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| INDUSTRY Auto cos to gain from urban market revival New norms to ease vehicle repossession Tata Motors sells half its holding in Tata Steel to Tata Sons INTERVIEWS/FEATURES CARS, SUVs, MUVs Nissans Leaf may electrify India only in 2011-12 Audi India plans service centre, showroom in Chennai COMMERCIAL VEHICLES COMPONENTS Kirloskar Oil promoters rejig stake
| ALLIED INDUSTRIES Exide recharges, eyes Rs 100 cr investment FINANCE & INSURANCE Uno sells Shriram Transport shares worth Rs 215 cr OIL, LUBRICANTS & ALTERNATIVE FUELS Oil slips to USD 68.48 a barrel INTERNATIONAL NEWS Magna sees Opel paying back state loans by 2015 Volkswagen to unveil new electric car at IAA VW sees increasing signs for market recovery US-China tyre row set to intensify as Beijing shows its no chicken | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INDUSTRY Go To Top Shweta Bhanot Yahoo India (Web Edition), Business Standard (Delhi Print Edition)
With a population of more than 750 million and a vehicle density of 2.3%, the Indian rural market is suddenly the cynosure of all eyes. It is the global economic meltdown that is forcing auto companies to take a real hard look at this market. Overall, the rural market contributes less than 10% to the total sales of the industry currently. It is expected to see double digit growth this year, higher than overall category growth.
"The future is in the rural market. It has great potential for perennial favourites including small cars and two-wheelers; even C segment cars are making inroads into the market," says, Abdul Majeed, auto analyst, PricewaterhouseCoopers.
Unlike the urban market, its rural counterpart is unique both in the way a buying decision is made and the way products are marketed. It is not about air-conditioned dealerships or spunky sales executives stationed there; it's about involvement of a whole community in helping a few make the buying decision. Endorsement of opinion makers including sarpanch, doctors, teachers in the government institutions and rural bank officers, among others, is a decisive factor in chalking out the path for a brand in the rural market, eventually leading to sales. This is in addition to establishing a cost-effective distribution network to maximise coverage.
"Building up volume in the rural market takes a couple of years. It took several years for Maruti Suzuki to establish its base in the rural market," explains Rakesh Batra, automotive sector leader, Ernst and Young India.
Many brands are treading the path dug out by Maruti and Hero Honda. Close to 10% of Maruti Suzuki's sales come from the rural market, which it plans to increase to 15% this year. Hero Honda, on its part, had 50% of its sales coming from rural market in FY'09, which it hopes to take to 55% in FY'10. It was due to their relatively strong presence in the rural market, that helped the two companies avert greater damage as the Indian auto sector skidded off track earlier this year.
Says Maruti Suzuki India executive officer (marketing) Mayank Pareek, "Rural presence gives us an edge over the others. We started pushing our rural strategy in a big way from July last year. One must remember rural does not mean poor and it also does not mean farmers. There's a lot of demand of our cars like the Alto, the WagonR and the Estilo from rural markets."
Realising the importance of opinion makers, companies such as Maruti Suzuki, Hyundai Motor India and General Motors India run special panchayat schemes in these markets.
GM India, for instance, runs a panchayat scheme wherein it gives Rs 2,000 as incentive on every buy of a Spark, says, Ankush Arora, vice-president (sales and marketing). GM India has appointed a marketing firm, RCandM, to help it formulate its strategy for rural marketing. The company has around 45 outlets in B category towns. GM's Arora says since availability of finance is limited and the income pattern is seasonal, the number of cash purchases in rural areas is higher compared to urban areas, and therefore, this market has been relatively less affected by the credit crisis.
Last year, Hyundai launched Ghar Ghar Ki Pehchaan, a scheme targeted at government employees in rural areas and members of gram panchayats. The company also has a marketing initiative, Hyundai Utsav, running in tier III cities and rural areas of Punjab and Andhra Pradesh. It looks to build the brand's visibility and creating awareness about the loans and schemes offered by the company.
Hyundai aims to penetrate in 58% of the Indian villages with a population of 500 or more, says an EandY report on the market. Maintenance and after sales service are two big factors influencing the buying decision of the rural customer, who prefer to cross check with their local mechanic before striking a deal. Price, an important factor, comes one step below these in importance. Further, since the awareness of brands and new technology is low, the rural customer is seen unwilling to pay a premium for these. "They do not like sudden changes in the existing products and prefer value for money and ease of use," says Sanjay Tripathi, division head for product planning, and brand management, Yamaha Motors.
Since awareness about and exposure to foreign brands are low, rural buyers lean towards Indian brands, which are familiar to them by vritue of the commercuial vehicles in their portfolio. All depends on the right product positioning. Tata Motors has been aggressive in the rural market with its Nano. Of the total bookings of Nano, the share of rural is less than a third. Less than 10% of Tata Motors' passenger car sales come from the rural market.
Mahindra and Mahindra (MandM), despite being being top of mind courtesy its utility vehicles, gets less than 10% of its sales from the rural market. http://in.biz.yahoo.com/090914/50/bau6qp.html
AUTO COS TO GAIN FROM URBAN MARKET REVIVAL Neha Rishi Daily News & Analysis (Web Edition)
Mumbai: While the deficient monsoon has hit rural sales of auto companies, there is also some good news for them. Growth in the urban market is moving into the positive zone.
According to Arvind Saxena, senior vice-president (marketing and sales), Hyundai Motor India, growth in auto sales in the top 10 cities had been flat during the last eight months, but the situation is getting better. "Over the last two months, we have seen the trend reversing and growth entering the positive territory. Though it is very early to say how much we will gain from this revival, due to the lower base of last year, our gain will be substantial. The urban market contributes nearly 60% of our total sales," Saxena said.
Maruti Suzuki, which controls about half the Indian car market, will benefit largely from the revival in this market. Almost 75% of the company's sales come from cities.
Mayank Pareek, executive officer (marketing and sales), said there was 3% year-on-year (YoY) decline in urban-market sales in April to June. "However, from July onwards, we are seeing a positive trend and hope for a double digit growth from the tope 10 cities.
Except for Bangalore and Chennai, the response from the other 8 cities has been good. These two cities, being IT industry hubs, are still showing negative growth," he said.
"Urban consumption is showing signs of a nascent recovery. Rural demand may be hit by a failed monsoon, but we reckon urban demand is on a sharp recovery curve. In July, domestic passenger car sales rose 31% YoY - benefiting from a low base, (last year, July marked the beginning of a slump in urban consumption) but they have still registered a 10% CAGR over June 2007," said Citibank analysts Jamshed Dadabhoy and Hitesh Goel in a report dated August 18.
"The Maruti management noted that sales in the top 10 cities were in positive territory for the first time in many months, while volumes in the top 20 cities rose by 20% YoY. It remains fairly positive, given the improvement in vehicle financing and a recovery in consumer sentiment," the Citi analysts noted.
The report also stated that while aggregate industry growth will be 5% CAGR over FY08-10; pent-up demand could positively surprise in FY11/12. The passenger cars segment grew by 13.47% in the April-August period and two-wheelers registered a 17.70% growth.
Two-wheelers major Hero Honda is also pinning hopes on a revival in the urban market.
"In the premium segment (150cc and above), we have grown by 37-38%, whereas the industry has grown by 30%. This segment has even grown better than the overall growth of 25%. A majority of our premium offerings sell in urban areas." http://www.dnaindia.com/money/report_auto-cos-to-gain-from-urban-market-revival_1290221
NEW NORMS TO EASE VEHICLE REPOSSESSION Danny Goodman Business Standard (Web & Print Edition)
New Delhi: Key changes are expected in vehicle repossession norms to ease the process for banks to take back cars and two-wheelers from owners that default on loan repayments. These changes are being discussed by leading private and government-owned banks through the Indian Banking Association, the Society of Indian Automobile Manufacturers and the Reserve Bank of India.
Chief among the important changes under discussion is a proposal to record phone conversations between the banks (and their recovery agents) and defaulting customers and retain proofs of registered letters reminding customers of late payment.
Second, all field visits by bank staff and recovery agents to the residence or office of the defaulting customer will be recorded in a log book. Three, local police stations will be educated on the legal rights of the banks to take automatic possession of cars or two-wheelers if the customer has not paid the equated monthly instalment or EMI for three consecutive months. Loan officers in banks say most police stations are unaware of this basic right to which customers agree when they sign the loan application documents. This lack of awareness has led to numerous criminal cases being filed against private banks
These changes are expected to correct a major flaw in repossession norms -- the lack of evidence with the police to re-take a vehicle from a defaulting owner. As a result, banks have no option but to appeal to the courts, which can be a long-drawn affair.
Banking officials involved in preparing the draft reposession norms, however, say it may take a while to implement these because they involved the security agencies Last month, the RBI released its first set of guidelines on vehicle repossession for non-banking financing companies or NBFCs. Sources in the NBFC industry said the Finance Industry Development Council, which represents the NBFCs, is also party to the current discussions.
The banks and NBFCs have submitted a set of 30 guidelines that will help us to use acceptable force to go after defaulters' vehicles that rightfully belong to us, an NBFC executive said.
The difficulties in repossessing vehicles prompted several banks and NBFCs to sharply reduce their exposure to vehicle financing. About two years ago, around 90 per cent of all cars bought at dealerships were financed by banks. That proportion is down to 65 per cent. For two-wheelers, 40 per cent of purchases are financed, down from a high of 65 per cent in the same time-frame. http://www.business-standard.com/india/news/new-norms-to-ease-vehicle-repossession/370124/
TATA MOTORS SELLS HALF ITS HOLDING IN TATA STEEL TO TATA SONS Business Standard (Web & Print Edition)
Mumbai: Tata Motors, India largest truck maker, raised Rs 236.5 crore on Monday by selling nearly half of its current investment in group firm Tata Steel. In a block deal on the Bombay Stock Exchange, the company sold five million shares of Tata Steel to group holding firm Tata Sons for Rs 473 a share.
Earlier in June, Tata Motors had sold 11 million shares of Tata Steel to Tata Sons for Rs 457 crore. Now, Tata Motors is left with 5.44 million shares of Tata Steel. Tata Motors, acquired the Jaguar and Land Rover brands from Ford Motor Company last year. It had earlier announced it would monetise its investment to meet the repayment requirements. On Monday, the stock of Tata Motors closed two per cent higher to Rs 561.8 a share and Tata Steels stock gained 2.12 per cent to Rs 479 a share. The Sensex the benchmark index of the exchange, was down by 0.31 per cent to 16,214 on the day.
Tata Sons had also bought 0.81 million shares of Titan Industries from Tata Chemicals for Rs 100 crore on Friday. The group holding firm has been increasing its holding since the downturn pulled down the stock prices of group firms.
S&P raises credit rating of Tata Power
The agency said it revised the outlook on Tata Power considering the significant progress made by the company on its two key projects, the 4,000 Mw Mundra project and the 1,050-Mw Maithon project, and the strengthening of its business position, said a press release. http://www.business-standard.com/india/news/tata-motors-sells-half-its-holding-in-tata-steel-to-tata-sons/370120/
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| INTERVIEWS/FEATURES Go To Top Bhupesh Bhandari Business Standard (Web & Print Edition)
New Delhi: Every Sunday, Jagdish Khattar makes it a point to call his customers to find out if they are satisfied. Was the quality of the service up to the mark? Was his staff polite or not? Was the bill high or low? Though a few complain of high bills, the answers are mostly positive. Khattar feels Carnation Auto, his venture which deals with automobile service, spares, accessories and now pre-owned cars, has begun on the right note.
The business mind you is still small Carnation has 10,000 customers out of the 11 million cars on the countrys roads. So, Khattar can afford to give a call to his customers. He may have to engage a call centre if the business grows in the days to come.
At the moment, automobile dealers say it will be hard for him to win the trust of customers and there will always be the element of doubt in their mind if they will get genuine spare parts at Carnation. Carmakers show mixed reactions some say it will help them expand into towns where they dont have a service station, others say there is no way Carnation can deliver on its promise. Experts raise doubts on his ability to source parts made with patented technology.
Still, Khattar feels he has hit upon the right formula for success. He is not the first mover in the market the TVS Group (MyTVS), Mukesh Ambani Group (Reliance Auto Zone) and Mahindra & Mahindra (First Choice) got in before him. But none has the national presence that Khattar plans to soon put in place.
Sitting in his small office situated on a high-rise off the expressway to Greater Noida, he talks investments of up to Rs 1,000 crore in the next four to five years, breakeven in two years and profits from the third year, joint ventures and strategic alliances. He has put in place a team of over 600 men and women drawn from top companies like Bharti Airtel, Schneider and Reliance Petroleum. Khattar took none from Maruti Suzuki, of which he was the managing director from August 1999 to December 2007, though two of his men have worked in the past for the countrys largest carmaker.
Demand vs supply
Subsequently, Khattar commissioned consultancy firm AT Kearney to research the sector. It said that top carmakers are slated to spend up to Rs 30,000 crore to up production capacity from 1.7 million in 2007 to 3.8 million by 2015. This, said AT Kearney, will require an investment of Rs 15,000 crore by 2012 in sale and service infrastructure. The all-important question was that who will bring this money? Experience at Maruti Suzuki had shown Khattar that dealers were losing interest in the business. The new generation didnt want to dirty its hands and was keen to use resources in sectors like information technology, retail or real estate. Some top dealers did not have male heirs and didnt know who to build the business for. When the car market took a turn for the worse earlier this year, many dealers were on the verge of bankruptcy. (The situation has improved in the last few months as car sale has picked up.)
This was the space Khattar decided he had to enter. The car population in the country, AT Kearney had projected, would grow from 11 million in 2008 to 15 million in 2012 and 19 million in 2015. This would strain the service infrastructure. Research also showed that over 50 per cent car owners move out of the dealer workshops for service after two years when the service warranty gets over. To save money, these people go to small unauthorised garages. With new emission norms, these garages may not have the right tools to service cars.
With the right price and product, Khattar says he can get business from dealers as well as these garages. It is worth noting that for the first two or three years, which are covered by the warranty, cars do not suffer much wear and tear. It is only later that fatigue sets in to parts. My average revenue per car will therefore be higher, says Khattar.
Sector experts say that there is growing dissatisfaction with service standards of automobile dealers the world over. When you go for service, the focus is on the car and not the customer, says Synovate Motoresearch Global Director Richard Rice. I dont think very many manufacturers have actually made that link in terms of how important it is going to be for ongoing prosperity to deliver at the dealers level.
Globally, third-party service chains have emerged as a serious alternative to authorised service stations and independent workshops. According to Khattar, these chains have cornered 13 per cent market share in Germany, 29 per cent in France and 30 per cent in the United Kingdom. Khattar, to be sure, had gained important insights into the service business while at Maruti Suzuki. Under him, the company had come out on top on as many as seven occasions in the JD Power survey on customer satisfaction. In fact, Khattar is one of the four individuals from the automotive industry to win the JD Power Founders Award.
Khattar also found support from an unexpected quarter: Motor insurance companies. Insurance claim is 120 per cent of the premium, says Khattar. Clearly, insurance companies want a chain of transparent service and repair workshops.
Spare parts
Component makers say that they are free to sell some parts to the after-sale market, especially those which go under the hood like piston rings and so on, but they are not free to sell parts that are visibly distinctive to each model and have been developed jointly with the carmaker headlights, taillights, bumper and so on. How does Khattar source such parts? Khattar says the law is very clear and he cannot be stopped from buying components. In Europe, this is a matter of anti-trust, says he.
So far as imports are concerned, carmakers say that Khattars costs would be high as he can buy only from independent dealers and not the original component manufacturer. Some of them even say that spare parts of recent models cannot be procured through dealers. An independent dealer, for instance, cannot stock parts of the new City or Accord, says a Honda Siel Cars executive. Khattar knows this is a problem but is confident that he can still solve most of the problems that could happen in any car. If Khattar is able to scale up his venture, he is bound to hurt car dealers and hence carmakers. In India, profit margins for car dealers are not more than two or three per cent, way below eight to nine per cent elsewhere in the world. Where they make money is spares and service. There the profit margins can be as high as 50 to 60 per cent.
At the moment, dealers are blas about Carnations challenge. I dont know if customers will have confidence in an independent service provider. He goes to an authorised service centre because he is assured of genuine parts, says a Delhi-based dealer. It is difficult to say at this stage what will happen to imported parts. Carmakers can put their foot down on such parts. To deal with the challenge, Carnation offers warranty on all parts something Khattar claims no car maker provides at the moment.
Not that everybody is opposed to Carnation. At least one car industry executive says that it can be of great help for small car companies that do not have a nationwide service network. We expect our customers to go to our dealers. But it is a good thing for places where we do not have an outlet, says General Motors India Director P Balendran.
Real estate
Khattars original plan was to set up a subsidiary company, Carnation Realty, to house all real estate. The obvious idea was to raise money in that company. But the slump in real estate has made him shelve the plan. Khattar claims he has received over 200 applications for franchises. But that is not the model he wants to follow. In each state, Carnation will form a joint venture company with a local businessman, which will cover the whole state. So far, he has formed six such joint ventures. Carnation retains majority control in all. Joint venture partners are all mid-sized businessmen worth Rs 50 to 100 crore.
Through the joint ventures, Khattar wants to target small towns which do not have service infrastructure. People from such towns go to large cities to purchase a car. To take the car back to the same city for service is an inconvenience. Carnation can take care of service in such towns, says he. Though market leader Maruti Suzuki has a huge network with some 2,000 authorised service stations, other carmakers lag far behind. At the same time, the market in small towns and even villages has gained a buzz because of improved rural prosperity. Support prices for all crops are up, monsoons (except the current one) have been bountiful and farm income is not taxed.
Price & convenience
For convenience, Carnation stations open at 9:00 in the morning and stay open till 9:00 at night. It offers car pickup and drop. Khattar even plans to have service vans which can park in a neighbourhood and service all the cars there.
But there are other ways Khattar is trying to keep his costs under check, which will help him keep the price tag on his service low. Instead of buying space in newspapers for advertisements, Khattar has put inserts in weekend editions a cost-effective way of reaching the customer. He expects word-of-mouth publicity to play a big role in his campaign.
Of course, the inserts carry prominently Khattars photograph. Even the logo of his company says, A Jagdish Khattar Initiative. Brand experts will tell you that such a plan runs two risks: One, people perceive it to be a one-man show that lacks management depth; and two, what happens if the promoter is not around?
Khattar says the tagline was attached on the advice of Piyush Pandey, the chairman of Ogilvy. A dipstick carried out by Pandey showed that Khattars credibility amongst automotive industry heavyweights was the highest across various parameters. Pandey therefore insisted that his name should be brought in one way or the other. Service, of course, is a highly personalised business and Khattar hopes it will help.
Meanwhile, Khattar has begun selling pre-owned cars. Most carmakers offer similar services but with a difference: They may buy any brand but they will only sell their own cars. The trick here is to sell a car within three to four weeks of buying it. Or else, it can add to costs. While the plan for pre-owned cars has begun to roll, Khattar is in no hurry to start car dealership. However, he has inked a deal with car designer Dilip Chhabria to become his exclusive dealer in the country. At the moment, his focus is on service, spare parts, accessories and pre-owned cars. http://www.business-standard.com/india/news/service-satisfaction/370035/
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| CARS, SUVs, MUVs Go To Top Pankaj Doval The Economic Times (Web Edition) See similar story in: The Times of India (Web & Print Edition)
New Delhi: After dominating the Indian market with its indigenously-built SUV Scorpio, Mahindra & Mahindra (M&M) is working on one of its most ambitious projects - building an all-new SUV from scratch with an eye on foreign markets. M&M will invest Rs 700-800 crore in the new product that is expected to be out before the next fiscal-end.
"It is being built in such a way that it will give us complete flexibility on what we require from it as per various markets. The basic body structure would remain the same even though the vehicle can be a right-hand drive or left-hand, meet varying safety requirements, or run on different fuels," Goenka said, adding that the first vehicle would roll out with a diesel option while others like hybrid could follow later.
NISSANS LEAF MAY ELECTRIFY INDIA ONLY IN 2011-12 Manu P. Toms The Hindu Business Line (Web & Print Edition)
Mumbai: Indians will have to wait till at least 2011-12 to see the Leaf, Nissans mass-market electric car that is slated for a global launch by the end of next year.
The launch would first be in Nissans home country, Japan, besides the US and Europe. China may also figure in the first set of countries. However, India will have to wait. Mr Kiminobu Tokuyama, CEO, Nissan India, indicated that Leaf might be introduced in India a year or so after the global launch.
We definitely want to introduce Leaf in India. I have already requested the Nissan headquarters to study the possibility of introducing Leaf in India, Mr Tokuyama told Business Line. I think the Indian Government will support this environment-friendly product, he said.
With the current 110 per cent import duty, Leaf in India will be imported from Japan, but at a cost that could be almost double its actual price. This is a product of the future with zero emission. There should be infrastructure (the network of charging stations). There should be a joint effort of manufacturers with central government or local governments to build infrastructure, he said.
The Leaf was unveiled at Nissans headquarters Yokohama in Japan last month. Nissans global chief, Mr Carlos Ghosn, had said that the Leaf, which runs 160 km on a single charge, would be priced on a par with gasoline-run cars, excluding the cost of battery.
Electric car projects Although Leafs India entry remains at least two years away, Indian companies have already moved ahead with their electric car projects. The Bangalore-based Reva Electric Car Company, which produces low-speed battery vehicles, has sold more than 3,000 vehicles since its inception in 2001, half of them in India and the rest abroad. The company is launching two new models on Wednesday at the Frankfurt Motor Show and will commission a 30,000-capacity plant early next year.
Meanwhile, Tata Motors is developing an electric version of Indica in Norway, with technical inputs from Miljobil Grenland, AS, a Norwegian company specialising in the development and manufacture of electric vehicles. Tata Motors had acquired Miljobil last year.
Tata Motors is likely to launch electric Indica in Norway by the end of this year. With the high battery prices, manufacture of electric Indica, at present, is not viable in India, Mr Ratan Tata, Chairman of Tata Motors, had said at the companys annual general meeting. http://www.thehindubusinessline.com/2009/09/15/stories/2009091551370200.htm
AUDI INDIA PLANS SERVICE CENTRE, SHOWROOM IN CHENNAI The Hindu Business Line (Web & Print Edition)
Chennai: Audi India, the wholly-owned subsidiary of Audi AG, will have its first showroom in Chennai in 2010. The Bangalore-based Jubilant Motors Private Ltd is setting up a service centre and a showroom in Chennai, investing about Rs 15 crore.
More outlets planned At a press conference to unveil the new version of its sports utility vehicle, Audi Q7, Mr Anil Reddy, Head of Sales, Audi India, said in addition to Chennai, the company is setting up sales outlets in Kolkata and Ludhiana.
Through nine sales outlets, the company currently sells three sedans A4, A6 and A8 assembled at its sister concern Volkswagens facility in Pune. Besides, it imports and sells TT, R8, Q5 and Q7.
Profitable growth In India, Audi sold 1,128 units till August this year growing by more than 60 per cent over last year. The company is cruising towards a fifth share of the 10,000-units-a-year luxury car market in India.
Asked if Audi would go in for multiple branding with group companies such as Volkswagen and Skoda for retailing, Mr Reddy said, Certainly not, each entity in Volkswagen group is a separate brand. http://www.thehindubusinessline.com/2009/09/15/stories/2009091551360200.htm
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| 2/3 WHEELERS Go To Top Bijoy Kumar Y Business Standard
Mumbai: Hes been a Marine, a McKinsey consultant, and even taught at B-Schools. But Harleys India chief is here for the passion, to indulge in his favourite bikes, even the Night Train.
Where else to meet the newly-appointed managing director of Harley-Davidson India than at Hard Rock Caf Mumbai one hard-rocking institution meets another and all that. This is an awesome place, says Anoop Prakash, looking ready for a Harley Owners Group (HOG) party rather than a newspaper interview in his black, white and orange Screamin Eagle shirt. There we were, motoring scribes armed with vested interests that revolved around long-term Softails and more loaners that could be ridden across America and India. Anoop, needless to say, looks at ease surrounded by towering walls decorated with guitars and costumes of has-beens. I introduce myself and my BS Motoring team mate Kyle, who incidentally owns 22 motorcycles. Anoop is impressed at the fact that Kyle has made the shift to journalism from being a garage supervisor. He should, since he has done his bit of shifting in his 36-odd years. From being a US Marine (yes, you read that right) to stints at McKinsey and teaching at business schools to helping the Bush administration deal with post-Katrina relief he has done it all, writes Bijoy Kumar Y.
So how character-building was his time as a Marine? It was during my Marine days that I caught the Harley-Davidson bug I never owned one, but my friends swore by them. And when I got this opportunity to bring Harley-Davidson to India, I thought there couldnt be a better dream job than that. A short pause to have a long sip from the diet Pepsi-and-ice and he continues. I am not here to sell a handful of motorcycles and waste time that is the job of a bureaucrat. I am here for the passion (gently thumps his chest) and I am overwhelmed by the reaction. This is his 20th interview in India and I am already getting scared that the media attention has scarred the man permanently. Ready for more marketing spiel then but we are yet to order food. The set lunch menu looks appetising, but we dont have the time to do justice to a four-course meal. So we settle for the Jumbo Starter Combo with enough oil in it to turn the V-Twin of a Sportster along with dips created to line your arteries. Mental note: Dont order starters when you are drinking less potent stuff like an ice-tea.
So what is the starting point for the India ride? Over 60 per cent of buyers are going to come from big metros and that is where we will start operating from. But we are looking at over 20 dealers across India sooner than you think. Trust me, we are not here to shortchange the Indian consumer lots of car makers and some big bike importers have done that. We will make motorcycles accessible and the brand accessible and that means the whole Harley-Davidson experience including accessories and apparel But authentic H-D apparel will be expensive and copies will flood the market before you say Heritage Softail, I interrupt, and pop a largish onion ring into my mouth with a bit of a struggle. Fakes are in a way compliments, and trust us, we at Harley-Davidson are good at nurturing as well as protecting our trademarks, Anoop answers but I do notice a worry-line emerge on his face only to disappear as quickly.
Words such as premium, authentic, quality and heritage are used liberally throughout the lunch and the business school blood is flowing faster than WD40. Time to change the tack then. What is the longest you have ridden? I ask. I do short rides and the longest I have done is 150 miles it took all afternoon and I thoroughly enjoyed it. He gets more excited as we talk about his favourite Harley. It is a Dyna Wide Glide, he beams and helps himself to a tender chicken finger. Would he try taking the product placement route or brand ambassador route to establish the brand in India? We are about a company that rides with people. We want to bring a life-changing evolution to riders in India. The whole authentic experience would sell our motorcycles and we dont really want to get caught in the trappings of a brand ambassador or a product placement in a Bollywood film. Actors like Sanjay Dutt and a few cricketers own our products because they know what it is to be a Harley-Davidson rider, and we like that. Anoop is just about finding his bearings on 20:20 cricket while he has been a Bollywood fan for a long time.
My colleague quizzes him about the Indianisation of H-D products. We rode a lot in India and discovered that our quality was suited to Indian terrain. Our riders ride on gravel and in no-road situations all the time and our motorcycles can cope very well. But there will be feedback from India as time goes by and we will take it seriously. Someday you can expect Harley-Davidson to build a motorcycle for India.
Wouldnt Royal Enfield being the only time-warped British motorcycle maker in the world become a nice brand in Harley-Davidsons portfolio? (H-D already owns MV Agusta, a high-end Italian sportbike maker). We like the fact that Royal Enfield has followed our approach of evolution with their range of motorcycles and we would like to closely associate with them but that is about it.
By now I am struggling not to make slurping noises with the straw as it searches in vain for the last drops of ice-tea. How long have you given Harley-Davidson and India? I pose the last question. Sure I have moved around quite a bit but as I told you before, this is a dream job for me and a great challenge at the same time.
It is time for a photo session and the Harley-Davidson boss in India looks the part next to the Hard Rock Caf neons. No time to explore the dessert menu or even coffee, as Anoop has to get some breathing space before interview number 21. Of course, we remind him gently that we would like to get on the saddle of a test bike as soon as possible. Preferably a Harley-Davidson Night Train. http://www.business-standard.com/india/news/lunchbs-anoop-prakash/370102/
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| COMPONENTS Go To Top
The Times of India
Chennai: Japans Toyota Group on Monday has bought a token 1.5% stake valued at Rs 19 crore in Tube Investments of India (TII), the flagship company of $3-billion Murugappa Group. Rs 2,900-crore TII makes precision steel tubes and strips, car doorframes, automotive and industrial chains and bicycles. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved"
KIRLOSKAR OIL PROMOTERS REJIG STAKE The Hindu Business Line
Pune: Two Kirloskar Group companies, Kirloskar Brothers Ltd (KBL) and Kirloskar Oil Engines Ltd (KOEL) will re-jig their shareholding by way of inter se transfer amongst group companies.
Acquisition Alpana Kirloskar, Aarti Kirolskar and Jyotsna Kulkarni each will acquire 2.22 per cent of the shares of KOEL from Better Value Holdings Pvt Ltd. The acquisition will be completed between September 19 and 30. Better Value Holdings Private Ltd bought 1.42 crore shares from Kirloskar Systems Ltd, according to BSE bulk deal data.
Updates Last week, Better Value had informed the National Stock Exchange that it proposed to acquire 1.43 crore equity shares representing 7.37 per cent of the shares/voting rights of KOEL from Kirloskar Systems Ltd.
KBL has also informed the National Stock Exchange that the share capitals of the company and Kirloskar Brothers Investments Ltd are being re-organised.
The share price of the company jumped to Rs 128 but ended flat at Rs 116 against the previous days close of Rs 114.25. http://www.thehindubusinessline.com/2009/09/15/stories/2009091551461000.htm
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| ALLIED INDUSTRY Go To Top Mayank Bhardwaj/ Reuters See this story in: Yahoo India
Coonoor, India Indian rubber consumption in the year to April 2010 is seen at 881,000 tonnes, slightly higher than the previous estimate of 875,000 tonnes helped by higher demand for automobiles, the country's Rubber Board said.
Rising demand in the world's third-biggest consumer of rubber behind China and the United States is expected to make India a bigger player internationally, Toms Joseph, an economist with the state-run Rubber Board, told Reuters at a conference on Monday.
"We are ready for a very prominent position in the world by becoming the second-largest consumer of rubber soon," he said.
Joseph said domestic demand was picking up after a relatively modest rise of 1.2 percent in the year ended March 2009 due to the economic slowdown.
There had been visible signs of recovery in rubber consumption from February, Joseph said, adding domestic demand had risen by 2.1 percent to 376,350 tonnes during the first five months of the year that began from April.
The chairman of the Rubber Board, Sajen Peter, said the economic slowdown had not hit the commodity as much as feared.
"In fact, the impact of the slowdown has not been as serious as perceived by many. Tyre and automobile sales have bounced back sharply and the demand is quite buoyant now," Rubber Board Chairman Sajen Peter told Reuters over phone from Bangalore.
India's car sales in August rose by a quarter from a year earlier, signalling strong demand for the festive season, which usually boosts sales of several commodities from edible oils to gold. Stronger local demand may not boost imports significantly, as local production was also rising and tyre firms ship in rubber duty free on the condition that final products made of imported commodity should be exported, Joseph said.
Analysts say large automobile tyre manufacturing firms such as MRF, JK Tyres and Apollo Tyres import tax-free rubber when international prices drop below domestic rates to cater to their export markets. "If we if try to see production and import figures of the last five years, 99 percent of the domestic production has been consumed within the country. I do not see any problem in meeting any rise in demand," Joseph said.
He said rubber output in India, the world's fourth-biggest producer, was expected at 867,000 tonnes in the year to April 2010, up from 864,500 tonnes in the previous year. Production was expected to rise due to the efforts initiated by the government to replant old rubber trees, Joseph said. Many plantations in India date back to the British colonial rule before 1947, and ageing trees have become less productive. http://in.biz.yahoo.com/090914/137/bau6p2.html
EXIDE RECHARGES, EYES RS 100 CR INVESTMENT Nandini Goswami Daily News & Analysis
Kolkata: Exide Industries is reviewing its investment plans on the back of a likely turnaround in the auto sector. The storage battery major may invest around Rs 100 crore across its facilities during the current fiscal.
The company is also planning to increase its smelter capacity to meet requirement for lead, which has been subject to volatile price movements in the last one year. An Exide official told DNA Money, "Things are looking up and we expect a reasonable growth in both the original equipment (OE) and the replacement segment of batteries. We did not fix any major target for investments in the beginning of the fiscal and thought of restricting ourselves to maintenance cost of around Rs 30-35 crore. We are estimating a spend of Rs 100 crore now across our facilities."
Exide has facilities in Shyamnagar and Haldia in West Bengal, Hosur in Karnataka, Chinchwad and Taloja in Maharashtra and Bawal in Haryana. The company needs additional capacity to meet its demand from an increasing demand of both automotive and industrial batteries.
While the OE segment suffered knocks from plummeting auto sales in the larger part of the last fiscal and till the first quarter of the current fiscal, replacement batteries have been doing well. "The company registered a good growth even in the worst period. The growth was 20% in the first quarter of the year. We expect the replacement category to grow by at least 18% during the year," the official said. Exide has a 65% market share in the replacement segment in the branded battery market. It has a 76% share in the OE category, although sales were marginally up in the first quarter of the current year.
Analyst Sanjaya Satapathy of Bank of America Merrill Lynch said in a report on Friday said Exide is a beneficiary of the pick-up in car and inverter sales. "We now expect its battery sales to grow 15% this fiscal instead of 10% growth driven by upward revision in OEM car battery demand to 15% and a jump in inverter battery demand to 20% from 12%," Satapathy said.
Exide is looking to increase the smelter capacity for recycling old batteries by 25% in the current fiscal and by another 25% in the next, the analyst said. At present, the two smelting facilities meet up to 30% of Exide's lead requirement and the company wants to take this to 50% in a few years. http://www.dnaindia.com/money/report_exide-recharges-eyes-rs-100-cr-investment_1290222
Shobhana Subramanian Business Standard (The Compass)
Mumbai: While Exide should be able to pass on the higher cost of lead to its customers, soaring prices of the commodity that recently crossed $2,400 a tonne, are nonetheless worrying.
Thats probably why the stock of the countrys largest producer of lead acid storage batteries has lost more than 7 per cent since the start of September. Lead prices have gone up by more than 80 per cent since May 2009.
While Exide purchases a fair share of lead on a contract basis, analysts say the company may just have to absorb some part of the increase.
The good news is that the company will benefit from better-than-expected pick-up in car sales. Sales of batteries are expected to grow by about 15 per cent in the current year since the demand from original equipment manufacturers (OEMs) is now fairly strong. Moreover, according to analysts, the demand from the inverters segment is now estimated to grow by 20 per cent, up from the earlier 12 per cent.
In a bid to cash in on the improving demand, Exide plans to spend around Rs 100 crore to create more capacity given that it is already using about 90 per cent of its facilities.
In the current year, the company is expected to turn in revenues of Rs 3,700 crore, an increase of 8.5 per cent over 2008-09. The net profit, however, is expected to increase by 60 per cent over the Rs 291 crore reported last year, thanks to better operating leverage and lower interest costs.
At the current price of Rs 89, the stock trades at just under 15 times estimated 2009-10 earnings with room for upside, especially since the company has a 50 per cent stake in ING Vysya Life Insurance. The stake, according to analysts, could be worth Rs 11-12 a share. http://www.business-standard.com/india/news/exide-all-charged-up/370057/
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| FINANCE & INSURANCE Go To Top
Jammu: The State Bank of India has stopped giving car loans to the applicants in the state of Jammu and Kashmir after a large number of customers in the region turned defaulters in paying their EMIs.
According to sources, around 600 borrowers of the bank have turned defaulters and havent paid their EMI for the past many months, forcing the higher-ups of the bank to block clearance of loan applications.
Even though festive season is round the corner when a large number of people prefer to buy new cars but the SBI, which was offering attractive interest rates as compared to other banks, has ceased to give loans for purchasing new cars.
Our interest rates are more competitive as compared to other banks. We offered only eight per cent rate of interest for the first year and then it was 10 per cent for the next two years on purchase of a new car, KK Iyer, DGM, zonal office, SBI told The Tribune. He further said, Though I cannot share the figures, but as the number of defaulters have increased so we got an order from the head office to stop issuing new car loans in the state.
The head office has issued clear cut instructions to first collect the amount that has been issued to the customers only then the new car loans would be sanctioned, Iyer said. http://www.tribuneindia.com/2009/20090915/biz.htm#4
VIJAYA BANK TO FINANCE LEYLAND VEHICLES The Hindu Chennai: Vijaya Bank has forged an alliance with Ashok Leyland. According to a memorandum of understanding, Vijaya Bank will be a preferred financier for commercial vehicles of Ashok Leyland. Under the vehicle loan scheme, customers can avail themselves of up to 85 per cent of on-road price of the vehicle with a repayment tenure of five years at 11.25 per cent interest. http://www.hindu.com/2009/09/15/stories/2009091550511700.htm
Hindustan Times New Delhi: Hindustan Motors, the flagship company of the C. K. Birla group, on Monday entered into a three-year finance tie-up with Punjab National Bank for its new mini truck HM Shifeng Winner. Rattan Singh, chief general manager, sales & marketing said the Winner is the first LCV of the country in CNG with BSIV version which has a powerful 4-cylinder 1800 cc engine with best operating economics.
UNO SELLS SHRIRAM TRANSPORT SHARES WORTH RS 215 CR PTI See this story in: The Hindu Business Line
Mumbai: Foreign fund house Uno Investments has sold shares worth over Rs 215 crore in Shriram Transport Finance Company through an open market transaction.
In a disclosure to the Bombay Stock Exchange the company said Mauritius based-Uno Investments has sold 57.92 lakh shares representing 2.74 per cent stake in Shriram Transport for an aggregate of Rs 215.72 crore, reducing its stake to 3.69 per cent from the earlier 6.43 per cent.
Shares of Shriram were trading at Rs 361.65, down 2.72 per cent in afternoon trade on the BSE. http://www.thehindubusinessline.com/blnus/02141416.htm
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| OIL, LUBRICANTS & ALTERNATIVE FUELS Go To Top The Financial Express See similar story in: The Hindu Business Line, Daily News & Analysis, Yahoo India
Kolkata: Andrew Yule, LIC and United India Insurance are mulling the possibility of disinvesting their stake in Tide Water Oil Co Ltd. The three entities have 40% stake in the company. Tide Water Oil is a part of the diversified Andrew Yule Group which operates in areas like engineering, power generation and lubricants.
The committee appointed board of directors (CABOD) set up by the centre for disinvestment in Tide Water Oil will meet on September 24 to discuss the sell-off programme further.
Talking to reporters after the companys annual general meeting here on Monday, chairman Kallol Datta said SBI Caps has been given the mandate to do the entire handholding exercise for selling stake of Andrew Yule, LIC and United India Insurance in Tide Water.
The next meeting of CABOD, which will also have government representatives, will take a decision on how smoothly we can go ahead with the divestment plan in Tide Water," Datta said.
At present, Andrew Yule holds 26.22%, United India Insurance 10% and LIC almost 4% stake in Tide Water. Andrew Yule expects to mop up Rs 110-130 crore from the stake sale.
Meanwhile, the company is planning to expand its lubricants producing capacity after two new plants are commissioned, which are being set up at a cost of Rs 35 crore. Datta said Tide Water is setting up a modern lube blending plant at Oragadam near Chennai, which is expected to function shortly. Its turbhe plant in Navi Mumbai, wherein the operations of the Deonar plant had been shifted, commenced its operations in 2008-09. "The second phase of the plant will kick off after Diwali," Datta said. http://www.thehindubusinessline.com/2009/09/15/stories/2009091550490300.htm http://www.dnaindia.com/money/report_tide-water-selloff-this-fiscal-says-chairman_1290231 http://in.biz.yahoo.com/090914/50/bau6qs.html
OIL SLIPS TO USD 68.48 A BARREL See this story in: The Indian Express Singapore: Oil prices eased in Asian trade on Monday amid weakness in the global equities market and as the dollar regained some of its losses, dealers said. New York's main contract, light sweet crude for October delivery was 81 cents lower at USD 68.48 a barrel.
Brent North Sea crude for October delivery tumbled 55 cents to USD 67.14. "The fall is really related to some weakness in equities markets. The dollar's weakness has also subsided a bit," said Victor Shum, senior principal at energy consultancy Purvin and Gertz in Singapore. Japan's Nikkei-225 index fell 2.47 percent in morning trade Monday, hit by a negative lead from Wall Street and worries about the effect of a stronger yen on exporters.
As oil is traded in the US currency, a stronger dollar makes the commodity more expensive to holders of other monetary units, dampening demand and leading to higher prices.
The opposite is true if the dollar weakens. "We continue to have this tug-of-war between weak supply fundamentals and optimistic hopes of economic recovery, so we are likely to stay in this USD 65 to USD 75 range," Shum said. http://www.indianexpress.com/news/oil-slips-to-usd-68.48-a-barrel/516848/
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| INTERNATIONAL NEWS Go To Top Reuters See this story in: Yahoo India
Detroit: The "cash for clunkers" stimulus program helped the auto industry but there is no need for another similar program, General Motors Vice Chairman Bob Lutz said on CNBC on Monday.
"I think it was good the first time around," Lutz said. "I don't think it's a program you run and run and run and run." Lutz said the U.S. government's $3 billion program to pay up to $4,500 to new car buyers if they traded in an old car that met program specifications brought atypical buyers into the market.
Boosted by cash for clunkers, U.S. auto sales in August reached a 20-month high, leaving some analysts to wonder if September sales will take a nosedive without the incentive program. "As most dealers will tell you these were not your normal, used car buyers," Lutz said. "So, (cash for clunkers) genuinely did provide a stimulus and got a bunch of old and heavily polluting vehicles off the road."
Lutz on Monday was making media rounds to pitch a 60-day, money-back guarantee on new vehicles that GM and Lutz announced last Thursday. It is accompanied by ads that will feature GM Chairman Ed Whitacre telling consumers that GM's cars are much better than the public's opinion of them. Lutz, 77, seven months ago said he would retire by the end of 2009, but in July said he had reconsidered and would not retire.
He said he changed his mind in large part because the new 13-member board of directors of GM, which is owned 61 percent by the U.S. Treasury, is allowing the company to "act like any other company" without major interference. http://in.biz.yahoo.com/090914/137/bau6oc.html
MAGNA SEES OPEL PAYING BACK STATE LOANS BY 2015 Christiaan Hetzner and Philip Blenkinsop Yahoo India
Frankfurt/Brussels (Reuters) - Magna will cut about 10,500 Opel jobs in Europe, the bulk in Germany, as it acts to return the carmaker to profit and pay back 4.5 billion euros ($6.55 billion) in state aid, its co-chief executive said.
The Canadian auto parts supplier aims to sign a deal with former Opel parent General Motors within two weeks to buy a 55 percent stake together with Russian partner Sberbank, Siegfried Wolf said on Monday.
"By 2015 we want to pay back the government-guaranteed loans. Opel will be profitable before that, however," Wolf told a news conference. Around 4,000 jobs in Germany will have to go for Opel to reach profitability, and Wolf said there was a risk an Opel plant in Antwerp may be closed.
He foresaw investing nearly 1 billion euros a year in Opel. Around 170 million euros of the funds it has earmarked would go to finish planned investment in Russia, he said, slamming an Opel trustee for saying 600 million in investments in Russia would come from state aid it gets.
"The 170 million would be used immediately, with the rest of the sum being generated from the internal cash flow that will be generated in Russia," he explained.
The Magna co-CEO dismissed talk that car parts customers like Volkswagen could pull contracts from Magna now that it was buying a rival carmaker.
Scrutiny of Aid Pledge Britain and Belgium urged the European Commission to ensure the takeover of Opel did not favour German workers because of 4.5 billion euros in promised aid from Germany. Both are wary of the deal with Magna and its Russian allies, under which all four German plants stay open while Antwerp and one of two Vauxhall sites in Britain could close.
"It is important to say that the (European) Commission should not accept anything that looks like a political fix or any linkage between aid and retention of jobs in any specific plant or country," British Business Secretary Peter Mandelson told BBC radio. Germany hopes Magna's expertise will preserve as many jobs as possible in Germany where Opel employs 25,000 people, half its workforce.
Kris Peeters, premier of the Belgian region of Flanders that is home to the Antwerp plant, said he and EU Industry Commissioner Guenter Verheugen had agreed that commercial and economic, not political, factors were paramount in deciding which plants should survive. "We are convinced Antwerp has a fair chance. Antwerp has a better chance than certain German plants," he told reporters.
Verheugen and Competition Commissioner Neelie Kroes were also due to address a European Parliament debate on Opel aid called by former Belgian Prime Minister Guy Verhofstadt. Another former Belgian prime minister and now foreign minister Yves Leterme engaged European counterparts on the Opel issue on Sunday.
The Commission said it expected to receive details on aid from Germany in the next couple of weeks and said no subsidies could be given before it was satisfied they complied with state aid and internal market rules.
Chancellor Angela Merkel's government, worried about potential job losses before an election on Sept. 27, had openly backed Magna over financial investor RHJ. Germany ringfenced and propped up Opel with a 1.5 billion euro bridge loan in May to ensure it did not get swept into GM's brief bankruptcy proceedings.
The federal and state governments are ready to provide billions more in aid once the Magna deal closes by the end of November. It will then ask other European countries such as Britain, Belgium and Spain to share the cost.
Germany plans to host a meeting of representatives from countries with Opel plants on Tuesday to discuss possible financial contributions. Flanders has pledged up to 500 million euros. http://in.biz.yahoo.com/090914/137/bau6pe.html
VOLKSWAGEN TO UNVEIL NEW ELECTRIC CAR AT IAA Agencies See this story in: The Economic Times
Frankfurt: German carmaker Volkswagen AG said on Monday that it would unveil several new models at the Frankfurt Auto Show, including an electric car called the E-Up.
VW SEES INCREASING SIGNS FOR MARKET RECOVERY Reuters See this story in: The Economic Times
Frankfurt: The chief executive of Volkswagen, Europe's largest car maker, sees increasing signs for a recovery of the automotive market but cautions that the crisis is not over yet. "The difficult crisis in the automotive industry is not over yet, but there are increasing signs that the bottom has been reached," Martin Winterkorn said in a speech at an industry event on Monday.
US-CHINA TYRE ROW SET TO INTENSIFY AS BEIJING SHOWS ITS NO CHICKEN Reuters See this story in: The Economic Times
Beijing: A US decision to impose special duties on Chinese tyres could open the door to a host of trade complaints against Chinese products, creating tensions as Western nations seek Beijings support at a G20 meeting. China responded swiftly to US president Barack Obamas announcement of safeguard duties on tyre imports from China on Friday, saying on Monday it would request World Trade Organization consultations with the US over the duties. It also announced its own anti-dumping investigations of chicken products from the United States, a trade worth $800 million a year, as well as US automotive exports. Looming in the United States are complaints about products ranging from electric blankets to a steelmaking ingredient, while Chinese and European trade negotiators are gearing up for a fight over shoes. Obama, in a speech on Wall Street, said he was committed to expanding world trade and denied protectionist intent. Both sides will work hard to limit the fallout from this to within certain parameters and not let it affect the broader state of relations and cooperation, he said.
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| ECONOMY & FINANCE Go To Top The Hindu Business Line
Mumbai: The rupee fell by around 20 paise against the dollar on Monday tracking the Asian equities. It opened weaker at 48.62 and touched an intra-day low of 48.80. It recovered to close at 48.67, against the previous close of 48.48.The rupee opened weaker on the back of negative Asian equity markets. However, dollar selling by exporters stemmed the losses, said a dealer with a public sector bank. State-run banks sold dollars at 48.80 level possibly at RBIs behest to curtai l the volatile movement of the rupee, added the dealer. In the overseas markets, the dollar gained marginally against other major currencies, after three continuous sell off sessions. In the forward premia market, the six month premium ended lower at 2.67 per cent (2.85 per cent) and the one-year was at 2.79 per cent (2.84 per cent). http://www.thehindubusinessline.com/2009/09/15/stories/2009091550680600.htm
PTI See this story in: The Hindu Business Line
Mumbai: Snapping the six-day rally, the Bombay Stock Exchange benchmark Sensex on Monday fell by 50 points as investors sold shares to book profits at existing high levels amid weak global trends.
The 30-share BSE barometer, which had gained 865 points in last six trading sessions, fell by 50.11 points to close at 16,214.19 points.
The wide-based National Stock Exchange index Nifty fell by 20.95 points to 4,808.60 points, after touching a low of 4,786.25 points.
Marketmen said a surge in the Sensex in last six trading sessions pushed up stocks to dizzy heights and attracted profit selling. A weak Asian trend and a lower opening in Europe also impacted the market sentiments, they added.
Japan's Nikkei, Hong Kong's Hengsang and Singapore's Straight times were down up to 2.25 per cent. The consumer durable index suffered the most losing 1.06 per cent to 3,338.58 points. The realty sector index lost 0.79 per cent to 4,213.44 points. http://www.thehindubusinessline.com/blnus/05141901.htm
The Hindu New Delhi: Planning Commission Deputy Chairman Montek Singh Ahluwalia on Monday sought to scale up the commissions earlier growth projection of 6.3 per cent for the current fiscal a tad higher on account of stronger industrial recovery during the second half of the year.
On the industrial front, in the last couple of months there is sequence of good news. I am hoping that the second half of this year, that means from end of September up to end of March, you will see stronger growth than you did in the first halfWhen we had full Planning Commission meeting [on September 1], I had said our central assumption is about 6.3 per cent... but you know it could be little bit more, Mr. Ahluwalia told the media here. Mr. Ahluwalia noted that except for the current drought situation which is impacting the farm sector adversely, the countrys economy, though it was affected by the global meltdown, was moving towards stabilisation. We expect to see revival from the last quarter. The next six months will be better than the first six months [of the current fiscal], he said.
Slipping from a robust GDP (gross domestic product) growth of about nine per cent in the previous years to 6.7 per cent in 2008-09 as a direct fall-out of the global financial crisis, the economy managed to notch up a growth of 6.1 per cent in the first quarter of 2009-10. And now with discernible signs of recovery and economic stability setting in, a growth rate higher than 6.3 per cent is expected.
No negative growth Commenting on the turnaround, Mr. Ahluwalia said: We never had contractions. At the moment, [the] economy is growing. There is no negative growth. I am not sure what the second quarter growth rate will be, because we have to see the effect of droughtI think it [the economy] has stabilised already. I think except for drought, which is affecting agriculture adversely, non-agriculture part of the economy has stabilised and now we want to go further. http://www.hindu.com/2009/09/15/stories/2009091566661800.htm
Last Financial closing
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Monday, September 14, 2009
Indian Auto Industry Update September 15, 2009
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