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| INDUSTRY Tata Motors consolidated Q1 results on Aug 31 INTERVIEWS/FEATURES CARS, SUVs, MUVs Rs 1,000 cr for Maruti Suzukis Rohtak R&D unit
COMMERCIAL VEHICLES | ALLIED INDUSTRIES INTERNATIONAL NEWS Caterpillar, Navistar eye China truck JV ECONOMY & FINANCE
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| INDUSTRY Go To Top The Hindu Business Line (Web & Print Edition)
Coimbatore: Tata Motors, along with the Fiat group, has been keeping pace with the eight per cent growth recorded by the automobile industry in the first four months of the current fiscal but the high growth rate of 20 per cent-plus registered by the industry during 2005-07 may not happen, according to a senior executive of Tata Motors Ltd.
The company is working on the launch of a refurbished sedan Indigo, which is expected to roll out in the third quarter of this year.
Speaking to newspersons on the sidelines of the opening of the second Tata Motors showroom here, Mr S. Krishnan, Vice President-Commercial (Passenger Cars), Tata Motors, said as a matter of policy he would not like to discuss the targeted annual sales of Tata cars.
Industry growth The automobile industry had grown at about 8 per cent in the first four months of the current fiscal and Tata Motors, along with Fiat, has been growing at that pace and has been seeing that growth about sustaining.
Asked whether the pick-up in the sale of commercial vehicles showed that the economy was on the mend, he said, we have seen signs of revival in the market and financing of vehicles, which was an issue in the market place looks that much easier now.
On whether the company was working on re-doing or phasing out its mid-segment Indigo models, whose sales fell nearly 20 per cent in July compared to July 2008, he said it was nearly six years since the model was launched. The new Indigo sedan would hit the market during October-December and would have the new Fiat power train.
Showrooms for Jaguar, Land Rover On whether Tata Motors planned to open showrooms in the South to sell Jaguar and Land Rover models that were launched in Mumbai recently, he said the company planned to launch them in Bangalore, Chennai, Hyderabad and Kochi which hold some promise. The response to the introduction of these models in Mumbai was extremely good and we are currently booked till the end of October in terms of what we can supply. http://www.thehindubusinessline.com/2009/08/22/stories/2009082250590200.htm
TATA MOTORS CONSOLIDATED Q1 RESULTS ON AUG 31 The Hindu Business Line (Web Edition)
Mumbai: Tata Motors Ltd has informed the BSE that a board meeting will be held on August 31 to consider the unaudited financial results (Consolidated) for the first quarter ended June 30, 2009 of the accounting year 2009-2010. http://www.thehindubusinessline.com/blnus/33211402.htm
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| INTERVIEWS/FEATURES Go To Top So you thought global positioning system (GPS)-based security systems are meant only for luxury vehicles segment? Think again! According to a recent Frost & Sullivan report, they are breaching the confines of the luxury vehicles segment and are making forays into other categories. The report says the revenues of the passenger vehicle telematics and navigation systems market in India was $23.2 million in 2008 and is expected to reach a chunky $44.1 million in 2013.
The maps and navigation marketespecially in markets like the US, Europe and some parts of Asia Pacifichas exploded in recent years. They have started gaining consumer acceptance in emerging markets like China and Korea over the last two years and is fast becoming popular in India, point out experts.
While it is difficult to put down the exact sales figures for these systemsgiven that they are largely aftermarket in natureindustry analysts say there has been a more-than-two-fold increase in the sales of these fitments in the last three years. Even though they still have to make in roads into the subcompact car categories, which constitute 60% of the total car sales in the country, they certainly are sold in enough numbers to gather attention, says CV Raman, chief general manager (engineering), Maruti Suzuki.
Attribute it to the increasing level of awareness and consumer interest or to the dropalbeit marginalin prices of these systems as a result of focused marketing and decreasing costs of components, the bottomline is the concept is finding wider acceptability among consumers and is working out as a nice brand differentiators for manufacturers.
Take Volvo Car India, the Indian arm of the Swedish car major Volvo Car Corporation which offers on-board GPS navigation system on both its S80 and XC 90 carlines. Says Paul de Voijs, managing director of Volvo Car India, Most of our customers opt for the GPS navigation system. For mainstream brands, typically the younger, more technology-savvy audience would be attracted to a GPS navigation system; but it would eventually be accepted even by older audience, he says, adding, As with every new technology, GPS navigation systems will be expensive in the beginning but once the solution providers attain economies of scale it will be financially accessible to a wider sector of car buyers and owners.
For their part, executives at Maruti Suzuki India, say if GPS devices become more viable and the necessary infrastructure is developed in the country, the company can look... at introducing the solution as a standard fitment in some variants of its models. Says Raman, GPS system is fitted in cars as an aftermarket accessory in the premium compact and premium mid-size category cars. It is mostly opted by the mid-size, upper mid-size and SUV customers.
According to Voijs, Volvo Car is the first brand to provide on-board GPS navigation system atop the dashboard on the carlines currently selling in India. This also provides minimum distraction to the driver as the screen is next to the instrumentation cluster. We currently offer over 400 cities across India and the software can be upgraded, he adds. The software provider is Garmin Solutions.
P Balendran, vice-president, General Motors India, says compared to the pre-2008 days, there is now a real consumer demand for such systems. The growth has been fuelled by the availability of low cost electronic components, satellite technology and ease of adapting to the electrical architecture of existing vehicles. The uptake among passenger car owners can only increase in the coming years.
There is also a huge penetration among the taxi fleet operators. Needless to say, with more flyover coming up and one-way streets designated, a GPS enhances maneuvering capability in traffic and helps in reaching destinations with minimum fuss.
But the question is, are Indians tuned to the concept of reading maps on the go? Is the market for such devices poised to take off?
The answer seems to be an overwhelming yes. According to an analyst with Frost & Sullivan, The increase in long distance-driving for recreation and exploration purposes has boosted the prospects of navigation devices. The rise in the instances of employee transfers to other states where the issue of language barrier comes into play, also augurs well for the industry. As the demand for safety and fuel optimisation becomes a priority among fleet operators, telematics is seen as the most efficient solution.
One may argue that India will take some time before it catches up with the European market for car navigation systems, things have started looking up with the availability of good maps, both in the printed and digital formats and is likely to improve as uptake increases and the software becomes more friendly.
We are a developing nation and the road infrastructure is still being developed. So it wont be fair to draw parallels, says Raman. The main reason for the mass acceptability of such devices in the West was the fast development of related infrastructure where value added services like online traffic advisory and congestion data is shared real time with drivers. If a similar development takes place in India, there is no reason why these systems would not penetrate further. One more factor that will hasten growth will be the availability of digital maps and upgrades. Says Voijs of Volvo, Solution providers would eventually need to upgrade software to include location-based and value-added services as is the case in other developed markets.
A beginning has already been made. Car manufacturers are tying up with navigation systems suppliers, says the Frost & Sullivan report.
Balendran points out that India being a price sensitive market, value for money would be the key for higher acceptance of this product. Low-cost GPS can be the USP of a vehicle. We are seeing an increasing number of options being developed and made available in the after-sales market.
Price remains a critical factor. These devices are currently priced anywhere between Rs 15,000 up to Rs 35,000. The Chinese systems in the market are available for about Rs 10,000 apiece.
But their reliability is a major concern. Above all is the issue of consumer education. Manufacturers of telematics systems also need to focus on educating customers about the service aspect of the technology. Improving service will help customers trust the technology and boost sales through word- of-mouth marketing, notes Frost & Sullivan report.... http://www.financialexpress.com/news/on-your-way-with-trusty-gps/505277/3
Rohin Nagrani Business Standard (Motoring)
Mumbai: Keep it above 40 and you will be just fine. Get any lower and you will be digging yourself out for the rest of the day! The sternness in his tone reminded me of Dennis Hopper from the Hollywood flick Speed at that point, but Beeboy Bargas wasnt playing villain here. As our route instructor for the day, we didnt have an option but to listen to him carefully. Driving on the river valley that once flowed under Mount Pinatubo in the Philippines, we had a soft river bed that threatened to sink us and the brand new Ford Everest to its axles. After all, Mt Pinatubo had erupted back in 1991, and the pyroclastic flow deposits made it one lairy place to drive.
You could call Ford crazy or rather brave to allow a couple of Indian auto journalists and a nervous instructor to put their new Everests through the ash-filled river bed off Manila, but then they were confident that their product would make it through without as much as a sneeze. This, the new Everest, will be our new Endeavour and yes, I know that you are dying to say it where has all that macho-ness gone? No, it didnt take a hike to Machu Picchu or any other peak, but the overall design elements are more in line with Fords Kinetic design philosophy. So gone are the butch-looking, rectangular grille and headlamps and in their place are new eyelash-like headlamps and a chrome-laden grille that give it a V-shape. To compensate for this newfound softness, Ford have added a pseudo bull-bar chunk of plastic to their bumper which sort of makes it the kind of car you can still take to your local Golds Gym. This new element did create problems with engine cooling, but with the design team and the engine team at Hiroshima going back and forth, it was finally sorted with no change to the design element.
Because this car is designed for Asian sensibilities, you also get a chrome strip atop the grille with its name emblazoned as a reminder. A new air-vent design on the side flanks takes inspiration from the bullet in a bow wave school of thought. The rear tail-lamps have been slightly modified while the wheels you see here are of the 18-inch diamond cut variety we will get 16-inchers in India. New mirrors with turn lamps and a new bumper sum up the raft of exterior changes. Overall there is a higher use of chrome all around, but it still doesnt give it the kind of raw appeal that made the previous two Endeavours such a hit!
As we hit the riverbed, we understood why Beeboy spent 15 minutes helping us unlearn how we drive. It doesnt strike immediately, but once the said Everest puts its boots on the new terra firma, firm was something it definitely didnt feel. A mere walk over it felt like walking over jelly the surface creating ripples for metres and heart-stopping moments on our faces. Then as we rolled back into the Everests and got moving on the new surface, panic set in.
In seconds, the automatic gearbox started screaming in first gear, the wheels started to dig in and, just 20 metres since wed gotten on, we were stuck nice and deep.Wait a minute, did I just mention automatic? Yup, thats right, the new Endeavour will be available with an automatic in India for the first time that too on the big momma of them all the 3.0-litre TDCI. This 2953cc diesel motor produces identical power and torque as the outgoing Thunder Plus 4x4 156 bhp and 38.6 kgm respectively. But whats different here is the presence of the aforesaid 5-speed automatic gearbox. Since the inline-four engine features a variable geometry turbocharger, Ford have tried to keep turbo lag to the minimum, but that doesnt stop the automatic from playing spoilsport once in a while.
Right now though, we were staring at the front end of a red Jeep Wrangler and its winch in action. We were stuck so deep that the floorboard of the Everest was in line with the surface that should give you an idea that even the Everests 210 mm ground clearance isnt enough at times. For the Range Rover-engined Wrangler, pulling out the Everest seemed like kindergarten stuff and before we knew it, we were back on track, tackling a concrete embankment with 35-40 degree attack angles. Finally it was time for a driver change and I got behind the wheel, ready to feast on the Everests offroad ability.
What lay in front of me was possibly the widest flat stretch of surface Id ever driven on. The river bed was causing resistance, but the experience was more fulfilling than many a super car drive in the past. Even at speeds of 50-60 kph with nearly 8 to 10 kilometres of riverbed ahead of me, the steering tugging away a bit, the engine being overworked and the suspension making little to no adjustments, the smile on my face kept getting wider.
Perhaps with such a challenging surface, the Everests true abilities came to the fore one that has made it such a delightful and capable offroader over the years. Its such an easy SUV to drive that getting lost in the wilderness is not entirely impossible, and yet it will get you out of there in one piece, no matter how much battering it goes through.
Thats the same for the Everest on-road too. Despite its large five metre plus length, the Everest doesnt feel all that ponderous. Okay, it doesnt handle like some of its softroader compatriots, but hey, they cant boast of its depth of abilities either. The steering is nicely weighted, even if it lacks feel. There is a reasonable amount of body roll and the suspension can feel stiff at times.
But the new Endeavour tries to get over all that except the gearbox. This five-speed unit probably traces back to some of the units weve seen on its larger American-bred brethren. Its perfectly fine until you start to flog it. Somehow it just refuses to upshift quickly and more often than not, time is lost in unnecessary revs before the upshift actually occurs. Not that it would matter to the fat cats who will be chauffeured around and hog the rear seat, but for those who do, it can be a bit of a bother. And no, from what we understand, Ford wont be offering a manual gearbox for the 3.0-litre 4x4. Not for the moment, at least.
For those who will hog that rear seat, theres good news. Ford have tried to work on the underthigh support on its rear seats and have somewhat succeeded. Some changes to the interiors have been made, including some to the surfaces and textures, but largely it remains the same as the outgoing model. The test car here featured a Philippine touch screen audio unit with navigation facility, though we might get a slightly different spec here. Safety kit now also includes optional side airbags for the front occupants which is a move in the right direction.
As for the price, Ford dont want to leave you with that sinking feeling. A marginal increase is pretty much possible, but for that you get probably one of the few, really good offroaders in the country. One that even volcanologists will swear by!
(The author was invited by Ford India to drive the new Endeavour in the Philippines) http://www.business-standard.com/india/news/scaling-new-heights/367723/
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| CARS, SUVs, MUVs Go To Top
Rohtak: Maruti Suzuki, the countrys largest manufacturer of cars, took formal possession of 700 acres of land allotted to it by the Haryana government for a major research and development hub at the Industrial Model Township here, 70 km from Delhi.
In a signing ceremony witnessed by the states chief minister, Bhupinder Singh Hooda, the companys chairman, R C Bhargava, said the event was a milestone in the companys history. Twenty five years ago, we started by assembling SKD kits. We have come to designing and manufacturing cars, not only for the domestic market but also for global markets. The upcoming R&D centre will transform Maruti into a complete world-class manufacturer of small cars, he said.
Maruti Suzuki operates two factories in Haryana, at Manesar and Guragon, both close to Delhi. The choice for choosing the state again to locate its R&D centre, according to the companys managing director and CEO, Shinzo Nakanishi, was locational advantage. About 80 per cent of Marutis suppliers are located in and around Gurgaon. The upcoming R&D centre will provide an opportunity for young Indian engineers to train in the companys facilities.
With more car manufacturers setting up facilities in India, Bhargava said both the industry and the government need to do more to retain the countrys competitive edge as a hub for small car manufacturing. Both the Chinese and the South Koreans are gearing up to become hubs for the manufacture of small cars. Further, the world has moved away from large cars and is becoming focused on small cars. We need to work together to improve competitiveness and thats what we hope to do with the upcoming R&D centre.
RS 1,000 CR FOR MARUTI SUZUKIS ROHTAK R&D UNIT
New Delhi: Maruti Suzukis 700-acre R&D facility in Haryana with a modern test track will see an investment of Rs 1,000 crore. Nearly 100 acres will be reserved for suppliers at the site in Rohtak and the dedicated Suppliers Park will bring in more investment, said a company statement.
The new facility is proof of the Japanese carmakers growing India-focus for small cars. It was a step in the direction of the promise made six years ago by Mr Osamu Suzuki, Chairman, Suzuki Motor Corporation, of making Maruti Suzuki the R&D hub for Asia, outside Japan, said Mr Shinzo Nakanishi, MD and CEO, MSIL.
The only such Suzuki Motor Corporation facility outside Japan, it will also have a proving ground, wind tunnel, a crash facility and an R&D centre for passenger cars. In the first phase, the allotted land will be developed and the test tracks constructed by 2012. The R&D facilities will be ready by 2015, said the company.
Maruti has a 3 lakh-unit annual capacity diesel engine plant at Manesar and a new-generation K-series engine plant in the State. The Rohtak facility will make Haryana the base for automobile engineering, besides catalysing future investments by automobile industry, says Maruti. Indias largest carmaker is working on a car on its own and plans to launch the made in India car by 2012. http://www.thehindubusinessline.com/2009/08/22/stories/2009082250550200.htm
SUZUKI TO INVEST RS 1,500 CR FOR GLOBAL R&D HUB IN INDIA PTI See this story in: Business Standard (Web Edition)
Rohtak: Japanese auto giant Suzuki has announced an investment of up to Rs 1,500 crore in the next 6-7 years for setting up a research and development (R&D) centre in India, which will be the company's global small car R&D hub.
The company's subsidiary -- Maruti Suzuki India -- will develop the 700-acre R&D centre, to be constructed in two phases, here in Haryana by 2015.
"This facility in Rohtak would be a big step forward in building the R&D capability of Maruti Suzuki, and enable us to offer superior products to our customers in the future as well," Maruti Suzuki India (MSI) Managing Director and CEO Shinzo Nakanishi said here.
The R&D facility, to be set up at an investment of Rs 1,000-Rs 1,500 crore, would become the Japanese auto giant's global showcase for small cars, he said adding that MSI would design and develop a made-in-India car by 2012.
Nakanishi said the project would add to MSI's in-house R&D capabilities and would be a "dream-come-true" for Indian engineers and automobile designers.
The largest such facility by Suzuki Motor Corp (SMC) outside Japan would comprise a 600-acre R&D centre and test tracks and a vendors park spread over 100 acres. SMC would develop the land and construct the test tracks in the first phase by 2012, while the entire project would be completed by 2015.
MARUTI TO PUT $310 MN IN R&D COMPLEX
Mumbai: Maruti Suzuki Ltd, India's top car maker, said on Friday it plans to invest up to 15 bn rupees ($310 mn) to set up a research and Development (R&D) complex in north India. The R&D complex, the first for Suzuki Motor Corp outside Japan, would also house auto parts makers for the firm. Suzuki owns 54.2 percent of Maruti.
MARUTI TO DECIDE ON LAUNCHING KIZASHI HERE IN TWO YEARS PTI See this story in: Hindustan Times (Web Edition)
Rohtak: The country's largest carmaker, Maruti Suzuki India (MSI), on Friday said it will decide on bringing in luxury sedan 'Kizashi' to India within the next two years.
MSI's parent Suzuki Motor Corp (SMC), which announced its intention to become complete carmaker with larger sedans in the portfolio when it launched the SX4, has been developing a big sedan based on the Kizashi concept powered by a 3.5 litre engine aimed at markets like the US.
However, SMC scaled down development of large cars following preference of smaller vehicles in the global auto market due to economic meltdown. It is now developing a 2 litre engine for the Kizashi concept car, which would be the biggest car in SMC's passenger car portfolio.
When asked if MSI would bring in Kizashi into India, the company's Managing Director and CEO Shinzo Nakanishi said, "If we decide to bring it to the country, it will be depend on the market situation. But any decision will be taken within the next two years." Asked if the company would phase out its once bread-and-butter model Maruti 800 from 11 cities once the Bharat Stage IV emmission norms would be applicable next year, Nakanishi said: "We would like to sell it as long as possible, but we are also not thinking of modifying the model."
He said the company would phase out the car from those 11 cities by April 1, 2010, while it would continue to sell in other parts of the country.
MARUTI'S FULLY INDIGENOUS CAR WILL HIT ROADS BY 2011 Sindhu Bhattacharya Daily News & Analysis (Web Edition)
New Delhi: Maruti Suzuki India plans to develop and design a car from scratch and launch a 'Made in India' model in two years. Maruti, which is now being developed as a global R&D hub for its Japanese parent, Suzuki Motor Corp, has announced significant investments in enhancing its overall R&D capability. The company will invest Rs 1,000 crore in two phases to establish a full fledged R&D centre and a vendors' park at Rohtak (Haryana).
The land allotment agreement was signed on Friday by Maruti Suzuki managing director and CEO Shinzo Nakanishi and the MD of Haryana State Industrial and Infrastructure Development Corporation, Rajeev Arora.
The Rohtak R&D complex will house a R&D centre for passenger cars -- including India's first state-of-the-art test track with a proving ground, wind tunnel, crash facility etc. While the development of the allotted land and construction of the test tracks will be completed during the first phase by 2012, the overall R&D facilities will be progressively completed by 2015.
"This facility in Rohtak would be a big step forward in building the R&D capability of Maruti Suzuki, and enable us to offer superior products to our customers in the future as well," Nakanishi said.
This complex will augment the full vehicle design and development capability of Maruti, thereby meeting the specific needs of the Indian customer. The first phase of this project will see Rs 400 crore investment by 2012.
Maruti has two manufacturing facilities at Gurgaon and Manesar with a combined manufacturing capacity of 1 million units per year. http://www.dnaindia.com/money/report_maruti-s-fully-indigenous-car-will-hit-roads-by-2011_1284357
MERCEDES PUTS BRAKES ON CNG-CLASS Sumit Chaturvedi The Economic Times (Web & Print Edition)
Mercedes Benz has dropped plans to market natural gas-fuelled vehicles in India because it doesnt want the patrician owners of its expensive cars waiting cheek by jowl with plebeian transport at filling stations.
For a car priced at Rs 28 lakh, more Indian customers prefer the diesel variant of the E-class, which is said to account for about 60% of sales of the model. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved"
INNOVAS HIGHER-END MODELS DRIVING UP SALES Shamik Paul The Hindu Business Line (Web & Print Edition)
Bangalore: A change in customer profile is helping to boost the demand for Toyota Innova with sales expected to nearly double to around 4,500 vehicles a month.
The Deputy Managing Director of Toyota Kirloskar, Mr Sandeep Singh, told Business Line that there has been a 10-15 per cent shift towards the higher-end models from the lower end, leading to 90 per cent of the sales of the car coming from the top-end variants. There are more number of families buying the car and it is also being used by senior-level executives of corporate houses, Mr Singh said.
When the Innova was launched, most of the sales came from the lower-end variants. A year ago, sales for the Innova were down to between 2,000 and 2,500 units a month but it has now gone up to about 4,500 units a month. But for production constraints, we would have sold more, he said. The higher-end variant of the Innova is at least 25 per cent more expensive than the lower-end variant.
The sales growth is expected to help the Japanese car maker exceed last years sales of 52,000 cars during the current calendar year. Mr Singh said even sports utility vehicle Fortuner, which is being launched next week, has got confirmed bookings for 2,500 units. Toyota Kirloskar expects to sell about 4,500 of these vehicles next year.
Mr Singh said sales of sports utility vehicles had gone down by about 50 per cent during the last three months. He said the Fortuner is expected to expand the market segment. The SUV, which is expected to be priced at about Rs 20 lakh, will compete with Chevrolet Captiva, Ford Endeavor and Honda CR-V.
Mr Singh said a new parts warehouse in Pune will be set up soon. The company has a warehouse each in Gurgaon and Bangalore. http://www.thehindubusinessline.com/2009/08/22/stories/2009082250630200.htm
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| 2/3 WHEELERS Go To Top Malabika Sarkar The Financial Express (Motobahn)
Honda Motorcycle & Scooter India (HMSI), the wholly-owned Indian subsidiary of Honda Motor Company, Japan, is credited with turning around the market for scooters in India, a segment that still hogs a bigger shareabout 65%of its total production. While its focus remains on scooters, it has gradually expanded its portfolio and is scouting for opportunities in the export market as well. In this interview with FEs Malabika Sarkar, the operating head, sales & marketing, general manager of HMSI, Naresh Kumar Rattan, talks about the growing demand of gearless scooters in the Indian market and what the company is doing to meet consumer expectations.
The market for scooters in India seems to be on the revival path. What are the factors that contributed to this trend?
Scooters are easy to use, convenient and an obvious choice of most Indians. It was the leading segment among two-wheelers till the mid-nineties. Then the motorcycles took over, courtesy their style and high fuel-efficiency. This led to a period of decline for scooters. However, HMSI took the initiative and introduced Activa, which was instantly accepted by the masses and the market revived. Later, HMSI introduced Dio, Eterno and Aviator.
What is the size of the scooter market in India?
The scooter market stands at 12 lakh units per annum and is growing at over 10% per annum over the last three years. In FY 2008-09, the scooter market grew at 11%, while the growth in FY 2007-08 was 12%.
Who is a typical gearless scooter customer for you?
HMSIs automatic scooters are targeted at customers in all income-groups and across all ages. The Activa is targeted as a family vehicle. The Dio is mainly for youngsters while the Aviator is targeted at the premium image-conscious customer.
Any new products lined up for the gearless segment?
In the current line-up, HMSI already has three modelsActiva, Dio and Aviator. At present, we feel this is enough. However, we continue to study the changing needs of customers.
What is the profile of competition that you are facing in this market?
It is a worldwide trend that Honda creates the demand and competition follows. It is healthy to have the competition; many makers are introducing products in the automatic segment and this will lead to expansion of the market. Honda will take up the challenge to improve the products.
How much do scooters contribute to the revenue of HMSI?
In the 8-year history of HMSI, only scooters were manufactured for... the first four years. The first motorcycle was introduced in October 2004. So scooters currently occupy a bigger shareabout 65% of our production.
What is the volume of production of scooters in India?
In FY 2008-09, the total production of scooters in India was 11.8 lakh and HMSI produced 6.6 lakh units, thus holding 55% of the market. http://www.financialexpress.com/news/scooters-account-for-65-of-our-production/505278/2
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| COMPONENTS Go To Top Mobis Philipose and Ravi Ananthanarayanan mint
Shares of Bharat Forge Ltd rose by 8% on Tuesday after it announced that its board had approved raising up to $150 million (Rs730 crore) by issuing equity shares or an equity-linked instrument. On Wednesday, the shares corrected by over 5%the markets way of acknowledging that the previous days reaction was overdone.
For the week, though, the stock was down 3.2%. Its not just this week; the companys shares have been on a roller coaster ride for the past few months.
They rose from the March lows of Rs77.50 to cross Rs190 by end-May, before correcting to the sub-Rs130 levels last month. Then, in less than a months time, the stock nearly doubled to the Rs250 levels, before correcting to current levels of Rs219. During this time, the firm has reported weak results for the March and June quarters, and so its interesting that valuations have nearly trebled compared with the March lows.
For the June quarter, the company reported a consolidated loss of Rs20.3 crore before tax and exceptionals.
In the year-ago period, the firm had a profit of Rs131.6 crore. Sales more than halved on a year-on-year (y-o-y) basis, with the majority of the pain being felt by various overseas subsidiaries of the company. The Indian units sales grew at a lower rate of 43.7% y-o-y and it reported a profit of Rs16.3 crore before tax and exceptionals.
There has been some excitement about the fact that the performance wasnt as bad as the March quarter, when the company had a consolidated loss of Rs54.7 crore before tax and exceptionals. All of this improvement has come out in the Indian unit, with sales improving 23% sequentially, and profit margins improving by about 550 basis points. Overseas operations continued to suffer, with revenues falling 25% sequentially, and losses continuing at around 15% of sales.
The companys overseas subsidiaries have suffered immensely owing to the global slowdown and the sharp cuts in auto production. Bharat Forge has gone on a restructuring mode and has written off Rs16 crore in the June quarter as restructuring and redundancy costs. (The losses mentioned above are before accounting for this exceptional item.) These costs will be charged through the year and hence there could be a write-off of Rs64 crore. Note that Bharat Forge reported a net profit of Rs58 crore in the year till March.
Because of the losses suffered on account of the global slowdown, the company has said that it will focus on the non-auto part of the forging business. This segment accounted for about 21% of consolidated revenues in the previous fiscal year and the company intends to increase it to 40% by fiscal 2012. The fund-raising initiative is to finance growth of this segment.
This is the main reason the markets have been apparently excited about Bharat Forge stock in recent months. But theres a big difference between stated intent and execution. Last month the company said the capacity utilization at its two new non-automative plants has been subdued because of weak market conditions, and that the ramp-up of production at these facilities will be slower than earlier projected.
This is not to say that the companys non-auto initiatives wont bear fruit, but as far as the market reaction goes, it seems to be a case of putting the cart before the horse. http://www.livemint.com/2009/08/21221410/Bharat-Forge8217s-roller-co.html
Abdul Majeed The Financial Express (Motobahn)
China is a key automobile market which is growing rapidly. For the past few years, automakers, both global original equipment manufacturers (OEMs) and local Chinese players, have made aggressive investments into the country. The vehicle penetration rates are lowonly about 40 out of every 1,000 people own a vehiclecompared with an average of 600 in mature markets and over 800 in the US. China was not an exception to the global slowdown and falling global demand for Chinese exports created a huge strain on the Chinese economy. Chinas automotive sales also cooled down, from 20%-plus growth rates to 6% in 2008 and actual sales contracted during the third and fourth quarters of 2008 by 1% and 4%, respectively.
Although the Chinese economy heavily depends on exports, unlike India, where the growth is mainly from the domestic market, all the fundamentals look encouraging in the long run. Chinas alliance group includes key global as well as some local OEMs. The key global OEMs include GM, VW-Porsche, Toyota, Hyundai, Renault-Nissan and Ford, while the local OEMs include Cherry, Changan, Dongfeng and Geely. Both GM and VW-Porsche are continuously making a significant push into the Chinese market and they are expected to add roughly 9,00,000 units of assembly between the two. The year 2008 was not very good for Cherry but the company may bounce back with better products and multi-brand strategy; it may also move up in its ranking from the ninth-largest automaker in China to sixth by 2012. In addition to the top-15 automakers, there are around 24 automakers that cumulatively had less than one million assembled units in 2008. Over the next few years, consolidation (both market-driven as well as government supported) would drive many weak players out of the market.
China unveiled a $585-billion stimulus package last November and ten specific industry stimulus plans were introduced to shore up the demand in the Chinese economy. The incentives mainly included increase in the subsidy for those who are willing to trade their older, polluting, gas-guzzlers for the newer, fuel-efficient and lower emission vehicles, and a onetime allowance to farmers to upgrade their vehicles. There were also initiatives surrounding availability of finance etc. In addition, there were reduction in taxes from 10% to 5% on cars whose engines are less than 1.6 litres. These initiatives have reflected in an increase in sales year-on-year in July 2009. There are both upsides and downsides that may impact the automotive industry in 2009-10. For instance, the economic stimulus package may or may not help in maintaining a sustained growth rate and also that the Chinese OEMs may fail to create a viable product for the mature markets, which may result in a decline in the exports.
Currently, exports are mainly driven by Chinese brands. Over the years, foreign automakers are also likely to leverage China to cater to their export market. PricewaterhouseCoopers Automotive Institute projects that the light vehicle assembly will approach the $12 million mark in 2013, with the exports accounting for roughly 4% of the total assembly.
The author is leader, automotive practice, PricewaterhouseCoopers http://www.financialexpress.com/news/stimulus-drives-china-market/505279/2
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| OIL, LUBRICANTS & ALTERNATIVE FUELS Go To Top
See this story in: The Times of India
Singapore: Oil prices fell in Asian trade on Friday but stayed above $72 a barrel as signs of an economic recovery continued to be weighed down by weak energy demand. http://timesofindia.indiatimes.com/news/business/international-business/Oil-above-72-in-Asian-trade/articleshow/4917798.cms
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| INTERNATIONAL NEWS Go To Top Reuters See this story in: The Economic Times
Frankfurt: General Motors is moving closer to picking Germany's favored buyer, Magna International and its Russian partners, for its Opel business when GM's board meets on Friday, sources close to the matter said.
AP See this story in: The Hindu Business Line
Seoul, South Korea - Hyundai Motor Co. Chairman Chung Mong-koo's son was promoted to vice chairman at the automaker, Hyundai said Friday.
Chung Eui-sun, formerly a president at Hyundai affiliate Kia Motors Corp., replaces Choi Jae-kook, who retired earlier this year, Hyundai said in a statement.
The younger Chung, 38, becomes one of six vice chairmen at Hyundai, said company spokesman Ki Jin-ho. Hyundai is South Korea's largest automaker.
Chung is in charge of sales and planning in his new post, Hyundai said.
With the appointment, the automaker said it aims to further elevate its competitiveness and reach the top tier of the global industry.
Together, Hyundai and Kia form the world's fifth-largest automative group.
Kia plans to start production later this year at its first factory in the United States., located in West Point, Georgia. The plant is not far from Hyundai's sole U.S. factory in Montgomery, Alabama.
CATERPILLAR, NAVISTAR EYE CHINA TRUCK JV Reuters See this story in: The Economic Times
Shanghai: Caterpillar and Navistar International are in talks with Chinas Jianghuai Automobile to set up a truck venture, a source said, as the firms become the latest foreign players to tap the market dominated by Chinese state auto groups. The two US companies hope to gain a foothold in Chinas 150 billion yuan ($22 billion) heavy truck market, joining Daimler AG, MAN and others which recently tied-up with local partners. The Chinese governments stimulus measures aimed at supporting a recovery in the worlds third-largest economy is already fuelling a boom in the retail automobile industry. The parties have basically agreed on the framework for a 50-50 venture to make heavy trucks and engines, but have yet to iron out the details, a source with direct knowledge of the matter told Reuters. Caterpillar and Navistar would hold a 50% stake in the venture, with Jianghuai owning the remainder, said the source who did not wish to be identified as he was not authorised to speak to the media. A spokesman with Anhui Jianghuai Automobile Co, a mid-size automaker, based in east China, declined comment, while Caterpillar and Navistar executives could not be reached. Analysts said the JV, expected to be finalised before the end of the year, offers Caterpillar and Navistar a chance to tap Chinas heavy truck segment. Heavy truck sales in China rose 11.75% to 541,256 units in 2008, more than double the level in 2003, according to Nomura Securities. Sales are set to rise in the coming years, bolstered by Beijing's continuous efforts to improve the countrys infrastructure, analysts said. Unlike General Motors and Volkswagen which have long become household names in China, foreign truck giants have made little headway over the years as their upscale models are too expensive for local trucking service operators.
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| The Hindu Business Line
Mumbai: Foreign exchange reserves fell by $214 million to $271.025 billion for the week ended August 14, according to the figures released in the Reserve Bank of Indias weekly statistical supplement.
For the week ended August 7, the reserves fell by $402 million to $271.239 billion. In the week under consideration, the foreign currency assets decreased by $209 million to $260.010 billion.
Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies. The dollar had weakened against other major currencies in the just ended week, said a dealer with a public sector bank. Gold reserves remained unchanged at $9.67 billion. SDRs were down by $1 million. The reserve position in the IMF decreased by $4 million to $1.344 billion. http://www.thehindubusinessline.com/2009/08/22/stories/2009082251540600.htm
PTI See this story in: The Hindu Business Line
Mumbai: The Bombay Stock Exchange benchmark index Sensex on Friday which fell by 162 points to below 15,000 level in opening trade recovered and moved into positive terrain in the mid-session.
At close, the Sensex was at 15,240.83 up by 228.51 points. It touched a low of 14,835.08 in the first five minutes of trade.
On the NSE, the Nifty was quoted at 4,528.80, up by 75.35 points after slipping to a low of 4,400.90. Stocks of realty, auto, IT, consumer durables and oil & gas turned stronger helping the overall market.
Brokers said selling pressure gathered momentum on the domestic bourses in early trade largely in line with weakening trend on the other Asian markets. http://www.thehindubusinessline.com/blnus/05211901.htm
Last Financial closing
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Saturday, August 22, 2009
Indian Auto Industry Update August 22, 2009
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