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| INDUSTRY Tata Motors posts Rs 329 cr consolidated loss in Q1 Nanos Pantnagar plant to hit full capacity soon Tata Motors assures Karnataka it is in race for second Nano plant Ratan Tata to meet Nirupam Sen JLR drives Tata Motors into red in Q1 Tata Motors still burning cash; may need more capital Tata Motors: JLR's cost side story INTERVIEWS/FEATURES CARS, SUVs, MUVs Ford plans to bring Rs 3 lakh-plus small car Toyota's Fortuner a huge hit, booking closed for now Toyota aims to capture 50% market share Toyota targets 150 dealerships COMMERCIAL VEHICLES 2/3 WHEELERS SC to decide Bajaj Auto-TVS row on Sep 15 | ALLIED INDUSTRIES IFCI offloads 4% Tata Motors DVR shares Sundaram Finance trims deposit rates OIL, LUBRICANTS & ALTERNATIVE FUELS Oil drops to $71, eyeing weaker equities INTERNATIONAL NEWS Employees aim up to 5% stake in VW Toyota car device to check drunk driving Japan auto output falls 32% in July Japanese bus makers eye tie-up ECONOMY & FINANCE Sensex down 255 points on profit taking GDP grows 6.1%, weak monsoon a worry
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| INDUSTRY Go To Top Nandini Sen Gupta & Sumit Chaturvedi The Economic Times (Web & Print Edition)
Even before Tata Motors starts full-scale production of Nano at its Sanand plant in Gujarat, suppliers of key components of the worlds cheapest car are being approached by some of the largest carmakers for cost-effective technology takeaways from the project.
For the Nano project, we basically started with a clean sheet of paper, without a lot of baggage and came up with many ideas, which are definitely low-cost but provide sufficient functionality for the end customers, Mr Bohr said. Bosch now wants to take this as a new base to build upon for European and American projects.
Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://economictimes.indiatimes.com/European-carmakers-wait-for-Nano-lessons/articleshow/4957038.cms
TATA MOTORS POSTS RS 329 CR CONSOLIDATED LOSS IN Q1 Business Standard (Web & Print Edition)
Mumbai: Tata Motors reported a Rs 329-crore consolidated loss for the quarter ended June 30, against a Rs 720- crore profit in the corresponding period a year earlier. The prime cause was the loss from Jaguar Land Rover (JLR) of Britain, its acquisition of last year.
In July, Tata Motors reported a standalone net profit of Rs 514 crore. JLR was acquired on June 2 last year, so the consolidated profit of a year ago did not include its performance.
Markets still continue to be challenging, said Ravi Kant, vice-chairman of the company, talking about the demand for luxury cars. JLR took a 150-million loan in the quarter for its working capital requirements. Another 340-million loan from the European Investment Bank (EIB) will be commissioned soon, said Kant. The company needs the money for its working capital requirements. It has finalised four banks for the loan and is likely to make the announcement soon.
Net sales for the quarter increased by 13 per cent to Rs 16,290 crore, said the company. It has repaid $150 million out of the $1-billion bridge loan rolled over in May this year; that loan was taken to buy JLR.
The company has pledged its holding of over 10.4 million shares in group company Tata Steel, representing a 1.31 per cent stake, as security for the loan rollover. The shares were valued at Rs 440 crore at Mondays price.
The company had a total debt of Rs 33,850 crore at the end of the quarter. Of that, Rs 22,000 crore was for the automotive business. The rest included debt for the vehicle finance business. We are working on bringing down the debt level, said C Ramakrishnan, chief financial officer of the company, without giving specifics.
NANOS PANTNAGAR PLANT TO HIT FULL CAPACITY SOON The Financial Express (Web & Print Edition) See similar story in: Yahoo India (Web Edition)
Mumbai: Tata Motors on Monday said the company will be hitting full production capacity at its Pantnagar plant in Uttarakhand for Nano in the coming months. The company, meanwhile, is preparing to start test production of the car from its new mother plant in Sanand, Gujarat, by January-February 2010. The commercial production of the Nano from Sanand is expected to start around the same period. The plant will have an annual capacity of 3,50,000 units. This is a delay by a couple of months, if vendors have to be believed. Earlier, according to the vendors supplying for the Nano, the test production at Sanand was supposed to commence by October this year followed by commercial production early next year.
We should be hitting the full capacity at Pantnagar by next month or so, said Ravi Kant, vice-chairman of the company. He added that the Pantnagar plant has an annual capacity of 2,50,000 units, of which the company had kept 50,000 for the Nano.
Asked what the current production level at Pantnagar is, PM Telang, managing director, Tata Motors, said, At present, we are producing 2,500 to 3,000 Nano cars per month from Pantnagar, which will be taken to 4,000 units per month soon.
In July, the company began delivery of the Nano and delivered 2,475 cars. On cancellations, Rajiv Dube, president-passenger vehicles division, Tata Motors, said, There have been cancellations but there is nothing to worry about. However, when contacted, a renowned dealer in Mumbai said, People who will get delivery of the car by 2013 have come ahead to cancel. There are cancellations close to 40%.
Talking on the Singur land, the earlier site for the mother plant of Nano and the possible interest of a third party in the land as mentioned by Ratan Tata at the annual general meeting of the company, Kant said, We are in talks with the West Bengal government and are waiting for reply. We will take the appropriate solution as and when requried. The land is on lease with the company. The company said the shifting work at Singur has been completed. However, the chairman has reasserted its desire to go to West Bengal in future.
We plan to launch Nano Europa by 2011-12. Our current focus is theIndian market, said Tata. Tata Motors will be launching a sub-one-tonne carrier this Wednesday in Mumbai. http://www.financialexpress.com/news/nanos-pantnagar-plant-to-hit-full-capacity-soon/509604/ http://in.biz.yahoo.com/090831/50/bau45a.html
TATA MOTORS ASSURES KARNATAKA IT IS IN RACE FOR SECOND NANO PLANT Mahesh Kulkarni Business Standard (Web & Print Edition)
Bangalore: Karnataka may have narrowly lost the race for housing Tata Motors Nano car plant but that is not stopping the southern state from nursing ambitions of winning the second round of the same race. It was late last year when Tata Motors announced that it would set up the first plant for producing the Rs 1-lakh car at Gujarats Sanand rather than Karnatakas Dharwad, among other places.
Now, if all goes well, Karnataka will get a chance to play host to Tata Motors proposed second Nano car plant in South India. The state government has been assured by the company that Dharwad will be a preferred choice for the companys plans to expand its Nano manufacturing capacity into South India.
The state government, in turn, has assured the company that it will provide the required land as well as tax concessions, similar to those offered by the Gujarat government, for setting up the second Nano car plant, Karnataka minister for medium and large industries Murugesh R Nirani said.
When Tata Motors initially came to inspect Dharwad, we had offered them 600 acres within 24 hours and had assured another 400 acres in three months. But the company chose to go to Gujarat for reasons best known to them. However, they have told us, for expansion of their Nano car capacity, they will consider Dharwad and we have promised them all possible help, he told Business Standard.
Nirani added the state government recently acquired 2,500 acres at Dharwad, adjacent to the existing Tata Motors bus plant, where the company had intended to set up the Nano plant. Tata Motors had indicated a requirement of around 1,000 acres.
We have already discussed this with the companys higher officials. They have plans to set up one more plant in South India for producing the Nano car and they want to do it in Dharwad because it is closer to Pune, where they have a major presence. Tata Group Chairman Ratan Tata has invited us for further talks in this regard and we will soon meet him, Nirani said.
Tata is currently manufacturing the Nano at their plant in Pantnagar. Its dedicated Nano car plant will be operational at Sanand in Gujarat by early 2010.
At Dharwad, Tata Motors currently operates two plants to manufacture construction equipment under the Telcon brand name. It also produces buses in a joint venture with Brazils Marcopolo. So far, it has acquired 600 acres and employs around 3,500 workers in both the plants. The company has invested close to Rs 500 crore in its bus plant, which started commercial production in January this year.
In addition to Tatas Nano car plant, the state government is also in talks with Koreas car maker Hyundai Motors and the domestic utility vehicle major, Mahindra and Mahindra, for locating their new plants in Karnataka.
Recently, the state government approved an additional investment proposal of Rs 800 crore by Toyota Kirloskar Motors at Bidadi, near Bangalore. The government is also planning to hold a special meeting with the automobile industry very soon in Bangalore, as a precursor to its forthcoming global investors meet scheduled to be held in January 2010, Nirani added.
RATAN TATA TO MEET NIRUPAM SEN Business Standard (Web & Print Edition)
Kolkata: Tata Sons Chairman Ratan Tata is likely to discuss the Singur issue with West Bengal Commerce and Industry Minister Nirupam Sen tomorrow.
Nirupam Sen confirmed he would meet Tata tomorrow. Ratan Tata is in the city to chair the Tata Tea annual general meeting (AGM). At the recent Tata Motors annual general meeting, Ratan Tata said he could return to Singur if the situation improved. Tata Motors has renewed the lease for the year and so have most of the vendors.
Last year, on the sidelines of the Tata Tea AGM, Tata had threatened to pull out from Singur, which became a reality in October 2008 after the indefinite dharna led by Trinamool Congress leader, Mamata Banerjee. http://www.business-standard.com/india/news/ratan-tata-to-meet-nirupam-sen-today/368730/
JLR DRIVES TATA MOTORS INTO RED IN Q1 The Financial Express (Web & Print Edition) See similar story in: The Hindu Business Line (Web & Print Edition), The Tribune (Web Edition), Daily News & Analysis (Web Edition), Hindustan Times (Web & Print Edition), The Times of India (Web Edition), The Hindu (Web & Print Edition), The Pioneer (Web & Print Edition), Asian Age (Web & Print Edition), Deccan Chronicle (Web Edition), The Telegraph (Web Edition), The Indian Express (Web & Print Edition), Yahoo India (Web Edition), Rediff India (Web Edition), Deccan Herald (Web Edition), mint (Web & Print Edition)
Mumbai: Tata Motors on Monday said it posted a consolidated net loss of Rs 328.78 crore for the first quarter ended June 30, 2009 after sales at its subsidiary Jaguar Land Rover (JLR) continued to plunge, shaving 52% off the previous quarter sales. But the company said it was close to sealing a deal with a consortium of banks for a fresh line of credit for the British marquee auto brand it acquired in June 2008.
Chief financial officer C Ramakrishnan said, We are a few weeks away from closing the working capital requirements for JLR with commercial banks. The company has already tied up with a few banks, including Standard Chartered, Burdale Financial, GE Capital and Bank of Baroda. We will be tying up with more banks during this quarter, he added.
Around 150 million pound was raised during the last quarter for JLR, of which 50 million pound was raised by Tatas and the remaining 100 million pound by banks.
Early this month, Tata Motors had said it expected a long-term loan of 340 million pounds from the European Investment Bank for JLR, without any guarantee from the UK government for which it was trying hard. Vice-chairman Ravi Kant said, the UK governments guarantee is being replaced by the commercial banks guarantee and in a short time, we will be concluding this.
Minus the JLR component, Tata Motors had last month declared a net profit growth of 58% for the first quarter at Rs 513.76 crore compared with Rs 326.11 crore a year ago.
Explaining the consolidated numbers, Ramakrishnan said the company increased borrowing to support new investments at the plant along with product development costs. These pushed up depreciation and interest charges, which offset its operating profit, resulting in a consolidated net loss. In the same quarter last year, the company had a consolidated net profit of Rs 719.69 crore.
He said the present set of numbers is not strictly comparable with last years. Hence, this financial year will see the full impact of the JLR performance. JLRs losses before tax for the first quarter stood at 62 million pounds (Rs 496 crore).
The stock markets had already factored in the losses and so Tata Motor shares went down only marginally on the Bombay Stock Exchange to close at Rs 489.6 on Monday. The company as a whole is focusing on de-leveraging and bringing down costs. Ravi Kant said, JLR is focused... on aligning production with demand. The layoffs at JLR are a continued process and will keep on happening. Depending on the market, people will be divested for work and new resources will be brought in.
Tata Motors has a consolidated debt of Rs 34,000 crore on its books and its acquisition debt has been $850 million. Ramakrishnan said the Rs 455 crore the company raised last week by pledging its Tata Steel holdings will help pay off a part of the dollar loan taken for JLR. Tata Motors bought JLR for $2.3 billion from Ford Motors. It invested $1 billion into JLR since. The amount was raised through a $3-billion bridge loan. Of this, $1.16 billion has been repaid through a rights issue and divestment proceeds last year.
Consolidated total income from operations stood at Rs 16,397 crore for the quarter compared to Rs 14,490.18 crore a year ago, a rise of 13%. The operating profits stood at Rs 595.93 crore, while the cash profit was Rs 333.48 crore.... http://www.financialexpress.com/news/jlr-drives-tata-motors-into-red-in-q1/509661/2 http://www.thehindubusinessline.com/2009/09/01/stories/2009090151840100.htm http://www.tribuneindia.com/2009/20090901/biz.htm http://www.dnaindia.com/money/report_tata-motors-swings-to-loss-on-jlr-unit_1286767 http://www.hindustantimes.com/News/auto/Tata-Motors-posts-Rs-2-505-cr-loss/Article1-448931.aspx http://www.hindu.com/2009/09/01/stories/2009090161861600.htm http://www.dailypioneer.com/199428/Snapshots.html http://www.deccanchronicle.com/business/tata-motors-q1-net-loss-rs-32878-crore-067 http://www.telegraphindia.com/1090901/jsp/business/story_11434813.jsp http://www.indianexpress.com/news/tata-motors-q1-net-loss-at-rs-328.78-cr/509487/ http://in.biz.yahoo.com/090831/137/bau42f.html http://business.rediff.com/report/2009/sep/01/how-tata-lowered-losses-at-jlr.htm http://www.deccanherald.com/content/22629/tata-motors-q1-net-loss.html http://www.livemint.com/2009/09/01000915/JLR-weighs-on-Tata-Motors-cos.html
TATA MOTORS STILL BURNING CASH; MAY NEED MORE CAPITAL Manas Chakravarty, Mobis Philipose and Ravi Anathanarayanan mint (Web & Print Edition)
The consolidated results of Tata Motors Ltd for the year ended March were a rude awakening for the markets, with the stock correcting almost 15% in the two trading sessions that followed. The firms shares have risen by 68% since, and so are ripe for another reality check. Jaguar-Land Rover (JLR) has reported another hefty loss of around $200 million (Rs978 crore) before tax and a notional forex gain, and this should be a cause of concern for the markets, that have primarily focused on improved conditions in the domestic market.
The saving grace is that the results are better compared with the January-March quarter, with the firms volumes rising by about 10%. While there are no comparable profit numbers for the March quarter, the firm has said the results are better on a quarter-on-quarter (q-o-q) basis because of manufacturing efficiencies, headcount reduction and improvement in working capital.
But the major worrying factor is that retail sales of JLR (different from the companys factory sales) have been flat q-o-q, with an improvement in some markets such as China and North America being offset by sharp declines in the UK and Russia. While the company is improving efficiency and cutting costs wherever possible, it desperately needs volumes to pick up to near break-even levels. As Ravi Kant, vice-chairman of the company, stated at the press conference to announce the results, We need help from the markets.
Meanwhile, a dangerous combination of low capacity utilization and high product development spending are resulting in high cash burn at JLR. JLRs results between June 2008 and March worked out to an annualized cash burn of around $1.6 billion. Based on the June quarter results alone, the annualized cash burn works out to over $1.7 billion. This is after accounting for product development expenses of around $240 million and normal capital expenditure of $100 million. Note that the acquisition debt sits on the books of a special purpose vehicle and so actual cash burn would be even higher, after accounting for the related interest cost.
At this rate, Tata Motors would need to continue raising capital, and investors should be worried about further value destruction. http://www.livemint.com/2009/08/31214854/Tata-Motors-still-burning-cash.html
TATA MOTORS: JLR'S COST SIDE STORY Shobhana Subramanian Business Standard (The Compass)
Mumbai: Aggressive cost cutting measures have been initiated at Jaguar and Land Rover (JLR), including lowering the headcount, imposing a wage freeze and sourcing components from markets that offer cheaper alternatives.
These measures have left the business in better shape at the end of the June 2009 quarter than it was in the March 2009 quarter but despite this JLR has posted a loss of 64 million pounds, in the June 2009 quarter, on revenues of 1.12 billion pounds.
The losses in the March 2009 quarter, however, were more than twice this amount so there is some material improvement thanks to lower spends on marketing, overheads and raw material costs. With demand in the key US and European markets yet to pick up, vehicle volumes were lower during the quarter dealer volumes saw a sharp drop of 52 per cent year-on-year while retail volumes were lower by 35 per cent year-on-year, as the company adjusted production with demand.
However, whats encouraging is that, sequentially, wholesale volumes were up 10 per cent and retail volumes stayed flat. Moreover, inventories are not unusually high. The other bit of good news is that JLR has managed to access bank finance to the tune of 100 million pounds and should manage another 340 million pounds soon. With the rationalisation measures bringing in cost savings, analysts expect JLR to break even in 2010-11 and losses could be curtailed to around 200 million this year compared with a loss of 307 million pounds in 2008-09.
With a consolidated debt of just under Rs 21,000 crore, Tata Motors balance sheet remains highly leveraged but the company plans to sell stakes in subsidiaries and in group companies in the last quarter for instance, sales of Tata Steel shares fetched it Rs 320 crore. With demand for commercial vehicles looking up in the home market, sales for Tata Motors in the current year are expected to come in close to Rs 71,000 crore. However, with the JLR business still weak, it may post marginal losses. http://www.business-standard.com/india/news/tata-motors-jlr/s-cost-side-story/368662/
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| INTERVIEWS/FEATURES Go To Top In Singapore: Last week, the Confederation of Indian Industry (CII) President, Mr Venu Srinivasan, led a CII Core Group in talks with Singapores Senior Minister, Mr Goh Chok Tong, and other leaders of the city-state. The Core Group included Mr N. Kumar, past-president of CII, and the CII Chief Mentor, Mr Tarun Das. Indias Acting High Commissioner in Singapore, Mr Tsewang Namgyal, also participated in the talks. In an interview to Business Line, Mr Srinivasan said that India has to learn to compete as it needs to get an adequate piece of the global economy pie.
Excerpts from the interview:
What has been the highlight of your visit?
It is an ongoing dialogue which the CII has with the Singapore Government, because the Singapore Government has been a gateway for us to Asean (the 10-member Association of South-East Asian Nations).
In Singapore, there is a bit of surprise and amusement (as to) why India cannot get its act together. But Mr Goh Chok Tong said: You have got to accept India as it is India has its own way of doing things.
CII and Mr Goh must have revisited the evolution of the Look East Policy envisioned by Narasimha Rao?
There is still not enough investment or interest in India from these countries in Asean, because China is so much easier to do business with. The glass is half-full or half-empty, as you look at it. For me, it is slightly different. Indias (glass) is only quarter-full; and we think it is half-full!
Were any specifics discussed with Singapore now?
They have an industrial technical education (programme). Thats one iconic project we (CII) thought we should push with Singapore.
On the Mumbai-Delhi corridor, Singapore can put up a model 2000-acre township. They are keen. The corridor is definitely Japanese.
With Singapore, we discussed the possible development of a township, possible collaboration on skills development.
Mr Goh said: Why are you not taking it to water, city management (and) traffic management? He said these are the areas that Singapore can get involved in.
Did you touch base with Singapore on the global economic situation as also Indias?
We were just telling them we have confidence that the new government (in India) will deliver, and that India is keen to engage the world commercially.
(CII has been) telling the Government in India that our transaction cost is adding 15-20 per cent, and is an obstacle in Indias competing with China.
Our government needs to tackle internal reform and bring down internal transaction costs, while pursuing the the World Trade Organisation-driven Doha Round and other such things.
Otherwise, you will end up exporting jobs and (will have) created a political crisis, a national crisis, because you have to create 75 million jobs in five years. And that demographic dividend that we so glibly talk about will not happen!
With the Asean-India Free Trade Agreement done now, do you foresee an immediate upsurge in business ties with this region?
A lot of Indian companies are going to Indonesia. We (TVS Motor Company) have gone there with a motorcycle plant. The Tatas (have) one of their huge coal ventures.
Others such as Reliance and Essar, they all want natural resources. We would definitely like to see an upsurge of activity. Asean represents a big market for India.
Is there any CII-driven analysis or roadmap for zeroing in on particular projects or particular countries in the immediate future?
The WTO is a major agenda that we have. Once the WTO comes (into play), India has to learn to compete. After the Doha Round conclusion, you cannot raise duties: period. Specific markets for us would be: Developing relationships much more strongly with BRICS, South Africa, and Indonesia. Now, with the meltdown, we suddenly realise that Brazil, Indonesia, Asean (are) where the big markets are going to be.
Where do you place China, from Indias business perspective?
China is a very major competitor for India. It is the largest manufacturing economy. Its export surplus is $200 billion. The contribution of manufacturing to GDP in China is 40 per cent. It is 16 per cent for India. For us, the concern from China will be: how do we internally reform to make ourselves competitive? Thats Indias problem.
Is there any complementary element? China and India, with large populations, want to be manufacturers to the world. So, the complementarity will be to a lesser degree than with another economy.
So, in economic terms, what do you think of the political slogan that there is enough space in the world for both India and China to grow?
There will always be enough space, because Chinas way of competing will be different from Indias. China may get the greater slice of the pie, but India needs to get an adequate piece too!
And, we may get it partly out of IT, BPO, that kind of thing, and partly by looking at higher precision engineering, higher value-added products, where knowledge-value added is higher than in plain manufacturing.
But, we have to become competitive. Like Germany and America. Germany tends to go for higher-end engineering. Even though their manufacturing cost may not be equally competitive (as Americas), they are able to compete because their technology input is better.
For India, how do you carve out a space which is different from Chinas? Rather than going head-on against China.
In todays world, it is all about co-opetition (a combination of co-operation and competition): you have to co-operate in certain spheres and compete in certain spheres. It makes sense for scale (in economics) to co-operate on an emerging technology than to dissipate our energies individually. Equally, it is very important for good global relations and peace that India and China should be engaged in co-opetition rather than competition.
We have large borders. We are in the same geographical sphere. And therefore, we need to make sure that, based on mutual respect, we have a good relationship. But competition will be there! http://www.thehindubusinessline.com/2009/09/01/stories/2009090150620900.htm
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| EXPECT A LONG LINE OF NEW-LOOK CARS THIS SEASON Chanchal Pal Chauhan The Economic Times (Web & Print Edition)
New Delhi: More than a dozen new cars will be launched or reintroduced with a fresh look in the Indian market in the next two months, making it one of the busiest seasons for carmakers looking to woo consumers. Demand for automobiles sees a spike during the September-November season every year, a period marked with various festivals celebrated across the country.
Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved"
FORD PLANS TO BRING RS 3 LAKH-PLUS SMALL CAR Pankaj Doval The Economic Times (Web Edition) See similar story in: The Times of India (Web & Print Edition)
New Delhi: Ford has started work on a new low-cost small car to sell in fast-growing markets like India, China, Eastern Europe and South America.
A senior company official said the new small car would not be confined to one market but will be positioned across markets, sporting a "Rs 3 lakh-plus price range," making it one of the low-cost cars for the company globally. "We plan to grow business in B (small) cars globally, and especially in the Asia-Pacific region where we plan to raise the share of B cars to our line-up from 15% to 45%," John G Parker, Ford's group executive V-P for Asia-Pacific and Africa, told TOI here.
Asked whether the company would have a multi-product strategy in the small car segment, he said Ford planned to have more than one car there. "We cannot be satisfied with just one product in this crucial segment. India is a big car market and we can't just meet the demand with just one product in small cars," he said. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://economictimes.indiatimes.com/articleshow/4957103.cms
TOYOTA'S FORTUNER A HUGE HIT, BOOKING CLOSED FOR NOW Agencies See this story in: Hindustan Times (Web Edition), The Telegraph (Web Edition)
Mumbai: Toyota's newly launched sports utility vehicle Fortuner has been a massive hit with 3,100 orders. Meanwhile, considering the rush, the company has stopped taking further orders for the next seven months.
Elaborating on the huge demand, Toyota Kirloskar Motor's Marketing Deputy Managing Director Sandeep Singh said they have asked the dealers not to take further orders from customers for the next seven months.
The demand for the new car is such that the company has a backlog of customers willing to buy it. Though at the moment, it is just registering the names of interested clients and is revving up the production to meet the growing demand.
Throwing light on this, Singh said that they can assemble 550 Fortuners per month and are working to touch the 600 mark.
The sports utility vehicle Fortuner is priced at Rs 18.45 lakh (ex-showroom, Delhi). Toyota Motor Corporation had launched Fortuner in 2005 and since then it has sold 2.5 lakh units in more than 60 nations. http://www.telegraphindia.com/1090901/jsp/business/story_11434398.jsp
TOYOTA AIMS TO CAPTURE 50% MARKET SHARE PTI See this story in: The Hindu Business Line (Web & Print Edition), Hindustan Times (Delhi Print Edition)
Kolkata: Toyota Kirloskar Motor hopes to gain a marketshare of 50 per cent in the mid-sized Sports Utility Vehicles (SUV) by December, 2009 with its range Fortuner.
"The bookings for Fortuner have already crossed 2,500 and if we can sell 2,000 units till December, we can gain a share of 50 per cent in mid-size SUV market,'' Toyota Kirloskar DGM, Mr Sanjay Gupta, said here on Monday while speaking at the launch of th e car. Globally, Fortuner has already been sold over 2.5 lakh units in more than 60 countries since its launch in 2005. Mr Gupta said it was not yet finalised if all the bookings of Fortuner would be delivered by December.
However, the company would deliver sufficient quantity till December to enable it to cross 50 per cent marketshare. "The SUV market in India has witnessed extensive growth with launches in mid and premium SUV segment. We expect that the launch of the Fortuner will expand the mid SUV market in India,'' Mr Gupta said. The localisation level of Fortuner is 30 per cent and is priced close to Rs 18.5 lakh. http://www.thehindubusinessline.com/blnus/02311860.htm
TOYOTA TARGETS 150 DEALERSHIPS PTI See this story in: Deccan Herald (Web Edition), The Pioneer (Web Edition)
New Delhi: Toyota on Monday, said at the inauguration of its 90th outlet of Espirit Toyota that it is looking to expand its dealership network in the country with plans to have a total of 150 outlets by 2010.
http://www.deccanherald.com/content/22593/toyota-targets-150-dealerships.html http://www.dailypioneer.com/199428/Snapshots.html
The Financial Express (Delhi Print Edition)
Hyundai Motors India Ltd has been conferred the prestigious Gold Trophy for the year 2007-08 in the category of Large Enterprises. Union minister of commerce & industry Anand Sharma presented the award to the HS Lheem, managing director of Hyundai Motor India, at a function organised in Mumbai by the Engineering Export Promotion Council (EEPC), said a press release in Chennai on Monday.
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| CONSTRUCTION & AGRI MACHINERY Go To Top The Hindu Business Line See this story in: Business Standard
New Delhi: JCB India announced on Monday that it has signed an MoU with State Bank of India according to which the bank would exclusively help dealers of the construction equipment manufacturer to finance their products.
According to the agreement, the bank would be the preferred financing institution for JCB as dealers would explain to prospective customers the loan advantages of SBI and help them in the application process.
The bank, in return, would process and disburse the loan within 72 working hours at the current rate of 12.25 per cent. http://www.thehindubusinessline.com/2009/09/01/stories/2009090151320600.htm http://www.business-standard.com/india/news/jcb-india-aims-to-touch-1-bn-revenue-in-three-yrs/72288/on
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| 2/3 WHEELERS Go To Top PTI See this story in: The Hindu Business Line, Daily News & Analysis
Dehra Dun: The notice period served to auto major Hero Honda by the Uttarakhand government for paying the cost of 94.486 acres of land in Haridwar industrial estate expired on Monday.
However, the State Infrastructure and Industrial Development Corporation of Uttarakhand Limited (SIDCUL) officials said they would take action in this regard at the appropriate time.
Hero Honda and its ancillaries were allotted 265 acres of land for setting up their plants at the Haridwar industrial estate in 2006 at the rate of Rs 1,000 per square metre.
After getting the possession, the company set up its plant on 119.74 acres of land and gave 50.774 acres of land to its ancillaries. The company paid the full amount for 119.74 acres of land and also an earnest money for the remaining 145.26 acres of lan d at the rate of Rs 2 lakh per acre, the officials said.
Though its ancillaries also paid the cost for 50.774 acres of land, the officials said, the company did not pay for the remaining 94.486 acres of land. This amount is nearly Rs 50 crore, they said. The officials said Hero Honda's contention that because it developed parks and other infrastructural facilities for its ancillaries on the land exempts it from paying the amount cannot be accepted.
Moreover, they said, another auto giant Tata Motors has also developed park and roads for its ancillaries but it has paid the money for the full land allotted to them. http://www.thehindubusinessline.com/blnus/27311907.htm
SC TO DECIDE BAJAJ AUTO-TVS ROW ON SEP 15 PTI See this story in: The Hindu Business Line, mint, Business Standard, The Hindu New Delhi: The Supreme Court on Monday posted a dispute between Chennai-based two-wheeler company TVS Motor Company and Bajaj Auto over rights to twin-spark plugs technology to September 15 for final disposal.
It continued its earlier interim order of June 8 that allowed TVS Motor to manufacture TVS Flame, a 125-cc bike sporting twin-spark plugs, the technology for which Bajaj Auto claims it holds the patent rights.
However, it did not permit TVS to move its "finished product (motorcycle) from its warehouse'' as the company had given an undertaking in this regard. The Bench had earlier issued notice to the Chennai company and allowed it to manufacture TVS Flame, bu t said that "no finished product would leave the respondent's (TVS) warehouse". "Both parties are restrained from using this order for any other purposes including publicity,'' the Bench stated. The order came on a petition filed by Bajaj Auto Ltd challenging the Madras High Court's ruling that permitted the Chennai-based two-wheel er company to use twin-spark plugs in its motorcycles. http://www.thehindubusinessline.com/blnus/28311966.htm
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| COMPONENTS Go To Top Kaustubh Kulkarni Business Standard
Pune: At a time when the Indian automobile sector is slowly getting back on track, forging units in the western region are facing severe hurdles in beating their Chinese counterparts in pricing. Forging units saw a 45 per cent drop in revenues across India in 2008-09, and expect that cheap Chinese forged components will prevent them from improving their business despite the current upsurge in the auto sector.
Forging units in Indias western region are hence raising their voices against the stiff increase in steel prices, electricity tariffs and the application of octroi in municipal corporation regions in Maharashtra. Indian forging units together manufactured 1.2 million tonnes of forged equipment in 2007-08. However, this dropped to 7 lakh tonnes in 2008-09, and the average capacity utilisation of forging units stood at 55 per cent.
While Indian auto companies are reporting growing sales during the initial period of the current fiscal, we are finding it difficult to compete with Chinese auto parts. Steel manufacturers have suddenly increased the price of steel by Rs 3,000 per tonne, while the Maharashtra State Electricity Distribution Company Ltd (MSEDCL) has proposed a tariff revision in Maharashtra. All this is going to make business impossible, said Asheet Pasricha, spokesperson, the Association of Indian Forging Industry (AIFI). http://www.business-standard.com/india/news/forging-units-hit-by-imports/368687/
ROBERT BOSCH TO SET UP CENTRE IN COIMBATORE The Hindu Business Line See similar story in: Asian Age, Deccan Herald
Bangalore: Robert Bosch Engineering and Business Solutions Ltd (RBEI), the engineering and IT services subsidiary of Bosch in India, said it would invest an initial Rs 170 crore in a new centre in Coimbatore, which would be developed in three phases.
The first phase of the new facility that is expected to be completed by January 2010 would accommodate 1,700 engineers, the company said. By the end of the year, the headcount would be increased to 2,500 engineers. The second phase of the development would be spread over 2010 and 2011, while the third phase would be taken up after that, it added.
The company would invest Rs 40 crore in the new centre in 2010, said Mr Friedhelm Pickhard, Managing Director, RBEI. While Rs 50 crore has already been spent in acquiring land and other expenses, another Rs 130 crore has been committed to constructing the building for the new centre, he added.
RBEI said Coimbatore, compared to Bangalore, offers 15 per cent cost savings. It said the attrition level in Coimbatore is negligible, and there is access to quality manpower as well. At present, RBEI employs about 900 people in a STPI unit and another 600 people in a temporary SEZ unit in Coimbatore, it added.
The company also launched its first reliability testing centre in India at an investment of Rs 8 crore, which would help enhance the reliability of automotive components like electronic control units (ECU) in varied environmental conditions. The centre would have about 25 engineers. ECUs are embedded systems that control one or more of vehicle sub-systems such as transmission control unit or airbag control units.
This test centre is filling up the last gap in our local product development processes. We are now able to develop products for our customer right from the concept stage to the delivery stage, completely localised in India, said Mr Pickhard. Earlier, components were sent to Germany for testing. Mr Pickhard said local requirement on reliability is best identified by local engineers who have a closer understanding of the market.
The company said more ECUs are being used in cars in India and it has developed three solutions for the Indian market. It has developed an electronic control for diesel and petrol engines, an electronic system for anti-lock braking and an electronic control for airbags.
RBEI said because of softness in demand in global markets, the companys growth rate is expected to slow down to 13-14 per cent in the current year, compared to its earlier growth rate of 30 per cent. http://www.thehindubusinessline.com/2009/09/01/stories/2009090150950200.htm http://www.deccanherald.com/content/22596/bosch-opens-testing-facility.html
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| FINANCE & INSURANCE Go To Top PTI See this story in: The Economic Times, The Hindu Business Line, Daily News & Analysis, The Statesman, The Telegraph
Mumbai: Union Bank of India (UBI) said that it has reduced interest rates on its housing and auto loans as a part of a festival offer. The public sector lender would now offer home loans at 8.50 per cent for the first three years and at floating rate linked to its benchmark prime lending rate from the fourth year onwards for loans up to Rs 50 lakh, a press release issued here said. http://www.thehindubusinessline.com/blnus/17311906.htm http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=266936 http://www.telegraphindia.com/1090901/jsp/business/story_11434404.jsp
IFCI OFFLOADS 4% TATA MOTORS DVR SHARES Tania Kishore Jaleel The Hindu Business Line
Mumbai, Aug. 31 IFCI has sold more than 27 lakh Differential Voting Right (DVR) shares of Tata Motors in the last two trading sessions through the bulk deal route.
At the time of the issue of these shares in November last year, IFCI was the sub-underwriter to Tata Motors DVR issue, along with JM Financial.
Of the 6.4 crore DVR shares issued by Tata Motors, IFCI held 81.96 lakh shares (12.77 per cent) as on June 30. After the sale, IFCIs stake has fallen to 8.4 per cent.
Marketmen said IFCI is likely to have sold the DVRs to take advantage of the rise in the share prices. IFCI had bought the shares at Rs 305 a piece in November last year.
On Friday, IFCI sold 9.07 lakh shares at Rs 352 a share on the BSE while Sundaram BNP Paribas bought 4.99 lakh shares. On Monday, IFCI sold 6.75 lakh shares at Rs 360 a share. On the NSE, it sold 11.50 lakh shares on Monday for Rs 41.79 crore on NSE. IFCI has made Rs 97.9 crore from these stake sales.
The Tata Motors DVR stock closed up 4.8 per cent at Rs 368.95 on the BSE.
IFCI purchased these shares at a lower price; this is quite a decent exit proposition. They have made fair bit of profit from this sale, said Mr Jagannadham Thunuguntla, Head of Equities at SMC Capitals.
Another reason for IFCIs sale of the DVR shares in the last two trading sessions could be that they wanted to sell before the release of Tata Motors consolidated first quarter results on Monday, Mr Thunuguntla said. Tata Motors made a consolidated net loss of Rs 329 crore for the quarter ended June 30.
DVR investors acquire shares of a company at lower prices with the prospects of higher dividends in return for surrendering their voting rights. The Companies Act permits issue of DVR shares when, among other conditions, the company has distributable profits and has not defaulted in filing annual accounts and returns for at least three financial years. The issue of such shares cannot exceed 25 per cent of the total issued share capital of the company.
PTI See this story in: The Hindu Business Line
Non-banking finance company Sundaram Finance on Monday announced a revision in interest rates on second and third year fixed and cumulative deposits with effect from September 7.
The company will be paying 8 per cent each year on the second year and 8.5 per cent on third year deposits, a company press release here said.
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| OIL, LUBRICANTS & ALTERNATIVE FUELS Go To Top Business Standard
Chennai/ Hyderabad: Indian Autogas Company Limited (IACL), a Chennai-based company engaged in trading of auto liquefied petroleum gas (ALPG), is planning to raise Rs 750 crore from private equity partners to fund its proposed expansion of setting up over 1,000 company-owned ALPG dispensing stations across five states by 2013. The expansion envisages an investment of Rs 1,500 crore.
We have already arranged funds to the tune of Rs 786 crore through internal accruals and from promoters. This would be sufficient for going ahead with our expansion over the next two years. We will be raising the rest from private equity partners, SM Anthony Thomas, chief executive of IACL, said here on Friday.
Thomas said the company, which currently has 27 dispensing stations in Andhra Pradesh and Tamil Nadu, would be setting up 565 in Tamil Nadu, 261 in Andhra Pradesh, Karnataka and Maharashtra, and 195 in Kerala. The proposed expansion will take our total sales volumes to 25,000 tonne per month by 2013 from the present 1,000 tonne, he added.
He said there were over 2 million LPG-operated cars already running on the Indian roads. However, while the country needs 5,000 ALPG dispensing stations to cater to these vehicles, there are only 640 at present. Automobile makers are rolling out close to 900,000 four-wheelers every year, of which one-third are LPG-converted. As a latent entrant in the industry, we see a huge growth potential in this, he added. http://www.business-standard.com/india/news/indian-autogas-to-raise-rs-750-crore-pe-fund/368636/
OIL DROPS TO $71, EYEING WEAKER EQUITIES
See this story in: The Times of IndiaThe Hindu Business Line
London: Oil fell more than 2% to around $71 a barrel on Monday as a drop in China's key stock dented optimism about the pace of economic recoveryand the US dollar strengthened. http://www.hindustantimes.com/business-news/global-economy/Oil-near-72-as-stocks-sink-recovery-questioned/Article1-448751.aspx
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| INTERNATIONAL NEWS Go To Top Reuters See this story in: The Economic Times, The Hindu Business Line
Los Angeles: The Prius hybrid automobile is popular for its fuel efficiency, but its electric motor and battery guzzle rare earth metals, a little known class of elements found in a wide range of gadgets and consumer goods.
EMPLOYEES AIM UP TO 5% STAKE IN VW Reuters See this story in: The Financial Express
Frankfurt: Roughly 3,70,000 employees of Volkswagen and Porsche are striving initially to acquire a stake of up to 5% in the automotive group, VWs labour chief told a German newspaper.
I dont know, how much we will end up with. It certainly wont be 10% overnight, but between 1 and 5% to begin with, Sueddeutsche Zeitung quoted Bernd Osterloh on Saturday as saying. It was not clear yet, how the employees would finance the purchase of their stake, the paper said.
Volkswagen Europes biggest carmaker agreed to buy a 42% stake in the sports car unit of debt-ridden Porsche SE earlier this month.
It will pay up to 3.3 billion euros ($4.7 billion) this year for the initial stake in the unit, Porsche AG, paving the way for the creation of an integrated automotive group by the end of 2011. Volkswagen plans a capital increase of preference shares in the first half of 2010 to finance the purchase. http://www.financialexpress.com/news/employees-aim-up-to-5-stake-in-vw/509143/
TOYOTA CAR DEVICE TO CHECK DRUNK DRIVING AFP See this story in: The Financial Express, The Tribune
Tokyo: Toyota Motor said on Monday it is developing anti-drunk driving equipment that would lock the ignition of a vehicle if high levels of alcohol are detected in the driver. The system features a hand-held breathalyser, equipped with a digital camera, that detects alcohol consumption and photographs the drivers face for identification, a company statement said. If the driver tests positive, the system either warns him or her, or locks the vehicles ignition depending on the level of alcohol detected, Toyota said.
The car-maker is conducting tests with affiliate truck maker Hino Motors, and will install the equipment in selected trucks and other vehicles of fleet customers that include companies and government organisations, Toyota said.
The system thus prevents drivers from operating vehicles in an inebriated state, while follow-up instructions given by fleet administrators aim to further reduce the possibility of alcohol-related traffic accidents. Nissan Motor is currently developing similar equipment.
In conjunction with the tests to be conducted by TMC and Hino, the Japanese Ministry of Land, Infrastructure, Transportation and Tourism will install the system in a vehicle under lease from TMC and conduct tests during everyday use. In the United States , certain states passed a legislation requiring drunk driving offenders to install breathalyser ignition locks in their cars. http://www.financialexpress.com/news/toyota-car-device-to-check-drunk-driving/509577/ http://www.tribuneindia.com/2009/20090901/biz.htm#5
JAPAN AUTO OUTPUT FALLS 32% IN JULY See this story in: The Hindu Business Line
JAPANESE BUS MAKERS EYE TIE-UP Agencies See this story in: The Economic Times, The Hindu Business Line
Tokyo: Japan's Nissan Diesel Motor Co. and Mitsubishi Fuso Truck and Bus Corp. said Monday they had agreed to explore a merger of their bus manufacturing operations amid a weak market.
AS HYBRID CARS USE UP RARE METALS, SHORTAGE LOOMS Reuters See this story in: The Hindu Business Line
Los Angeles: The Prius hybrid automobile is popular for its fuel efficiency, but its electric motor and battery guzzle rare earth metals, a little-known class of elements found in a wide range of gadgets and consumer goods.
Vulnerability That makes Toyota's market-leading gasoline-electric hybrid car and other similar vehicles vulnerable to a supply crunch predicted by experts as China, the world's dominant rare earths producer, limits exports while global demand swells.
Worldwide demand for rare earths, covering 15 entries on the periodic table of elements, is expected to exceed supply by some 40,000 tonnes annually in several years unless major new production sources are developed. One promising U.S. source is a rare earths mine slated to reopen in California by 2012.
Set to be most affected Among the rare earths that would be most affected in a shortage is neodymium, the key component of an alloy used to make the high-power, lightweight magnets for electric motors of hybrid cars, such as the Prius, Honda Insight and Ford Focus, as well as in generators for wind turbines.
Major Ingredient Close cousins terbium and dysprosium are added in smaller amounts to the alloy to preserve neodymium's magnetic properties at high temperatures. Yet another rare earth metal, lanthanum, is a major ingredient for hybrid car batteries.
Production of both hybrids cars and wind turbines is expected to climb sharply amid the clamor for cleaner transportation and energy alternatives that reduce dependence on fossil fuels blamed for global climate change. Toyota has 70 percent of the U.S. market for vehicles powered by a combination of an internal-combustion engine and electric motor. The Prius is its No. 1 hybrid seller.
Biggest user Mr Jack Lifton, an independent commodities consultant and strategic metals expert, calls the Prius "the biggest user of rare earths of any object in the world."
Each electric Prius motor requires 1 kilogram (2.2 lb) of neodymium, and each battery uses 10 to 15 kg (22-33 lb) of lanthanum. That number will nearly double under Toyota's plans to boost the car's fuel economy, he said.
As China's industries begin to consume most of its own rare earth production, Toyota and other companies are seeking to secure reliable reserves for themselves.
Reuters reported last year that Japanese firms are showing strong interest in a Canadian rare earth site under development at Thor Lake in the Northwest Territories.
A Toyota spokeswoman in Los Angeles said the automaker would not comment on its resource development plans. But media accounts and industry blogs have reported recently that Toyota has looked at rare earth possibilities in Canada and Vietnam.
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| ECONOMY & FINANCE Go To Top The Hindu Business Line
Mumbai: The rupee depreciated by 18 paise against the dollar on Monday, tracking the negative equity markets around the world. The rupee opened at 48.85 and traded in a narrow range. It ended at 48.83, weaker than Fridays close of 48.65. Risk aversion among investors put pressure on the rupee. However, dollar selling by exporters stemmed rupees losses, said a dealer with a public sector bank. In the overseas markets, the greenback gained against other major currencie s. In the forward premia market, the six month ended lower at 2.5 per cent (2.58 per cent) and the one-year was at 2.37 per cent (2.4 per cent). http://www.thehindubusinessline.com/2009/09/01/stories/2009090151220600.htm
SENEX DOWN 255 POINTS ON PROFIT TAKING The Hindu Business Line
Mumbai: Snapping a seven-session winning streak, the BSE benchmark Sensex fell by 255 points on Monday on emergence of profit booking by funds and retail investors amid weak Asian markets.
The Sensex closed at 15,666.65, down by 255.70 points from Fridays close. The Sensex, which had gained nearly 1,112.73 points, or 7.5 per cent in the past seven sessions, fell to a low of 15,589.80 points.
The Nifty index on the wide-based National Stock Exchange fell to a low of 4,635 points before being quoted at 4,662.10, down 70.25 points from Fridays close of 4,732.35.
Brokers said emergence of profit booking by funds as well as retail investors after recording handsome gains in the past seven sessions, mainly led to the decline. Besides, weak trend on the other Asian bourses which were down up to 5.37 per cent in th e morning trade also dampened the trading sentiments on the domestic bourses. Major contributors to todays losses were IT, Metal, Capital Goods, FMCG, Banking and Power sectors. http://www.thehindubusinessline.com/blnus/05311901.htm
GDP GROWS 6.1%, WEAK MONSOON A WORRY Business Standard See this story in: The Times of India, The Hindu Business Line
New Delhi: Showing signs of recovery, Indian economy grew 6.1 per cent in the first quarter (April-June) of the current financial year, the highest quarterly growth since the onset of the global economic slowdown in September 2008, primarily due to expansion in manufacturing and services sectors.
The gross domestic product (GDP) growth stood at 5.8 per cent in the previous quarter ended March 31, 2009, and at 7.8 per cent in the corresponding period in 2008. Analysts and economists maintain a conservative outlook, as they expect weak monsoons to affect growth rates in the coming quarters.
The growth in manufacturing and services sectors is primarily seen as a result of the fiscal and monetary stimulus provided by the government. Indias GDP growth is unlikely to decelerate in the second half of 2009. The previous rounds of fiscal stimulus are now trickling down, providing a notable boost to activity, said Sherman Chan, economist with Moodys Economy.com in a report.
D K Joshi, chief economist with Crisil India said the growth figures were on expected lines influenced by stimulus packages but added it was not an indicator of decisive recovery.
The government expects 2009-10 to close with a growth rate of 6-6.5 per cent. The data is consistent with the Economic Survey forecast of a U-shaped recovery (in quarterly terms), with average growth for 2009-10 of 7 per cent adjusted for below normal monsoon/agriculture growth. Given the currently available information on monsoon/agricultural situation, this would imply a growth rate of 6 per cent to 6.5 per cent for 2009-10, said Arvind Virmani, the chief economic advisor to the government. On a quarter-on-quarter basis, growth in agriculture, forestry and fishing declined marginally to 2.4 per cent after expanding by 2.7 per cent in the previous quarter ended March 2009. Manufacturing grew by 3.4 per cent in the quarter under consideration, while it had contracted by 1.4 per cent in the previous quarter.
Construction and trade, hotels, transport and communications expanded on a quarterly basis to 7.1 per cent and 8.1 per cent, respectively, from 6.8 per cent and 6.3 per cent during January-March 2009.
I am glad that the worst may be over and we expect to see improved performance in the subsequent quarters. The (GDP) numbers are very good, it is consistent with what we are hoping for, Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters after the data were released.
The growth rate is in line with improved growth rate of major economies like China, which grew at 7.9 per cent in the first quarter, while German and French economies came out of recession to post 0.3 per cent growth each. The drought situation in the country, however, caused a word of caution. "The next two quarters may see lower growth than 6.1 per cent as the impact of poor rains comes on board. As of August 26, rainfall has been 25 per cent below normal. We estimate that this could reduce agricultural growth to -2 per cent for 2010 fiscal," said Tushar Poddar,chief economist , Goldman Sachs India in a report. http://www.business-standard.com/india/news/gdp-grows-61-weak-monsoonworry/368736/ http://www.thehindubusinessline.com/2009/09/01/stories/2009090151290600.htm
Last Financial closing
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Monday, August 31, 2009
Indian Auto Industry Update September 01, 2009
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