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| INDUSTRY Good demand for Jaguar, Land Rover INTERVIEWS/FEATURES Maruti says sales not likely to be affected by drought Maruti getting its first hires from Detroit A Maruti car to be made entirely in India Mercedes Benz to raise R&D strength Toyota Kirloskar gets 2100 bookings ahead of Fortuner launch COMMERCIAL VEHICLES Harley-Davidson superbikes set to finally ride into India | ALLIED INDUSTRIES Bridgestone rolls into Pune for 2nd tyre plant FINANCE & INSURANCE INTERNATIONAL NEWS Porsche says raided in insider trading probe ECONOMY & FINANCE Markets pull back, Sensex gains 202 points Inflation up slightly to (-) 1.53 per cent
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| INDUSTRY Go To Top Devina Sengupta Daily News & Analysis (Web Edition)
Bangalore: Hiring in the auto industry is warming up, if not going at full-throttle. Expansion plans, movement into new segments including the small car, lower interest rates, and stimulus packages are fueling the recruitment drive in the auto sector.
A survey on hiring trends by Iris found that recruitments in auto and ancillary units were up 11% in July 2009, compared with June 2009. The recruiters have managed to put a foot in the door of the auto companies, but are yet to see it opened out.
A R Rajesh, VP of recruitment firm TeamLease Services, said, "The mandates have opened up and we are expecting a 8-9% growth quarter-on-quarter. The recruitment demands are mainly for middle management and senior cadres. But we expect much more hiring in the third quarter."
Industry insiders say auto firms hire blue-collared employees on contract basis and under the Labour Act. They are rotated to other firms after every 210 days, which makes hiring them easier with markets improving.
"We have seen a 15% growth in hiring pan India in the second quarter compared to the earlier one in the auto and its ancillary segment," said E Balaji, director & CEO Ma Foi Management Consultants Ltd.
He however, added that, despite a nudge up, the coming times may prove to be a challenge. He said the delay in monsoons may have an adverse impact on the rural segment, which forms a large part of the consumer market, especially for companies manufacturing trucks, tractors and two-wheelers.
Ma Foi has seen recruitments for engineers, supervisors and the managerial positions. But the market is still open for lateral positions only.
Toyota Kirloskar Motors Ltd (TKM), which is planning to launch its compact car by December 2010, has flagged off its recruitment drive. "We will hire around 2,000 employees over the next one and a half years by when the compact car will be ready for launch. Our new marketing team is already in place and subsequent hiring will be for the production site," said Sandeep Singh, deputy managing director, TKM.
For some, the stability of the markets would be the driving force and are refraining from getting more on board. However, General Motors VP, P Balendran, said his company is yet to go ahead with new recruitments and the ones that are happening are only need based. "Auto sector has seen growth due to newer introductions. General Motors will recruit when markets improve and right now we have optimum manpower."
He added that they will take in 300 employees when the second shift for their Talegaon plant begins. Hiring for the technical and R& D lab in Bangalore will follow depending on market conditions and requirements.
Maruti Suzuki India Limited (MSIL) is planning to set up a new R&D division in Haryana and plans to increase the number of engineers in its Gurgaon plant form 760 to 1000 by the year end. A source, who did not wish to be named, said that the firm is hiring currently, but refused to give any further details. http://www.dnaindia.com/money/report_auto-hiring-is-back-on-fast-track_1284097
GOOD DEMAND FOR JAGUAR, LAND ROVER PTI See this story in: The Economic Times (Web Edition)
Coimbatore: Booking for Jaguar and Land rover was good and waiting list was till October, a top Tata Motors official said on Thursday.
The demand was also tremendous for both the variants, B Krishnan, Vice-President, Commercial, Passenger Car Business unit, Tata Motors, told reporters here. http://economictimes.indiatimes.com/News/News-By-Industry/Auto/Good-demand-for-Jaguar-Landrover-/articleshow/4916608.cms
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| CARS, SUVs, MUVs Go To Top
New Delhi: Maruti Suzuki India expects to export 1.2 lakh cars during 2009-10. Of this, a lakh will be the A-Star, its newest hatchback. Till April, Maruti had exported 38,000 A-Stars, benefiting from the scrappage incentives, to replace old cars with new, offered in Europe. Nissan Motor Company, which also sells the A-Star under the Pixo brand has increased its orders from 30,000 to 50,000 units.
Indias biggest car-maker expects volumes to grow in double-digit during April-October. According to Mr Mayank Pareek, Executive Officer, Marketing and Sales, Maruti Suzuki, sales have grown 14 per cent in April-July and the company should continue to do well with the festive season starting, earlier than usual, in September. Dealerships are already being stocked up for the festive season, said Mr Pareek, at the launch of the new Estilo. Current inventory levels are at three weeks.
The New Estilo Maruti has dropped the Zen from the Estilo, powered it with its next-gen K-series petrol engine, introduced a new cable-type transmission and advanced gear-shifting technology, and redone the exterior for a sportier look. The new Estilo complies with Bharat IV emission norms. The cars revamp, excluding the engine, cost Rs 120 crore, according to Mr I. V. Rao, Managing Executive Officer, Engineering, Maruti Suzuki.
The cars sale had averaged 3,000 unit a month last year.
The car would be considered for export to Indonesia, where its earlier version had done well. For now, however, the Estilo is not headed to Europe.
CNG cars With Bharat Gas IV emission norms coming into effect in 13 cities, Maruti is working to upgrade its car portfolio. Mr Pareek said that encouraged by the gas finds in the KG basin, Maruti is betting big on the popularity of CNG (compressed natural gas) vehicles and its R&D team is working on CNG models.
Maruti is to also raising its diesel engine plant output to three lakh units by FY2011 from 2.4 lakh units now. Mr Pareek also dismissed concerns that the deficient monsoons would affect sales in small towns. While a bad monsoon did affect the economy at large, till the impact on sales had not been significant, he said.
The rural consumer isnt just the farmer but also the primary health worker, the teacher and the shopkeeper. In July, we actually saw a turnaround in the top cities, despite the deficient monsoon, he said. Top cities account for 44 per cent of Marutis car sales.
ZEN SET TO DRIVE INTO HISTORY
New Delhi: Maruti Suzuki's Zen, the once-iconic brand that was perhaps the country's first luxury compact car, is all set to fade into history with the company deciding to drop the name from a new refurbished version of the model.
MARUTI SAYS SALES NOT LIKELY TO BE AFFECTED BY DROUGHT T. Murrali The Hindu Business Line (Web & Print Edition)
Chennai: The oncoming drought is not likely to impact passenger car leader Maruti Suzuki. Drought may impact small farmers and small farmers do not buy too many of our cars, says Mr R.C. Bhargava, Chairman, Maruti Suzuki India Ltd.
Speaking to Business Line on the sidelines of a conference of the Madras Management Association here on Tuesday, Mr Bhargava said that the companys sales have been going up since December and we will continue to grow in double digits in the next three months.
Marutis total sales grew 18 per cent to 2, 26,729 units in the quarter ending June this year against corresponding quarter last year. This included exports of 29,314 units, which grew by 135 per cent over the same period a year ago. In July the company reported 33.4 percent increase in sales to 78,074 units (58,543 units) including export of 10,546 cars.
Removal of scrappage sops to affect sales Removal of scrappage incentive scheme in several European countries will have its effect to some extent on Maruti as it is the second largest exporter of passenger cars from India. The scrappage scheme allows car users in EU to sell their old and polluting cars and get a discount on new fuel-efficient cars.
The subsidy differs from country to country and ranges anywhere between 600 and 3,500. This has propelled sales of small and medium sized cars in EU.
The removal of the incentives will certainly have some impact for Maruti and other car exporters from India, Mr Bhargava said. Over time, when demand starts building up, there is always a need for scrappage policy. It (the policy) is required to tide over the bad time, he said.
Irrespective of the policy, the demand for small cars is growing. There was a clear shift in peoples preference from large cars and guzzlers to small and fuel-efficient cars. I dont think we need to worry, he said. http://www.thehindubusinessline.com/2009/08/21/stories/2009082151660200.htm
MARUTI GETTING ITS FIRST HIRES FROM DETROIT Danny Goodman Business Standard (Web & Print Edition)
New Delhi: Eight automobile engineers from Detroit, the car capital of the United States, will join Maruti Suzukis operations in India in the next two months, as part of the start of the latters plan to transform itself as the largest research and development centre for parent Suzuki outside Japan.
These are engineers with tremendous capabilities in automobile research and engineering. They have specialisation in car design, styling and modeling, engine development and manufacturing, crash testing and hybrid technology, said I V Rao, managing executive officer (engineering) of Maruti Suzuki.
Rao was part of a senior delegation which visited Detroit in April this year to look at the engineers who were laid off following the bankruptcy filings by General Motors and Chrysler. Tata Motors was another domestic passenger vehicle manufacturer to visit Detroit.
The move to hire car engineers and designers from the US is, as mentioned, part of Marutis bigger plan. Tomorrow, the company will inaugurate its newly-acquired 700-acre facility for R&D located in Manesar. This is part of the companys Rs 9,000 crore investment to be completed by 2010. Maruti, currently, employs around 700 employees for its R&D initiatives and hopes to scale it up to 1,000 by 2010.
Most of these fresh recruits leaving the US to join Maruti in India, according to Rao, are engineers of Indian origin. All the eight engineers have experience in working for GM, Ford and Chrysler. Six of these engineers are Indians who are desirous of leaving the US to work in India. The rest are from places like the UK.
The company said all will be based at the middle management level. Some would be taken on a contractual basis, while the others would be full time hires.
The move to tap advanced automobile markets like the US for top engineering talent by Maruti Suzuki, follows the companys new confidence in designing and manufacturing cars for global markets. In 2008, the company launched its fifth world strategic model, the A-Star, whose designing was largely done at Marutis facilities in India. Next, came the commissioning of the Euro-V compliant KB series engine facility at Gurgaon. Other credits come from being the second company in the world to comply with stiff recyclable norms which are incorporated in the manufacture of the A-Star model.
Rao said the key reason for hiring talent from overseas markets was not only to increase the headcount of skilled R&D talent, but also to use them to train local engineers who are fresh on the job. Last year, the company spent Rs 9.5 crore on training employees across all levels. http://www.business-standard.com/india/news/maruti-getting-its-first-hiresdetroit/367678/
A MARUTI CAR TO BE MADE ENTIRELY IN INDIA Samar Srivastava mint (Web & Print Edition)
New Delhi: When the first Maruti 800 rolled out in 1983 from its factory in Gurgaon, then a sleepy and largely rural suburb of New Delhi, the only things Indian about the small car were the carpet, the battery and the tray on which it rested. Around 25 years on, 99% of the parts that go into the 800 are made in India.
On Friday, Maruti Suzuki India Ltd will lay the foundation stone for a 700-acre, state-of- the-art research and development (R&D) facility in Rohtak, Haryana. The company plans to spend Rs1,200-1,500 crore on setting up facilities including testing tracks, collision test areas, emission labs and a wind tunnel testing facility.
Behind this R&D investment is an ambitious objective: To design and build from scratch a car in India by 2012the first for a foreign car maker.
From assembling a car that was almost wholly imported to developing one in Indiaalbeit on an already existing platformhas been a long journey for Maruti. It is a story of steady incremental progress made by its engineers over the years; from localization to preparing cars for Indian conditions by changing suspension and air conditioning systems; and from effecting minor design changes to collaborating with their Japanese counterparts on designing entirely new vehicles.
Still, had it not been for an unexpected event in 1999, Suzuki Motor Corp. might never have started trusting Marutis engineers.
In April that year, when the Supreme Court decided to advance the implementation of Euro I emission norms, Maruti was caught by surprise. In a couple of months, it had to make sure that all its cars sold in New Delhi were Euro I compatible. At that time, New Delhi accounted for nearly one-fourth of the companys sales.
Suzuki was unwilling to believe that Marutis engineers could modify the engines to launch the cars with the required technology. For Suzuki, it was an open and shut case; the company had never made Euro I-compliant cars without using fuel injection technology. Maruti, however, believed that it would be possible to do this with carburettor technology itself.
I.V. Rao, managing executive officer for engineering at Maruti, recalls how the companys engineers rushed almost overnight to Japan. We had a very tough meeting with our counterparts there, says Rao. Tempers rose as both sides argued their case. Over the previous decade, Maruti had been collecting emission data from the 800, Esteem and Zen models, and on the basis of that it was able to convince Suzuki that it would be able to meet the requirements before deadline.
After three days of discussions, Suzuki agreed to allow Maruti to make the changes. This marked a turning point. In research and development, people only believe in your capability once you actually do something, says Rao.
But R.C. Bhargava, chairman and former managing director of Maruti, recalls: Suzuki was never convinced we could do this. They kept checking the cars periodically.
The early years Almost immediately after starting operations in 1983, Maruti realized it had to aggressively work towards getting more parts made in India. Strict foreign exchange controls meant that the company had to run to the government for approvals every time it imported components.
It taught Indian vendors to make parts, but quickly realized that Indian component makers lacked the ability to meet delivery schedules or stick to quality specifications. There wasnt much of a supplier base in India then, says Rao.
For instance, wheel rims in India were sent to car makers in the so-called primer painted condition with just the anti-rust paint on them.
Maruti was the first to insist that they be sent in a finished painted condition.
But when the vendors started doing this, the rims would reach the plant with a lot of scratches and defects. Similarly, the company faced problems with parts such as wire harnesses, glass for the windshields and windows and lamps.
Marutis prime task in those years was to increase the localization levels of the cars it made. The engineering team focused primarily on vendor development. Designs were sent from Japan, the drawings modified to suit Indian conditions and the plans sent to vendors. The companys engineers would regularly visit vendors; many were often stationed in their factories and worked with vendors to improve the quality of their parts.
Then, in February 1984, Maruti faced a serious problem. It hadnt met the deadlines on some parts that should have been localized and had to airlift them. A rather embarrassed company had to explain to the government why it needed the extra foreign exchange.
This was when Maruti began taking small stakes in its suppliers. Along the way, new companies such as Asahi India Glass Ltd were set up after the only supplier of automobile glass, Hindustan Safety Glass, which serviced both Premier Automobiles Ltd and Hindustan Motors Ltd, had initially refused to supply to Maruti.
Maruti still has 11.1% stake in Asahi India and in doing so, has followed the Japanese model in which car makers hold shares in their large suppliers.
The company has played a vital role in making vendors improve the parts they send to us car makers, concedes the head of a rival car maker. This made its entry into India a lot smoother than it would have otherwise been, he added. Asahi, for instance, is now a Rs1,363 crore company that supplies to every car maker in the country except Mitsubishi Motor Corp.
Exports and the Omni Having surpassed the initial quality glitches with suppliers Marutis engineering team received its first major task in 1986. The Maruti Van, which was used as a cargo vehicle in Japan, was launched in India for the passenger market. With its poor seating, a black interior and rough suspension, the car failed to impress Indian buyers.
The van was then redesigned and relaunched as the Omni, which went on to become a huge success in the Indian market. It still has the same seat we designed, says a visibly proud C.V. Raman, chief general manager of the engineering team.
By then, about 50% of the parts used in the 800 were made locally and Bhargava wanted the car to be exported. His rationale was simple: The quality level of Indian cars could only be tested when a model was exported.
Exports began in 1987, initially to Communist bloc eastern European countries and then to Italy and France.
People in India had never known what quality to expect and so if Maruti cars proved to be better than the Ambassadors and Fiats that were its only local competitors, they were satisfied, says Bhargava. Getting critical customer feedback was important to us, he says.
While European customers were satisfied with the performance of the 800, they complained about minor dents, defects in the paint jobs, the gap between the door and the body, the placement of the matsthe entire fitment was analysed and improved upon.
As a result, when the Zen was launched in 1993, the car was exported under the Alto badge to Europe from Day 1.
Suzuki stipulated that all components (for the Zen) must be sent to Japan for testing as the specifications were very stringent, says Krishna Kumar, Marutis former director of engineering. Just as the 800 and Omni were a generation ahead of cars in the Indian market, the Zen was a generation ahead of Marutis other cars, its engineers say.
Government pressure Ironically, it was Suzukis tussle with the government that gave another boost to research work. The 1990s were not a happy period for what had then become a 50:50 joint venture between Suzuki and the government of India. The two sparred on a number of issues.
The conflict began with Suzuki wanting to raise money for expanding capacity by 100,000 units and ended with the government appointing R.S.S.L.N. Bhaskarudu as managing director, a choice bitterly opposed by Suzuki. The government had also alleged that Suzuki was deliberately going slow on transferring technology.
It was during this time, partly to overcome government criticism, that Maruti decided to send engineers to Japan on extended two-year terms. Since then, engineers have been sent there every year, allowing them to take part in the development of a vehicle from start to finish. This proved crucial in bolstering their capabilities and, more importantly, it taught them how to design cars.
In 2000, a design laboratory was set up in Gurgaon that allowed the India team to make clay models of products and Marutis engineers moved to make what the industry terms minor changes to models.
Since then, Osamu Suzuki, the companys chairman, has said he plans to make Maruti a hub for research and development of small cars with an engine capacity less than 1,200cc. India also houses the only research centre the company has outside Japan. Maruti, which has been doubling its research team every year for the last two years, says it is on track to have a 1,000-strong team by next year, which would be half the size of the team in Japan.
Perhaps the most important thing is that the recent research and development portfolio is aligned to the (Indian) ecosystem, says Arun Jaura of Eton Technologies Group Ltd, who previously headed research activities for Mahindra and Mahindra Ltd.
According to Jaura, Maruti has done a superb job of understanding the type of cars Indians want and he sees this as key to the company continuing to come up with products relevant to the Indian market.
In 2002, the India team modified the front and rear portionsprimarily the lights and bumpersof the Zen. This was the first time a Suzuki car had been partly designed outside Japan.
Since then, it has been a smoother ride for the Indian subsidiary. Minor changes have been carried out on the Wagon-R and Zen Estilo (next week, Maruti plans to launch a new version of the Estilo). Teams of Indian engineers worked with their Japanese counterparts on designing the Swift in a process known as collaborative design.
During this time, Suzuki also veered away from its traditional car designs. Hirotaka Ono, Osamu Suzukis son-in-law, who died in 2007, led the companys drive towards more sporty, sleeker designs. The Swift, launched in 2004, was the first manifestation of this. The car has been a runaway success in Europe and Asia.
Now on Marutis agenda is to make a new car locally on an existing platform. The planning for this has begun, but company officials are tight-lipped about the project which is expected to deliver results by 2015. http://www.livemint.com/2009/08/20205913/A-Maruti-car-to-be-made-entire.html?pg=3
MERCEDES BENZ TO RAISE R&D STRENGTH The Hindu Business Line (Web & Print Edition) See similar story in: The Hindu (Web & Print Edition), The Statesman (Web Edition), The Pioneer (Web & Print Edition), The Times of India (Web Edition), Deccan Herald (Web Edition), The Indian Express (Web Edition), mint (Web Edition)
New Delhi: Mercedes-Benz is looking to increase its Research and Development strength in India by two-thirds by 2010. Mr Wilfried Aulbur, MD and CEO, Mercedes Benz India, said the R&D centre in Bangalore was the largest outside Germany, and that the company would take the R&D staff strength to 400-500 by the end of 2010, from the current 300.
The German luxury car-maker launched a special edition of its C-Class model in the capital on Thursday. Mr Aulbur also said a new E-Class sedan with multiple variants would be launched before the end of the year to consolidate Mercedes position in the luxury car market.
Only 60 of the special sporty edition C Class model, priced between Rs 28.46 lakh and Rs 31.30 lakh (ex-showroom Delhi) for petrol and diesel variants, will be produced. The car will be available in Carneol Red, Obsidian Black and Calcite White colours. The C class is the most popular entry level vehicle from the Mercedes-Benz stable. http://www.thehindubusinessline.com/2009/08/21/stories/2009082151740200.htm http://www.hindu.com/2009/08/21/stories/2009082160701500.htm http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=265485 http://www.dailypioneer.com/197002/Mercedes-to-launch-new-E-class-car-soon.html http://www.deccanherald.com/content/20724/mercedes-benz-eyes-big-share.html http://www.indianexpress.com/news/mercedes-launches-special-edition-model-in-india/504403/ http://www.livemint.com/2009/08/20125253/MercedesBenz-special-edition.html
TOYOTA KIRLOSKAR GETS 2100 BOOKINGS AHEAD OF FORTUNER LAUNCH Shally Seth mint (Web Edition)
Mumbai: Toyota Kirloskar Motor India Pvt Ltd has received at least 2100 bookings for its utility vehicle Fortuner ahead of its 24 August launch in New Delhi, a senior official said on Thursday.
The Fortuner, which will be assembled near Bangalore, will be priced at about Rs20 lakh and sold as an imported vehicle, said Sandeep Singh, deputy managing director (marketing).
The launch is a critical one for the company, the local arm of Toyota Motor Co., coming at a time when utility vehicle sales in Indian have fallen 1.53% to 81,794 units in the four months of financial year ending March 2010, compared to the previous fiscal. http://www.livemint.com/2009/08/20190038/Toyota-Kirloskar-gets-2100-boo.html
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| 2/3 WHEELERS Go To Top Swaraj Baggonkar Business Standard
Mumbai: Ready to serve Indias newly found appetite for powerful and flashy superbikes, global two-wheeler giants are preparing to meet the demand through a slew of models due for debut in six to seven months.
In the pipeline are bikes from Yamaha, Suzuki, KTM and Kawasaki, capable of accelerating from zero to 100 km/hr in a little over three seconds. Honda, too, has promised further launches if demand continues to multiply.
Though such bikes cost upward of Rs 10-12 lakh (putting it in the equivalent category of executive sedans), demand is growing in double digits, pegging its market to 600-700 units per year. Companies appear to be keen on showcasing their technological and design prowess to the Indian consumer.
Atul Gupta, V-P (marketing and sales), Suzuki Motorcycle and Scooter India, said: We want to complete the range of big bikes in India and will launch the Gixxer range before the end of the year.
Suzuki will launch a GSX-R model (also known as Gixxer) by December, whose pricing will be on a par with its current fastest bike, Hayabusa, also available in India. Both the Hayabusa and the Intruder (a crusier) are priced at Rs 12.5 lakh (ex-showroom, Delhi). More than 100 units of both models have been sold so far in the year and the company is confident of achieving the target of 200 before the end of the year.
Similarly, Yamaha will launch the worlds most popular superbike, the next generation YZF R1 (2009 edition), before the year ends. The company plans to have more completely built unit (CBUs or direct imports) launches in the coming months.
Currently, it is failing to keep pace with the demand, which has surged manifold: the sales target set for the entire year for the country has been met in less than four months. Yamaha presently sells the previous generation YZF R1 and MT01 models, which have sold 127 units so far.
Sanjay Tripathi, department head, product planning and strategy, India Yamaha Motor, said, Looking at the success of the two superbikes in our line-up, we are planning to add more models that would complete our product portfolio.
Meanwhile, Pune-based Bajaj Auto will gear up to launch superbike models from partners Kawasaki Heavy Industries and KTM Power Sport AG in the coming period. Bajaj Auto has committed to launch models, including Sports Roadster, Ninja ZX-6R, Z1000 and the Vulcan Cruiser from the Kawasaki stable and the 1190 RC8 from the KTM stable next year. All the models will be imported and sold through Bajajs speciality showrooms, known as Probiking.
Another Japanese manufacturer, Honda, which sells two superbikes in the country, the CB 1000 and the CBR 1000, may look at making further additions. An official from the company stated, The response has been very encouraging for our two flagship brands. If customer demand continues to grow like this, then we will definitely consider more launches in CBUs.
Manufacturers say the governments high import duty (113 per cent) on such bikes more than doubles cost, thereby pushing these beyond the reach of many potential buyers. However, the cost of the same models in the grey market can be more than 30 per cent cheaper, as importers pay only 25 per cent duty when importing these as spare parts into India and later assembling in various garages. http://www.business-standard.com/india/news/more-power-bikes-ready-to-vroom-into-india/367677/
HARLEY-DAVIDSON SUPERBIKES SET TO FINALLY RIDE INTO INDIA Samar Srivastava mint
New Delhi: In 2007, after some mangoes-for-bikes diplomacy, it looked like iconic bike maker Harley-Davidson Motor Co. was ready to ride into India, but that wasnt to be.
That entry, however, may happen as early as next week when Matt Levatich, president and chief operating officer of the company visits India, said a person familiar with the matter who did not want to be identified. Levatich has been invited as one of the speakers at the annual convention of industry body, the Society of Indian Automobile Manufacturers, on 28 August.
Harley-Davidson continues to lay the groundwork for our market entry into India. We are making good progress on our overall plan to enter the market, and will have more details to share at the appropriate time, wrote a company spokesperson in response to an email questionnaire seeking details on when the company planned to enter India.
Accompanying Levatich is Anoop Prakash, who has been appointed the India managing director at Harley-Davidson. Prakash, who graduated from Harvard Business School, previously worked at the US department of housing and urban development and workflow solutions firm Lexis-Nexis.
Specific details on which models the company plans to launch were not available. Harley-Davidson was first granted permission to start operations in India by the Foreign Investment Promotion Board in April 2007. In exchange, the US government allowed the import of mangoes from India after a gap of 18 years.
But Harley was forced to abandon plans to enter the Indian bike market as the duty structure made importing unviable. Import of completely built up, or CBU, units of automobiles are taxed at the rate of 104% in India. The company had then said that this would put its products out of reach for Indian consumers.
We are looking for some concessions from the government... We want to enter India as it is a key market but we dont know when will it be, Tim Hoelter, vice-president of government affairs at Harley-Davidson, had told PTI in May 2007.
Before 2007, the countrys ministry of shipping, road transport and highways had blocked the entry of Harley-Davidsons bikes saying that the country lacked emission norms for bikes with an engine capacity exceeding 500cc. The government then agreed to recognize Euro III emission norms for bikes with an engine capacity of 800cc and above.
Duty rates at present would likely result in Harley-Davidson pricing its bikes at between Rs4 lakh and Rs14 lakh. But that is unlikely to deter prospective customers as the market for superbikes has been doing well in India. Superbikes, which have a large engine displacement of around 1,000cc, are priced anywhere between Rs9 lakh and Rs12 lakh in India.
Manufacturers such as India Yamaha Motor Pvt. Ltd and Honda Motorcycle and Scooter India Pvt. Ltd, which at present import these bikes, say they had underestimated the potential size of the market. While manufacturers had initially estimated there was a market for 300 such bikes every year, sales have shown the number is closer to 450-475, according to Debsena Banerjee of Segment Y Automotive Intelligence Pvt. Ltd, a Goa-based consultancy. http://www.livemint.com/2009/08/20213100/HarleyDavidson-superbikes-set.html
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| COMPONENTS Go To Top The Economic Times See similar story in: The Hindu Business Line, The Hindu Chennai: Sundram Fasteners (SFL), part of the TVS Group and which was hit by the worst-ever slump in the auto sector last year, is serious on diversifying into non-auto sector. While expanding its traditional auto component business, it wants to insulate itself from the cyclical impact associated with the auto sector.
With reference to global auto majors like GM filing for bankruptcy (Chapter 11), he said even SFL could have chosen that or closed its plants. But
it has managed to stay afloat and make profit. This only reflects the solid fundamentals of a company that has performed for 45 years and the soundness of a group (TVS) that has been in business for over a century, Mr Krishna said. http://www.thehindubusinessline.com/2009/08/21/stories/2009082151650200.htm http://www.hindu.com/2009/08/21/stories/2009082160821500.htm
T E Narasimhan Business Standard
Though this development is widely being viewed as a succession plan for TVS Motors, insiders say it is just another example of how the group is readying young women managers to manage the $4 billion (around Rs 20,000 crore) TVS group companies. In fact, Lakshmis induction is probably less of an event within the family than it is for the media because women have been involved in the group for several years.
For instance, over the last couple of years, Lakshmi Venus cousins Arathi Krishna and Arundathi Krishna, daughters of Suresh Krishna, chairman and managing director of Sundram Fasteners, have joined the company as executive director and additional director respectively.
Shobana Ramachandran, daughter of TV Sundaram Iyengar & Sons chairman R Ramachandran, has been steering Madurai-based tyre maker TVS Srichakra. Indeed, Lakshmis induction is part of a long drawn restructuring of Sundaram Claytons businesses.
Lakshmi will also be the third woman manager in the automobile industry, which of course is a less travelled path for women though like the others the development is familial rather than professional. She has a role model in her mother Mallika Srinivasan whose success at the head of Chennai-based tractor company TAFE, which is part of Mallikas fathers Rs 6,500 crore Amalgamations group. The other successful woman manager in the industry is Sulajja Firodia Motwani, joint managing director of two-wheeler firm Kinetic Motor Company, a position she also inherited from her father.
If her managerial skills are yet to be displayed, Lakshmi comes with impressive educational credentials. The school topper in both school finals from Sishya School in Chennai, Lakshmi joined Yale and graduated in economics and is a doctorate degree-holder from the University of Warwick in the United Kingdom.
I am lucky to grow up with my parents in their own businesses with completely different management skills and different ways of handling situations. It has given me very interesting perspectives and they are the role models, she told Business Standard. Venu Srinivasans comment was Lakshmi will have to work her way in the organisation.
Of course, he knows all about working his way up. The grandson of T V Sundaram Iyengar, founder of the TVS Group, Srinivasan started his career as a mechanic in the TVS garage. Lakshmi hasnt started quite so far down the ladder, but for the last three years, she has been working at TVS Motors Hosur manufacturing unit as a management trainee.
This entailed travelling from Bangalore to Hosur a distance of some 50 kms to understand the nitty-gritty of the automobile business. Back in the corporate office she was training in management and finance.
If she faces a challenge ahead, it is TVS Motors long-standing number three position to Hero Honda and Bajaj Auto. TVS Motor might be the third player in the two-wheeler market in India, but it is the first two-wheeler company from India to set up a greenfield project abroad when it recently commissioning of a plant in Indonesia.
Before its latest spat with Bajaj Auto over the use of a patented spark plus technology, TVS Motor under Venu Srinivasan has displayed a fighting spirit that is not associated with its conservative image. In 1989-90, for instance, the company was foundering following serious labour problems at its mother plant in Hosur. Within two years, Srinivasan pulled the company back from the brink with a remarkable turnaround, an achievement that has kept TVS Motor a standard case study for management students. http://www.business-standard.com/india/news/newsmaker-lakshmi-srinivasan/367602/
UCAL FUEL TO STRENGTHEN US ARM T. Murrali The Hindu Business Line
Chennai: Chennai-based Ucal Fuel Systems Ltd will soon consolidate its wholly-owned subsidiary, Amtec Precision Products Inc, based in the US, as part of its revival plan. The plan includes merging two plants in Chicago, reducing the supplier base and shedding non-profitable products.
Mr Jayakar Krishnamurthy, Managing Director, Ucal Fuel Systems, told Business Line that, in addition to the funds raised from the promoters through the preferential issue of 82.18 lakh shares, SBI has offered a loan of $4 million, Exim Bank $2 million, and SBI in Chicago $1.2 million.
These initiatives and additional funds would help Amtec optimise the resources and turn around faster once the US economy revives. Amtec had earlier availed itself of a $30-million loan from Exim Bank, SBI and Ucal.
Due to the slowdown in India and recession in the US, Exim Bank has reduced the interest rate for the outstanding loans by 5 per cent, and SBI by 3 per cent from June. This would ease the burden on Ucal and Amtec. So far Ucal Fuel Systems has invested about Rs 150 crore in Amtec, which was acquired in 2005.
Shareholders give nod Earlier, at the extraordinary general meeting, shareholders approved issue of 82.18 lakh equity shares to six promoters including Carburettors Ltd for Rs 29.87 crore at a price of Rs 36.35 (face value of Rs 10 plus a premium of Rs 26.35).
This will increase the shares held by the companys promoters from 53.04 per cent to 70.49 per cent. Eventually the shares held by public will also be reduced to 29.51 per cent from the current 46.96 per cent. http://www.thehindubusinessline.com/2009/08/21/stories/2009082151770300.htm
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| ALLIED INDUSTRY Go To Top Business Standard
Automotive tyre exports from India suffered a 22 per cent fall in the first quarter of the current fiscal year, compared with same period last year, according to the latest Automotive Tyre Manufacturers Association data. http://www.business-standard.com/india/news/tyre-exports-fall-22-in-q1/367676/
BRIDGESTONE ROLLS INTO PUNE FOR 2ND TYRE PLANT Rahul Wadke The Hindu Business Line
Mumbai: Japanese tyre manufacturer Bridgestone, which has a plant at Pithampur, near Indore, will set up a second facility near Pune at an investment of Rs 2,050 crore.
The Maharashtra Industries Secretary Mr A. Khan, told Business Line that it took eight months to convince Bridgestone about setting up its plant here.
The main draw is that the Pune region, comprising Chakan, Ranjangaon and Talegaon, is home to auto majors, including Mahindra International, Tata-Fiat, General Motors India, Volkswagen and Bajaj Auto.
The leading tyre manufacturers Pithampur plant caters to several big vehicle manufacturers, and the Pune plant is expected to offer logistical advantages.
VW steps up funding In another development for Maharashtra, the German carmaker Volkswagen has decided to invest Rs 2,200 crore more towards expansion at its Chakan plant.
The company had earlier earmarked Rs 2,000 crore, but has now decided to more than double it, Mr Khan said. The recently commissioned facility has just begun producing the Skoda Fabia and is gearing for the 2010 launch of the VW Polo.
More big-ticket projects While the automotive sector has brought happy tidings for Maharashtra, the State has also signed memorandums of understanding with eight companies.
Of these, the big-ticket investments totalling Rs 10,400 crore, are in Raigad district the Welspun groups Rs 6,000-crore integrated steel plant and South Korean steel giant Poscos plans to set up a galvanising plant at an investment of Rs 4,400 crore.
Poscos investment will be in phases, starting with Rs 1,200 crore and scaled up gradually. It has already acquired land for the project, Mr Khan said. http://www.thehindubusinessline.com/2009/08/21/stories/2009082152290100.htm
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| OIL, LUBRICANTS & ALTERNATIVE FUELS Go To Top The Hindu Business Line
Singapore: Crude oil prices eased in Asian trade on Thursday as traders took note of high distillate inventories, which indicated that a global economic recovery was still sluggish. New York's main futures contract, light sweet crude for delivery in September, slipped 27 cents to $72.15 a barrel. The September contract expires later today. Brent North Sea crude for October delivery fell 26 cents to $74.33. http://www.thehindubusinessline.com/blnus/08201006.htm
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| GM, MAGNA, SBERBANK CEOS TO MEET ON THURSDAY-SOURCE Reuters See this story in: Mint
Frankfurt: The heads of Canadas Magna and Russian partner Sberbank will meet their General Motors counterpart on Thursday, a person close to the matter said, as decision time nears on the sale of GMs Opel business.
Automotive group Magna Co-Chief Executive Siegfried Wolf and Sberbank CEO German Gref would hold an informal chat with GMs Fritz Henderson in Detroit, the source said, adding that no negotiations were on the agenda.
The source was confirming a report in Germanys mass-circulation Bild newspaper, which said the meeting aimed to let all the parties get to know each other better.
Germany also firmed up an offer to make 4.5 billion euros ($6.40 billion) in state aid available should GM select Magna, Berlins preferred partner, as Opels buyer.
Government spokesman Ulrich Wilhelm told Reuters on Thursday Germany had made the offer to facilitate a solution to the bidding, but that it would continue to work with other countries in which Opel has plants to come up with a joint solution.
Magna and Sberbank are competing for the business against Belgium-based financial investor RHJ International.
Sources close to the deal have told Reuters that GMs board of directors will address the sale of Opel on Friday and aims to recommend one of the suitors.
Trustees who oversee a majority stake in Opel which was ringfenced and propped up with German aid in May to avoid being swept into GMs brief bankruptcy must approve any decision.
Germany has been championing the Magna groups offer, while some GM executives have praised RHJs bid. http://www.livemint.com/2009/08/20165448/GM-Magna-Sberbank-CEOs-to-me.html
Bloomberg See this story in: The Economic Times
Southfield: General Motors said it cancelled plans for a Buick sport-utility vehicle announced August 6 after potential customers said in person and online that the model lacked luxury touches they expect of the brand. The decision was made August 14, after GM earlier in the week showed the SUV and other future vehicles to consumers, dealers, employees, analysts and news reporters, vice-chairman Tom Stephens said on a company blog. One blogger called it hideous and users of Twitter dubbed it the Vuick.
PORSCHE SAYS RAIDED IN INSIDER TRADING PROBE AFP See this story in: mint
Berlin: German prosecutors raided the headquarters of sportscar maker Porsche on Thursday and seized documents in an insider trading investigation, the company said.
Porsche gave few further details but the Die Welt daily reported that the probe centred on former executives including Wendelin Wiedeking, who resigned as CEO last month after failing in his bid to acquire Volkswagen.
On Thursday morning, officers from Stuttgart prosecutors entered the companys offices with search warrants ... the prosecutors suspect a breach of public disclosure requirements and market manipulation, the firm said in a statement.
Porsche denies the accusations. The company will cooperate with the prosecutors and is fully supporting the investigating officers in order to contribute to a swift clearing-up of the matter.
Under Wiedeking, Porsche built up a 51% stake in the much larger VW and wanted to take full control but the attempt failed and left Porsche squeezed under a huge debt pile. The two firms now plan to merge.
In the course of the takeover battle, VW shares soared but in recent days they have fallen back sharply as the takeover premium has unwound. http://www.livemint.com/2009/08/20191417/Porsche-says-raided-in-insider.html
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| ECONOMY & FINANCE Go To Top
See this story in: The Times of India
Mumbai: The rupee on Thursday appreciated further by 9 paise against the American currency following positive trends in equity markets despite sustained capital outflows. In see-saw trade at the Interbank Stock Exchange market, the domestic unit opened higher at 48.74/76 a dollar against Tuesday's close of 48.79/80.
MARKETS PULL BACK, SENSEX GAINS 202 POINTS The Hindu Business Line
Mumbai: The stock markets opened sharply higher on Thursday as a rebound in Chinese peers boosted markets across Asia, with higher commodity prices lending support. At close, the Sensex ended at 15,012.32, up by 202.68 points. It closed yesterday at 14,809.64.
On the NSE, the Nifty finished at 4,453.45, up 59.35 points over yesterdays close. Sectors such as auto, realty, banking, metal and IT performed well.
Utility Adani Power stock made its debut on the bourses. On the NSE, the stock opened at Rs 108, touched a high of Rs 110, and was quoted at Rs 100.80. On the BSE, the stock opened at Rs 105, made a high of Rs 107.90 and was trading at Rs 101.80 at 2.30 pm. The Rs 3,000-crore Adani Power IPO was priced between Rs 90 and Rs 100. http://www.thehindubusinessline.com/blnus/05201901.htm
INFLATION UP SLIGHTLY TO (-)1.53 PER CENT PTI See this story in: The Hindu Business Line
New Delhi: Inflation for the week ended August 8 rose slightly to (-)1.53 per cent against (-)1.74 per cent in the previous week. Inflation in the corresponding week in the previous year was 12.82 per cent.
Prices of food articles continued to rise over the previous week. Bajra and urad prices rose by two per cent each, and condiments and spices, arhar, and fruit and vegetables became more expensive by one per cent. However, the prices of jowar came down b y four per cent, barley by two per cent, and moong by one per cent. http://www.thehindubusinessline.com/businessline/blnus/01201201.htm
Last Financial closing
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Saturday, August 22, 2009
Indian Auto Industry Update August 21, 2009
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