| INDIAN AUTOMOBILE INDUSTRY | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INDUSTRY Car sales rise for sixth month on new launches, bank financing Tata Motors to deliver 3,000 Nano cars in Orissa JLR ties up three-year financing for inventory INTERVIEWS/FEATURES Ford India launches Ikon variant COMMERCIAL VEHICLES CONSTRUCTION & AGRI MACHINERY Ultra Motor to launch 3 electric scooters COMPONENTS
| ALLIED INDUSTRIES FINANCE & INSURANCE M&M floats in-house PE firm to advise, fund new projects OIL, LUBRICANTS & ALTERNATIVE FUELS Oil slips below $71, inventories, dollar in focus INTERNATIONAL NEWS Electric car future may power a charging industry Toyota to up annual output target by 3% ECONOMY & FINANCE Sensex down 258 points on monsoon worries
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INDUSTRY Go To Top
New Delhi: The lower base effect of July 2008 translated into healthy sales growth in July this year, as carmakers posted increase in sales of 31% to 1.15 lakh cars last month in the domestic market over the same month last year, when sales dipped 1.7% to 87,724 cars.
Hindustan Times (Web & Print Edition)
New Delhi: They are bitter rivals, competing day in day out for the same prize across the world but with recession eating into their business like never before automobile majors Suzuki, Hyundai and Honda have a common denominator India.
The three Asian auto majors have seen their sales decline heavily in developed markets in recent months, but their performance in India has been as solid as ever.
Suzuki Motor Corporation saw its overall sales decline 22.4 per cent in April-June 2009, but its Indian subsidiary, Maruti Suzuki India Ltd, posted an overall growth of 17.7 per cent, selling 2.27 lakh cars in the 3-month period. It had grown a mere 1.45 per cent in the previous fiscal.
Little wonder that Suzuki is tipped to weather the downturn better than most car makers. Marutis four car assembly plants account for over 45 per cent of Suzuki's total sales. Arch rival Hyundai Motor Corporation also saw its sales skid by 20.8 per cent in the first six months of this year, as demand for its cars slumped in the US and Europe. Even its home market, South Korea, saw stagnant sales at 314,000 units.
In India though, courtesy recent successes like i10 and i20, the companys sales rose 9.7 per cent to 2.57 lakh units. China saw an even greater surge at 56 per cent during the same period.
The story was no different in the case of Honda: its sales 20.4 per cent in the April-June period selling almost 2 lakh less cars than last year. Its biggest reversals were in North America, where its sales slumped 30 per cent, and Russia and Japan.
The new City and the small car Jazz helped the company log 5.7 per cent sales growth, thanks to India and China. The company has revised its sales forecast for 2010 for Asia and Japan, downgrading North America and Europe. http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=
CAR SALES RISE FOR SIXTH MONTH ON NEW LAUNCHES, BANK FINANCING Devidutta Tripathy / Reuters mint (Web & Print Edition)
New Delhi: Indian car sales should pick up helped by coming festive season demand after they climbed for a sixth successive month in July, propelled by new launches and a revival in bank financing, industry and analysts said on Monday.
Car sales are a leading gauge of consumer sentiment in India in the absence of other indices, and the country is one of the few markets in the world where demand has been picking up.
Data from the Society of Indian Automobile Manufacturers (Siam) showed companies sold 115,067 cars during July, 31% more than the 87,901 cars a year earlier.
Unlike last year, banks are willing to lend now and there is a return in customer demand, which will grow sales, said Ashish Nigam, analyst with Antique Stock Broking Ltd.
There could be some effect because of the bad monsoons this year, but I think that would be only temporary. With the new launches, there are more urban buyers and I see demand for vehicles being sustained, he said.
Vehicle sales get a boost during the festival season, which starts from the last week of September, when many families like to make big purchases. An industry official said dealers had already started stocking for the festive season.
I think some dispatches are happening because this time Diwali is coming early, said Dilip Chenoy, director general of Siam, referring to the festival of lights in October.
Automobile stocks have been among the major gainers this year on the back of improving outlook for the sector.
Leader utility vehicle and tractor maker Mahindra and Mahindra Ltd (M&M) has more than trebled this year and top car maker Maruti Suzuki India Ltd has rallied 148%, outpacing the Bombay Stock Exchange index that has risen 57% over the same period.
Maruti, in which Japans Suzuki Motor Corp. has a 54% stake, reported a 33.4% jump in July sales on strong demand for its Swift model and A-Star exports.
Its profit in the June quarter had unexpectedly leapt a quarter from a year earlier, helped by a fall in commodity prices and lower costs.
Sanjiv Duggal, who runs the worlds biggest India fund, managing at least $4 billion (Rs19,120 crore) at HSBC, said last week automobile and property were set to benefit from Indias stimulus measures to boost growth.
Car sales had registered their first fall in three years last year in July and fell in five out of the last six months of 2008 as the rising cost of financing purchases and higher prices crimped demand.
On average, July sales for Maruti, Tata, M&M and Hyundai Motor India have risen by about one-third, according to Reuters calculations.
Sales of trucks and buses, a barometer of economic activity, rose 9.6% from a year earlier to 37,624 units, their first rise since July last year, the Siam data showed, helped by sales of light commercial vehicles.
But sales of medium and heavy trucks and buses were still falling. Motorcycle sales rose 19.5% to 546,245 units from a year ago. http://www.livemint.com/2009/08/10120545/Car-sales-rise-for-sixth-month.html
TATA MOTORS TO DELIVER 3,000 NANO CARS IN ORISSA Business Standard (Web Edition)
Kolkata/ Bhubaneswar: Tata Motors would deliver 3,000 Nano cars in Orissa in 2009-10 and 2010-11. On a pan-India basis, the company aims to deliver one lakh units of the worlds cheapest car by that period.
Out of the targeted figure 1250 cars will be delivered through Swapna Motors, a leading Tata Motors dealer in the city, while the rest cars will be sold through other dealers. Meanwhile, Tata Motors plans to come out with a modified variant of its utility vehicle Sumo Grande within a month or two and a new variant of Indigo during Diwali this year. The much awaited crossover sports utility vehicle of the auto major is expected to hit the market in the January-March quarter of this fiscal.
Tata Motors has started delivery of its different Nano variants across the country in July this year. The Nano cars are being despatched by Tata Motors to its dealer outlets from its manufacturing facility at Pantnagar in Uttarakhand.
In order to ensure smooth deliveries of the cars Tata Motors aims to ramp up production at the Pantnagar plant and also its upcoming plant at Sanand (Gujarat), said BN Saha, chairman and managing director of Swapna Motors. Tata Motors has delivered the first Nano car in Orissa to Baljit Singh, a resident of Paradeep.
The company delivered Nano LX, a high-end Nano variant priced at Rs 1,84,673 (ex-showroom). Tata Motors is aiming at 20 per cent growth in its sales in the passenger car segment (cars and utility vehicles) in the Orissa market in 2009-10.
The company sold about 4,200 units of cars and utility vehicles (UVs) in the previous fiscal.
The growth in sales is expected to come on the back of Nano and other new launches. The company plans to strengthen its dealership network in the state by opening up two new outlets at Angul and Cuttack in this fiscal.
Tata Motors has 29 per cent market share in the overall car sales in Orissa and about 11 per cent share in the utility vehicle market in the state.
It may be mentioned that Orissa accounts for about 22 per cent of the companys total sales volume in the eastern region. http://www.business-standard.com/india/news/tata-motors-to-deliver-3000-nano-cars-in-orissa/366582/
Joel Rebello & Neha Rishi Daily News & Analysis (Web Edition)
Mumbai: V R Sundaram was thrilled to bits when Tata Motors allotted him the Nano in June. He had booked the car through the Pollachi branch of State Bank of India in Tamil Nadu.
But the 58-year-old businessman's elation was shortlived because he was soon told the car would be delivered only by March 2011. To boot, monthly instalments for the loan would start in July. That's because EMIs on the booking amount (between Rs 95,000 and Rs 140,000, depending on the model, and the interest paid thereon @10%-10.5%) start a month after allotment.
Tata Motors completed the allotment process for Nano in June. In all 100,000 people received allotments and 55,000 were named 'retainees' whose booking amounts Tata Motors retained, promising to pay them interest @8.75%.
Sundaram promptly cancelled his booking. "Why should I pay interest now when I am getting the car only in 2011?" he asked. Sundaram is one of the many who have been deterred by the huge gap between when the instalments start and when the car is actually delivered.
Banks say they are seeing increasing requests for cancellation of allotments. At some banks, close to half the allottees have cancelled.
Central Bank of India, for example, received around 9,200 applications for the Nano, of which 7,200 got allotments. However, 4,700 of these are to get the car only in 2011, and a majority of them have opted out, an official with the bank said.
"We have already received applications for 3,000 cancellations... the last date for
"This was bound to happen. People would not be comfortable getting possession of the car later while having to pay the instalments much earlier," he said.
He did not give an estimate of the cancellations as it was difficult for the public sector
A Tata Motors spokesperson confirmed that the company is aware of the cancellations.
The story at Chennai-based Indian Bank is no different. It sold 3,200 forms of which 434 got allotments. Of these, 210 have been cancelled, said A K Dhar, general manager, retail loans. "Since cancellations were coming in batches, we had to designate July 23 as the last date for it," Dhar said.
More "than 60-65% of the 5,000 people" who applied for the car through Union Bank of India have either not got allotment or chosen not to take it.
"About 2,400 got allotments from our bank but we are still processing the data for cancellations," a bank official said. Bangalore-based Canara Bank got 1,818 applications for the car, of which 530 were rejected.
M Dohare, chief manager, marketing and new initiatives at Kolkata-based United Bank of India said 2,366 applicants out of 3,270 have been allotted the car. Of these 1500 deliveries will happen before 2010 and the rest in 2011.
"The majority of the cancellations are from those getting allotment in 2010-2011. But there are others also from the lucky 100,000 who are withdrawing. We cannot give an exact figure as our last date for cancellations is August 20," Dohare said.
Not just banks, dealers are also facing cancellations because of the long waiting period.
"If people go for the finance option, they have to pay interest which amounts to an average of around Rs 25,000 a year till they get delivery. After delivery, they have to pay EMIs and the actual rate of interest, which is another Rs 25,000. People are not willing to spend Rs 50,000 for this," Chakravarty said.
That apart, those who booked through ICICI Bank, the only private financer for the car, have faced another problem.
"The bank has placed a rider that it will finance only people who have Rs 5 lakh established annual income. This has led to many cancellations from ICICI," Chakravarty said.
Online's no different.
The Nano is currently being produced at the Pantnagar facility of Tata Motors, which has an annual capacity of 50,000 units, and once the Sanand plant in Gujarat goes on stream by the first quarter of 2010, the company will manufacture 350,000 units a year. http://www.dnaindia.com/money/report_emi-spurs-nano-cancellations_1281312
JLR TIES UP THREE-YEAR FINANCING FOR INVENTORY S Kalyana Ramanathan Business Standard (Web & Print Edition) See similar story in: The Times of India (Web & Print Edition), Asian Age (Web & Print Edition), mint (Web & Print Edition)
London: Tata Motors-owned Jaguar Land Rover (JLR) said yesterday it had successfully secured a financing facility of up to 75 million (Rs 600 crore) with Burdale Financial Ltd, a member of the Bank of Ireland Group.
The package consists of a three-year committed facility to finance Land Rovers parts and accessories inventories and receivables in the UK and the US. It does not form part of JLRs applications to the UK governments Automotive Assistance Programme, about which discussions continue, the company said in a media statement.
Said Ken Gregor, CFO: Jaguar Land Rover is pleased to have concluded this facility, which is an important element of our working capital financing arrangements. This is an important element of JLRs working capital financing to cover the key Land Rover parts and accessories inventories and receivables part of our business, which has a high cash requirement, to function properly.
The company continues to negotiate with the UK government for securing a guarantee on a 340 million loan from the European Investment Bank, which was approved by the Luxembourg-based bank in April. According to recent reports in the media, most conditions have been sorted between JLR and the UK government and the government guarantee could be secured soon.
JLR is also negotiating for loans from Indian banks like Bank of Baroda, the status of which is yet to be announced officially by the company. http://www.business-standard.com/india/news/jlr-tiesthree-year-financing-for-inventory/366618/ http://www.asianage.com/presentation/leftnavigation/news/business/uk-bank-lends-75m-to-jlr.aspx http://www.livemint.com/2009/08/10224600/JLR-gets-75-million-pounds-fin.html?h=B
Shobhana Subramanian Business Standard (The Compass)
Mumbai: With news that at least half-a-dozen states have had poor rainfall, the Mahindra and Mahindra (M&M) stock fell 9 per cent on Monday. The stock had rallied smartly with the rest of the market over the past couple of months to a high of 943 early last week. Since then, it has lost nearly 20 per cent. Should the monsoon turn out to be much weaker than normal, it would undoubtedly hit sales of tractors, which accounted for nearly half the companys sales in the June 2009 quarter.
Even if a fair share of tractors is now used for non-agricultural purposes, industry watchers point out that the demand will certainly drop, hurting the companys sales volumes. At the end of July, M&M was believed to be holding tractor inventories of around three weeks, which is normal.
Tractors are a highly profitable business for M&M. In fact, it was better-than-expected profitability of the farm equipment segment, which posted an EBIT (earnings before interest and tax) margin of nearly 17 per cent, that resulted in strong earnings for the auto major in the June 2009 quarter.
The farm segment included number for Punjab Tractors (PTL), which was merged with M&M in August last year and, therefore, the results are not comparable with those for the June 2008 quarter. Nevertheless, the strong volumes pushed up revenues while lower prices of key inputs such as steel, aluminium and plastics helped bring down the raw material bill.
The PTL merger should continue to yield synergies but the 14.4 per cent operating profit margin that M&M managed in the June 2009 quarter could slip to around 12 per cent in 2009-10 given that raw material prices are inching up and because there could be some pressure on the top line in the coming quarters.
Also, while the Xylo has turned out to be a popular model and will drive UV volumes in the current year, its also true that the elections helped create some extra business for M&M in the last quarter. All in all, the impact of the monsoon will be crucial for the company. At the current price of Rs 758, the stock trades at around 12.5 times estimated 2009-10 consolidated earnings and is not cheap. http://www.business-standard.com/india/news/mm-cloudsthe-horizon/366554/
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INTERVIEWS/FEATURES Go To Top | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CARS, SUVs, MUVs Go To Top Murali Gopalan The Hindu Business Line (Web & Print Edition)
Mumbai: Mahindra & Mahindra is convinced that not all is lost with the Logan mid-size sedan whose sales have been averaging barely 500 units over the last few months. The company is now in talks with partner, Renault, to see if some re-engineering is possible so that it qualifies for a lower excise duty of eight per cent, applicable to small cars, instead of the present 20 per cent.
The real disadvantage for the Logan has been this excise duty differential. This is a big thing for such a price-sensitive segment and something which cannot be ignored, Mr Anand Mahindra, Vice-Chairman and Managing Director, M&M, told Business Line. In the Indian context, small cars which attract a lower excise duty are classified as up to four metres long with engine capacities not exceeding 1.5 litres for diesel and 1.2 litres for petrol. The Logan has a 1.5-litre diesel engine but is slightly over four metres long (4.24 metres).
The car is produced at the companys Nashik plant under the Mahindra-Renault umbrella where M&M holds 51 per cent with the French automaker accounting for the balance. The facility has the capacity to produce 50,000 units annually but barely one-thirds is used thanks to the tepid response to the Logan in the market.
If anyone asks what the problem with the Logan is, it is everything to do with an excise duty structure, which is unfortunately disadvantaged, and our ability as Mahindra-Renault to customise the product appropriately, Mr Mahindra said.
The obstacle lies in the fact that the Logan is a Renault product, which does not give M&M the liberty to effect any changes in it. Had it been our product, we would have done it. You cannot blame a multinational like Renault because they are building a standard product and sending completely knocked down kits around the world, he added.
The fact remains that the Logan is doing well in other countries and has suffered a setback in India thanks to the anomalous excise duty structure. From Renaults perspective, it is not worth the effort to engineer a different vehicle for this size of market. That is the conundrum, Mr Mahindra said.
Revival plan M&M is now pulling out all stops to chalk out a revival plan for the Logan. Discussions are under way with Renault to see whether any alteration is worth the effort because by the end of the day, it is equally important for the French company to be convinced about the potential of the Indian market.
We are willing to make changes, if we can, to move nimbly and adjust our product to the demand of the market which Mahindra is very well known for doing. The question is that Renault has to make up its mind on doing that, he said.
This could pose a challenge because, like all multinationals, the company had had a rough run over the last year or two trying to grapple with the slowdown. We will have to wait and see if they are willing to make those commitments on product to the Indian market, Mr Mahindra added.
M&M remains bullish on the Logan and is convinced that it is perfect from the viewpoint of durability, fuel efficiency and quality. Increasingly, it has emerged the best bet for luxury taxis in Mumbai, Hyderabad and Bangalore.
Our goals as a management have been met in terms of producing a high quality car and maintaining its quality and value proposition, he said. http://www.thehindubusinessline.com/2009/08/11/stories/2009081150410200.htm
FORD INDIA LAUNCHES IKON VARIANT PTI See this story in: The Hindu Business Line (Web Edition), The Times of India (Web Edition)
New Delhi: Ford India on Monday announced the launch of a new variant of Ford Ikon - the iKool - at a price starting from Rs 4.82 lakh (ex-showroom, New Delhi) which will be available across the country from Wednesday.
Starting August 12, the Ikon iKool will be available at Ford dealerships across India at an aggressive price of Rs 4.82 lakh (petrol) and Rs 5.42 lakh (diesel), ex-showroom, New Delhi, the company said in a statement.
It said the Ikon iKool models have Duratorq TDCi 1.4 diesel and ROCAM 1.3 petrol engines that offer class leading fuel efficiency.
Its new feature rich persona along with legendary driving characteristics will appeal to the upwardly mobile and ambitious customers who want their car to complement their active lifestyles, Ford India Executive Director (Marketing, Sales and Service), Mr Nigel Wark said. http://www.thehindubusinessline.com/blnus/19101806.htm http://timesofindia.indiatimes.com/news/business/india-business/Ford-India-launches-Ikon-variant/articleshow/4877793.cms
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COMMERCIAL VEHICLES Go To Top Deccan Chronicle (Web Edition) See this story in: Asian Age (Delhi Print Edition)
Mumbai: The lower-than-normal monsoon will severely affect the medium and heavy vehicles companies. According to Ms Revati Kasture, the head-of industry research at Care Ratings, A 25 per cent below normal level rainfall would affect agricultural production, which would result in a decline in transportation activity. In turn, the demand for the heavy vehicles may further decline. Though the cumulative automobile production grew by 10.26 per cent in the first quarter, the heavy vehicle sector has registered a negative growth of 30.11 per cent. http://www.deccanchronicle.com/business/truck-cos-take-hit-agri-slump-135
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONSTRUCTION & AGRI MACHINERY Go To Top | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/3 WHEELERS Go To Top Business Standard
New Delhi: Sales of two-wheelers in the month of July grew by 20.1 per cent over the same month last year, at 719,668 units, the highest growth till date in 200910. This strong growth comes on the back of Hero Honda, which has around 60 per cent of the market share, Yamaha, and Suzuki posting double-digit growth for the month.
Motorcycles constitute about 76 per cent of all two-wheeler sales. For market leader Hero Honda, the ratio of urban to rural sales are roughly in the ratio 60:40. Analysts say most rural purchases of two-wheelers are largely by cash. This segment could get impacted, should the monsoons be inadequate in the coming months, which could affect farm incomes, says H S Goindi, president (sales) of TVS Motors.
The other key factor is the repossession norm currently being deliberated by the Reserve Bank. http://www.business-standard.com/india/news/two-wheeler-sales-rise-20-per-cent/366620/
ULTRA MOTOR TO LAUNCH 3 ELECTRIC SCOOTERS
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COMPONENTS Go To Top Menaka Doshi & Sumantra B. Barooah mint
Mumbai: On the back of automobile demand falling by at least 50% in Europe, Bharat Forge Ltd could shutter an unviable plant in Europe.
Around 75% of the companys consolidated revenue comes from overseas, and a lions share of it from the automotive sector.
We have six plants in Europe and we could do with five instead of six. It doesnt really make any sense but we have not made that decision yet, chairman and managing director Baba Kalyani said. We will make that decision once we get a little more clarity from our customers.
Scottish Stampings Ltd, which the company bought in 2005, could be the first. Deputy managing director G.K. Agarwal said: At Scottish Stampings, which is located in the UK, we have seen some issues with the volumes being very low, as it is a single press operation. So that is a operation that could possibly get reorganized.
The firm is now planning for flexible capacity that can be realigned to market demand quicker than fixed capacity. Although the company is trying hard to maintain profitability by shutting idle capacities, it is also looking to buying assets to climb up the value curve.
Agarwal said: We are looking at a lot of consolidation opportunities right now. What would interest us is opportunities that would consolidate our business in terms of technology, market share and obviously our efforts to rationalize our own capacities on a global scale.
The company said most consolidation opportunities are in Germany and the US. With at least Rs500 crore in surplus cash, the company is looking at forging itself stronger to better weather future economic storms. http://www.livemint.com/2009/08/10225757/Bharat-Forge-may-close-Europe.html?h=A4
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ALLIED INDUSTRY Go To Top Swaraj Baggonkar Business Standard
Mumbai: Despite a revival in offtake in the domestic market, the margin-boosting export segment continues to hurt tyre companies, as the latter recorded a fall of 25 per cent in the first two months of this financial year.
According to the latest figures from the industry body, the Automotive Tyre Manufacturers Association (Atma), total exports dropped by 25 per cent to 736,070 units during April-May, compared with 985,273 units reported in the corresponding month last year.
Exports of key categories like the truck and bus segment fell by 10 per cent to 282,247 units as against 314,938 units.
This category is the largest amongst all the export market segments and is considered the cash cow for manufacturers, due to superior margins.
Exports of tyres for passenger cars during the same period of dipped by 19 per cent to 125,542 units, as against 155,934 units recorded in the same period a year earlier. Similarly, exports of light commercial vehicle tyres witnessed a slump of as much as 35 per cent. The segment saw exports of just 201,478 tyres as compared to 309,450 tyres during the two reporting periods.
Rajiv Budhraja, Director-General, Atma, said: The impact of continuous fall in export volumes is significant, as exports have traditionally accounted for approximately 15 per cent of the total turnover of the tyre industry.
Indias export markets are yet to fully recover from the downturn in the last one year. More important, Indias competitors in export markets, particularly China, are aggressively tapping export markets, aided by export incentives provided by these countries, added Budhraja.
The decline in export numbers from India is reflected in the export free-on-board (FOB) value. The average monthly export FOB value, which stood at $42.96 million in 2007-08, fell 4.9 per cent in 2008-09 to $40.88 and has seen a sharp decline of 21.2 per cent to $32.20 this year.
During last year, the total FOB value was cushioned by strengthening of the dollar against the rupee; otherwise the impact of fall in exports on FOB value would have been severer, added Budhraja.
To indicate, the rupee fell from an average of Rs 40.23 a dollar in 2007-08 to Rs 46.47 a dollar during 2008-09, a depreciation of 14 per cent.
In addition, cheaper tyres from China and Korea have flooded the domestic market, with their imports jumping by 47 per cent to nearly 2.4 million tyres in the 10 month period of April-January last year, from 1.62 million recorded in same period of the previous year. Experts say the surge in imports of cheap tyres is due to the lack of government effort to address the dumping concerns on such tyres.
George Joseph Business Standard
During April-July, total imports were 70,328 tonnes against 23,878 tonnes in the same period of 2008-09. Imports in July alone were 20,412 tonnes against 2,589 tonnes in July last year.
The wide gap between local and international prices during March-June this year is the main reason behind the huge rubber imports in the country. The local tags were higher by Rs 17 a kg compared to global prices. Due to this, the rubber-based industry, especially automotive tyre manufacturers, imported more rubber.
The current increase in rubber import is based on orders placed during April-June. The huge gap in prices has narrowed down now, though domestic tags are still higher by Rs 5-6 a kg. Hence, the quantum of import is expected to be regulated in the coming months. There might be a slowdown in imports during September-December owing to the start of the production season in India. Still imports, especially through the advance licence scheme, would be a more lucrative route for users of the commodity.
Meanwhile, the export front is struggling hard to supply a minimum quantity to overseas markets. But the month of July went without any export of the commodity. In June, only 38 tonnes were exported while the cumulative export in the April-July period was to the tune of 878 tonnes against 9,299 tonnes in the same period in the last financial year.
The sharp rise in imports and a decline in exports have resulted in the total stock of the commodity going up in the country. The stock as on July 31 this year was 183,270 tonnes against 115,146 tonnes on July 31, 2008.
Meanwhile, total output in April-July has dropped by 13 per cent to 209,825 tonnes against 242,115 tonnes in the same period of last year. Consumption has edged up by 1.2 per cent to 296,220 tonnes against 292,840 tonnes in the same period last year. http://www.business-standard.com/india/news/traders-cash-inrubber/366532/
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FINANCE & INSURANCE Go To Top T E Narasimhan Business Standard
Chennai: The General Insurance Corporation of India (GIC) is planning to join hands with regional transport offices (RTOs) to track uninsured vehicles.
The pilot project is expected to be launched in two states. Based on the success of the projects, it will be extended to other parts of the country, according to S L Mohan, secretary general, GIC. According to Mohan, 70 per cent of the two-wheelers and 40 per cent of the four-wheelers in the country are uninsured. In India, every month around 400,000 two-wheelers are produced.
It is not the new insurance policy which GIC is worried about. The issue is renewal, said Mohan. GIC has prepared a concept paper in this regard, which will seek approval from a forum, comprising chairmen of the countrys 21 general insurance companies, in the next two weeks. The states where the pilot project will be launched and how it will be funded will be decided in the meeting, he added. While welcoming GICs initiative, a senior industry representative from a public sector company, said that one out of every three vehicles on Indian roads does not have the mandatory third-party liability insurance, let alone personal cover.
Whoever drives a motor vehicle or causes or allows a motor vehicle to be driven in contravention of the provisions of Section 146 shall be punishable with imprisonment which may extend to three months, or fine which may extend to Rs 1,000, or with both.
M&M FLOATS IN-HOUSE PE FIRM TO ADVISE, FUND NEW PROJECTS Nandini Sen Gupta The Economic Times
The $6.3-billion Mahindra group has set up an in-house private equity (PE) division that will serve as a launch pad for new projects within the group.
What we have created is a new division within the group called Mahindra Partners. Loosely, its a kind of private equity within the group, said Anand Mahindra, vice-chairman and managing director of Mahindra & Mahindra. The PE vertical is a fairly significant change in the architecture of the group, Mr Mahindra added. The PE vertical will be the groups growth driver of the future, he said.
In addition, the diversified Mahindra groups experience with new ventures has convinced it that the traditional external PE culture is not growth-inducive. Club Mahindra took us 8-9 years to get critical mass and an IPO, Mr Mahindra said. Also, if a corporate house simply mimics a PE, why should it do better? After all, the real strength of a corporate group is management and institution-building. http://economictimes.indiatimes.com/News/News-By-Industry/Auto/MM-floats-in-house-PE-firm-to-advise-fund-new-projects/articleshow/4879245.cms
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OIL, LUBRICANTS & ALTERNATIVE FUELS Go To Top PTI See this story in: Business Standard
New Delhi: The Indian Oil Corporation (IOC) and Adani Energy combine has bagged rights to retail CNG to automobiles and piped gas to industries in Chandigarh and Allahabad by quoting zero pipeline tariff.
The Petroleum and Natural Gas Regulatory Board (PNGRB) had asked the companies to quote only the tariff that they will charge for transporting gas within the perimeters of a city and left the final selling price of the fuel for the companies to decide.
This provision of zero tariff, sources said, is made up by companies through CNG charges levied from users household or industries as they deem fit.
Industry sources said PNGRB opened price bids for two cities to discover that IOC-Adani combine had quoted zero pipeline tariff for 25 years in Chandigarh and the same for 7 years in Allahabad. On top of this, the PNGRB has also allowed a 5-year marketing exclusivity to the winning company.
Even after 5 years, the operator like IOC-Adani will have system (that is pipeline) exclusivity for 25 years, meaning no other company can lay a pipeline network and would have to necessarily request them to use their network if they want to retail CNG to automobiles and piped gas. But the regulations do not specify the extra capacity the operators would have to create in the system for usage by others and so third parties can be turned down on pretext of no capacity, they added.
Sources said in Allahabad, the IOC-Adani joint venture was in a direct fight with GAIL Gas Ltd, the city gas subsidiary of state gas utility GAIL India Ltd. Chandigarh saw a four-cornered contest among IOC-Adani, HPCL, GAIL Gas and GSPC Gas.
The other bidding criteria was the length of pipeline a company proposes to lay in the city and the number of consumers they propose to sell the gas to. In some cases, companies have indicated enrolling consumers even more than the population in that area, again making a mockery of PNGRBs regulations, they added.
Along with Chandigarh and Allahabad, Jhansi, Shahdol and Yanam had also been put on auction but had received single bids GAIL Gas for Jhansi and Reliance Gas a unit of Reliance Industries for Shahdol and Yanam. Owing to the single bids, PNGRB had extended the bid deadline by a month for these cities but only Avantika Gas made a bid for Shahdol.
In all, seven cities were put on auction, the other two being Ghaziabad and Rajahmundry, the bids for which are likely to be opened on August 13. Ghaziabad had witnessed the fiercest competition, with IOC-Adani, HPCL, GAIL Gas, IGL, Siti Energy and GSPC Gas in the fray. Rajahmundry has IOC-Adani, Reliance Gas and Bhagyanagar Gas Ltd contesting, they added. http://www.business-standard.com/india/news/ioc-adani-win-cng-rights/366615/
OIL SLIPS BELOW $71, INVENTORIES, DOLLAR IN FOCUS Barbara Lewis/ Reuters See this story in: Yahoo India
London: Oil prices dipped below $71 a barrel on Monday as traders focused on swollen inventories and prospects for a stronger dollar.
U.S. crude fell 35 cents to $70.58 a barrel by 1226 GMT. London Brent crude fell 5 cents to $73.54.
Modest price support was provided after the U.S. National Hurricane Center said a low pressure system southwest of the Cape Verde Islands could develop into the first tropical cyclone of the Atlantic hurricane season.
Traders watch for storms with the potential to enter the Gulf of Mexico and to disrupt oil and gas infrastructure there.
U.S. crude futures gained a modest 2 percent over the course of last week but closed lower on the day on Friday, following U.S. data that showed the first drop in unemployment in 15 months.
That was regarded as raising the chances of higher interest rates before the year-end and gave a surprise boost to the U.S. dollar, although it weakened early on Monday against a basket of currencies.
"The U.S. payrolls data would have been supportive for crude, but investors are now focusing on the strength in the U.S. dollar," said David Moore, a commodities analyst at the Commonwealth Bank of Australia.
For much of this year, oil prices have risen in line with gains on equities and have been negatively correlated to the dollar. A stronger dollar can be bearish for dollar-denominated commodities, which effectively become more expensive to non-dollar buyers.
Analysts have said those relationships, which were only ever provisional, could have begun to shift as the market returns its focus to fundamentals of supply and demand. Tokyo shares hit a 10-month closing high on Monday, but European shares faltered after Friday's broad-based rally.
The MSCI world equity index edged 0.04 percent lower after hitting its highest since October on Friday. http://in.biz.yahoo.com/090810/137/bau0qb.html
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INTERNATIONAL NEWS Go To Top Reuters See this story in: The Economic Times
Detroit: General Motors Co and eBay Inc said Monday that they launched a test program in California that will allow consumers to negotiate with dealers and buy vehicles online.
ELECTRIC CAR FUTURE MAY POWER A CHARGING INDUSTRY Reuters See this story in: The Economic Times
San Francisco: As makers from Tesla to Nissan Motor Co jockey to dominate the next generation electric-powered cars, a fight on which companies will control the lucrative market to fuel them is just getting started. US President Barack Obama aims to put a million electric vehicles on the road by 2015 as part of the new US effort to cut greenhouse gas emissions linked to global warming.
TOYOTA TO UP ANNUAL OUTPUT TARGET BY 3% Reuters See this story in: The Economic Times
Tokyo: Japans Toyota Motor Corp plans to raise its global output target for the year to March 2010 by 3% to 6.5 million units, the Yomiuri newspaper said, in the latest sign of a nascent recovery in auto demand. Toyotas inventory adjustment has run its course, and sales are picking up due to various government measures around the world to simulate demand for new cars, the paper said on Sunday. Governments from Tokyo to Berlin and Beijing have offered subsidies and tax incentives to encourage consumers to buy new fuel efficient models to boost their auto industries, hit hard by the global downturn and ensuing sales slump. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ECONOMY & FINANCE Go To Top The Hindu Business Line
Mumbai: The rupee was flat against the dollar on Monday after it lost most of its initial gains in day trade. The domestic currency opened at 47.80 and strengthened to touch an intra-day high of 47.64. It weakened to close at 47.82, as against the previous close of 47.84/85. The rupee opened with gains as the subscription money from foreign institutional investors for the NHPC IPO came into the market. The dollars weakness against other international currencies also propped up the rupee, said a dealer with a public sector bank. However, it lost most of its gains tracking the sharp fall in the domestic equity indices, added the dealer. The greenback bounced back against the pound and the euro to close in the green. In the forward premia market, the six-month ended at 2.78 per cent and the one-year was at 2.48. http://www.thehindubusinessline.com/2009/08/11/stories/2009081151830600.htm
SENSEX DOWN 258 POINTS ON MONSOON WORRIES PTI See this story in: The Hindu Business Line
Mumbai: The Bombay Stock Exchange benchmark index Sensex plunged by 258 points on Monday, reversing an early upward trend, as speculators preferred to book profits at higher levels amid weak monsoon concerns.
The Sensex, which had opened in positive zone with gains of over 257 points, fell by 258.22 points to 14,902.02 points. It touched a low of 14,902.02.
Auto, FMCG, capital goods, realty, PSU, power and banking sector stocks retreated. In similar fashion, wide-based National Stock Exchange's index Nifty lost 43.75 points at 4,437.65.
Brokers said profit-booking at improved levels and worries that weak monsoon rains will hurt country's economy, weighed on investors' confidence and triggered selling activity. - http://www.thehindubusinessline.com/blnus/05101901.htm
Last Financial closing
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tuesday, August 11, 2009
Indian Auto Industry Update August 11, 2009
Subscribe to:
Post Comments (Atom)
Subscribe To
Posts
Comments
No comments:
Post a Comment