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| INDUSTRY INTERVIEWS/FEATURES GM India on consolidation drive, targets 10% growth COMMERCIAL VEHICLES
| ALLIED INDUSTRIES OIL, LUBRICANTS & ALTERNATIVE FUELS Chevron pulls out of Indian lube market CEAT conducts programme for fleet owners INTERNATIONAL NEWS Magna wants to cut 10,500 jobs, 4,500 in Germany: Report China may approach WTO against Obama's tyre import tariffs ECONOMY & FINANCE |
| INDUSTRY Go To Top
The Times of India (Web & Print Edition) (Sept 14)
The Indian auto industry came of age and emerged as a global strategic market when recession drove auto giants into panic in the first world. India and China which were hailed as the next great frontiers for companies globally. And the small car, long the backbone of the Indian market, proved bigkeeping demand going in the domestic market while also helping spread across the globe. Companies like Ford, General Motors, Honda and Hyundai took a fresh perspective of Indiato learn the now-crucial basics of frugal engineeringmaking fuel efficient small cars at low cost. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://timesofindia.indiatimes.com/news/business/india-business/Global-slump-oiled-Indian-auto-wheels/articleshow/5007261.cms
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| CARS, SUVs, MUVs Go To Top N. Ramakrishnan The Hindu Business Line (Web & Print Edition) (Sept 13)
Chennai: Come Monday, Hyundai Motor Indias factory at Irungattukottai, 45 km west of Chennai, will be busier than before. The second plant on the 535-acre campus will start working in three shifts, as the company increases production capacity.
Has the domestic market picked up so much for the company to ramp up its operations? We are not forecasting just on the domestic market, says Mr H. S. Lheem, Managing Director, Hyundai Motor India Ltd, the company has enough export orders to have three-shift operations. The domestic demand too has picked up and the industry now projects a nine per cent growth this year against the earlier anticipated six per cent.
With both plants working three shifts, Hyundai hopes to produce 5.5 lakh cars this year, of which the domestic market will account for 2.8 lakh units and exports the balance. In 2010, the company hopes to produce 5.8 lakh cars, with domestic sales and exports being split equally. In 2008, it sold 4.89 lakh vehicles. The companys total capacity is six lakh cars a year.
Hyundai, according to Mr Lheem, has finished recruiting technicians for the three-shift operation. It employed 795 trainees last year when the plant that was inaugurated in February 2008 was running on three shifts, after which it switched to two-shift operations. These trainees have now been recalled.
The domestic market looks positive, Mr Lheem says and attributes the change in fortunes to the Governments support. They controlled the interest rate. The interest rates are much more stable now, he adds. Besides, after the general elections, the overall market sentiment has improved.
How does he feel about the performance of the premium hatchback i20? Mr Lheem replies that it is performing much better than what the company expected. Initially, Hyundai projected 12,000 units for the domestic market. It now believes that it will be more than three times that estimate close to 40,000 units for the year. After we introduced the diesel and automatic versions, sales have been at minimum 3,500 a month in the domestic market.
He is happy that the i20 sells more than the Honda Jazz and the Fiat Grande Punto. Did the pricing of the Jazz help? Mr Lheem laughs and says, may be. (The Jazz starts at Rs 6.98 lakh ex-showroom Delhi, and the i20 in comparison starts at Rs 4.80 lakh.) With Hyundai expecting to produce to full capacity, reliable official sources say the company has started planning for a capacity increase a couple of years down the line. It has sounded out the State Industries Promotion Corporation of Tamil Nadu, a State Government agency responsible for industrial development, for land adjoining its campus, which may be difficult.
The company feels there may be enough space on its campus for one more press shop the key to car manufacturing where steel coils are pressed, cut and shaped into body panels.
Has Hyundai started thinking of expanding beyond six lakh units? No, not yet, Mr Lheem says. With some efficiency improvement, the output can be increased by five per cent or to a total of 6.3 lakh units. Any further expansion in capacity will have to depend on how the market develops. http://www.thehindubusinessline.com/2009/09/13/stories/2009091350270200.htm
GM INDIA ON CONSOLIDATION DRIVE, TARGETS 10% GROWTH Shweta Bhanot, Yogima Seth The Financial Express (Web & Print Edition) See similar story in: Yahoo India (Web Edition) (Sept 14)
New Delhi, Mumbai: Having resolved its spare parts problem and with a new mini-car on the anvil, General Motors India is now looking at a bigger share of the passenger car market in India.
Earlier this year, Chevrolet customers had to face delays ranging between 12-15 days in availability of spare parts in India. But since the company shifted its spare parts business from Mumbai to Talegaon, the situation has improved considerably. The availability of spare parts was delayed in the initial months of this year. But after moving our parts distribution centre from Bombay to Talegaon, the company has been able to meet all demands on time, said Karl Slym, managing director, GM India, adding that all pending orders have also been completed.
He added that GM India is all set to launch its bigger sedan, Cruze, next month, followed by its much-talked about mini-car in January next year. The company plans to register a growth of 10% this year, over 65,702 units that the company sold in India in 2008.
A General Motors (GM) dealer in Kolkata, who is also a member of the Federation of Automobile Dealers Association (FADA), said, There was a lot of confusion over distribution of parts earlier, but any part can be made available within a weeks time.
However, this wasnt the case till some time back, when GM car owners in India had to wait for several days and, in some cases involving replacement of engine parts and body parts, even months to get their damaged parts repaired. This resulted in lower sales of the company vis--vis its counterparts Maruti Suzuki India and Hyundai Motor India. All Maruti workshops in Delhi and NCR can make spare parts available in a days time due to their proximity with the companys plants in Gurgaon and Manesar.
Though GM dealers in Mumbai also claim that they face no problem in sourcing components from the company, largely due to proximity with the Talegaon plant, it takes several days in other cities.
Stephen DArcy, global head (automotive practices), PricewaterhouseCoopers, said spare parts distribution is a problem in India for most companies. For owners of international brands, either the parts are too expensive or the service level is inadequate, which leads to lower sales in India, he added. http://www.financialexpress.com/news/gm-india-on-consolidation-drive-targets-10-growth/516629/ http://in.biz.yahoo.com/090913/50/bau6hq.html
The Hindu (Metro Plus)
The company says that this is fastest ever ramp-up of any Maruti Suzuki model and is thanks to the growing demand for the A-star (which is called Alto in Europe) and the Pixo in the European market due to the scrappage schemes in the U.K., Germany, France and Italy.
Production of the export versions began around December last year with the first shipments commencing in January this year. Until August 2009, Maruti had exported 40,000 units of the A-star and an additional 13,500 Nissan Pixos.
Maruti Suzuki India chairman R. C. Bhargava said, The A-star is doing very well in the export market and we are planning to export over 75,000 units of the car by the end of March 2010. http://www.hindu.com/mp/2009/09/09/stories/2009090950020200.htm
The Hindu (Metro Plus)
Ford India has launched a new version it the Ikon. Called the iKool, the saloon features new badging, chrome deck lid appliqu and spoiler. The interior features an iPod-compatible MP3 audio system, which is becoming popular on most new cars. It also has a remote keyless entry anti-theft system and matching seat covers.
The 1.3 litre petrol version is priced at Rs 4.82 lakh and Rs 5.42 lakh for the 1.4-litre diesel version. Both the prices are ex-showroom, New Delhi. Ford offers a two-year / 100,000km warranty on the Ikon iKool and an option to purchase Extended Warranty that covers the car against all electrical and mechanical failures for an additional period. http://www.hindu.com/mp/2009/09/14/stories/2009091450560300.htm
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| COMMERCIAL VEHICLES Go To Top | |
| CONSTRUCTION & AGRI MACHINERY Go To Top | |
| The Hindu (Metro Plus)
Its clear that Bajaj is moving along its tight schedule after rolling out the stylish XCD 135 DTS-Si, revamping the Pulsar line-up and also enhancing its existing models by improving their quality and refinement. In July, the manufacturer introduced a new Discover DTS-Si. But does the new Bajaj motorcycle possess the potential for discovering a new commuter market share for Bajaj?
The Discover DTS-Si does not sport a fresh face and shares its silhouette with the original Discover 125 DTS-i. But the all-black treatment to the new 100cc bikes, smart five-spoke alloy wheels, front forks, engine, chain cover and neat-looking sheared silencer manage to mask its age.
A new battery-powered headlight is flanked by twin pilot lamps in the familiar headlamp cluster and provides bright, totally waver-free illumination at night. There are neat twin-pod instruments that offer riders a useful tripmeter, speedometer and fuel gauge, beacons for the turn indicators, neutral warning and battery. We found the grips and levers comfortable to use and the switchgear easy to work with. This includes a blue ride-control switch that helps riders maximise mileage by providing tactile guidance to prevent excessive opening of the throttle. The handle-mounted mirrors give a good view of the world behind.
The Discover 100 sports rubberised gearshift and rear brake pedals that feel comfortable and offer relatively better grip in the wet. The new bike follows the Discover family tradition by displaying its frame around the swingarm pivot region. A blackened alloy grab handle at the rear sits atop a stylish LED tail-lamp. We enjoyed the extra protection provided by the rear mudguard. Whats part of the standard kit on the Discover DTS-Si 100cc is a maintenance-free battery as well as a self-start. Its single-cylinder, air-cooled and four-stroke unit displaces 94.38cc while the engine cylinder sports long-stroke dimensions of bore and stroke measuring 47 x 54.4mm. This is the first of the Bajaj bikes to adopt an improved DTS-Si 2.0 engine. While DTS-Si or Digital Twin Spark with swirl induction is a Bajaj-patented fuel economy boosting twin-plug technology, version 2.0 claims further benefits of swirl in the combustion chamber while retaining twin spark plugs to aid quicker and more complete combustion cycles. The twin-valve engine also uses a graphite-based piston coating that reduces friction between the piston and cylinder block, thereby increasing engine efficiency. An exhausTEC resonance chamber on the silencer works behind the scenes to further bump up low-end grunt.
Like most 100cc bikes, the Discover 100s engine is tuned towards fuel economy. The bike pumps out a modest 7.7bhp at 7500rpm, while producing a max torque of 0.8kgm at 5000rpm.
The Discover comes with a five-speed gearbox a rarity in this segment that shifts in an all-down pattern via a heel-and-toe-lever. While enthusiasts will welcome this added ratio for its fun factor, some true-blue commuters may find that the extra cog translates into extra work for them when riding in the city.
Engine and ride There is a good spread of torque throughout the rev range and enough low-end muscle in the powerband to allow the Discover to pull off urban overtaking moves thanks to well-thought-out ratios.
The rubber-mounted engine feels smooth and refined, with vibrations firmly kept at bay. Our performance tests had the Discover completing a 0-60kph dash in 9.78sec with the bike reaching a true maximum speed of 90kph.
The Discover DTS-Si deploys a single downtube frame that splits at the engine and reunites at the swingarm. The swingarm itself is made of rectangle section metal. The new 100 uses twin telescopic forks up front and a pair of adjustable and gas-filled shock absorbers at the rear.
A high handlebar seats riders in an upright posture thats comfortable for even tall riders. The seat is well padded and adequate for long distance riding. Ride quality is good, really spine-pampering with the bike efficiently soaking up all sorts of road undulations.
At 1305mm, the Discover has among the longest wheelbases in this segment. It does not mind being flicked through traffic.
A combination of 130mm front and 110mm rear drums provide anchorage to the Discover DTS-Si. While brake feel at the lever is always reassuring, feedback from the tyres under heavy braking can be unnerving. Our best stop from 60kph to rest was 22 metres in 2.63 seconds.
Bajaj has done as much as they can to ensure the Discover DTS-Si stays as frugal as can be. The bike returned 62kpl in real-world city riding conditions, and an even more creditable 67.1kpl when out on a highway run.
Verdict Styling tweaks have given the original Discover a new lease of life.
Bajajs refined 94.38cc engine is well-suited to city riding and delivers excellent mileage as expected from this segment. The new Discover also impresses with its good ride and light handling.
Accompanied by novel features such as a battery-powered headlight, a five-speed gearbox and an LED tail-lamp at an affordable price-tag this new Discover variant does make a sound case for itself.
Technical data Engine Layout Single-cylinder, air-cooled, four-stroke Displacement 94.38cc Max power 7.7bhp at 7500rpm Max torque 0.8kgm at 5000rpm Specific output 81.6bhp per litre Power to weight 66.9bhp per tonne Bore/stroke 47/ 54.4mm Valve gear 2 per cylinder, sohc Compression ratio 9.8:1 Ignition and fuel CDI, carburettor http://www.hindu.com/mp/2009/09/09/stories/2009090950060200.htm
The Hindu (Metro Plus)
Harley-Davidson leader in cruising and touring motorcycles has officially announced its plans to unleash its cult motorcycles on India. The bikes will be here by 2010.
After many false starts, the company seems to have concretised plans.For now, Harley-Davidson India will focus on growing the Harley-Davidson brand through a variety of consumer experiences and on establishing a local dealer network.
HD has already identified dealers in Mumbai, Delhi, Bangalore, Hyderabad and Punjab. The range and price of the Harleys that are to be introduced are yet to be confirmed. May be an India-specific model is also on the cards.
We need to till 2010 for the cattle and common strays on our streets to make way for these gurgling hogs. http://www.hindu.com/mp/2009/09/14/stories/2009091450550300.htm
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| COMPONENTS Go To Top | |
| ALLIED INDUSTRY Go To Top | |
| FINANCE & INSURANCE Go To Top Shally Seth mint (Sept 14)
Mumbai: Indias biggest auto maker by revenue, Tata Motors Ltd, plans to soon raise about Rs2,000 crore ($413 million) from overseas investors through a sale of global depository receipts, or GDRs, and use the proceeds to pare its debt burden, according to two merchant bankers and three analysts familiar with the plan.
Tata Motors is working with a group of investment banks, including Japans Mizuho Corporate Bank Ltd, to raise the funds, said a merchant banker whose firm is not part of the deal and who didnt want to be identified.
The firm will offer GDRs to raise around Rs2,000 crore as early as within this month, said an analyst at a Mumbai-based brokerage firm who also didnt want to be named.
Mizuho Corporate Bank was also part of a consortium of 24 foreign and domestic banks that in March 2008 offered a bridge loan of $3 billion (Rs14,310 crore at the time) to Tata Motors for its purchase of the luxury Jaguar and Land Rover brands from Ford Motor Co.
Tata Motors is raising funds to pay down debt it took on for the purchase, of which $850 million is still to be repaid, analysts said.
It repaid $1 billion using the proceeds of a rights issue in September 2008, stake sales in some Tata group firms and a Rs4,200 crore bond sale in May that was guaranteed by State Bank of India(SBI).
Tata Motors took a $1.2 billion refinancing facility this year from a consortium of 12 banks including Citibank NA, SBI and BNP Paribas, and has retired part of this debt.
In the quarter ended June, dragged down by a 52% drop in sales at the Jaguar and Land Rover units, and the cost of servicing debt, Tata Motors posted a consolidated loss of Rs330 crore.
Its consolidated net debt to equity ratio for the quarter was 3.7:1 (excluding its vehicle finance business).
A senior banker with a Mumbai-based investment bank said it would make sense for Tata Motors to hold off on its fund-raising for some more time as the companys stock, which has more than quadrupled since hitting a low in February, could strengthen further given the companys domestic sales, which have increased every month since February. The recovery, he said, has just begun.
The companys share price has risen from a low of Rs130 on 17 February to Rs550 on 11 September.
Sensex, the benchmark index of the Bombay Stock Exchange (BSE), has risen 80% in the same period, while the auto index of the BSE has risen 137%.
Analyst Supriya Kedkar of ICICIdirect.com, in a 3 September report, changed her firms rating on the stock from hold to outperformer after the recent increase in share price while maintaining its price target of Rs560.
The company did not confirm or deny plans to sell GDRs. Tata Motors has said that it is committed to deleverage the company through divestments and capital raising at an appropriate time, but specifics will be announced as and when we finalize on a case-to-case basis, Tata Motors spokesperson Debasis Ray wrote in an email.
At a media briefing last month, Tata Motors chief financial officer C.R. Ramakrishnan said the companys consolidated debt for the quarter ended 30 June was Rs23,00024,000 crore, excluding its vehicle finance business.
Given the high debt-to-equity ratio, equity infusion is critical for the company. Hence, going for GDRs is only logical, said another analyst from a local brokerage who declined to be identified.
Already, some analysts have expressed concern about Tata Motors funds outflow. In a 28 August report, Mahantesh Sabarad and Vijay Nara of Centrum Broking Ltd wrote: We find this situation alarming and so do rating agencies. http://www.livemint.com/2009/09/13234443/Tata-Motors-to-raise-Rs2000cr.html
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| OIL, LUBRICANTS & ALTERNATIVE FUELS Go To Top (Sept 14)
Currently, India has Euro-III petrol and diesel norms in the 13 cities and Euro-II in the rest of the country.
Of the countrys 178 million tones of refining capacity, Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation have a combined capacity of 82 mt.
CHEVRON PULLS OUT OF INDIAN LUBE MARKET Lijee Philip & Piyush Pandey The Economic Times (Sept 14)
Mumbai: Chevron, the worlds third-largest oil company, has decided to pull out of the lubricants business in India, seven decades after it started operations in the country, in the face of tough competition and a faulty business model. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved"
CEAT CONDUCTS PROGRAMME FOR FLEET OWNERS The Hindu Business Line (Sept 14)
Chennai: CEAT Ltd, in partnership with Total Lubricants, organised an interactive platform CEAT PRO for the fleet owners of Chennai. A company release said the objective of conducting the programme was to give fleet owners access to best practices and ideas across diverse fields enabling them to improve their businesses and reduce operation costs.
The panelists spoke on fuel economy, telematics, radialisation and advantages of on-site service support. Mr Subrata Basu, Head (Business Development), CEAT Ltd, said, the Indian truck transportation market is estimated at Rs 38,000 crore, of this more than 80 per cent market lies in the unorganised sector. Even with the recent developments, the overall awareness of technology improvements and industry best practices is low.
Penetration of new age systems such as the Fleet Management software or the GPS systems is dismal and restricted to a few big transporters. http://www.thehindubusinessline.com/2009/09/14/stories/2009091450511300.htm
The Hindu (Metro Plus)
Gulf Oil Corporation Limited has made an aggressive bid to augment its presence in the passenger car motor oil segment by launching three new products with MX-4 technology. The products were unveiled by Yuvraj Singh, Irfan Pathan, S Sreesanth and Piy ush Chawla, players from the Kings XI Punjab IPL team, of which Gulf Oil is the official team partner.
Ravi Chawla, President, Lubes Business, Gulf Oil Corporation Limited says, The passenger cars segment is doing well and has been registering growth even in these challenging times. With the economy showing signs of recovery, the segment is expected to witness attractive growth.
With Gulf Multi G 20W-50 already well entrenched in the mass based entry level segment of passenger cars, Chawla says, Gulf Oil is launching three new products to cater to the newly emerging premium and top-end segment of petrol engine passenger cars as well as all diesel engine passenger cars and utility vehicles. http://www.hindu.com/mp/2009/09/14/stories/2009091450570300.htm
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| INTERNATIONAL NEWS Go To Top Reuters See this story in: The Economic Times (Sept 13)
San Francisco: British carmaker Bentley, owned by Volkswagen, is seeing some signs of revival in the super luxury vehicle segment and expects sales of premium cars to improve next year, one of its top executives said on Friday. We can see some movement. There is some activity going on, said Christophe Georges, chief operating officer of the Americas division. We expect the last part of this year to be a little better.
Georges declined to reveal the price of the Mulsanne. The least expensive Bentley, the Continental Flying Spur model, starts at $191,500. Based in Crewe, England, Bentley is also getting ready to launch a sports car. The Continental Super sports can run on ethanol and accelerate from zero to 60 mph in 3.7 seconds. Super-luxury carmakers, typically immune to the boom-and-bust cycles that affect their mass-market counterparts, were hurt in the past year by the fallout from the credit crisis and the economic slowdown. The wealthy shunned luxury cars during the recession as they saw their net worth decline following the collapse in financial markets and real-estate values. Bentleys U.S. sales are down 57 percent to 863 units through August this year.
Customers are there but they have postponed their purchases because of lack of confidence, Georges said. So far this year, U.S. sales of super luxury cars models from Bentley, Lamborghini, Rolls-Royce and Maybach are down 52 percent, according to industry tracking service AutoData.
MAGNA WANTS TO CUT 10,500 JOBS, 4,500 IN GERMANY: REPORT Agencies See this story in: The Economic Times (Sept 14)
Berlin: Canadian auto parts maker Magna and its Russian finance partner plan to cut 10,500 jobs in Europe when taking over car makers Opel and Vauxhall, 4,500 of them in Germany, a German newspaper reported.
"Since spring, it was known by all the parties, including representatives of the (Opel) employees, and from the information I was given, that the number (of job cuts) mentioned by Magna only concerned the productions sector but other job cuts were feared in administration," Guttenberg said in an interview to appear Sunday in the Bild am Sonntag.
CHINA MAY APPROACH WTO AGAINST OBAMA'S TYRE IMPORT TARIFFS Bloomberg See this story in: Business Standard, The Indian Express, The Tribune (Sept 13)
China strongly opposes US President Barack Obamas decision to impose tariffs on tyre imports from China and may refer the case to the World Trade Organization, the Asian countrys Ministry of Commerce said.
The US violated rules of the WTO and the tariff imposition is a breach of the commitments made by the US at the Group of 20 summits, the ministry said in a statement posted on its Web site, citing spokesman Yao Jian. The move will harm both countries interests and produce a chain reaction of trade protectionism, slowing world economic recovery, it added.
The US government placed tariffs starting at 35 per cent on tyre imports from China, backing a United Steelworkers union complaint against the second-largest US trading partner, according to a White House statement yesterday. The case brought by the United Steelworkers is the largest so-called safeguard petition filed to protect US producers from increasing imports from China.
It is an abuse of the trade remedy measures and made an extremely bad start against the backdrop of global financial crisis, Chinas statement said. China will reserve all legitimate rights, including referring the case to the WTO.
The decision is a blow to Chinese producers such as GITI Tire Pte Ltd, the largest Chinese tyre maker, and US retailers of low-cost imports.
Tyre production
The US duties on Chinese tyres likely wont spark a trade war, White House spokesman Robert Gibbs told reporters in Minneapolis. Obama is in Minneapolis with Health and Human Services Secretary Kathleen Sebelius drumming up support for his health-care reform efforts.
For trade to work for everybody it has to be based on fairness and rules, Gibbs said. Were simply enforcing those rules and would expect the Chinese to understand those rules. Four US companies have operations in tyre production in China and they account for two-thirds of exports to the US, and the tariffs will have a direct impact on these companies, Chinas commerce ministry said.
Chinese tyre exports
The independent US International Trade Commission recommended that Obama impose duties for three years, starting at 55 per cent, to counter a tripling of tyre imports from China from 2004 to 2008. The steelworkers union, which represents 15,000 employees at 13 tyre plants in the US, said cheap imports were forcing factories to close, eliminating jobs.
These remedies are a necessary response to the harm done to U.S. workers and businesses, US Trade Representative Ron Kirk said in a statement. Enforcing trade laws is key to maintaining an open and free trading system.
Democratic Representative Louise Slaughter of New York said the decision was the first big test of whether President Obama was going to side with the interest of big corporations and the US Chamber of Commerce or with workers. http://www.indianexpress.com/news/us-imposes-35-duty-on-chinese-tyres/516331/ http://www.tribuneindia.com/2009/20090913/biz.htm#2
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| ECONOMY & FINANCE Go To Top See this story in: The Indian Express
Mumbai: When bank lending (credit) grows faster than the GDP over a certain period, it is a signal for central banks to tighten monetary policy, a top official of rating agency Fitch has said.
"If, over a certain period, credit grows faster than GDP, central banks should ask banks to set aside more reserves to prevent the kind of problems being witnessed now in the developed economies," Fitch Ratings Managing Director, Financial Institutions, Asia-Pacific, David Marshall, said.
During an economic boom, central banks should raise capital adequacy norms and discourage banks from aggressive lending, Marshall said, adding that this is the single-most important lesson learnt from the financial meltdown that led to the collapse of banks in the US. "Discouraging aggressive lending will also help prevent over-heating in the economy," he said. http://www.indianexpress.com/news/faster-credit-growth-than-gdp-signals-central-bank-to-act/516518/
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Monday, September 14, 2009
Indian Auto Industry Update September 14, 2009
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