high-speed diesel blended with up to 20 per cent biodiesel to be exempted from excise duties. But, it is seeking clarity on the benefits the moves would bring.

We are trying to ascertain if the exemption would be available only to blended fuel or if it would be extended to the total product. This in any case would mean a huge cost advantage to the oil marketing firms. Around 5 per cent blending could mean that entire 95 per cent blending of the fuel could be exempted from duty, said an industry expert who advises firms on procuring bio-fuel.

Industry experts say while fossil fuel attracts excise duty, biodiesel does not. So a clarity is required on if blended bio-diesel will invite any amount of tax. Also, how the details would be worked out and what procedure would be followed.

Biodiesel Association of India (BAI) has also written to the finance ministry seeking the customs duty concession to be extended on feedstock (free fatty acid and non-edible oils) imports to encourage running of over a dozen biodiesel processing units in India.

While industry watchers believe the reduction in duty will also promote import of biodiesel, producers of biodiesel differ. Indias processing capacity of bio-diesel is estimated at 200,000 tonnes per year but a majority of biodiesel units are not operational most of the year. What good will abolishing the duties do? wondered an executive from a firm whose plant has been lying idle.

Commercial production and marketing of bio-diesel in India is negligible due to the lack of availability of jatropha seed and other non-edible oil feedstock.

Most existing bio-diesel producers use mixed feedstock including non-edible oilseeds, non-edible oil waste, and animal or fish fat as feedstock.

The existing jatropha plantations are at a very initial stage of growth. The total jatropha plantation area in the country is presently estimated around 450,000 hectares and, of this, over 70 per cent are new plantations and would mature in the next four years, said an Ahmedabad-based industry analyst.

In October 2005, the Ministry of Petroleum and Natural Gas announced a biodiesel purchase policy, in which oil companies would purchase biodiesel and blend it with high-speed diesel (HSD) at a 5 per cent blending ratio which was to take place in 20 procurement centres across major producing areas in the country from January 2006.
However, owing to the cost of production of bio-diesel, which is said to be 20 per cent higher than the pre-determined price (reviewed every six months by the ministry), of Rs 26.5 per litre, there are no sales of bio-diesel at these centers. The overall cost of production for bio-diesel is around Rs 31 per litre.

Firms acquire land abroadWith the present measures, companies like Emami Biotech, an outfit of the Emami group and Hazel Mercantile would benefit which are planning to produce and process bio-diesel abroad. Sources close to the development said these companies have acquired 10,000 acroes to 25,000 hectares in Africa for cultivating jatropha and processing bio-diesel.
An official from Emami confirmed the move. Emami last year, commissioned its 1,000 tonnes per day edible oil plant at Haldia which has the capacity to produce 300 tonnes per day of bio-diesel from palm oil.

The plant, however, is lying idle. Industry experts say that to process bio-fuel, land and other resources are more easily available abroad. Thus more and more companies are looking to adopting this strategy to enter the bio-fuel segment.
http://www.business-standard.com/india/news/biodiesel-sector-waits-for-claritybenefitsduty-cut/363357/
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OIL PRICES TUMBLE NEAR $60 AS GAS SUPPLIES SURGE
AP
See this story in: The Times of India

New York: Oil prices neared $60 per barrel on Wednesday as the U.S. government reported unused gasoline held in storage surged yet again. Energy markets are undergoing an extended sell-off, the longest in 10 months, with new economic reports dampening optimism about any economic recovery. Benchmark crude for August delivery fell more than 4 percent, or $2.79, to settle at $60.14 a barrel on the New York Mercantile Exchange. In just over one week, oil prices have fallen more than 18 percent. ``The recession is far from over,'' said analyst Stephen Schork. ``Perhaps the run-up in prices was a bit overstated.'' Crude prices by last week had more than doubled from lows reached January, when a barrel of crude cost just over $30. That was just six months removed from record highs near $150 per barrel last summer. Cheap oil sparked a new round of investment, as did a dollar that had been weakened by government efforts to bail out major banks and automakers. Crude is priced in the dollar, so it effectively becomes cheaper internationally. Yet dismal economic data continues to emerge and the fundamentals of supply and demand appeared to take control of the market again last week. International Monetary Fund on Wednesday lowered its global economic forecast, the latest that would not support high energy prices. Since peaking at $73.38 last Tuesday, crude futures have fallen by almost $13 per barrel. Gasoline, heating oil and natural gas futures are also tanking. The Organization of Petroleum Exporting Countries predicted Wednesday that demand for crude has fallen so sharply, it will take another four years to recover to 2008 levels. Americans are driving billions fewer miles than they had in recent years with millions losing their jobs. Even though refiners have been slashing production, gasoline continues to pile up. The Department of Energy reported Wednesday that gasoline supplies grew by another 1.9 million barrels last week, the fifth straight week that storage levels have grown. The volatile energy markets may lead to increased scrutiny, both in the U.S. and overseas. Federal regulators said Tuesday they would examine whether the government should impose limits on the number of futures contracts in oil and other energy commodities held by speculative traders. Concerns about the affect of volatile energy prices has spread overseas as well. It will be one of the topics discussed by world leaders meeting in Italy for the Group of Eight summit. In an editorial published by The Wall Street Journal, British Prime Minister Gordon Brown and French President Nicolas Sarkozy also called for closer government oversight of the oil-trading markets. In other Nymex trading, gasoline for August delivery slid by 9.9 cents to settle at $1.6333 a gallon and heating oil lost about 6.2 cents to $1.5386. Natural gas for August delivery fell 6.7 cents to $3.362 per 1,000 cubic feet. In London, Brent prices shed $2.02 to $61.21 a barrel on the ICE Futures exchange.
http://timesofindia.indiatimes.com/articlelist/msid--2128682902,curpg-2.cms Go To Top

INTERNATIONAL NEWS Go To TopGM TO GO GREEN, CUT EXECS, AS IT EXITS BANKRUPTCY
Agencies
See this story in: The Economic Times

Detroit: General Motors could literally turn green as it readies itself for major management and cultural changes that will coincide with its escape from bankruptcy protection. People briefed on its plans say the company is looking into changing the background color of its corporate logo from blue to green in an effort to show consumers that it is leaner and greener, more focused on fuel efficiency and better able to make quick decisions. Ed Welburn, GM's vice president of design, is leading a group that is studying name and logo changes, but no recommendation has been made, according to one of the people. Changing the background of the familiar square blue-and-white GM logo has been discussed, said the people, who requested anonymity because no decision has been reached. What has been decided, though, is the need for management and cultural changes. New CEO Fritz Henderson is preparing to cut another 4,000 white-collar jobs, including 450 executive-level employees such as plant managers or engineering group heads. Henderson, under pressure from the new GM's largest shareholder, the U.S. government, wants a more nimble company, one that can make decisions faster and is less bureaucratic than the GM of the past. In the old GM, several committees often reviewed decisions, holding up new vehicles and making it slow to respond to market changes. Designs were often changed from bold to bland, with GM stamping out nondescript cars such as the old Chevrolet Malibu. With taxpayer dollars and its very existence on the line, GM can no longer afford to take too long. So Henderson will thin executive ranks by 35 percent, from about 1,300 to 850 by the end of the year. Total U.S. salaried employment will drop by 6,150, or 21 percent, from 29,650 at the start of the year to 23,500 by the end. The changes could be announced as soon as Friday after the courts clear the sale of GM's good assets to a new company largely owned by the U.S. and Canadian governments and the United Auto Workers union. They will flatten the automaker's organizational chart, eliminating work groups and shrinking the organization to match a smaller footprint, according to the people briefed on the plan. The flatter organization will make it easier for Henderson to hold people accountable for their work, while focusing more on product development and customer service, one of the people said. The new structure would be similar to one imposed on Chrysler Group LLC by Fiat CEO Sergio Marchionne, who now controls the company. Marchionne shed layers of management. General Motors Corp. also could announce a subcompact car to be built at a Michigan factory, widely believed to be the four-seat Chevrolet Spark minicar now being sold in China. GM for years had neglected its small cars , unable to make money on them because of high labor costs. Instead, it focused more on high-profit trucks and sport utility vehicles. Its current entries, such as the Korean-made Chevrolet Aveo subcompact and the U.S.-made Chevrolet Cobalt compact, have not sold as well as top-selling entries from Toyota and Honda. The new GM, however, is betting that car buyers will shift to small as gas prices swing wildly, and it's trying to upgrade that class of vehicle. The company says lower labor costs and higher sales prices should yield more profits. GM is also trying to go leaner by selling off its European Adam Opel GmbH unit, as well as Sweden's Saab, and the Hummer and Saturn brands. Pontiac is to be discontinued by the end of the year, leaving GM with only four brands _ Chevrolet, Buick, Cadillac and GMC. Steve Rattner, the head of the Obama administration's auto task force, told reporters earlier this week that GM must adjust to being smaller and less global. ``It would be natural as part of this overall downsizing of GM for there to be a change in the management structure to become a bit closer to the ground, a bit leaner and meaner,'' he said Monday. The U.S. government is expected to provide about $50 billion in aid to the automaker as it exits bankruptcy and tries to become profitable even in a depressed world auto sales market. That won't be easy for a company that has lost more than $80 billion in the past four years. The cuts will help GM adjust to being a smaller company, but will not make it successful without forceful leadership to change the culture of bureaucratic committees making decisions too slowly, said Harlan Platt, a professor at Northeastern University in Boston who teaches corporate turnarounds. GM simply must transform itself into a company that makes cars and trucks that people would love to own, Platt said. ``That's great,'' he said of the cuts. ``But if it doesn't end up with General Motors being transformed, then it's just another step on the way toward the ultimate demise of General Motors.''
http://economictimes.indiatimes.com/News/International-Business/GM-to-go-green-cut-execs-as-it-exits-bankruptcy/articleshow/4755649.cms Go To Top

ECONOMY & FINANCE Go To Top
RUPEE SLIPS ON FEARS OF CAPITAL OUTFLOWS
The Hindu Business Line

Mumbai: The rupee depreciated by 43 paise against the dollar on Wednesday on fears of capital outflows. The domestic currency opened lower at 48.75 and weakened to touch an intra-day low of 48.94. It closed at 48.89, as against the previous close of 48.45.
The rupee opened with losses tracking the capital outflows from the equity markets and this affected sentiments, said a dealer with a public sector bank.

The dollars strength against other major currencies in the overseas markets and dollar demand from oil importers put pressure on the rupee. Sentiments were also affected after Standard & Poors said that Indias high fiscal deficit is not sustainable in the medium term.

If the fiscal consolidation is delayed, there is a risk that the Indias sovereign credit ratings may be lowered, S&P said. In the forward premia market, there was not much movement and the premiums closed unchanged.
http://www.thehindubusinessline.com/2009/07/09/stories/2009070951000600.htm
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SENSEX TANKS 400 AS FII SELLING CONTINUES
The Hindu Business Line

Mumbai: The Sensex dropped 401 points on Wednesday, only a two days after it lost close to 900 points, falling below the 14,000-mark as foreign institutional investors continued to shed stocks.

FIIs have sold Indian equities worth Rs 3,232 crore in the net since Budget day.
FIIs, whose investments had swept the market up since the election results, are now booking profits, said Mr G. Chokkalingam, Head of Equity Research at Barclays Wealth. We do not believe that it is on account of any negative view on India.
Investors shed especially those stocks that had seen an unusual run-up over the last two months. They included SBI, ICICI, L&T, Suzlon and RNRL.

Bank stocks were down as investors were nervous about the impact of the Governments borrowing programme on the financial sector.

Investors who bought before the elections are booking profits now as the markets are still trading higher than what they were two months back, said Mr Krish Shanbhag, Head of Research at Antique Stock Broking. Global cues kicked in as well, and the domestic stock indices followed the trail of the Dow, which closed lower on Tuesday on concerns regarding US economic recovery; and of the Asian indices, which were in the red on Wednesday.

DIIs were net buyers again for Rs 594 crore and FIIs net sellers for Rs 828 crore on the exchanges.