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| INDUSTRY Auto industry: Revival, restructuring & sustainable growth INTERVIEWS/FEATURES CARS, SUVs, MUVs One in every 4 car buyers pays in cash: Survey Maruti exec says no impact from drought yet Maruti Suzuki customers most satisfied: JD Power survey Hyundai Motor to step up i20 exports Nissan to shift production of small car from UK to India Nissan aims for 6% mkt share in 3 yrs Nissan's Made-in-India car next year M&M set for 3 launches by '11; plans JV-launch with Renault Karma renewal: Estilo gets a new lease of life COMMERCIAL VEHICLES IIP whirr revives heavy vehicle sales CONSTRUCTION & AGRI MACHINERY Escorts Ltd appoints O K Balraj as CFO 2/3 WHEELERS Bajaj Auto expects rise in sales on better demand Harley Davidson to zip on Indian roads by 2010 All our products are very relevant to the Indian market Suzuki set to roll out entry-level mobikes | ALLIED INDUSTRIES Vijaya Bank loan for M&M vehicles OIL, LUBRICANTS & ALTERNATIVE FUELS INTERNATIONAL NEWS Nissan, Chrysler scrap vehicle supply deal Toyota plans to end production at a GM joint venture ECONOMY & FINANCE Sensex ends flat with select scrips up Weak monsoon could stoke inflation, dampen growth: RBI
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| INDUSTRY Go To Top INDIAN AUTOMAKERS ROPE IN INTERNATIONAL DESIGNERS Lijee Philip & Hemamalini Venkatraman The Economic Times (Web & Print Edition)
Mumbai/Chennai: Spurred by a worldwide consolidation wave, Indian carmakers are rushing to global automotive designers in a bid to give a cutting edge to their products line-up. Auto majors such as Bajaj Auto, Maruti Suzuki, Mahindra & Mahindra and Tata Motors are understood to be meeting several top auto designers in a bid to scale up their in-house design functions.
A senior MNC official, on condition of anonymity, said, India has so far not gained repute for its design capabilities as it has always been relying on external assistance. In two-wheeler design, however, Indian auto companies have been building their capabilities. TVS chose to build up its design muscle by having a separate lab, following its break-up with Suzuki . After the introduction of Chetak, Bajaj took the help of Japanese companies to upgrade its products. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved"
AUTO INDUSTRY: REVIVAL, RESTRUCTURING & SUSTAINABLE GROWTH The Economic Times, Zigwheels
The current global crisis has reshuffled the positions of the players on the global canvas. The giants of the industry are facing problems such as bankruptcies, and others are being forced to reduce their global output by more than one-third. As a consequence, there is going to be a reduction in the capital expenditure by foreign car makers in emerging markets. Under various stimulus packages, governments across the globe have stressed upon environment friendly vehicle incentivising for both customers and manufacturers.
While there has been a correction in nearly all markets, emerging automotive markets are expected to be more resilient and continue to gain more importance on the global stage. It's no secret that the center of gravity of the automotive industry is moving east-rapidly. Asia (excluding Japan) already exceeds the United States in annual unit car sales, and it will pull away even further in the coming years. Between now and 2012, the Asian automobile market is projected to grow by more than 5 percent a year, while that of much of the rest of the world, including North America and most of Europe, will likely see little or even negative growth in that time. Indeed, India's automotive market has the potential to become larger than that of Germany and many other European markets by 2015. This rosy automotive picture is particularly significant because of what it says about the economic outlook in India and the region: Because there is a direct correlation between a nation's mobility and its standard of living, such increases in car sales indicate that within the next four decades, India will become the world's third largest economy, after China and the United States. The global commercial vehicle (CV) industry is currently facing an unprecedented downturn. Although the CV industry has always been cyclical, the combination of the global recession and massive financial crisis has dealt a severe blow in recent months. Demand for freight and passenger movement has declined and, at the same time, limited available credit has impeded customers' purchasing ability. CV OEMs and suppliers have been hit hard globally, and experts are unsure when volumes will return to prerecession levels. In addition, the CV industry is facing a number of other challenges: stricter emission norms, greater safety requirements, increased life cycle and operating costs expectations, growing commoditization of the market, and greater demand for financing solutions. Regulatory compliance with emission and safety norms is applying significant pressure on all value chain players. With increasing environmental concerns, emission norms are frequently tightened; CV manufacturers have responded by increasing technology investments and reducing product development cycles. What's more, there is an expectation to develop hybrid and pure-electric power-trains in the medium term. Safety norms, which are especially important for passenger-carrying vehicles, are also becoming more stringent globally. While there has recently been encouraging news of resurgence in volumes, this has come on the heels of deep discounts and government support. A full-scale revival is far off. For the CV industry, remaining profitable while taking advantage of the opportunity in emerging markets requires bold new approaches from all the stakeholders. The epicenter of growth of the two wheeler industry is in Asia with six of its nations accounting for about 90% of the global two wheeler output of approximately 47 million in 2008. India is currently the second largest two wheeler manufacturer in the world producing 8.4 million units, only behind China which is estimated to produce about 25 million vehicles. The focus is, however, on low cost vehicles commuting solutions. After growing at an impressive 14% over 2003-07 period, the industry experienced a decline in 2007-08 due to credit crunch in the local market. In the current environment of global financial crisis in which the automotive industry has been one of the worst hit, the marginal growth of 3% posted in domestic Two-Wheeler Industry in 2008-09 is an impressive feat. With exports touching to 1 million units in the same year at a growth rate of about 30%, the Indian 2W industry is well poised for the global stage. The fundamental consumer drivers for Indian Two-Wheeler industry is the rising income levels, changing demographics, increased needs of mobility, etc. remain strong and would continue drive adoption. SIAM Annual Convention is expected to discuss, how the evolution of market would take place from pure commuting to a combination of commuting and leisure, would deliberate on how will market segmentation change in the domestic market with the emergence of new product segments and customer groups under the challenges of sustainable mobility. In the 21st century, the transition to a sustainable energy economy is one of the greatest challenges of mankind. When talking about sustainability issues like; global warming, fossil fuel depletion, security of energy supply, air quality and environmental damage, spring to mind. Rightly or wrongly, road transport is considered a prime contributor to these problems though its impact in India is far less compared to the other sectors.
Massive improvements have been made in the area of toxic emissions (e.g. NOx, CO, PM) driven by legislation (e.g. Bharat, Euro, US and Japanese norms). The progress is less pronounced for the reduction of green house gases and with road transport accounting for approximately 20% of man-made green house gases world-wide, this has become an area of increasing concern. Many improvements have been made on a vehicle level, however, global road transport emissions continue to grow. Asia (specifically India and China) will experience a growth in vehicle population; hence firms in developing countries and developed countries need to work together - as the challenges and opportunities are global. New players will enter the scene, new alliances will be forged. The boundaries of competition and collaboration will blur. New business and funding models will need to be developed. Governments will have to set the right framework conditions. Exciting times of change are ahead!
Indian automakers are clearly at a telling crossroads. If OEMs and government policymakers have the will to take immediate actions to support the growth of the industry, the nation and some of its most critical companies will be rewarded by a lucrative and robust domestic and export automobile market that holds out the promise to put the Indian economy into overdrive and contribute mightily to its security. The other path-lack of action-represents a loss of value for the entire society. To ensure that this doesn't happen and that India's OEMs don't fall further behind neighboring countries, it is critical that the government pursue clear, long-term policies to promote its automakers that take into account both macroeconomic and industry trends. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
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| INTERVIEWS/FEATURES Go To Top Dangling before JLR and other carmakers and suppliers was the promise, made in January by Lord Mandelson, the business secretary, of 2.3 billion ($3.2 billion) of government loans and guarantees to aid investment in low-emission car projects. So far not a penny of the money has been spent, though separately 300m has gone on a car scrappage scheme, which mainly helps makers of small, cheap cars.
On August 11th an exasperated Tata said it no longer needed government help. That ended over six months of sometimes bitter negotiation with the Shareholder Executive, a state agency that looks after the governments stakes in businesses. (Those include Northern Rock, a rescued mortgage bank, but not RBS and Lloyds Banking Group, which are handled by UK Financial Investments.)
Tata, having bought JLR in June 2008 for $2.3 billion, found it was hit by the credit crunch, like all other car firms. Bank funding dried up and in November JLR asked the government for guarantees to enhance its credit on commercial loans. Unlike the French and German governments, which were able to help carmakers via these firms financing arms, which are authorised banks, the British government did not have that option. The Shareholder Executive had to deal directly with JLR and first of all judge whether Tata, which owns businesses ranging from British steel mills and tea packers, to chemical and car plants in India, was really that needy of cash. Tatas commitment to JLR seemed firm. But JLR had previously been a division of Ford Motor Company: it had no proper treasury function and was thinly capitalised.
In protracted investigations, the Shareholder Executive, staffed mainly by hard-nosed former corporate financiers, began to demand radical changes to JLRs financial structure, if they were to put taxpayers money at risk. That may have been reasonable, but it was not what Tata management wanted to hear. The European Investment Bank (EIB) was offering JLR a 340m loan for the development of green technology, but required a government guarantee. On top of that JLR wanted around 400m of short-term funding. But the Shareholder Executive played hardball. The requested guarantee shrank to 175m. Moreover, the agency wanted a premium of close to 10% and a counter-guarantee from a commercial bank so that, in the case of a payout, it had a chance to claw back the funds. And it wanted the power to remove JLRs chairman if necessary.
Tata found these terms unacceptable, even an affront, and finally wrote to say it was looking elsewhere: the EIB would get a guarantee from a consortium of banks instead, and JLR would raise bridge finance by pledging future cashflows. This new-found confidence was helped by the buoyancy of Tatas car sales in India, and a modest recovery of orders at JLR.
But there is some residual rancour and speculation that prompter action, at least on the EIB funding, would have accelerated JLRs development of the LRX, a small, low-emission Land Rover, whose production is due to replace that of the Jaguar X-type at Halewood at the end of this year.
On the other hand, it could be argued that abrasive dealings with the Shareholder Executive forced Tata to get to grips with JLR and bring in consultants KPMG to drive down costs, and Roland Berger of Germany to develop strategy. Ravi Kant, non-executive vice-chairman of Tata Motors, is now spending more time at JLR headquarters in Gaydon, Warwickshire. There are thoughts of more co-operation with Tata, perhaps involving shared production platforms. At the same time Tata does not appear that strapped for cash, having put 1.2 billion into JLR over the past 14 months.
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| CARS, SUVs, MUVs Go To Top GLOBAL RECESSION TURN CAR-MAKERS FESTIVE Bijoy Kumar Y Business Standard (Web & Print Edition)
Mumbai: There was a time not so long ago when automotive giants took scant notice of the Indian festival season. Increasing competition and recession in Europe and the US have forced them to change their outlook and time their launches around the festive months just like consumer goods companies do.
With cars, though, the stakes are pretty high. If you thought the full-page advertisements for the Toyota Fortuner and the Maruti Suzuki Estillo are indicators of automotive industry trying to wriggle out of a global recession, well, you could be right.
While the Fortuner, despite its Rs 22 lakh on-road price tag, has been received exceptionally well, the Estillo with its Rs 3.5 lakh price tag, a brand new K-Series engine and new look will have to fight it out with other contemporary cars from the Suzuki stables like the A-Star and the Ritz.
Maruti Suzuki, in a bid to modernise its fleet of cars, will be launching more cars with the K-series engines and the next one to go through the heart transplant will be the highly successful Swift. With a 1.2 litre engine in place of the ageing 1.3 litre Esteem-derived motor; the Swift will attract less excise duty and hence will become more attractive to the prospective buyers.
The new Ford Endeavour, scheduled sometime next month, is supposed to give the Toyota Fortuner a run for its money. What it lacks on the power front to the Toyota, the big Ford makes up with sheet metal and glass.
Honda is fresh from launching the Jazz, its premium hatchback, but we hear two face-lifts are due for the festive season with the new, improved Honda Civic leading the way. The first serious offering from the new GM India will be the Chevrolet Cruz a car that slots between the current Optra and the Skoda Octavia. The Cruz will feature an economical yet potent 2.0 litre diesel engine and a petrol motor will follow suit.
A more significant launch though may come towards the end of the year, if not early 2010, when the all-new Beat small car is launched from the new car plant near Pune. GM will keep the Chevrolet Spark in production though at a price point that will attract more and more Tata Nano buyers.
Tata Motors will flex its affordable car USP again with a good looking sedan the Indigo Vista and it will have modern, Fiat-derived diesel and petrol engines going for it. Sold alongside the Tata Indigo, Vista will be a more powerful version of the Fiat Linea (this time with a turbo-petrol option) in petrol and diesel variants. This is an indicator that Fiat is taking feedback from its customers seriously.
A spanking new Mercedes-Benz E-Class is due anytime now. The W212 model E-Class is an attempt from Mercedes-Benz to go back to the carved from a billet days of yore and will be launched with a petrol engine (E350) and a diesel will follow suit later. Expect the price range to be around Rs 45-50 lakh.
BMW is all set to create some interest in their showrooms with the stunning new Z4 convertible which will be sold through the CBU route.
The icing on the festival season cake will be the new Volkswagen (VW) Beetle. It will come through the CBU (completely built unit) route, so it will be prohibitively expensive at Rs 12-15 lakh. Still, it will do VW a world of good to get its message across to prospective customers of the volume seller, the New Polo, to be unveiled at the Auto Expo in January, 2010.
Expect VW to price the Polo aggressively though it is a bit of a challenge with the equally well-built Skoda Fabia still around. The Czech arm of VW will, by the way, unveil the Yeti a mini SUV at Rs 15-20 lakh that could appeal to urban dwellers. http://www.business-standard.com/india/news/global-recession-turn-car-makers-festive/368276/
ONE IN EVERY 4 CAR BUYERS PAYS IN CASH: SURVEY
New Delhi: One in every four car buyers in the country prefers to pay cash for their vehicles with a majority of purchases in the entry-level small-car segment, a study says.
The interest rates on car loans are hovering around 9-10 per cent at present. In addition, the proportion of first-time new vehicle buyers has increased from 27 per cent in 2004 to 40 per cent in 2009. Manufacturers and dealers may benefit from tailoring their offerings in this fast-growing segment to this younger, increasingly affluent and value-conscious customer segment, Mr Arora added. http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=266368 http://www.deccanchronicle.com/business/one-every-four-car-buyers-pays-cash-survey-283
MARUTI EXEC SAYS NO IMPACT FROM DROUGHT YET
New Delhi: Indias top car maker Maruti Suzuki has seen double-digit percentage growth in its August sales and has not felt any impact yet from a drought in much of the country, its sales chief said on Thursday.
Maruti, 54.2% owned by Japans Suzuki Motor Corp, earns about 15% of its revenues from the rural market, a segment it plans to expand in, but a deficient monsoon this year could hit rural income and spending.
So far, we have not seen any impact because this crop comes in November, said Mayank Pareek, executive officer of marketing and sales.
My guess is the effect will be there, but will be very marginal effect. If at all it is there, the first hint we will get in November, he said, adding Maruti was not reconsidering its plans to expand in rural areas.
The countrys monsoon rains were 5% below normal in the week to 26 August and are 25% below normal so far this year, the Meteorological Department said.
MARUTI SUZUKI CUSTOMERS MOST SATISFIED: JD POWER SURVEY
New Delhi Car buyers in India have become more satisfied in the past one year ranking Maruti Suzuki as their top choice in terms of new vehicle purchase experience, while relegating homegrown Tata Motors to the least favoured slot, a new survey said.
Maruti is closely followed by Honda and Toyota, both at the second slot, on the customer satisfaction scale, which ranked a total of 11 car makers present in the country.
"Maruti Suzuki ranks highest in overall new vehicle sales satisfaction in India," found the annual survey by automotive research and consultancy JD Power, which ranked the carmakers on the basis of points earned on a scale of 1,000 points.
Maruti Suzuki scored 800 points, followed by Honda and Toyota with scores of 799 points each, against the industry average of 793 points, JD Power Asia Pacific said in a statement.
South Korean major Hyundai was ranked third (796 points), followed by Mahindra (796 points), Skoda (794 points), Ford (790 points), Fiat (789 points) Mahindra-Renault (786 points), Chevrolet (772 points) and Tata Motors (766 points).
The overall industry-wide customer satisfaction with new-vehicle sales experience increased considerably during the year as the industry average score rose by 26 points, JD Power said about its tenth annual survey.
Hyundai recorded the greatest improvement among all the brands examined in the study.
"It is encouraging to note the considerable improvements made by the industry in 2009, especially in the vehicle delivery process, salesperson and paperwork factors," JD Power Asia Pacific (Singapore) Senior Director Mohit Arora said.
JD Power's customer satisfaction index, in its 10th year now, measures the overall satisfaction with the new-vehicle buyer sales experience. The research firm determines customer satisfaction through seven measures delivery process; delivery timing; salesperson, sales initiation, dealer facility, paperwork and deal.
The study said proportion of first-time new-vehicle buyers has increased from 27 per cent in 2004 to 40 per cent in 2009.
The 2009 India Sales Satisfaction Index Study is based on responses from 5,422 new-vehicle owners who purchased their vehicles between September 2008 and April 2009. The study was fielded from March to June 2009. http://www.thehindubusinessline.com/2009/08/28/stories/2009082851580200.htm
HYUNDAI MOTOR TO STEP UP I20 EXPORTS The Economic Times (Web & Print Edition) See similar story in: The Financial Express (Web & Print Edition), The Hindu Business Line (Web & Print Edition), The Tribune (Web Edition), Deccan Herald (Web Edition), mint (Web Edition)
Chennai: Hyundai Motor India plans to step-up exports of its premium hatchback i20 in the non-European markets. In line with the companys game plan to make India a manufacturing hub, it plans to increase its export base to 42 new non-European countries. http://www.financialexpress.com/news/hyundai-motor-set-to-hike-i20-exports/508065/ http://www.thehindubusinessline.com/2009/08/28/stories/2009082851940300.htm http://www.tribuneindia.com/2009/20090828/biz.htm http://www.deccanherald.com/content/21810/hyundai-india-step-up-exports.html http://www.livemint.com/2009/08/27163638/Hyundai-India-to-step-up-expor.html
NISSAN TO SHIFT PRODUCTION OF SMALL CAR FROM UK TO INDIA Pankaj Doval The Economic Times (Web Edition) See similar story in: The Times of India (Web & Print Edition)
New Delhi: Forget China, its focus India for global automakers, courtesy small cars. In a move that reflects the growing stature of the Indian car industry globally, Japanese major Nissan has decided to shift the entire production of its small car, Micra, from the UK to India. After production of the Micra begins here, Nissan plans to manufacture four more models in India, involving a total investment of over Rs 2,000 crore.
NISSAN AIMS FOR 6% MKT SHARE IN 3 YRS Pankaj Doval The Times of India (Web & Print Edition)
New Delhi: Nissans move points to the growing importance of India in small car manufacturing, which was initiated by the government by way of lower manufacturing tax on them. The rising scale of small car production in India also sweetens the deal in favour of the country as component makers have improved on quality and scale, making them a safe and a reliable bet. Lower wages in the market, and relatively high engineering skills, is another big advantage that attracts companies. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://timesofindia.indiatimes.com/articleshow/4942862.cms
NISSAN'S MADE-IN-INDIA CAR NEXT YEAR Sindhu Bhattacharya Daily News & Analysis (Web Edition)
New Delhi: Nissan Motor Co is betting big on India. Though this Carlos Ghosn led company has only a token presence in the country at present with just two imported products, it is planning to launch the first Made-in-India car next year. And, in keeping with Ghosn's 'frugal engineering' cry, Nissan has already decided to use India as one of its major global manufacturing hubs.
The company is in the final stages of developing a global strategic small-car platform from which the first product to roll out would be the India-made Micra (or March) hatchback in June next year. The car would be built at Nissan and sister company Renault's joint production facility coming up at Chennai.
Kiminobu Tokuyama, the MD & CEO of Nissan Motor India, told DNA Money, "We have decided to shut the UK manufacturing plant for Micra and shift production of this car to India. From June next year, all Micra supplies to Europe would be done from Chennai."
He said the investment in this 400,000-unit facility stays at Rs 4,500 crore over a 7 year horizon and the product pipeline from Nissan would see nine different cars being launched in the medium term. The small car platform itself would be used to develop and launch the Micra hatchback, an unnamed sedan and another model. Then, the existing CBU lineup of 'Teana' and 'X-Trail' would be augmented with the '370 ZX' global sports model early next year, followed by another CBU model.
Tokuyama made it clear that India is being seen as one of Nissan's prominent export hubs since Micra production for Europe would be shifted to Chennai. The overall export target within the first 12 months has been fixed at an ambitious 110,000 units! This would be increased to 180,000 units by about 2014.
And what is Nissan's domestic market target for 2011, by when other global brand names such as Toyota and Volkswagen would also have made an entry into the small car segment? "Nissan held a global market share of 5.7% in 2008 and I see no reason why we cannot target this minimum number in India," he said.
Nissan at present has two distinct companies in India - NMIPL which is the marketing, distribution and sales arm, and RNAIPL, which is the manufacturing facility.
Besides, it is involved as the third partner in the Renault-Bajaj ultra low cost car project
To a question on why were the crucial functions of sales, marketing and distribution farmed out to an external agency (Hover), Tokuyama said Hover is run by people who know and understand the Indian market well. Through Hover, NMIPL plans to set up 55 dealerships by 2012 and thereby cover 80 per cent of the Indian market.
Nissan's Indian operations have recently been restructured with the manufacturing and marketing/sales functions being put under two different companies. While Tokuyama heads the latter, RNAIPL is being headed by Akira Sakurai.
Tokuyama said that though sister company and JV partner Renault has frozen its product plans for India for the time being, it has decided to launch made-in-India products by using Nissan's small car platform. He said that though the manufacturing JV is a 50:50 partnership, the Rs 4,500 crore investment may not be split in the same ratio. http://www.dnaindia.com/money/report_nissan-s-made-in-india-car-next-year_1285745
M&M SET FOR 3 LAUNCHES BY '11; PLANS JV-LAUNCH WITH RENAULT PTI See this story in: Deccan Herald (Web Edition), mint (Web Edition), Business Standard (Delhi Print Edition)
New Delhi: The company, in a joint venture with French car giant Renault, is also considering to launch a new product in the Indian market. The JV's existing product Logan is expected to witness a decline in sales during the current fiscal year.
"Construction of our upcoming Chakan plant is on track and production will start by November. The first product to be launched is a small four-wheeler loader under one tonne category by January 2010," Goenka said on new product launches. The company would also roll out a truck and a new Sports Utility Vehicle (SUV) by the end of fiscal year 2010-11. When asked about any new product launch under its joint venture with Renault, Goenka said, "we are in talks with Renault to bring in a new product in the JV, but nothing has been finalised."
http://www.deccanherald.com/content/21816/mampm-set-3-launches-11.html http://www.livemint.com/2009/08/27170152/Mahindra-set-for-3-launches-by.html
KARMA RENEWAL: ESTILO GETS A NEW LEASE OF LIFE Vikram Gour The Economic Times, Zigwheels
Without the flair or the aura, of the original Zen, the Zen Estilo was under pressure from enthusiasts and car buyers alike. The only mistake on Maruti's part being that they tried to carry over a brand name that had a very strong impression of being fast, zippy and young, and they took that and stamped it onto a car that was not any of those words! Now, don't get me wrong, it was not a disaster in terms of money when looking at the sales charts, for it was able to clock total sales of over 1 lakh units in its life span. The loss that I speak of was in terms of a brand name and the Estilo had to live up to being 'just another small car.'
All that is set to change now, for Maruti has taken painstaking efforts to right a wrong, and in doing so they have started from the beginning. First things first, they've dropped the 'Zen' tag, so the new car is now just the Estilo. Secondly they've addressed everything that made the Estilo 'just another car' and now the new car boasts of a soul of its own. Starting with the exteriors, the sculptors at Maruti Suzuki came alive and did a commendable job of livening up the front. Gone are the flatpan looks, for the front now comes with redesigned headlights that are in line with the Suzuki family design (read as Swift, Ritz and A-Star). The car also has a new grill that almost smiles at you and a bold new bumper with integrated fog lamps that have a 'sculpted look'. The front fenders have also been revised slightly. Overall the front fascia gets a muscular overtone that does brighten up the front end of the car as well as lends towards a younger personality. The interiors are pretty much the same and the beige color expression is carried over from the outgoing model. Subtle changes however include a new seat fabric, a two tone dash, rear parcel tray and a digital fuel indicator. Seating is convenient for a small family, thanks to the tall boy stance there is enough knee room in the rear as well. For the driver, it's a very upright seating position which allows for a good view of the road, but for someone who is above 6 feet tall, it might be a slightly tight fit.
The biggest change and the best aspect of the new Estilo lies under the hood. Gone is the 1.1 litre mill that also does duty in the Wagon R as Maruti has gone ahead and given the Estilo a more contemporary heart. Powering the new Estilo is the KB10 Series engine that also does duty in the A-Star. Its peppy nature is more suitable for a young car like the Estilo. The lightweight aluminium engine boasts of low NVH levels, enhanced fuel efficiency and linear performance throughout the powerband. In fact according to ARAI tests, the Estilo is set to return a fuel average of 18.2 kilometers to the litre. Incidentally, the new engine is also E-10 compliant. Drastic weight reduction all-round has lead to the engine having a dry weight of just 47 kilograms.
With so many changes carried out, it made sense for Maruti Suzuki to also address the ride and handling. The company claims to have changed the suspension set up in order to benefit handling, however you'll be hardpressed to tell the difference here unless you drive the old model and this one back to back. Having said that, the ride quality is not bad for a small car. The new Estilo might still be a tall boy, but this major makeover has given it a new lease on life for now the car has its own soul. What Maruti Suzuki has managed here is to address every ailing issue that plagued the earlier model and has successfully found solutions to make the Estilo a brand in its own right. Having said that, the road ahead is tough as competition is not slowing down to let anyone catch up. What does play in Maruti's favour however are its service network and ability to price its products aggressively, such as the new Estilo. Let's hope the new Estilo has better innings this time around, for the changes do deserve that chance. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
Adil Jal Darukhanawala The Economic Times, Zigwheels
First things first, and it is not about how late Toyota was to usher its Fortuner in India but the fact that this is an SUV which has the making of another big winner for the Japanese numero uno. In essence it is almost the anti-thesis of a Japanese SUV of the sort we have seen in the country to date, notably the likes of the ultra-refined Honda CR-V, which has dominated the senses of those in the market for an SUV-ish vehicle with about Rs 20 to 22 lakhs to splurge. The Fortuner turns this line of thought on its head and what was earlier the preserve of soft-roaders in either all wheel drive or front wheel drive form is now set to give in to a butch diesel-propelled "proper" all-wheel drive SUV which not only sports the don't-messwith-me cred but is also outfitted in strong measure to dance dirty without its occupants getting stuffed under their collars! The front end of the Fortuner is more Yankee-Japanese handsome than Euro-chic but it works just as superbly in the real world of Bharat while effectively stamping its presence on India. This ability to work the rural-urban shift seamlessly with character and aplomb is key to this vehicle's appeal the very first time you set eyes on it. The new-age twin headlamps housed in a rectangular pod on either side of the thin twin slat grille work well with the large wrap around bumper into which are housed the auxiliary lights and that well crafted sump shield skid plate on the lower lip of the bumper makes its appearance to pleasing effect on the Fortuner. And while the bonnet line might be high and imposing, what truly makes the front end imposing is the bulging scoop on the bonnet which is both for form and function. Drivetrain: The power to move mountains Any SUV if it has to remain faithful to the first alphabet in its acronym needs to have good seamless torque first and then back this up with enough power to demolish any and everything that comes in its way. I use the term demolish to only graphically illustrate an SUV's core character and on this critical count the Fortuner is not just flabby muscle but a lithe performer who is also well toned and built. Credit this to the use of a large 3.0-litre four-cylinder turbocharged and intercooled engine equipped with Toyota's famed D-4D common rail injection system. This 16-valve twin overhead cam engine has an excellent torque spread and the variable geometry turbo aids in this smooth flow of power to all the wheels whenever one calls for it. The Fortuner makes do with a 5-speed manual gearbox and this would be the only transmission to be offered at the time of launch though a 4-speed automatic could make an appearance within the next year or so. The vehicle has full time all wheel drive and what should be music to the diehard SUVistas ears, it comes with lockable diffs in addition to a two-speed low ratio transfer case for engaging high and low ranges.
The Fortuner delivers that iron fist in a velvet glove almost effortlessly. It is now up to the competition to decide whether it wants to fortify itself by taking the punches squarely on the chin or build up their own capabilities to counter the Fortuner's attack. The game, for their information and yours, has just changed. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
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| COMMERCIAL VEHICLES Go To Top ASHOK LEYLAND SEES HCV SALES IMPROVING The Hindu Business Line (Web & Print Edition) See similar story in: mint (Web Edition), Business Standard (Web & Print Edition)
Kolkata: Ashok Leyland expects a better performance in heavy commercial vehicles segment in the remainder of the year riding on the possibility of reasonable improvement in sales of trucks and a steady order book position for buses procured under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM).
The company has secured orders for supplying 5,200 buses, approximately half of the total order placed under JNURRM, so far. With a relatively better demand for buses, the company is expecting buses to contribute 25 per cent of its total HCV sales volume in 2009-10, up from 20 per cent in 2008-09.
Ashok Leyland controls 20 per cent of the countrys truck market and 57 per cent of the bus market. Truck sales in the country are lower so far in this fiscal compared to 2008-09. Bus sales, are however, less affected due to the procurements under JNNURM. We are witnessing positive market sentiments and are hopeful of a better performance in the second half of this fiscal, Mr Rajiv Saharia, Executive Director (Marketing), told media persons here.
He, however, admitted that the fundamentals might differ if agricultural production was seriously affected. Mr Saharia was in the city in connection with the launch of 2516 Super multi axle truck in the eastern region.
Elaborating on the reasons for the positive sentiment, he said that compared to the October-December 2008 quarter, the iron ore mining activity had picked up considerably. An improved performance was also expected from the core manufacturing sectors such as cement. Together these two sectors may bring in substantial change in the HCV demand outlook.
HCV sales crashed during the October 2008 March 2009 period due to economic meltdown. There is a decent possibility that the domestic HCV sales may grow in the second half of this fiscal taking advantage of lower sales during the corresponding period of 2008-09, he said. http://www.thehindubusinessline.com/2009/08/28/stories/2009082851510200.htm http://www.livemint.com/2009/08/27175225/Ashok-Leyland8217s-sales-gr.html http://www.business-standard.com/india/news/ashok-leyland-nissan-jv-may-launch-lcvs-in-2011/71979/on
IIP WHIRR REVIVES HEAVY VEHICLE SALES Neha Rishi Daily News & Analysis
Mumbai: The rebound in industrial production has put the medium and heavy commercial vehicle (M&HCV) segment, which was showing negative growth last fiscal, on the revival path. Light commercial vehicles have already become a winning bet for commercial vehicles manufacturers.
The index of industrial production (IIP) which was -0.20% in December 2008 zoomed to 7.80% in June 2009, while the IIP growth in the six core industries jumped from 1.1% in December 2008 to 6.5% in June, indicating that manufacturing activity has started to gain traction. Ratan Tata, chairman, Tata Motors, said at the company AGM, "During the first half of the last financial year the commercial vehicle market grew by 9.3%, but in the second half we witnessed a massive decline of 40%. This was due to reduced spending on infrastructure, drop in industrial activity and lack of vehicle finance. Due to the steps taken by the government there is some improvement in this sector."
Tipper sales were adversely affected due to slump in mining and construction activity while tractor-trailer sales declined following a fall in import and export freight and ocean freight demand, an analyst with a leading research firm said.
"Now with things showing up, demand for these two vehicle categories is back. Tractor-trailer is always the last segment to revive, and now with signs of recovery in this segment we can be sure that the M&HCV space will start to show good numbers from August," the analyst said.
Falling discount structure in the segment is also pointing towards demand revival. Discounts on tippers, tractor-trailers and multi-axel trucks have been declining since May. Mahantesh Sabarad, analyst with Centrum Capital, said that since inventory levels have started to go down the discounts are being withdrawn.
"The rising freight availability could lead to fleet augmentation while the demand from fleet replacement will anyway be there," he said. Bharat Sanghvi, chairman, Automotive Manufacturers Pvt Ltd, the largest dealer for Ashok Leyland trucks, said, "The drop in discounts is due to the inventory levels going down by almost 40% as the original equipment manufacturers (OEMs) cut production in line with demand."
Now, on certain M&HCV models there is a waiting period of almost a month, he said.
The company discount used to be in the range of Rs 50,000-55,000 on medium trucks during the October-March period, which have been reduced to Rs 30,000-35,000, he said. Arun Mishra, who heads Tata Sales and Services in Orissa, said, "The company has cut down on the discounts in order to tighten its fund outflow. It is now focusing on a new format -- Business Return Template -- that informs the customer that yearly savings on purchasing Tata Motors products is much greater than a one-time discount."
The average monthly M&HCV sales for January-March stood at 13,700, for February-April it were 14,465, March-May 14,191, for April-June 12,954 while in May-July it were 14,659. Sabarad of Centrum estimates that August onwards this number will rise to 15,500. http://www.dnaindia.com/money/report_iip-whirr-revives-heavy-vehicle-sales_1285724
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| CONSTRUCTION & AGRI MACHINERY Go To Top M&MS NEW TRACTOR The Financial Express
ESCORTS LTD APPOINTS O K BALRAJ AS CFO PTI See this story in: The Hindu Business Line
Mumbai: Engineering company Escorts Ltd on Thursday said it has appointed Mr O K Balraj as the group Chief Financial Officer (CFO). Prior to joining Escorts Ltd, Balraj was working as Group Director (Finance) at NSL Group, a release said.
Balrajs focus would be to provide strategic thrust for Escorts growth through improving business economic performance of the organisation with focus on profit earnings for all businesses, Escorts Ltd Chairman, Mr Rajan Nanda said. http://www.thehindubusinessline.com/blnus/02271606.htm
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| 2/3 WHEELERS Go To Top HMSI EYES 18 PC RISE IN SALES IN FY'10 PTI See this story in: The Economic Times, mint, The Hindu Business Line, The Indian Express
New Delhi: Two-wheeler maker Honda Motorcycle & Scooter India on Thursday said it is expecting its sales to grow by 18 per cent during the current fiscal on the back of several launches. http://www.livemint.com/2009/08/27115319/HMSI-eyes-18-rise-in-sales-in.html http://www.thehindubusinessline.com/blnus/02271170.htm http://www.indianexpress.com/news/hmsi-eyes-18-pct-rise-in-sales-in-fy10/507880/0
BAJAJ AUTO EXPECTS RISE IN SALES ON BETTER DEMAND PTI See this story in: The Hindu Business Line
New Delhi: Bajaj Auto on Thursday said it expects an increase in the company's sales volume on account of better demand during the festive season.
We expect the credit market to improve and the upcoming festive season to contribute in improving our sales. However, the monsoon remains a factor and we are closely watching the situation, Bajaj Auto Vice-Chairman, Mr Madhur Bajaj said on the sideline s of Federation of Automobile Dealers Associations function here.
He said the company is gearing up to launch some new models in both the two-wheeler and the three-wheeler categories, but did not divulge details.
The monsoon has somewhat dampened the two-wheeler market and it has impacted our company also. However, we expect sales to improve in the coming months, Mr Bajaj added. http://www.thehindubusinessline.com/blnus/02271608.htm
HARLEY DAVIDSON TO ZIP ON INDIAN ROADS BY 2010 The Economic Times See this story in: Business Standard, The Hindu Business Line, The Financial Express, The Hindu, Daily News & Analysis, The Times of India, Deccan Chronicle, Asian Age, The Statesman, The Tribune, The Indian Express
New Delhi: The worlds oldest and the most popular motorcycle brand Harley Davidson will hit the Indian roads finally after dilly-dallying for over two years. The iconic American brand will be available from early 2010 and although it is yet to announce price tags, the vehicles are expected to be priced in the band of Rs 7-15 lakh. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://www.thehindubusinessline.com/2009/08/28/stories/2009082851910300.htm http://www.financialexpress.com/news/harley-davidson-gears-up-to-hit-indian-roads-in-2010/508046/2 http://www.hindu.com/2009/08/28/stories/2009082853621400.htm http://www.dnaindia.com/money/report_harley-davidson-set-for-for-india-ride-finally_1285606 http://www.deccanchronicle.com/business/harley-davidson-ready-india-launch-sales-start-2010-346 http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=266359 http://www.tribuneindia.com/2009/20090828/biz.htm http://www.indianexpress.com/news/harleydavidson-will-vroom-into-india-next-year/508195/
Varad More The Economic Times, Zigwheels
Seriously little time stands between America's most successful motorcyclemaker from gracing the Indian shores. Yes, we are talking about the iconic and cult brand Harley Davidson, which has enticed and charmed over a million bikers around the world and it continues to do so with the same enthusiasm and energy that it had 108 years back when William S. Harley made his first blueprint drawing of an engine designed to fit into a bicycle. Harley Davidson has officially announced on its website that the company will make its foray in the fast-emerging and promising Indian market with its range of elite cruiser motorcycles. The model-range and its pricing are still under wraps as the product is yet to be launched. However this is a clear indication of the impact the recent economic showdown has had on the American economy. The US auto giants are now focusing on developing markets such as ours in order to reap the maximum possible benefits they can, to cover up on the lost ground and tap the potential of an emerging economy. The import route for bikes above 800cc was opened in mid-2007 when the Indian government traded mangoes for Harley Davidson motorcycles. Yes, you read it right. For last 18 years, the Indian mangoes were banned in the US since the American government believed that the Indian farmers were using too many pesticides. In April 2007, the US government lifted the ban on Indian mangoes which meant that the Indian farmers could now be entitled to farm subsidies. In return, the Indian government revised the rule of importing highcapacity powered twowheelers to India allowing bikes above 800cc to be imported legally in the Indian market. However, the excise duties charged by the Indian government on 800cc and above capacity imported motorcycles are extremely difficult to overcome in order to gain a manageable profit margin. Hence Harley Davidson, which was the key factor in opening up the import route, held back its foray into India in 2007. The Japanese bikemaker Yamaha was the first one to make use of the import trade policy to launch its flagship model the YZF-R1 and its streetfighter model, the MT-01. Suzuki and Honda have followed suit by bringing in their international flagships to India and now Harley Davidson is all geared up and ready to roll into the country with its extensive range of lifestyle cruiser motorcycles. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
ALL OUR PRODUCTS ARE VERY RELEVANT TO THE INDIAN MARKET Samar Srivastava mint
New Delhi: Harley-Davidson Motor Co. on Thursday announced its entry into the Indian market. The company plans to initially import its Fat Boy and Night Rod Special models, which are expected to retail at around Rs15 lakh, in the first half of 2010 from its plants in the US. President and chief operating officer Matthew Levatich and Anoop Prakash, managing director for Harleys India operations, spoke in an interview on the companys plans. Edited excerpts:
Youre finally here. Excited?
Prakash: Absolutely. Thrilled. Theres been a tremendous pull from riders and enthusiasts over the last couple of years and were excited to start on this journey.
Why did it take so long?
Prakash: I think the sentiment that it took long is misguided. We only had permission to come in with heavyweights in 2007.
Only from that point on we had a legitimate opportunity to make investments and look at the market... We plan to be in India for the long haul. Its a wonderful market. Theres great diversity in the market, there are great opportunities to really think about what are (the) models, what is the distribution approach were going to take, what are the products that are most relevant for Indian riders.
What are the products that are most relevant?
Prakash: We know that the pull for our motorcycles (is there), all families (of the motorcycles). I think there was an earlier notion that only certain families might be relevant.
We did product clinics in three cities in April 2009 with over 500 riders and learnt that all our products are very relevant to the Indian marketeverything from our Cruisers to our touring bikes to our powercruisers like the Night Rod Special. So, I think we feel incredibly thrilled on our feedback and the opportunity that it presents.
Does this mean that you plan to launch the complete range in India?
Prakash: We plan to launch with bikes from every family. We will most likely not launch with every motorcycle thats sold in the United States.
We hope to have our first dealers opening their doors in the first half of 2010. We havent made any final determination on those models...but the Night Rod Special will be part of the line-up and the Fat Boy are two bikes that we know well bring to the market.
What cities do you plan to enter initially?
Prakash: Were seeking interest from Delhi and Mumbai for sure, Bangalore as well. Wed love to see some interest from Chandigarh and Ludhiana and also Hyderabad.
Globally, Harley-Davidson makes a lot of money from accessories and merchandise. Do you see the same happening in India?
Levatich: I think its important to convey (that) its more than a machine and part of what makes it more than a machine is the whole aspect of self-expression that riders have. Around the world, the Harley-Davidson motorcycle is a canvas for self-expression through accessories.
Also personal accessorization through clothing and tattoosall that is part of what were delivering in the launch here in India. So yes, accessories and clothing are going to play a key role.
How many bikes do you hope to sell in the first year?
Prakash: Our expectation is that well have relatively modest sales in the first couple of years as we build the brand and experience and find the right dealers. Our focus is really on the building blocks and delivering a profoundly unique experience for the Indian rider. We have internal targets (for sales) but our focus is not on market share or to achieve a certain number.
The market for bikes in your price range has been above expectations of a number of bike makers and they have rushed to launch their products in the last year or so. Do you expect sales to rise much faster from here on or do you expect the market for these bikes to grow steadily?
Levatich: I think that whats happening in the market is sort of an affirmation of why we believe this is an opportune moment for Harley-Davidson in India. The convergence of a very strong economy, growing professional class, investment in infrastructure.
A lot of things are coming in India that lead to people wanting to do a lot more in their leisure pursuits and thats where we have strength. Were not basic transportation.
In the past, Harley-Davidson asked for some concession on duties. Are you still hoping for those?
Prakash: I think that was an appropriate strategy at that time. The recent sales that youre quoting about the market zooming wasnt apparent to any manufacturer at that time.
I think Harley looked at all the options... But now that weve seen some of the market dynamics shift and weve seen our colleagues and competitors in this space to be able to compete at a level playing field and be price competitive to consumers at that segment, were ready to compete and be price-competitive for consumers in that segment. Were ready to compete with them. http://www.livemint.com/2009/08/27223525/HarleyDavidson-All-our-produ.html
SUZUKI SET TO ROLL OUT ENTRY-LEVEL MOBIKES Pranav Nambiar Daily News & Analysis
Bangalore: Suzuki Motorcycle India, a subsidiary of the Japanese auto major Suzuki Motor Corporation, is set to foray into the entry- level motorbikes segment. Atul Gupta, vice president, sales and marketing, Suzuki Motorcycle India, said the company will launch a bike early next fiscal.
"We are keen to enter this segment which is a high volumes market," Gupta said.
Entry level or economy bikes, priced between Rs 40,000 and Rs 50,000 on road, constitute 70% of the 58 lakh motorcycle market. The segment is currently growing at around 14%.
The other segments are executive (125-250 cc) and premium (250 cc & more).
Dhimant Kothari, CARE Research, said with rural India foreseen as the next growth frontier, the economy segment would continue to contribute significantly to sales. "Thus, the segment has become inevitable for the industry to encash the humungous opportunity offered by rural India," he said.
From the next fiscal, Suzuki will also import completely built units (CBUs) of its 1,000 cc GSX-R model (also known as Gixxer). Its other two superbike models Hayabusa and Intruder, costing around Rs 12.5 lakhs each, have together sold about 100 units since their launch 8 months back.
The company which started out independently in 2006 after exiting a joint venture with TVS Motor, expects to break even and make operating profits by the end of the fiscal. "We will become operationally profitable this fiscal, thanks to our increased manufacturing capacity, which will enable us to meet the rising demand for two wheelers," said Gupta.
The company will increase capacity of its manufacturing facility in Gurgaon from 1.75 lakh units to 2.5 lakh units by the end of the fiscal. The company recently infused Rs 150 crore for expansions and new launches.
Since 2006, Suzuki has invested about Rs 400 crore on its Indian operations and plans to have a manufacturing capacity of 4 lakh units by 2012.
Suzuki Motorcycle India currently sells five two wheelers in the country. These include a gearless scooter model --- Access 125, as well as two executive segment motorbikes --- Zeus and GS150R, and two superbikes --- Hayabusa and Intruder.
The company reported a 20.35% rise in sales in July at 12,585 units compared with 10,457 units in the same month last year. Last fiscal, the company had sold 1.4 lakh units. http://www.dnaindia.com/money/report_suzuki-set-to-roll-out-entry-level-mobikes_1285739
MAHINDRAS NEW 3-WHEELER IS HYDROGEN POWERED! Vikram Gour The Economic Times, Zigwheels
Mahindra & Mahindra Ltd. (M&M) in recent years has shown India that they are a company that is not scared to experiment. In doing so, they have now managed to make the world's first three wheeler that is hydrogen powered. Based on the Alfa 3 wheeler, the Hy-Alfa runs solely on hydrogen and is a zero emissions vehicle. The internal combustion engine of the vehicle is powered by hydrogen and is available on both cargo and 3-seater passenger versions. This product is a result of Mahindra's sustainable mobility program which has given us products like the CNG Pik-Up and Mahindra Micro-Hybrids. The Hy-Alfa boasts of a 396cc engine that is capable of generating 6.11PS (4.5kW) @ 3600 rpm. The naturally aspirated engine comes with an electronic ignition system, electronic fuel injection and a hydrogen leak detection mechanism. Speaking about the Hy-Alfa, Dr. Mathew Abraham, General Manager (R&D), Mahindra & Mahindra R&D Centre, stated, "The Hy-Alfa is the first vehicle of its kind in the world. It runs on nothing but compressed hydrogen gas and is incredibly engineered to run with absolutely zero emissions, which makes it a pleasure to drive on congested city roads. Hydrogen is, in fact, the technology and fuel of tomorrow and is the long term solution to pollution, energy security & CO2 emission related concerns." Mahindra has also collaborated with global R&D centres and some Indian partners in order to further the research on this technology of the future. The company has also signed an MoU with UNDIO (United Nations Industrial Development Organization) India and ICHET (International Center for Hydrogen Energy and Technology) Turkey, in order to develop 15 Hy-Alfa demo project vehicles which will be showcased at Pragati Maidan, new Delhi next year. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
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| COMPONENTS Go To Top UCAL FUEL RESTRUCTURING US ARM M. Ramesh, T. Murrali The Hindu Business Line
Chennai: Ucal Fuel Systems Ltd has taken steps to ensure that its wholly owned US subsidiary, Amtec Precision Products, is not a drag on the parent any more, Ucals Managing Director, Mr Jayakar Krishnamurthy, told Business Line on Tuesday.
These measures broadly fall into two categories downsizing the operations of Amtec so that it runs on its own steam without losing money, and seeking non-automotive business.
Neither of these could be done earlier, Mr Krishnamurthy said, because Amtec had long-term supply contracts that Amtec had signed before it was taken over by Ucal in 2005. But the current economic downturn enabled the company to get out of such contracts.
The downturn gave us an opportunity to get out of some long-term contracts, he said. Besides, the company is planning to shed some non-profitable products to enhance its profitability. Eventually, the company will reduce the business to a third of the current level to $2 million a month.
Amtec manufactures precision machined components and injection moulded plastic parts, catering to a host of customers including Caterpillar, Ford and General Motors. The company was taken over by Ucal in 2005, for Rs 100.86 crore. Till date, Ucal has invested Rs 150 crore in Amtec.
Mr Krishnamurthy said that the two manufacturing facilities of Amtec at Chicago will be merged while one at Rockford will continue its operations. This will save space and labour, but Amtec does not intend to sell any machinery.
Mr Krishnamurthy says that rather than distress-sell the assets, Amtec would prefer to keep the facilities and wait for the downturn to reverse.
Fund infusion Ucals promoters Mr Krishnamurthys family will infuse close to Rs 30 crore into Amtec to keep its operations running.
In 2008-09, Ucal reported a net loss, although, according to Mr Krishnamurthy, its Indian operations continued to be profitable. The loss was because of an interest burden of Rs 37.48 crore, attributable to supporting Amtec. Relieved of this burden, Ucal would do well in the current year. Mr Krishnamurthy expects a 15 per cent jump in turnover for the current year. Last year, its turnover was Rs 480 crore. http://www.thehindubusinessline.com/2009/08/28/stories/2009082851900300.htm
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| FINANCE & INSURANCE Go To Top Business Standard
Chandigarh: L&T Finance is planning to enter north eastern market for financing commercial vehicles. At present, the company has presence in Guwahati only. Speaking to Business Standard, L&T Finance head Ravindra Gersappa said, We plan to commence operations in the north east for financing commercial vehicles. At present, we are financing construction equipment in that part of the country. He said, The slowdown in the economy in the second half of 2008-09 had resulted in lower disbursements. But with a relative recovery, the business is growing again.
VIJAYA BANK LOAN FOR M&M VEHICLES
Mumbai: Vijaya Bank has forged an alliance with M&M to serve as a preferred financier for both commercial and passenger vehicles of the company. Customers can avail of up to 85% of on-road price of the vehicle, including registration, insurance and body building, with a repayment tenure of five years at a competitive rate of 11.25% (BPLR minus 1%). Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
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| OIL, LUBRICANTS & ALTERNATIVE FUELS Go To Top IOC TO PROVIDE HYDROGEN BLENDED CNG Rakesh Bihari Jha The Pioneer
New Delhi: If top global car companies like General Motors, Honda, Toyota, BMW and others are making all out effort to come up with cost effective hydrogen powered vehicles, India is also not lagging behind. IOC, the State-run company, has taken a step forward by setting up countrys first commercial filling station at Dwarka in Delhi, which will make available hydrogen blended compressed natural gas for three-wheelers and cars. http://www.dailypioneer.com/198321/IOC-to-provide-hydrogen-blended-CNG.html
AP See this story in: The Economic Times
London: Oil prices fell to near $71 a barrel on Thursday, dragged down by signs of faltering US crude demand and concerns the global economic recovery will be weak. Benchmark crude for October delivery was down 33 cents to $71.12 a barrel by midday in Europe in electronic trading on the New York Mercantile Exchange. On Wednesday it fell 62 cents to settle at $71.43. Oil briefly hit the $75 a barrel level Tuesday but failed to break higher and has been sliding since then. Investors are cashing out as new government data showed weak demand with crude supplies rising last week in the United States, the world's biggest energy user, said Tetsu Emori, commodity markets fund manager at ASTMAZ Futures Co. in Tokyo. Reality is setting in. The latest US data showed that fundamentals in the oil market remain bearish, he said, adding that oil prices could fall below $70 a barrel in the next few days. The Energy Department reported Wednesday that US crude stockpiles rose by 200,000 barrels for the week ended August 21. The same report a week ago showed a large and unexpected draw on oil, which sent prices soaring. David Donora, executive director of commodities for London-based Threadneedle, which manages about $80 billion in assets, warned global oil demand could decline over the longer term given anemic economic growth and high oil prices. He said in a recent report that rising unemployment, high levels of debt, increased savings and low economic growth may cause US oil consumption to dwindle in the next few years. In other Nymex trading, gasoline for September delivery fell 1.37 cents to $1.9689 a gallon and heating oil fell 2.0 cents to $1.8320 a gallon. Natural gas shed 4.5 cents to $2.865 per 1,000 cubic feet. In London, Brent crude fell 29 cents to $71.46.
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| INTERNATIONAL NEWS Go To Top FORD ADDS SHIFTS AT TWO TRUCK PLANTS Reuters See this story in: The Economic Times
Detroit: Ford Motor Co said on Thursday it is adding shifts at its truck plants in Michigan and Missouri in response to increased demand for its F-150 pickup trucks and Escape SUVs.
NISSAN, CHRYSLER SCRAP VEHICLE SUPPLY DEAL AFP See this story in: Mint, Hindustan Times Tokyo: Japans Nissan Motor and Chrysler of the United States have scrapped a plan to supply vehicles to each other because of the ongoing turmoil in the industry, the two companies said.
Nissan had announced last year it would provide to Chrysler a compact sedan for the South American market beginning this year and a small vehicle for global markets from 2010.
Chrysler, which has since partnered with Italys Fiat as part of its bankruptcy plan, had been due to supply a pickup truck to Nissan from 2011.
But the two companies decided to end the project in light of significant changes in business conditions since the projects were announced, according to a joint statement released late on Wednesday.
The move comes after Chrysler and Fiat sealed a deal in June to create a new auto giant after the Italian maker stepped in to salvage the bankrupt US firm.
Fiat will at first hold 20% of Chrysler Group, with its equity stake rising to 35% and eventually to a majority stake as long as certain targets are achieved and US government funds are repaid.
Nissan, Japans third largest automaker, is 44% owned by Frances Renault. The Japanese maker is axing 20,000 jobs in an effort to recover from its first annual loss in almost a decade. http://www.livemint.com/2009/08/27142736/Nissan-Chrysler-scrap-vehicle.html
TOYOTA PLANS TO END PRODUCTION AT A GM JOINT VENTURE Agencies See this story in: The Economic Times
Washington: Toyota Motor Corp. plans to end production in March 2010 at a California joint venture where it has built vehicles with General Motor Co.
A Toyota spokeswoman confirms that Toyota's board voted early Thursday to end the company's production contract at the Fremont, California-based New United Motor Manufacturing Inc.
Bloomberg See this story in: The Financial Express (The Economist)
The feud between Porsche and Volkswagen, and between the Pich and Porsche families that own most of them, had dragged on for two years. First, tiny Porsche, which makes 100,000 cars a year, tried to take control of VW, Europes biggest carmaker, which makes 6million a year. But the sports-car firm buckled under the debts it acquired along with 51% of VWs shares and options to buy yet more. Then VW tried to take over Porsche, but that deal also stalled until Porsches boss and finance chief resigned last month.
Now the two companies, with the help of one of Qatars sovereign-wealth funds, have at last laid out a road map for a merger by 2011 at the latest. Many of the details are still rather vague, especially regarding the Qatari investment, but there is no longer any argument about where the two companies are heading.
VW is buying 42% of Porsche for 3.3 billion euro ($4.7 billion). It will pay as much again for a big car dealership Porsche owns, which may be sold later to shore up the merged firms finances. VW will also raise up to 4 billion euro in new capital to fund the purchase, in order to keep its balance sheet strong and hold on to its solid credit rating. Qatar Holding will buy 10% of Porsche, plus most of its options to buy VW shares.
Later, VWs management says, the two carmakers will merge fully, with the two families owning some 40% of the new entity, the German state of Lower Saxony 20% and Qatar Holding slightly less than that. Barely a fifth of the shares will float freely.
VWs shares have gyrated wildly since the deal was announced on August 13th, as investors tried to work out who would buy what, when and at what price. At one point they fell by nearly 16%, hinting at fears that VW is paying too much to fold Porsche into its large stable of brands.
But VW, which has been one of the few carmakers to hold its own as markets collapsed, claims that closer integration from shared design and pooled purchasing will, in the long term, boost the merged firms operating profit by 700million euro a year. The enlarged VW will have eight passenger-car brands, plus bus and truck units.
The underlying strength of the VW group is that it manages to make a range of models that appeal to different segments of the market but use many of the same parts, especially in the bits of vehicles that are normally out of sight. Although this platform strategy is now commonplace within the industry, VW has adopted it without eating into sales of more expensive models. The Skoda Octavia is built from the same basic parts as the more expensive VW Golf, but finish, add-ons and marketing have made both models successful in their respective slots. Until now the only collaboration between VW and Porsche has been the Porsche Cayenne, which is a luxury version of the Touareg, a sport-utility vehicle made by VW. As the two companies get closer, Porsches technology could boost the appeal of VWs more expensive models.
In Europe the VW brand alone outsells all others, with sales in the first six months of the year of 973,000, ahead of Ford with 793,000, according to JATO Dynamics, a research firm. Sales in Europe of VWs star model, the Golf, have risen nearly 16% so far this year, making it Europes bestselling car, ahead of the Ford Fiesta.
A strong performance in China and Germany (boosted by scrappage schemes in both places) helped VW increase worldwide sales by 7% in July compared with a year earlier, its third monthly increase in a row. But the groups global sales are still down about 4% so far this year compared with the first seven months of last year, though that is much better than the average for the industry. In Brazil, a relatively buoyant market, VW is vying with Fiat to become the market leader.
If the Porsche merger goes according to plan, a resurgent VW could soon be challenging Toyota for the title of the worlds biggest carmaker. VWs managers would doubtless welcome the chance to get on with building cars, and put all the financial engineering behind them. http://www.financialexpress.com/news/my-other-car-firms-a-porsche/508031/2
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| ECONOMY & FINANCE Go To Top
See this story in: The Times of India
Mumbai: The rupee fell to a 1- month lows early on Thursday as losses in Asian stocks raised concerns about foreign fund outflows, while weaker regional currencies also weighed.
PTI See this story in: The Hindu Business Line
Mumbai: In lacklustre trading, Sensex on Thursday closed flat with some select blue-chip stocks attracting buying, while some other heavyweights came under pressure. After moving 85 points up and down, the Bombay Stock Exchange benchmark Sensex settled up 11.22 points at 15,781.07, completing six straight days of gains, the longest winning streak in four months.
Investors covering short positions on the final day of August derivatives contracts, was the marked feature. The 50-share National Stock Exchange index Nifty rose by 7.35 points at 4,688.20, after briefly crossing the crucial 4,700-point level during the day. Among the key 30 stocks, half of the stocks ended with gains while other half closed lower. Blue-chips Bharti Airtel, BHEL, Larsen and Toubro, Wipro and Sterlite were the major key gainers.
Tata Steel, Tata Motors, Hind Unilever and DLF Ltd were the big losers. Bharti Airtel, advanced 2.74 per cent after reports that it would conclude a tie-up with South Africas MTN Group Ltd before September 30. http://www.thehindubusinessline.com/blnus/05271901.htm
WEAK MONSOON COULD STOKE INFLATION, DAMPEN GROWTH: RBI The Hindu Business Line
Mumbai: The Reserve Bank of India on Thursday set the alarm bells ringing that a deficient monsoon could affect the inflation outlook for the country more than growth prospects for the economy.
It also underscored the fact that large borrowing programmes (the Centres budgeted gross market borrowing in FY-2010 is Rs 4,91,044 crore) and a high fiscal deficit (the estimate for FY-10 is 6.8 per cent of GDP) could worsen the actual inflation situation over time, while also putting upward pressure on interest rates.
Trends in global commodity prices in the first quarter of 2009-10, according to the RBIs annual report for 2008-09, indicate that an upside risk to inflation could persist from a rebound in global commodity prices ahead of the global recovery.
Increase in minimum support price that may be seen as a measure to support farmers in a below monsoon year, could stoke inflation, the report warned.
The first quarter review of the Monetary Policy revised the inflation projection for the end of the year to 5 per cent from 4 per cent projected in April and placed the GDP growth at 6 per cent with an upward bias.
Rainfall deficiency during the kharif season could affect the growth and inflation outlook, besides rural disposable income. Despite positive growth and signs of recovery in the first quarter of 2009-10, the growth outlook for the industrial sector remains mixed, the report said.
The RBI is faced with the dilemma with regard to its Monetary Policy stance while monetary tightening will result in weakening of recovery impulses, an easy Monetary Policy stance could stoke inflation in the future.
A major challenge for the RBI is to deal with the unpleasant combination of subdued growth with emerging risk of high inflation, which poses a complex dilemma on the appropriate stance of the Monetary Policy, the report said. http://www.thehindubusinessline.com/2009/08/28/stories/2009082852030100.htm
Last Financial closing
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Sunday, August 30, 2009
Indian Auto Industry Update August 28, 2009
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