Indian Auto Industry News: Indian Auto Industry Update August 12, 2009

See similar story in: Business Standard (Web & Print Edition), The Hindu Business Line (Web & Print Edition), The Hindu (Web & Print Edition), The Telegraph (Web Edition), The Pioneer (Web & Print Edition), Yahoo India (Web Edition), Rediff India (Web Edition), mint (Web & Print Edition), The Financial Express (Web & Print Edition), Asian Age (Delhi Print Edition)

Mumbai/London: The long drawn out waiting game between the Tatas and the UK government to secure the future of Jaguar Land Rover is over.

The Tatas have informed the UK government that it no longer needs government guarantees to raise funds either for its short-term or long-term loans, ending a 11-month-long saga of tortuous negotiations.

In a short announcement, Tatas announced that it has almost finalised its short-term funding facilities through commercial banks. The Tatas have also said that the group is close to negotiating commercial arrangements for funding and guarantees for the approved 340-million loan ($566 million) from the European Investment Bank for long-term funding. These arrangements have been and are expected to be concluded without necessitating guarantees from the UK government, the statement said.

David Smith, CEO of Jaguar Land Rover, said: We are hopeful of soon being able to access the approved 340-million European Investment Bank loan in support of our future product and environmental technology development, also through commercial means.

This has always been our desired route and it clearly demonstrates recognition of the inherent strength in our business and faith in our future business plans.

Encouraging outcome for JLR: UK govt

In a separate move, signalling increased easing of credit, JLR has also finalised a 75-million, 3-year, loan for technology upgradation from Burdale, part of the Bank of Ireland. Peter Mandelsen, business secretary, was reported by the British media to be quietly satisfied.

The UK government, loath to be seen as giving away taxpayer money to a foreign luxury carmaker, had been dragging its feet over details of the deal for months. We understand the Tata group will now be successful in resolving longer-term financial needs, but we are willing to help again if necessary.

This is a good and encouraging outcome for JLR, its workforce and its supply chain, Mr Mandelsen told the media in London. In a letter to Mr Mandelsen, widely reported in the UK media, Mr Tata said he hoped that the funding secured would succeed in re-establishing these venerable British brands to their earlier glory.

Tata Motors acquired JLR for $2.3 billion, and while most of the loans it took for the acquisition have been refinanced, it is believed that some 200 million ($333 million) is still due next July.

The major portion of the refinancing was done by utilising the proceeds of the Rs 4,000-crore rights issue last year and a Rs 4,200-crore non-convertible debenture, which was guaranteed by SBI, three months ago. Also, the company has raised funds through a fixed-deposit scheme.

Mahantesh Sabarad, of Centrum Broking, a Mumbai-based brokerage, said: The commercial rate on EIB loan would be much higher than the soft-rate loan Tata Motors could have secured under the UK government guarantees. JLR employs around 14,000 people in its 5 sites in the UK, and has recently launched the new Jaguar XJ.

It has been badly hit by the global recession, along with the entire auto industry, and had requested the UK government guarantees to help it raise the required credit for working capital and product development. This move will make it easier for JLR to go ahead with its scheduled launch of the Jaguar XJ, planned improvements for Land Rover, and ride out the cruel drop in demand. Mr Smith, however, warned: The environment is still very challenging. It will continue to be so for some time to come.

The company gave no details about its consortium of banks or financing details, media reports mentioned names like Bank of Baroda as part of the consortium. The Tata Motors stock gained 6.8% to close at Rs 428.25 in a flat Mumbai market on Tuesday.

Tata Motors had reported a consolidated net loss of Rs 2,505 crore for the year ended March 2009, and attributed the fall to the global meltdown, in particular, a 37% decline in JLR volumes. The UK operations with a segment loss of Rs 1,777 crore, was the biggest contributor to the consolidated loss for the year ended March 2009.

JLRs combined volumes stood at 1.67 lakh units for the June 2008-09 period compared with 2.46 lakh units in the same period of the previous year. While Land Rover sales fell by 40% to 1.2 lakh units, Jaguar sales fell by 4% to 47,000 units.

http://economictimes.indiatimes.com/News/News-By-Industry/Auto/Automobiles/Tatas-no-longer-need-UK-govts-help-for-JLR/articleshow/4883520.cms?curpg=2

http://www.business-standard.com/india/news/jlr-gets-funding-without-uk-government-aid/366710/

http://www.thehindubusinessline.com/2009/08/12/stories/2009081252390100.htm

http://www.hindu.com/2009/08/12/stories/2009081255711300.htm

http://www.telegraphindia.com/1090812/jsp/business/story_11351152.jsp

http://www.dailypioneer.com/195152/Tatas-secure-private-funding-for-JLR.html

http://in.biz.yahoo.com/090811/137/bau0yu.html

http://business.rediff.com/report/2009/aug/11/tata-may-meet-jlr-funding.htm

http://www.livemint.com/2009/08/11214637/Tata-Motors-gets-credit-from-b.html

http://www.financialexpress.com/news/no-need-for-uk-guarantee-for-jlr-loan-tata-motors/500828/

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JLR BREATHES A LOT EASIER THOUGH TOUGH TIMES CONTINUE

The Hindu Business Line (Web & Print Edition)

Mumbai: We are hopeful of soon being able to access the approved 340-million European Investment Bank (EIB) loan in support of our future product and environmental technology development, said Mr David Smith, CEO of Jaguar Land Rover, in a statement here.

In fact, JLR has embarked on emission reduction technologies and the initial development in this regard, as reflected on the start-stop technology adopted on the Freelander.

The project concerns the financing of the promoters activities related to the reduction of CO{-2} emissions of its cars. The Banks support would be focused on the development of those powertrains that are designed to meet the CO{-2} emission targets set by the EU Commission, notably the development of downsized diesel engines and downsized drivetrains. The promoter will carry out the work in its existing R&D centres in the UK, said the EIB Web site.

The spokespersons of Tata Motors and Jaguar Land Rover refused to disclose the names of the commercial banks that had guaranteed the EIB loan. The Tata official also declined to comment on an agency report citing 175-million private funding to JLR. I am afraid I cant confirm it, said Mr Don Hume, Director, Corporate and Government Affairs, JLR.

Tata Motors bought the two British brands for $2.5 billion from Ford Motor Company in March 2008. It then spent $1 billion more to meet JLRs working capital requirements. However, things got difficult with the global economic slowdown. The combined annual sales of JLR fell 32 per cent to 1.67 lakh units in 2008-09. While Land Rover numbers were down to 1.2 lakh units from 1.98 lakh units, Jaguar sold 47,000 units, 1,000 cars fewer than last year. The JLR business reported a loss of Rs 1,777 crore last fiscal, which impacted Tata Motors bottomline.

Cost-cutting

The British automaker has been doing its bit through cost-cutting measures, which include temporary plant shutdowns. We have been forced to take unprecedented actions through this tough economic crisis and the environment is still very challenging. It will continue to be so for some time to come and we will continue to take further actions to secure the future of the business, said Mr Smith.

Tata Motors, meanwhile, recently repaid $150 million of its $1-billion debt outstanding on account of the JLR acquisition from the proceeds of stake divestment in group companies. Jaguar and Land Rover models have made an India entry and are now housed in an exclusive showroom in Mumbai.

http://www.thehindubusinessline.com/2009/08/12/stories/2009081250580200.htm

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TATA MOTORS SOARS 7% ON JLR FUNDING REPORTS

PTI

See this story in: The Hindu Business Line (Web Edition), Business Standard (Delhi Print Edition)

Mumbai: Shares of Tata Motors on Tuesday surged nearly seven per cent on the Bombay Stock Exchange amid reports that the automaker expects to meet the funding requirement for its two British luxury brands without the loan guarantee from the UK government .

Tata Motors closed at Rs 428.25 on BSE, up 6.81 per cent over the previous close. On the National Stock Exchange, Tata Motors settled up 6.60 per cent at Rs 430.50. Over 1.44 crore shares changed hands on the bourses.

Analysts said the scrip, which was witnessing a lackluster trade in morning, gained on the bourses after reports came in that the firm has secured some direct bank loans, as well as guarantees.

The scrip, which has fallen nearly 11 per cent in the past three trading session, bounced back and became the biggest index-wise gainer at the end of the trade.

"Strong buying emerged in the stock as investors turned optimistic on the stock,'' SMC Global Vice President, Mr Rajesh Jain said. After the close of market hours, Tata Motors in a statement said that it expects to meet the funding requirement for its two British marquees brand without the loan guarantee from the UK government.

http://www.thehindubusinessline.com/blnus/05111962.htm

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INDIAN AUTO SECTOR HAS REVIVED: SECRETARY, DIPP

PTI

See this story in: The Hindu Business Line (Web Edition)

London: India has weathered the global economic downturn and is emerging as a globally competitive manufacturing hub for small, fuel efficient cars, a senior Indian official said last night.

Department of Industrial Policy and Promotion Secretary Ajay Shankar told PTI, India is emerging as a globally competitive manufacturing hub for small fuel efficient cars.'' Shankar who was here to interact with the UK-India Business Council and the In dia Business Forum said, though, export-oriented Small and Medium Enterprises (SMEs) have been severely hit, fortunately the auto-sector in India has revived.''

In July, two large car manufacturing companies, Maruti-Suzuki and Hyundai Motors India Ltd have registered a growth rate of 20 per cent year-on-year. That in turn has helped the entire Small and Medium Enterprise chain and the auto-component sector to g et out of the woods,'' he said. Indian car manufacturers were exporting cars mainly to the European markets where people are looking for cheap and fuel efficient cars owing to the economic downturn, he said.

Answering questions, Shankar said compared with other countries, the Indian economy has faired better'' during the global economic crisis. The budget has also improved the confidence of investors and the last 2-3 months have seen confidence re-emerge in the Indian economy,'' he said.

http://www.thehindubusinessline.com/blnus/03111102.htm
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CARS, SUVs, MUVs Go To Top

MARUTI GETS 700 ACRES FOR R&D UNIT AT ROHTAK
The Hindu Business Line (Web & Print Edition)
See this story in: The Financial Express (Web & Print Edition), Yahoo India (Web Edition), Deccan Herald (Web Edition), Asian Age (Web & Print Edition)

New Delhi: Maruti Suzuki India Ltd (MSIL) has been allotted 700 acres for an R&D facility in Industrial Model Township at Rohtak by the Haryana Government.

This includes a suppliers park on 100 acres. The estimated investment in the Rohtak facility is Rs 1,000 crore. The car maker is expected to announce the details of the project

and investments soon.

The facility is to be the R&D hub for the countrys largest car maker. A test course for high-speed and acceleration tests will be provided at the facility, which could undertake full vehicle design and development. It would also house a collision test area, emission labs and wind tunnel testing facility.

The companys two plants, one in Gurgaon and the other in Manesar, are not too far from Rohtak, which is providing space for its ancillary providers. This is in addition to the Rs 9,000 crore investment that the company has announced for a diesel manufacturing plant, a port-based facility and modernisation.

Maruti is headed to become the R&D centre for Asia. The company had earlier hoped to set up the R&D facility at Manesar from where its A-star was produced.
http://www.thehindubusinessline.com/2009/08/12/stories/2009081250530200.htm
http://www.financialexpress.com/news/suzuki-to-set-up-asian-r&d-hub-in-rohtak/500865/
http://in.biz.yahoo.com/090811/50/bau10t.html
http://www.deccanherald.com/content/19146/haryana-unit-suzukis-investment-hub.html

http://www.asianage.com/presentation/leftnavigation/news/business/pe-cos-bet-on-green-energy.aspx

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TOYOTA MULLS DIESEL SMALL CAR FOR INDIA

PTI

See this story in: The Hindu Business Line (Web & Print Edition), The Telegraph (Web Edition), Deccan Herald (Web Edition), Rediff India (Web Edition), The Times of India (Web Edition), mint (Web Edition), Business Standard (Delhi Print Edition)

New Delhi: The world's largest carmaker, Toyota, is evaluating options to introduce a diesel version of its small car to be launched in the Indian market by 2011.

We are keenly studying the diesel option for the small car to be launched by 2011. It will depend on the market and the government regulations regarding diesel engines, Toyota Kirloskar Motor (TKM) Deputy Managing Director (Marketing), Mr Sandeep Singh told reporters here.

He, however, declined to give any timeframe to launch the diesel version of the 'strategic' small car in the country. Toyota Kirloskar Motor - the Indian joint venture of the Japanese carmaker with the Kirloskar Group - is investing Rs 3,200 crore in se tting up a second plant in Bangalore to roll out the small car in the country.

Mr Singh said the company is also evaluating options to launch a diesel version of its premium sedan Corolla Altis. Asked about the Indian operations amidst the Japanese parent incurring losses of over $ 800 million for the April-June quarter, TKM Manag ing Director, Mr Hiroshi Nakagawa said: "Our margins are under pressure, but so far we have been able to remain profitable. We expect to make marginal profits in this year as well.''

http://www.thehindubusinessline.com/blnus/02111965.htm

http://www.telegraphindia.com/1090812/jsp/business/story_11350795.jsp

http://www.deccanherald.com/content/19088/toyota-mulls-diesel-small-car.html

http://business.rediff.com/report/2009/aug/11/toyota-mulls-diesel-small-car-for-india.htm

http://timesofindia.indiatimes.com/news/business/india-business/Toyota-mulls-diesel-small-car-for-India-/articleshow/4882156.cms

http://www.livemint.com/2009/08/11184438/Toyota-mulls-diesel-small-car.html
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ASHOK LEYLAND IN PACT WITH BELGIAN COMPANY

Business Standard (Web & Print Edition)

See similar story in: The Hindu Business Line (Web & Print Edition)

Chennai: Belgium-based Wabco, a global technology leader, has entered into a supply agreement with commercial vehicles manufacturer Ashok Leyland. The agreement is for development of transmission automation technology and the long term supply of automated manual transmission systems from 2010 through 2015.

Wabco will supply its new OptiDrive modular AMT system, an automation technology, to Ashok Leyland. The company will be the first manufacturer of commercial vehicles in India to adopt OptiDrive system in volume production, according to a Wabco statement. Both the companies did not disclose the value of the agreement.

This agreement with Ashok Leyland is Wabcos first new major contract since taking control of Wabco-TVS in India two months ago, further leveraging the well-anchored leading position of Wabco-TVS in the local market and our ability to provide maximum value for customers, said P Kaniappan, director, Wabco-TVS (India) Ltd.

Depending on the drivers preference, the OptiDrive system can change gears in full automatic mode or as initiated by the driver. By partnering with Wabco, we can continue to create value in the marketplace while strengthening our commitment to innovation, said R Seshasayee, managing director, Ashok Leyland Ltd, in the release.

http://www.business-standard.com/india/news/ashok-leyland-in-pactbelgian-company/366650/

http://www.thehindubusinessline.com/2009/08/12/stories/2009081250620200.htm
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IIT HONOURS TVS CHIEF SRINIVASAN

The Times of India

The Indian Institute of Technology (IIT) Kharagpur, has conferred the Honoris Causa Doctor of Science on Venu Srinivasan, chairman of TVS Motor, for his outstanding contributions in the field of Quality Movement and Manufacturing Excellence. He thus joins an elite list of luminary recipients including former President A P J Abdul Kalam, Ratan Tata, Narayana Murthy, to name a few. Venu Srinivasan said, I have no words to express how sincerely and deeply I appreciate this honour.

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LEO FASTENERS TO EXPAND CAPACITY

Hemamalini Venkatraman

The Economic Times

Chennai: Global slowdown has impacted expansion plans of Leo Fasteners, operating out of Puducherry. As part of its efforts to streamline, the closely-held family-owned enterprise has lined up expansion plans to boost its capacity by 25%. Currently, the Rs 75-crore Leo has a capacity to produce 1.2 billion parts annually.

Leo has been supplying forged automotive components to Maruti, Hero Honda and TVS Motor right since its inception in the eighties. Catering to 300-plus customers, Leo Fasteners is part of the Grace Infrastructure group, that has interest in energy business too.

"We anticipate a growth of 10-12% if the market sustains at current levels," says Leo Fasteners director A L Shah. Though it faces space constraint at its two factory units in the union territory, the company is hoping that the situation would improve soon so that it can go ahead with its capacity expansion programme. It is scouting for an additional land area of 10-12 acres. Currently, Leos output stands at 680 million annually.

Incidentally, Grace Infrastructure has invested Rs 150 crore in a 42-MW wind farm unit in Tirunelveli district of TN. The group has been investing in the non-conventional energy business since 1997 in turnkey projects, that include those by Suzlon and Vestas, Mr Shah said.

For the year ending March 2010, Grace is expecting to go past the Rs 100 crore mark, with Rs 18-crore business targeted from the wind segment.

http://economictimes.indiatimes.com/News/News-By-Industry/Auto/Auto-Components/Leo-Fasteners-to-expand-capacity/articleshow/4880670.cms

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ICRA CUTS BHARAT FORGE RATINGS

Business Standard

Rating agency Icra has revised the long-term ratings of Bharat Forge to LA+ from LAA-to the proposed Rs 350-crore non-convertible debenture (NCD) programme of the company. The agency has also assigned a short-term rating of A1+to the Rs 100 crore short-term debt (including commercial paper) programme of the company.
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APOLLO TYRES PLANS CAPEX OF RS 900 CR

Swaraj Baggonkar

Business Standard

Mumbai: Apollo Tyres, Indias second-largest tyre manufacturer (by tonnage), will invest Rs 900 crore as capital expenditure this year, the bulk of it towards more than doubling the capacity at its new factory in Chennai, which is expected to come on stream later in the year.

Apollos capacity expansion comes on the heels of the French tyre giant, Michelin, finalising plans to pump Rs 11,000 crore, also in Tamil Nadu, to set up a radial tyres, tubes and ancillary products plant.

Of the Rs 900 crore earmarked for this financial year, the Chennai plant will see an investment of Rs 700 crore, while the balance will be used for off-the-road tyres (OTRs) and also for expanding production at the Baroda (Gujarat) plant.

The company had earlier set aside Rs 700 crore as capital expenditure, 90 per cent of which was planned for the new plant. However, the New Delhi-based company decided to increase the output of commercial vehicle tyres by more than two-fold to meet demand, which is expected to rise in the second half of the year.

The revised output will now be 3,000 truck and bus tyres per day as against 1,100 units decided earlier, with plans to increase it further in later stages. The plant will also produce passenger car tyres. Apollos commercial vehicle emphasis comes at a time when the truck and bus market in the medium and heavy segment has slumped by 30 per cent in the first four months of this financial year.

http://www.business-standard.com/india/news/apollo-tyres-plans-capexrs-900-cr/366733/
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FINANCE & INSURANCE Go To Top

M&M, SYNDICATE BANK TIE-UP

The Financial Express

Mahindra & Mahindra Limiteds multi-brand pre-owned car company Mahindra First Choice Wheels Limited has signed a pact with state-owned Syndicate Bank for financing vehicle purchases by dealers and retail customers. Syndicate Bank will be a preferred financier for dealers buying vehicles for inventory. Mahindra First Choice, a part of Mahindra groups after-market sector, is the countrys only organized multi-brand player.
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OIL FALLS 2 PCT AS US DATA DAMPS RECOVERY HOPES

Reuters

See this story in: Yahoo India

New York: Oil prices fell 2 percent on Tuesday as doubts resurfaced over the pace of economic recovery after U.S. data showed another drop in wholesale business inventories.

Oil followed Wall Street stock prices lower after the U.S. Commerce Department reported that U.S. wholesale inventories plummeted 1.7 percent in June, and investors worried that businesses were running as lean as possible because of doubts about an economic recovery.

The decline, nearly double analyst expectations and the 10th straight monthly drop, pushed inventories to their lowest level in more than two years.

U.S. crude fell $1.43 to $69.17 a barrel by 1210 p.m. EDT (1710 GMT). London Brent crude dropped $1.07 to $72.43 a barrel.

"I think the market will continue to test resistance and support levels in the recent range until further evidence surfaces that addresses the alleged recovery's sustainability," said Mike Fitzpatrick, vice president at MF Global in New York.

Optimism that a turnaround in the economy could bolster weak energy demand has helped oil prices recover in the months since crude dropped below $33 a barrel in December.

The Organization of the Petroleum Exporting Countries forecast the slow recovery in global consumption and rival oil supplies will shrink demand for its crude next year.

"In light of weakening fundamentals, the sustainability of current prices will mainly depend on clearer signs of improvement in the global economy," OPEC's economists said in a report.

Prices rose earlier on news crude imports to No. 2 consumer China had surged by 42 percent in July to a record 4.62 million barrels per day gave oil prices a lift.

Traders were also awaiting weekly American Petroleum Institute inventory data late on Tuesday, followed by weekly U.S. government data on Wednesday.

Analysts polled by Reuters forecast the weekly data will show a build in crude oil inventories and a drop in gasoline and crude stocks in the week to Aug. 7.

http://in.biz.yahoo.com/090811/137/bau0zu.html
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INTERNATIONAL NEWS Go To Top

GM SAYS WILL NOT REOPEN OPEL SALE PROCESS

Reuters

See this story in: The Economic Times

Milford/Michigan: General Motors Co has no intention of reopening the sale process for its European Opel operations and remains intent on reaching a deal with one of the two remaining bidders as quickly as possible.

GM Chief Financial Officer Ray Young said the automaker was looking to wrap up the Opel sale as quickly as possible even after improvements in its own financial position removed the immediate threat of bankruptcy for Opel. "I think everyone is anxious to get this thing done," Young said on the sidelines of a GM event at its vehicle testing facility outside Detroit.

Canadian auto parts group Magna International is locked in a two-way competition with Belgium-based investor RHJ International to buy Opel in negotiations that have also involved the German government. Berlin has thrown its support behind Magna's offer, which is backed by Russia's Sberbank, on the grounds that it offers better protection for the 25,000 jobs on Opel's payroll in Germany.

GM has expressed reservations about the Magna deal, saying it wants to make sure that its proprietary technology in Opel is protected in any partnership. Talks between GM and Magna last week failed to produce a deal for Opel. GM Chief Executive Fritz Henderson told Reuters Television in an interview on Tuesday that he did not expect to reopen the Opel sale to any party beyond Magna and RHJ. "I don't think so," Henderson said when asked if a dark horse bidder could emerge for Opel.

Although GM is leading the talks on the Opel sale, the German government is being asked to provide billions of euros in aid to finance the deal. With a federal election looming next month, the German government is keen to avoid an unpopular takeover and mass layoffs. Separately, Henderson said GM would have an announcement by the end of August on production increases for the current and the coming quarter to respond to steadier demand in its home market.

GM emerged from bankruptcy in the United States in July under the majority ownership of the US Treasury, which invested $50 billion to finance its turnaround. The automaker still has an application pending for another $7 billion in low-cost funding from the US Department of Energy to retool factories to make more fuel efficient vehicles. Young said he expected GM would be close to completing the application for that $7 billion in funding in the next month or two and could submit additional loan requests for other projects.

http://economictimes.indiatimes.com/International-Business/GM-not-to-reopen-Opel-sale-process/articleshow/4883782.cms

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GM SAYS VOLT TO GIVE FOUR TIMES MORE MILEAGE THAN TOYOTA PRIUS

Agencies

See this story in: The Economic Times, Business Standard

Warren (Michigan): General Motors Corp said on Tuesday its Chevrolet Volt rechargeable electric car should get 230 miles per gallon (98 kilometers per liter) of gasoline in city driving, more than four times the current champion, the Toyota Prius.

The Volt is powered by an electric motor and a battery pack with a 40-mile (65-kilometer) range. After that, a small internal combustion engine kicks in to generate electricity for a total range of 300 miles (480 kilometers). The battery pack can be recharged from a standard home outlet.

GM is marketing the 230-mile (370-kilometer) figure following early tests using draft guidelines from the US Environmental Protection Agency for calculating the mileage of extended range electric vehicles.

The EPA guidelines, developed with guidance from automakers, figure that cars like the Volt will travel more on straight electricity in the city than on the highway. If a person drives the Volt less than 40 miles (65 kilometers), in theory they could go without using gasoline.

Highway mileage estimates which are generally higher than city ones for the Volt have yet to be released using the EPA's methodology.

"We are confident the highway (mileage) will be a triple-digit composite," GM CEO Fritz Henderson said.

If the figure is confirmed by the EPA, which does the tests for the mileage posted on new car door stickers, the Volt would be the first car to exceed triple-digit gas mileage.

EPA said in a statement Tuesday that it has not tested a Volt "and therefore cannot confirm the fuel economy values claimed by GM." The agency said it applauded "GM's commitment to designing and building the car of the future an American made car that will save families money, significantly reduce our dependence on foreign oil and create good-paying American jobs."

GM has produced about 30 Volts so far and is making 10 a week, CEO Fritz Henderson said during a presentation of the vehicle at the company's technical center in the Detroit suburb of Warren.

Henderson said charging the volt will cost about 40 cents a day, at approximately 5 cents per kilowatt hour.

Most automakers are working similar plug-in designs, but GM could be the leader with the Volt, which is due in showrooms late in 2010.

Toyota's Prius, the most efficient car now sold in the US, gets 48 miles per gallon (20 kilometers per liter) of gas. It is a gas-electric hybrid that runs on a small internal combustion engine assisted by a battery-powered electric motor to save gasoline.

Although Henderson would not give details on pricing, the first-generation Volt is expected to cost near $40,000, making it cost-prohibitive to many people even if gasoline returns to $4 per gallon.

The price is expected to drop with future generations of the Volt, but GM has said government tax credits of up to $7,500 and the savings on fuel could make it cost-effective, especially at 230 miles per gallon (98 kilometers per liter).

"We get a little cautious about trying to forecast what fuel prices will do," said Tony Posawatz, GM's vehicle line director for the Volt. "We achieved this number and if fuel prices go up, it certainly does get more attractive even in the near-term generation."

http://economictimes.indiatimes.com/News/News-By-Industry/Auto/GM-says-Volt-to-give-four-times-more-mileage-than-Toyota-Prius/articleshow/4882695.cms

http://www.business-standard.com/india/news/gm-claims-unprecedented-mileage-for-volt/366719/
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ECONOMY & FINANCE Go To Top

RUPEE FALLS BY 14 P AGAINST DOLLAR

The Hindu Business Line

Mumbai: The rupee fell marginally by 14 paise against the dollar on Tuesday, in a range-bound market. The domestic currency opened at 48 and strengthened to touch an intra-day high of 47.81. It weakened to close at 47.96/97, as against the previous close of 47.82. The rupee opened with a negative gap on expectations that there would be capital outflows from the country, said a dealer with a private bank. The dollars rally against other international currencies also exerted pressure. The rupee traded in a range between 47.88 and 48.05 during the day. It lost most of its gains in the last hour of trade after the domestic equities market fell sharply, added the dealer. In the forward premia market, the six month ended higher at 2.88 per cent (2.78 per cent) and the one-year was at 2.56 per cent (2.48 per cent).

http://www.thehindubusinessline.com/2009/08/12/stories/2009081251830600.htm

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SENSEX SNAPS LOSING STREAK

PTI

See this story in: The Hindu Business Line

Mumbai: Snapping a three-day falling streak, the Bombay Stock Exchange benchmark Sensex on Tuesday gained nearly 65 points as investors indulged in buying at lower levels in blue-chip stocks led by auto.

The Sensex, which had lost nearly 6 per cent in the last three days, rebounded to close higher by 64.82 points at 15,074.59, after oscillating between 15,218.65 and 14,864.23 during the day.

Similarly, the 50-share National Stock Exchange index rose by 33.70 points to 4,471.35. The Nifty shot up to touch the day's high of 4,510.80 and a low of 4,398.90. The recovery was mostly due to a rise in stocks of auto, realty and metals.

The auto sector index, which rose by 3.07 per cent to 2,537.48, was the biggest gainer on aggressive buying by funds on the basis of reports that the automobile industry posted healthy growth in July.

The industry data revealed domestic passenger car sales in July went up to 1,15,067 units from 87,901 units in the same month last year.

http://www.thehindubusinessline.com/blnus/05111901.htm

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WEAK MONSOON TO IMPACT GROWTH, INFLATION, SAYS CRISIL

The Hindu Business Line

Mumbai: Weak monsoon between July and August has emerged as a major macroeconomic risk for both growth and inflation.

In its latest report Deficient Rainfall Impact Parameter (DRIP), Crisil said the 64 per cent shortfall in rain during July 30-August 5 raised the cumulative deficiency in this monsoon season to 25 per cent.

Our analysis shows that July and August rainfall is the most critical determinant of agricultural production, the report said and added that after a dismal June there was some improvement in July, but the cheer brought was short lived as towards the end of July and the first week of August many parts of the country witnessed deficient to scanty rainfall.

DRIP scores based till August 5 show that Uttar Pradesh, Madhya Pradesh, Maharashtra, Andhra Pradesh, Bihar and West Bengal have been hit the most by poor rainfall.

These six States account for 47 per cent of total kharif foodgrain production and 46 per cent of total kharif rice output.

Punjab and Haryana too have suffered from rainfall deficiency but has irrigation buffer.

The crop loss may not be significant but cost of irrigation may go up and will definitely result in increased input subsidy. Food inflation which is already pressurised will face further pressure due to poor rainfall. Sufficient rice stocks will keep a lid on rice prices.

Inflationary pressure

The prices of pulses and coarse cereals, which are rain-fed crops and for which no buffer stock exists, will continue to remain under pressure, it said.

Mr Dharmakirti Joshi, Principal Economist, Crisil, said Most of the six States which had poor rainfall not only have high incidence of rural poverty but also high dependence on agriculture. This translates into higher burden on the exchequer to provide relief to these States.

Rice will remain the most adversely impacted crop due to high water requirement. The poor rainfall will lead to a sharp reduction in the area under rice cultivation. Other vulnerable crops are coarse cereals and pulses.

Area under some of the coarse cereals and pulses has expanded this year due to attractive prices as well substitution of rice.

The increased area under these crops will lead to higher production critically depending on the performance of monsoons in the coming weeks. The signs so far are not encouraging, the report said.

http://www.thehindubusinessline.com/2009/08/12/stories/2009081250481700.htm

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Tuesday, August 11, 2009

Indian Auto Industry Update August 12, 2009

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Indian Auto Industry Update August 12, 2009

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