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| INDUSTRY Tatas smoothen Nano vendors' journey to Sanand Tata arm gets 10-mn loan from UK govt Tatas to launch Freelander SUV on September 22 INTERVIEWS/FEATURES CARS, SUVs, MUVs VW India gets 100-m loan from EIB The buzz is palpable in the SUV market Changing the rules of the power game COMMERCIAL VEHICLES COMPONENTS | ALLIED INDUSTRIES FINANCE & INSURANCE INTERNATIONAL NEWS Sensex up by 30 pts; auto, realty stocks gain Inflation may rise to 6% by March next year: RBI
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| INDUSTRY Go To Top The Hindu Business Line (Web & Print Edition)
New Delhi: The Ministry of Heavy Industries has urged the Finance Ministry to waive the Special Excise Duty (SED) of Rs 15,000 and Rs 20,000 on 1500cc and 2000cc cars respectively, said Mr Ambuj Sharma, Joint Secretary, Ministry of Heavy Industries.
The SED was levied by the Finance Ministry on fuel guzzling cars to contain carbon emissions.
Inaugurating the National Summit on Public Buying organised by Assocham, Mr Sharma said, The Ministry of Heavy Industries had last year too lobbied for withdrawal of SEDs, but the request was turned down by the Finance Ministry. We are again pressurising the Finance Ministry to waive it off.
Mr Sharma said the Ministry of Heavy Industries is setting up seven auto testing centres to make India a hub for testing cars before they are out on roads. In these auto testing centres, car manufacturers from Indonesia, Malaysia and Thailand would be allowed to test their products as part of the Governments attempt to invite more foreign direct investment in the automobile sector, he added.
India is setting up the centres with Government aided funds of Rs 1,800 crore. The centres would become operational by September 2011 in Manesar, Pune, Ahmednagar and Raebareli. http://www.thehindubusinessline.com/2009/09/19/stories/2009091951511500.htm
TATAS SMOOTHEN NANO VENDORS' JOURNEY TO SANAND Sushmita Mohapatra, Sumit Chaturvedi & Himanshu Darji The Economic Times (Web & Print Edition)
Ahmedabad/New Delhi: For Nano vendors, the journey from Singur to Sanand is now in its final leg. Tata Motors has been in talks with its vendors, after it decided to relocate its dream car project from West Bengal to Gujarat.
Sources told ET the company is now looking at compensating vendors for about 75% of the total costs incurred by them. Shifting the plant has resulted in nearly 50 vendors losing around Rs 500 crore.
While details of the compensation package are still being worked out, Nano vendors have already started setting up units in Sanand. Sources added nearly 37 vendors have already been allotted land. However, the lease agreement is yet to be signed by them. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://economictimes.indiatimes.com/articleshow/5029044.cms
TATA ARM GETS 10-MN LOAN FROM UK GOVT The Economic Times (Web & Print Edition) See similar story in: Business Standard (Web & Print Edition), The Hindu Business Line (Web & Print Edition), The Hindu (Web Edition), The Statesman (Web Edition), The Times of India (Web & Print Edition), The Telegraph (Web Edition), Deccan Chronicle (Web Edition), Yahoo India (Web Edition), mint (Web & Print Edition)
Mumbai: Auto major Tata Motors on Friday said its wholly-owned European subsidiary, Tata Motors European Technical Centre (TMETC), has received a loan of 10 million (approximately Rs 80 crore) from the British government to develop an electric vehicle in the UK for a total investment of 25 million (Rs 195 crore). http://www.thehindubusinessline.com/2009/09/19/stories/2009091951930100.htm http://www.hindu.com/2009/09/19/stories/2009091957891400.htm http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=268972 http://www.telegraphindia.com/1090919/jsp/business/story_11515737.jsp http://www.deccanchronicle.com/business/tata-motors-gets-rs-78-cr-loan-uk-govt-electric-car-429 http://in.biz.yahoo.com/090918/137/bau7pd.html http://www.livemint.com/2009/09/18164253/Tata-Motors-gets-Rs78-cr-loan.html
TATAS TO LAUNCH FREELANDER SUV ON SEPTEMBER 22 Business Standard (Web & Print Edition) See this story in: The Financial Express (Delhi Print Edition)
Mumbai: Less than three months after UKs luxury automotive brands, Jaguar and Land Rover, introduced their models in India, the company is gearing up to launch its cheapest product, Freelander 2, here on Tuesday.
Jaguar and Land Rover are owned by Tata Motors. Although pricing details were not available, sources said the sports utility vehicle (SUV) made by Land Rover would carry a price tag of Rs 35 lakh or less (excluding local taxes).
Freelander is a compact, yet premium all-wheel drive vehicle, sold in large European markets such as the UK, France, Italy and Spain, as well as China.
Sources said the vehicle, earlier proposed to be launched in the early half of October, was in the final stages of passing its homologation tests in July.
The SUV will attract an import duty of more than 100 per cent, as it will be sold in India as a completely built unit. The Freelander is sold at about Rs 17 lakh (21,295) in the UK. Tata Motors sells three models of the Land Rover brand in India Range Rover, Range Rover Sport and Discovery 3. The Discovery 3 is currently the cheapest of the three models, sold at Rs 63 lakh, while the other two cost up to Rs 85 lakh (all prices ex-showroom Mumbai). http://www.business-standard.com/india/news/tatas-to-launch-freelander-suvseptember-22/370590/
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| INTERVIEWS/FEATURES Go To Top Mumbai: If you are very good at your game, you are allowed a few mistakes. For example, if your name is Maradona, you are allowed to use drugs, shoot journalists and even occasionally score goals with your hand.
Likewise, cars such as the Mercedes-Benz S-Class and the BMW 7 Series do not necessarily have to be on a high-octane petrol diet they occasionally do visit the slimy side of the fuel station and drink dark pitchers of truck fuel.
And guess what, we have no option but to continue praising them because they look damn good while at it. And when their bellies are full they will even make a song and dance about how good they are when it comes to tearing up asphalt and thereby connecting distant towns. If you stay in Europe, these towns are usually separated by whole countries. Get the picture now? You will, soon.
Most Ferraris and Lamborghinis do the 100 kph sprint in 3-4 seconds. The BMW 730Ld featured in these pages can manage that in 7.4 seconds. You realise what that means?
This car weighs almost double of most Ferraris and Lamborghinis, has only half the output at 245 bhp, can still manage 240 kph which is a shade short of what you are allowed in most countries costs less than half the money to buy, has five seats with lots of airbags and other safety kit and, hold your breath now, consumes diesel! And it is separated from super cars by a mere three seconds! And we thought Albert Einstein was supremely talented.
Needless to say, I fell in love with the machine. Like all BMWs, it shrunk around me as I started driving, despite the sheer size. The alphabet L in the name of the car indicates that it is a long wheelbase 7er and the rear legroom is worth every penny if you are going to spend time in the comfortable rear seats. But make no mistake, this is every inch a BMW and that means it needs to be driven to be appreciated fully.
The six-cylinder motor displaces close to 3000cc and is aided by a variable geometry turbocharger in developing a mouth-watering spread of torque.
A six-speed automatic gearbox with Steptronic is used to send this turning force to the rear wheels in the true tradition of cars from Munich. There is more technology to this power transfer process than there is beer at an average Oktoberfest tent, though.
Dynamic stability control including ABS, dynamic traction control and cornering brake control along with reasonable restraint from the driver will help you keep this Beemer right side up all the time.
Naturally, a four-lane highway is its natural habitat and the 730Ld gobbles miles as if it is its birthright. Ride quality on good roads is sublime and is much improved on bad roads despite the run-flats.
But it is the directness of the steering, the sharpness of the turn-ins and overall agility of the whole car that separates it from its competitors. Changing lanes at triple digit speeds? Charge into a decreasing radius corner and brake late? This car is more than willing to do all that and still look sublime and absolutely in control while at it.
I took the test car through some hilly terrain and the only thing that was hindering the enjoyment was its sheer width. Memories of the launch drive of the new 7 in and around Dresden last year came gushing in the roads were relatively narrow and it was a tough ask to keep all four wheels on tarmac all the time. Change pace to a relaxed (still fast) cruise mode and the 730Ld will pamper you with a quality music system and a brilliant climate control.
Theres got to be something I dont like about the car, right? Well, I cannot yet come to terms with that large kidney-grille it is too flat and feature-less for comfort from most angles.
Some people, like Srini for example, think it is a brilliant car to look at. I want Bangle back. Period. At Rs 81.2 lakh, the car featured here is the most sensible 7 Series around. Pity most of them will form part of expensive hotel and travel fleets than that of personal collections. The turbo-petrol V8 powered version will do the latter job fine, thank you! http://www.business-standard.com/india/news/super-seven/370516/
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| CARS, SUVs, MUVs Go To Top Rishi Raj, Yogima Seth The Financial Express (Web & Print Edition)
New Delhi: Its the only car in the country that doesnt have a formal nameits known only by the cubic capacity of its engine. But for millions of Indians, Maruti-Suzukis 800 is the vehicle that single-handedly transformed the almost monochromatic landscape of urban thoroughfares. Now, over a quarter of a century lateryes, it has been that longjust when it appeared that the impish icon had come to the end of a very crowded road, the Maruti 800 could get a fresh lease of life.
In an exclusive interview with FE, Maruti chairman RC Bhargava said, The option of upgrading Maruti 800 to meet Euro-IV emission norms is open. We are yet to take a call on it, but if we decide that it would be upgraded, we could think of giving the vehicle a facelift. A makeover is long overdue. The 800 last received a major facelift in 1997, followed by cosmetic changes in 2005 and the introduction of an LPG variant in 2008.
Bhargavas comments are significant, as without a Euro-IV upgrade, strict emission norms would have forced the vehicle to be phased out from next April in 11 cities, including Delhi, Mumbai, Hyderabad and Bangalore. The model is currently only Euro-III compliant. Euro-IV norms for the rest of the country are expected by 2015-16.
Bhargava, who was managing director at Maruti from 1985-1997 when the 800 was its bread and butter, said sales of the model have declined as buyers have a lot of options. What were the options 10-12 years ago, apart from the M-800? I remember, there was such a long waiting list for it that we had once come out with a tatkal scheme. Since it was unveiled back in December 1983, over 27 lakh 800 variants have been sold.
However, sales have been waning in recent months, dipping 26.4% in August at 2,734 units, against 3,717 in the same month last year. Sales between April and August fell by half to 12,649 units vis--vis last year. The 800 constitutes a mere 4.3% of Marutis total sales.
However, though sales lack lustre in bigger cities, its quite a different picture in smaller cities and towns. Our main markets for the small car are the rural areas, said Bhargava. Driven by this demand, a new-look 800 could still jostle its way on to the black top for a few more years to come. http://www.financialexpress.com/news/maruti-mulls-smarter-greener-800/518914/
VW INDIA GETS 100-M LOAN FROM EIB The Hindu Business Line (Web & Print Edition)
New Delhi: The European Investment Bank (EIB) announced on Friday a 100-million loan for Volkswagen (VW) India, primarily to part-finance the auto makers new car manufacturing facility in Maharashtra.
According to EIB, the financing contract signed in Luxembourg would help VW set up the manufacturing facility to produce three models of small cars, specifically for the Indian market.
This loan clearly responds to a three-fold strategy to promote the Lisbon Strategy, by reinforcing the competitiveness of European companies, to support a climate change agenda by improving the environmental standards of production and to contribute to wealth and job creation in the partner country where the project is promoted, said Mr Carlos da Silva Costa, Vice-President, EIB.
He added that the investments would involve transfer of technology and know-how from Europe, leading to the production of cleaner cars for the Indian market. It will also directly create 2,500 jobs in the company, besides other jobs among local supplier companies.
The loan is just part of the 580 million being invested in India by the Volkswagen Group. Most of this goes to the factory in Pune, said Mr Kurt Rippholz, Head, Volkswagen India Group Communication, while speaking to Business Line. He added that since August, the company has started manufacturing the Skoda Fabia from the plant and will manufacture the VW Polo hatch by December and a new sedan on the Polo platform by the beginning of the next year.
Volkswagen, which already operates an assembly plant in Aurangabad, will develop this new factory for the production of more mass-market cars.
The new models are also to be equipped with more modern engines, with low-emission technology compatible with the local fuel quality. This would ensure compliance with the tighter legislation on emissions to be introduced in the country from April 2010. Mr Rippholz, however, added that VW was not looking to manufacture engines for the small cars in the country. http://www.thehindubusinessline.com/2009/09/19/stories/2009091951790300.htm
THE BUZZ IS PALPABLE IN THE SUV MARKET Malabika Sarkar The Financial Express (Motobahn)
The battlelines are being redrawn in the market for sport utility vehicles (SUV) in India. Even as Toyota Kirloskar Motor (TKM) executives were celebrating the record 5,000 bookings in over a month for its new diesel SUV, Fortuner, segment leader Ford put the spotlight back on itself with a new version of its mid-market Endeavour. And it walked right into enemy fire by pricing the automatic variant of the model at Rs 17.9 lakh and the manual at Rs 15.9 lakh (ex-showroom, New Delhi), invitingly lower than Fortuners Rs 18.45 lakh (ex-showroom Delhi).
What this all adds up to is a nearly palpable buzz. Industry analysts peg the overall size of the SUV market at a little over 10,000 units annually, and believe TKM, a joint venture between Japan-based Toyota Motor Corp and Indias Kirloskar group, will likely rev up demand for a market hit hard by the general market slowdown. In the January-July period of the current year, SUV segment sales were down 60% compared to the same period last year.
The introduction of the Fortuner is likely to heat up competition largely in the mid-SUV market, says Abdul Majeed, partner & auto analyst, PricewaterhouseCoopers. While Ford Motor quickly introduced a refurbished Endeavour, Honda and GM seem to be waiting to gauge the response to Toyotas new offering. Audi, a German company and part of the Volkswagen Group, recently launched its SUV, Q7, at a price starting Rs 53.4 lakh. In that sense it really doesnt compete with the likes of the Fortuner and the Endeavour, but it attests to the potential of the market.
At present, SUVs constitute nearly 2% of the total passenger car market in India. TKL is aiming at a 50% share of that market by the end of the year.
Its share in the overall passenger vehicle market, is about 3%. Our strength lies in the dealer network and customer confidence in the Toyota brand name that will help us lead the segment eventually, says Sandeep Singh, TKM deputy MD (marketing).
The Fortuner will be assembled from completely-knocked-down or CKD kits at TKLs plant at Bidadi, Karnataka, where the Innova and the Corolla are manufactured. Currently, it has the capacity to produce 550 units of the Fortuner per month. The company is trying to ramp up monthly production figures to 600 units to meet high customer demand. If successful, TKM is likely to sell nearly 2,500-3,000 units of the model by December 2009.
In India, the premium SUV market is dominated by two playersHonda CR-V (Rs 22-25 lakh) and Chevrolet Captiva (Rs 21-24 lakh). By aggressively pricing its Fortuner, TKL is hoping to wean away a chunk of this market, says Majeed.
On its part, Honda Siel Cars India feels a comparison with other SUVs is a tad unfair because the company has moved to the order-based system since April this year and also because the CR-V is sold as a CBU (completely built unit) import from Japan.
This means that the company would import readymade units from Japan only after an order has been placed. A Honda CR-V customer has to wait three months to drive the car home, a reason why its sales have slipped in recent months.
The Fortuner is in a different segment altogether, explains Anita Sharma, general manager, marketing communication, Honda Siel Cars India. We are operating in the petrol segment and the others in the diesel segment. On an average, we sell about 60 to 70 cars per month. Before we went on to the order-based system, we were selling about 250 to 300 units per month. Being a fully imported car it is expensiveso we deliberately changed our strategy. In comparison, the Fortuner is a diesel car and is assembled in India.
On an average day 30-35 people walk in to check out the Fortuner only, says AK Singh, vice-president, operations, Galaxy Toyota, a Delhi-based Toyota dealer. The conversion rate is about 50%. These people have already decided to buy the car and come here to just have a look at it with family and friends before booking. They are the serious customers and are enthusiastic. As of now, TKM dealers have been advised to take customer orders without advance payments, while committing to a tentative date of delivery.
Certainly, the Fortuner has filled a huge gap in the market. The statistics in other markets where it sells speaks for its potential. According to the company, the Fortuner has already sold over 2.5 lakh units in more than 60 countries since its launch in 2005. http://www.financialexpress.com/news/the-buzz-is-palpable-in-the-suv-market/518809/2
CHANGING THE RULES OF THE POWER GAME Murad Ali Baig The Financial Express (Motobahn)
Indias SUV sales had slowed down before the long-awaited Toyota Fortuner was launchedwhich clocked over 2,000 bookings. Indias SUVs are in three groups with entry level vehicles like the Scorpio and Safari in the Rs 10 lakh price range, a mid-range of sophisticated offroaders like the CR-V, Captiva, Endeavour, Pagero, Montero, Vitara and Xtrail in the roughly Rs 20 lakh range, and the expensive imports like the BMW X5, Mercedes M Class, Audi Q7, Porsche Cayenne, Toyota Land Cruiser and Hummer costing over Rs 50 lakh.
The new Fortuner, priced aggressively at Rs 18.5 lakh is a formidable product with a peppy 2,600-cc 171 HP diesel engine and a unique permanent 4-wheel drive. But unlike most 4WDs, its surprisingly easy on fuel consumption as the Automotive Research Association of India (ARAI) tests show. As it has been built on the Innova platform, it has substantially similar comfort, and as the gearbox for the entire Toyota range is made in India, the vehicle has a high local content to keep the tax element far lower than any rival. In terms of road presence, that every urban cowboy must have, it doesnt disappoint. It will tempt some buyers to move up from the cheaper range and also be good enough to attract buyers who can afford twice the price.
God bless competition! The Ford Endeavour that had commanded a big share of the Indian SUV market has quickly responded to the Fortuner with two well-priced new models. The bigger 158 HP 3,000-cc model has better torque for lugging power and has on-the-fly 4WD allowing the driver to instantly switch from economical 2-wheel drive to 4-wheel drive whenever needed. This model has a 5-speed automatic and ABS and is priced a whisker below Rs 18 lakh. There is also another model with a 2,500-cc engine just under Rs 16 lakh. The Endeavour has now replaced its boxy lights with more contemporary curvy wrap around headlights. Both models have a commanding presence on the road and the best second row seat comfort in their class.
The Chevrolet Captiva is a very comfortable and competent vehicle with a smaller 2,000 cc diesel engine but its price in the Rs 21-22 lakh range is now out of line, so we can expect a model upgradition or price adjustments soon. The Honda CR-V is the other major brand and a most comfortable vehicle though its petrol plant makes it rather expensive to run. Its price in the Rs 22-24 lakh range will also come under pressure. Mitsubishis slightly dated Pajero and Montero are quite competent offroaders with good diesel mills but may need price adjustment as well. Marutis smart new Grand Vitara now has a peppy 163 HP petrol engine and is priced about Rs 18-19 lakh, but will need a diesel mill before it can make a real dent on the market.
All these SUVs offer the comfort and prestige of a luxury saloon, they also have a big and masculine road presence. The New Fortuner will stimulate more interest among Indian SUV buyers who can expect a lot of action in the months to come. http://www.financialexpress.com/news/changing-the-rules-of-the-power-game/518811/2
NISSAN MOTORS EXPORTS
Nissan Motors car export terminal in the Ennore Port is under construction and car exports would start in August 2010, the Union shipping minister GK Vasan said on Friday. Being built at an investment of Rs 110 crore, the company has proposed to export 1.8 lakh cars a year, he said. The Japanese auto major is setting up a Rs 4,500-crore car-manufacturing facility near Chennai. The project was expected to be commissioned in August, 2010. Ennore Port Ltd, a miniratna company, has attracted Rs 1200 crore investment on various terminals and harbour crafts, he said.
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| 2/3 WHEELERS Go To Top Swaraj Baggonkar Business Standard
Mumbai: Looking to expand its newly-formed two-wheeler business unit, Mahindra & Mahindra (M&M) is studying the options of launching models of Italjet Moto SpA, a famed Italian scooter and motorcycle manufacturing company, in the fiercely competitive domestic market.
Mahindra inherited the rights to make the stylish and powerful scooters of Italjet through the buy-out of assets of Pune-based Kinetic Motors in July last year for Rs 110 crore.
Kinetic Motors had forged a licencing deal with Italjet which allowed it to source design and technology for seven scooter models ranging from moto-scooters to retro-scooters.
Anoop Mathur, president-two-wheeler sector, M&M, said: Out of the number of products which Kinetic had signed up, only Blaze was taken to some distance before it ran into some issues. Lets say (that) the opportunity is available with us and we will evaluate the options to see how best we can utilise them.
Italjet, which began designing and making bikes for Ducati, has only a few models left in its fold, including dirt bikes, All Terrain Vehicles, scooters and motorcycles.
Kinetic reserved the rights to manufacture scooters like Jetset, Millenium (called Blaze in the Indian market), Jupiter, Dragster, Torpedo, Formula and Velocifero for the domestic and export market.
Although the Pune-based company had the rights to manufacture all seven models in India, only one product made it to the local streets. The 165cc, 11.6 bhp Blaze was the only model from Kinetics Italian series launched in India.
Access to manufacturing rights of the seven models will enable M&M to leapfrog in design and technology for manufacturing scooters, an area where the company has made a fresh splash with the launch of two indigenously-built models Rodeo and Duro introduced last week.
M&M re-engineered Kinetics manufacturing plant to suit the requirements of its own products. In addition, the company has outsourced the design and technology task to Engines Engineering SrL, an Italian company that M&M had bought earlier. Engines Engineering has worked with legendary motorcycle-making companies such as Malaguti and Yamaha.
Although Mahindra 2 Wheelers currently has as many as six models (all scooters) under its belt, comprising three models from Kinetic (Nova, Kine and 4S), one (Flyte) from technology partner SYM and two of its own models, experts say with Honda Motorcycle and Scooter India (HMSI) controlling a majority of the scooter market, the challenge for M&M will be daunting.
According to the last years financial tally supplied by the Society of Indian Automobile Manufacturers, HMSI commanded a share of 57 per cent of the scooter market, followed by the Chennai-based TVS Motors with 21 per cent.
In all, the scooter segment comprised 15 per cent of last years total or 1.14 million units, of the overall two-wheeler market, which stood at 7.4 million units. The growth was 9 per cent; during the same year, motorcycles grew by a paltry 1 per cent, to 5.83 million units.
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| COMPONENTS Go To Top The Financial Express
Jamshedpur: The Jharkhand government has finalised release of its contribution of Rs 6.53 crore to Adityapur Auto Cluster Ltd (AACL), the first high-tech auto component testing laboratory-cum-effluent & hazardous waste treatment plant coming up here in the east, the ground-breaking ceremony of which is slated for Monday.
The Centre has already released its first installment of around Rs 16 crore while the Jharkhand governments share of Rs 6.53 crore is to come anytime now as they have finalised everything, said Adityapur Small Industries Association (ASIA) president S N Thakur, speaking to FE on Friday.
The AACL project is coming up on two separate plots of lands of five and 12 acres in the Adityapur industrial area. While on the first five-acre plot high-tech labs equipped with gadgets for sound/noise pollution testing, engine testing, plastic, rubber and sheet metal testing, etc and a high-tech auditorium/business centre are to come up, on the second 12-acre plot at a different location in Adityapur two units, a common effluent treatment plant and hazardous waste disposal plant are to come up in the next year-and-a-half.
While the high-tech labs and the business centre is to cost around Rs 40 crore, the effluent treatment and the hazardous waste plants are to cost another Rs 25 crore.
As the project comes under the Industrial Infrastructure Upgradation Scheme (IIUS), the Centre is providing a 75% subsidy worth Rs 48.75 crore of the Rs 65.33 crore project cost, the Jharkhand government another 10% (Rs 6.53 crore) and a special purpose vehicle (SPV) constituting the Adityapur Small Industries Association (ASIA) and other individual companies of the area would contribute the balance amount of Rs 10.05 crore.
The Centre would release its two subsequent installments of around Rs 16 crore each on utilisation of the installments paid earlier.
The Adityapur Industrial Area Development Authority (AIADA), which has allotted a total of 17 acres of land to AACL, has been compensated by way of allotment of Rs 2 crore worth of AACLs shares in the companys authorised equity capital of Rs 20 crore.
Our members have already pooled in Rs 1 crore worth of equity; we will approach companies like Tata Steel, Tata Motors and a host of other companies later on to participate in AACLs equity, added Thakur.
Spread over 3,000 acres, the Adityapur industrial area is Jharkhands biggest industry agglomeration with around 600 medium and small units housed in it, several of which are ancillaries of Tata Motors and Tata Steel.
AACLs business centre as well as the high-tech labs would come handy to most units which, by virtue of being members of the Adityapur Small Industries Association (ASIA), would now be able to avail themselves of the services of the testing labs as well as of the high-tech business centre.
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| ALLIED INDUSTRY Go To Top Malabika Sarkar The Financial Express (Motobahn)
Just when the automobile industry was showing signs of revival bringing the optimism back among the Indian tyre manufacturers, they are faced with a 10-15% increase in the prices of natural rubber, a key raw material for the industry. Currently natural rubber prices are about Rs 105 per kg. In the midst of all this, Ceat, part of RPG Enterprises, is looking to ramp up its retail presence. In this interview with FEs Malabika Sarkar, Shujaul Rehman, general manager-sales, Ceat, talks about the issues facing the industry and the companys plans.
Excerpts:
Ceat was the first company in its category to announce lay-offs as inventory piled up. You may have also considered cutting production. Has the situation improved since? There were no lay-offs by Ceat; production was cut in the third quarter of 2008-09 but since then we are running on 100% production. Yes, the situation has improved and demand has come to earlier levels.
What advantages do you hope to gain after the commissioning of the radial plant at Halol (Gujarat)?
The major advantage will be availability of radial tyres for the passenger and commercial segments. Production costs will also be significantly lower.
Retail is an important consumer contact point for tyre brands. What are your plans to spruce up retail, given that tyres are a low-involvement category?
Ceat was the first tyre company to get into tyre retail seriously with Ceat Shoppes for passenger tyres and we have moved into commercial tyre retail as well with Ceat Hubs.
We feel that tyre retail has a good future keeping in mind the way retail has panned out elsewhere in the world. Ceat Shoppes will get a big fillip once our Halol plant gets under way. Tell us about your customer contact and service programmes.
We know our customers and their needs. We keep a track of their requirement and our focus on improving our quality on a regular basis helps us in retaining them. We have also launched a programme called Ceat Royale wherein we interact with them on a professional and personal level. We also have a dedicated team of service engineers whose job is to ensure high degree of customer satisfaction and customer retention by ensuring a 24-hour redressal of their problems.
Have you benefited from the government-imposed ban on the import of Chinese bus and truck radial tyres?
Radial ban has had a marginal impact on the demand for Indian tyres. Companies with radial capacities have benefited.
You have reported a net profit of Rs 60.20 crore for the first quarter 2009-10, ended June 30, 2009, against a loss of Rs 10.67 crore in the first quarter of the previous fiscal. What are the factors that contribute to this performance?
The slowdown forced many companies including Ceat into major value engineering and cost rationalisation exercises. We had a cross-functional task force looking at costs across the value chainfrom production to distribution. Production and sales plans were made to focus on the bottom line. We planned higher growth in the domestic replacement market which is most profitable and our highest possible replacement sales helped us clock highest ever profit.
Chinese imports and slowing demand are forcing companies to cut production to protect their bottom line. When can you expect this situation to come under control?
Chinese imports are definitely a threat; despite poor quality they sell because of low prices. Another reason they sell is because of evasion of duties and taxes. The current government policy has stopped evasion of taxes. Passenger car users are brand conscious. Quality and brand image plays a key role in their decision. We dont see any major threat as Chinese products are perceived to be poor in quality.
Your plans for the rural market?
We have a vigorous distribution expansion agenda: we are planning to be present directly in all towns of 20,000-plus population as we see rural demand increasing. We have a dedicated team for rural sales30% of our field force is dedicated to rural servicing and we see it going to 50% in the next 12-18 months. http://www.financialexpress.com/news/the-slowdown-forced-us-to-rationalise-costs/518813/2
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| OIL, LUBRICANTS & ALTERNATIVE FUELS Go To Top Reuters See this story in: The Economic Times
London: Oil prices slipped on Friday as a retrenchment in investor risk appetite pulled money out of commodities and into the US dollar.
US crude for October delivery fell 46 cents to $72.01 a barrel by 1525 GMT, after touching as low as $71.27 in earlier trade. London Brent fell 27 cents to $71.28.
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| ECONOMY & FINANCE Go To Top The Hindu Business Line
Mumbai: The foreign exchange reserves rose by $3.329 billion to touch $280.978 billion for the week ended September 11, according to the figures from the Reserve Bank of India. This is the fourth week in a row that the forex reserves have risen.
In the week ended September 4, the reserves had increased by $1.28 billion to $277.64 billion.
Foreign currency assets A large part of the rise in reserves was on account of foreign currency assets, which increased by $2.905 billion to touch $264.562 billion. Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies such as the euro, the sterling, the yen held in reserves. Gold was unchanged at $9.828 billion. SDRs went up by $405 billion to $5.223 billion and the reserve position in the IMF went up to $19 million to $1.365 billion.
Next week, the rupee could trade in the range of 47.90-48.50, said a forex dealer with a private bank. http://www.thehindubusinessline.com/2009/09/19/stories/2009091951070600.htm
SENSEX UP BY 30 PTS; AUTO, REALTY STOCKS GAIN PTI See this story in: The Hindu Business Line
Mumbai: A sudden revival of buying in auto and realty counters helped the benchmark Sensex end the day higher by over 30 points to stretch the winning streak to the fourth consecutive day on Friday.
After losing over 100 points in afternoon trade, short coverings ahead of a three-day weekend holidays helped the index settle in the positive terrain. The 30-share Sensex on the Bombay Stock Exchange ended the day at 1,6741.30, up by 30.19 points or 0.1 8 per cent over from previous close. The broad-based Nifty of the National Stock Exchange also improved by 10.50 points at 4,976.05. The BSE and the NSE will remain closed on Monday on account of Ramzan Id.
Brokers said if the moderate gain of 30 points in a lacklustre trading is any hint, then the market is consolidating below 17,000- level. Auto and realty counters attracted good buying support while banking stocks suffered losses on profit-booking.
Global cues were narrowly mixed with downward bias. In Asia, Shanghai Composite index was down by 3.19 per cent, after steel counters tumbled on reports that the US might impose extra heavy duty on Chinese made steel tubes.
Straits Times ended down by 0.92 per cent, the Nikkei by 0.70 per cent and the Hang Seng by 0.67 per cent while Taiwan Weighted closed up by 0.66 per cent and Kospi by 0.25 pct. European indices were trading barely flat in their afternoon deals.
During the day auto and realty counters attracted good buying support while banking stocks suffered losses on profit -booking. Foreign institutional investors (FIIs) continued their frenzied buying pumping in Rs 8,459.06 crore since September 7, includi ng provisional data of September 17.
From the index-based counters, Maruti Suzuki firmed up by 5.23 per cent, REL Infra by 4.47 per cent, Jaipra Asso by 3.82 per cent, Bharti Airtel by 2.18 per cent, ACC by 2.04 per cent, DLF by 1.92 per cent, M&M by 1.75 per cent, SBI by 1.69 per cent, Gra sim by 1.49 per cent and Hindalco by 1.21 pct.
However, ICICI Bank declined by 3.35 per cent, Sun Pharma by 1.61 per cent, REL Com by 1.49 per cent, Sterlite Ind by 1.29 per cent and Tata Motors by 1.19 per cent. Among the sectoral indices, the BSE-Auto shot up by 135.89 points or 2.10 per cent and t he BSE-Realty by 56.88 points or 1.29 per cent while the Bankex dropped by 110.58 points or 1.17 per cent.
Total market breadth was positive as 1,443 counters recorded gains while 1,334 that ended with losses on the BSE. Small-cap and Mid-cap counters were in demand on buying by retail investors. The trading volume dropped to Rs 6,309.48 crore from Rs 9,401. 72 crore on Thursday. SBI was the top traded share with the highest turnover of Rs 181.83 crore. http://www.thehindubusinessline.com/blnus/05181901.htm
INFLATION MAY RISE TO 6% BY MARCH NEXT YEAR: RBI PTI See this story in: The Hindu Business Line
New Delhi: With inflation turning positive after 13 weeks, the Reserve Bank of India (RBI) on Friday said the wholesale price index may rise to six per cent by this fiscal end - a development that may pose challenges to the central bank in maintaining a stable monetary policy.
We have always said by March it should be five per cent. It may become six per cent, RBI Deputy Governor, Mr K C Chakrabarty said on the sidelines of a seminar on financial inclusion.
He said if procurement prices increase 10 per cent every year, food inflation cannot be less than 10 per cent. This is also partially policy oriented ... We want to give more money in the hands of farmers, he said.
When asked whether it will be a challenge for the RBI to choose between promoting growth and stemming inflation, he said the challenge is also there.
The wholesale price index turned positive for the first time in 13 weeks, rising to 0.12 per cent for the week ended September 5 on inflating prices of essential food items. http://www.thehindubusinessline.com/blnus/01181110.htm
Last Financial closing
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Sunday, September 20, 2009
Indian Auto Industry Update September 19, 2009
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