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| INDUSTRY Bengal auto park set to start next year INTERVIEWS/FEATURES SUV buyers may be spoilt for choice Porsche drives in its sedan, Panamera M&M, Renault take a relook at joint venture COMMERCIAL VEHICLES Mercedes luxury coaches for APSRTC CONSTRUCTION & AGRI MACHINERY BSA Motors unveils electric scooters in Delhi BSA to tie up with foreign firm
| ALLIED INDUSTRIES Dunlop to reopen TN plant this year Saint-Gobain uses slowdown to reflect on improving biz FINANCE & INSURANCE OIL, LUBRICANTS & ALTERNATIVE FUELS INTERNATIONAL NEWS Toyota hybrids face potential US import ban Toyota recalls 3.8 m vehicles in USA Delphi emerges from bankruptcy ECONOMY & FINANCE Sensex recovers from day's low, closes 92 points up Continue stimulus as global recovery seems long-drawn: Pranab | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INDUSTRY Go To Top R Ravichandran The Financial Express (Web & Print Edition)
Chennai: The higher growth in demand for passenger vehicles and two-wheelers over the past few months have led auto analysts believe that the auto companies are in all probability set for a sharp revival with robust earnings in the quarters to come.
The core business performance of the auto companies has changed for the better; visibility has been restored with substantial year-on-year growth in the last two quarters. Consequently, the second quarters performance is likely to be robust on a year-on-year basis and companies are expected to post a robust sequential growth in their revenues due to better volumes, an analyst with Angel Broking said.
This comes on the backdrop of robust numbers by all auto majors in the country. While sales of Maruti Suzuki India, countrys largest passenger car manufacturer, went up by 22.5% in the July to September quarter, Tata Motors, which is countrys largest commercial vehicle manufacturer and third largest passenger car manufacturer, registered a year-on-year growth of 18.5% in the second quarter ended September 30. Likewise, Hero Honda, worlds largest two-wheeler manufacturer also saw a jump of 21.7% in the second quarter sales in the current financial year vis--vis the corresponding quarter in the last financial year.
An analyst with Nomura says, despite low monsoon, the growth in tractors, two-wheelers and passengers in the last few months have proved things other way around. We believe the numbers during the months will allay concerns of weak volume because of lower-than-normal rainfall in India. We see significant upside to our volume growth estimate in the months to come, the analyst added.
In the first quarter of 2009-10, Maruti Suzuki reported 33.9% jump in net sales to Rs 6,365 crore (including service income), on the back of 17.7% y-o-y increase in volumes while average realisation per vehicle moved up 13.5% y-o-y, which was primarily due to the change in sales mix and better performance by high realisation segments like sedans and multi utility vehicles. Its net profit for the quarter rose by 25.3% y-o-y to Rs 583.5 crore (Rs 465.9 crore).
Likewise, Hero Honda clocked a 34.1% growth in net sales in the first quarter at Rs 3,822 crore (Rs 2,851 crore) on the back of 25% growth in volumes for the company, and better average realisations (Rs 34,000 per bike, compared to Rs 31,000 last year). Companys net profit went up by 34.6% at Rs 402 crore (Rs 299crore) mainly on account of lower tax provision owing to the benefits arising from commencement of the Haridwar plant.
On the other hand, the ancillaries are set to gain their lost market over the last one year due to a strong revival of the sector, favorable interest rates and commodity prices, improved volumes and better operating leverage, said the analyst with Nomura.
Explaining in details on the possibility of strong revival, the Angel Broking analyst said that finance has started returning to the auto sector and to a large extent in private ventures due to a large ticket size and lower defaults. Banks and financial institutions have reduced their interest rates by almost 350-400 basis points in the last six months. Commercial vehicle disbursements are also improving, albeit at a slower pace.
Financiers are optimistic that truck demand will recover by fourth quarter as freight volumes in the economy start improving fast. The prices of commodities such as steel, aluminium, rubber which were on the higher side during last fiscal, are set to move downwards and to remain low in the medium term, which would in turn help manufacturers improve their margins.
According to them, after being under tremendous pressure during last one year due to global meltdown, the commercial vehicles are set to regain their lost ground and this is evident from the fact that the last two quarters have seen a sequential recovery in the sales of Tata Motors and Ashok Leyland.
The passenger vehicle segment, in particular, reported a good recovery in the last two quarters, largely aided by an increase in export volumes and a gradual recovery in domestic market front. Given its low penetration, the PV segment has the potential to record double-digit growth over the next five years. The significant export plans of various manufacturers will further boost the sustaining growth levels in the years to come.
The analysts are of the view that going ahead, new launches, rising income levels and easy availability of finance will play a crucial role in reviving the fortune of auto sector and their continued revenue and earnings growth. http://www.financialexpress.com/news/auto-cos-on-revival-path-q2-earnings-to-be-robust/525845/2
BENGAL AUTO PARK SET TO START NEXT YEAR Business Standard (Web Edition)
Kolkata: The ongoing turmoil in the global automobile sector is affecting the planning for the proposed Bengal Integrated Auto Park at Guptamani near Kharagpur. However, the construction of the project which had been conceived last year was expected to commence next year.
The Auto Park, a joint venture between the West Bengal Industrial Infrastructure Development Corporation (WBIIDC) and Bengal Srei Infrastructure Development Ltd, will be developed over 500 acres including a 250-acre auto SEZ.
The planning process is underway and we are yet to determine the exact split between component manufacturers, original equipment manufacturers and the anchor. Since the automobile industry globally is unsettled, our planners are exploring the mix between domestic and export oriented units to be set up at the park, WBIIDC Chairman Sumanata Chaudhuri said here. He was speaking on the sidelines of a CII seminar. Chaudhuri said that Jurong Consultants India had been roped in to prepare the master plan for the project, but declined to divulge further details. We have already started the direct purchase of land at Guptamani. The construction work will only start in 2010, he added.
However, Chairman and Managing Director Hemant Kanoria of Srei which is the JV partner in Bengal Srei Infrastructure Development along with West Bengal Industrial Development Corporation (WBIDC) said that the initial report by Jurong would be submitted by the end of October and firms would be approached to set-up shop at the park early next year. http://www.business-standard.com/india/news/bengal-auto-park-set-to-start-next-year/372455/ Work on Bengal auto park next fiscal The Hindu Business Line (Web Edition) http://www.thehindubusinessline.com/2009/10/07/stories/2009100751721700.htm Bengal auto park in slow lane The Telegraph (Web Edition) http://www.telegraphindia.com/1091007/jsp/business/story_11585447.jsp
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| CARS, SUVs, MUVs Go To Top Lijee Philip The Economic Times (Delhi Print Edition)
Mumbai: Exports by Indian small-car producers such as Maruti Suzuki and Hyundai Motor have started shrinking as scrappage schemes in various European markets are set to lapse by the year-end. These big automakers saw their exports shoot up 35-40% in the last few months on the back of incentives offered by Germany, France and the UK to help owners of older cars and vans buy new fuel-efficient vehicles. Germany, the biggest market in Europe, and Austria have already concluded their scrappage programmes and other countries are expected to wrap up their schemes by December. So, as exports to Europe start declining, Indian carmakers have started looking at non-European markets. While we are hoping the European countries will announce new schemes to encourage small car exports or the existing schemes in some countries get a further extension, we are simultaneously working with non-European countries too, said a senior official at a Delhi-based car company. We are focusing on non-European markets for exports, but once the scrappage incentives are exhausted in Europe, the export numbers are likely to normalise, said a Maruti-Suzuki spokesperson. Analysts, however, do not expect Maruti Suzukis exports to cross 1.16 lakh units this year as many European countries have withdrawn their scrappage schemes. Of the total targeted exports, Europe would account for 90,000 units and the balance 30,000 units from non-European countries. Hyundai Motor India (HMIL), the countrys largest car exporter, too benefitted from additional European export orders. More than 50% of our exports are targeted at European countries with Germany accounting for the maximum, said Arvind Saxena, HMILs senior vice-president for sales and marketing. The company aims to export about 2.7 lakh units in 2009-10 against 2.45 lakh units last year. We are covered for the calendar year as we get advance export orders. The export orders have lowered and we will start seeing the impact, Mr Saxena said. HMIL exports the i10 and i20 models to Europe. To qualify for the scrappage benefit, the emission levels in the new car should be below 160 g per km. Germany had created a 5 billion fund for the old-car scrappage scheme, doling out 2,500 incentive for a fuel-efficient new car. France had set aside 220 million, offering 1,000 and a deferred tax benefit of up to 5,000 for a new car. While the UK government had initially created a 300-million corpus under cashfor-clunkers scheme and offered the customer 2,000 for purchasing a new car, it is extending the offer with additional 100-million funding. The other European countries that imported small cars under the scrappage programme are Spain, Italy, Austria and the Netherlands. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
Sourav Sen Daily News & Analysis (Web Edition)
New Delhi: Maruti Suzuki India Ltd would relaunch its SX4 sedan on October 13 with cosmetic changes and a new engine configuration to meet the mandatory BS-IV emission norms, a company source said on Tuesday.
"The production of SX4 has been discontinued since a few days. We will now relaunch the vehicle on October 13 to take advantage of the spurt in car purchase ahead of Diwali," a company official said.
The new model would be a little more expensive than the existing one, the official said.
Maruti has already relaunched its Zen Estilo with a new 1 L K-Series engine. The company had launched the SX4 model in 2007 with a 1.6 L petrol engine. Since then, it has not made any changes in the model. http://www.dnaindia.com/money/report_maruti-suzuki-to-relaunch-sx4_1295768
SUV BUYERS MAY BE SPOILT FOR CHOICE Chanchal Pal Chauhan The Economic Times (Web Edition)
New Delhi: Customers looking to pick up a new sports utility vehicle (SUV) will find themselves spoilt for choice in the coming months as carmakers line up almost a dozen launches. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
The Economic Times (Web & Print Edition)
New Delhi: Luxury car maker Porsche launched its solitary sedan offering, Panamera, in the Indian market on Tuesday. Priced at Rs 1.4 crore to Rs 2.05 crore (ex-showroom Delhi), Panamera will be one of the fastest cars on Indian roads, with a top speed of 282 km per hour. The car will be available in three versions S, 4S and the top-of-the-range Turbo. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" Porsche expects 20% jump in sales The Hindu Business Line (Web & Print Edition) http://www.thehindubusinessline.com/blnus/14061306.htm Porsche introduces Panamera sedan The Indian Express (Web Edition) http://www.indianexpress.com/news/porsche-introduces-panamera-sedan/525784/ Porsche unveils Panamera The Hindu (Web & Print Edition) http://www.hindu.com/2009/10/07/stories/2009100757031300.htm Porsche eyes 20% growth The Statesman (Web Edition) http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=270719 Porsche to increase footprint in India The Pioneer (Web & Print Edition) http://www.dailypioneer.com/207167/Porsche-to-increase-footprint-in-India.html Porsche drives in Rs 1.4cr Panamera The Times of India (Web & Print Edition) Porsche expects 20% jump in sales in India this year mint (Web & Print Edition) http://www.livemint.com/2009/10/06163915/Porsche-expects-20-jump-in-sa.html Porsche in pricey style Hindustan Times (Web & Print Edition) http://www.hindustantimes.com/business-news/auto/Porsche-in-pricey-style/Article1-461974.aspx
M&M, RENAULT TAKE A RELOOK AT JOINT VENTURE
The Times of India (Web & Print Edition)
New Delhi: With depleting sales and mounting losses, Mahindra & Mahindra (M&M) and its French partner Renault are taking a fresh look at their joint venture for cars to decide on the future course for the company. The JV, Mahindra-Renault Pvt Ltd (MRPL), has failed to cut much ice in the market with the first product the no-frills sedan Logan failing to take off. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" Renault JVs in blind alley The Economic Times (Delhi Print Edition)
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| COMMERCIAL VEHICLES Go To Top The Indian Express (Web & Print Edition)
New Delhi: Commercial vehicles have staged a smart recovery in July-September with sales accelerating for the first time since October-December 2008. But September 2009 snapped the rising sales seen in July and August. While light commercial vehicles (LCVs) sales have continued to grow stronger, lacklustre Medium and High CV (MHCV) sales pulled down the overall performance in September.
Segment leader Tata Motors sold 13,020 units and managed to increase MHCV sales by 2.35 per cent this September over the same month last year, its slowest growth during the quarter. LCV sales continued to grow having emerged from the red zone in February 2009. Their sales accelerated 45 per cent this September for the fourth consecutive month. The company sold 18,454 units in September this year compared with 15,927 units in September last.
It is Tata Motors LCV sales that has boosted numbers since the beginning of this financial year. LCV sales growth, however, slowed down from 28.24 per cent in Q1 to 18.53 per cent in Q2. Alternatively, MHCV sales that declined by 25.70 per cent in Q1 have grown by 11.23 per cent in Q2. The contrary growth trends of LCV and MHCV sales have not affected overall company growth which has jumped to 20.72 per cent in Q2 from 6.37 per cent in Q1. The company sold 31,474 units in the domestic market in September 2009, up 9.86 per cent over the same month last year. Tata Motors has recorded a 11.07 per cent growth increase in sales in the first half of the current year.
Ashok Leyland, however, is still unable to stop its MHCV sales from declining and since its base in the LCV segment is meagre to make any impact on the overall bottom line, it continues to struggle. The percentage drop in MHCV sales got worse for the first time since April 2009 this September. Sales declined 12.17 per cent to 4,763 units. On the other hand, a comparative Q2 recovery has helped Ashok Leyland better its first half numbers. A sales decline of 60.92 per cent in Q1 vis--vis a 17.59 per cent decline in Q2 leaves a 40.55 per cent overall decline for the first half of the FY. http://www.indianexpress.com/news/truck-sales-accelerate/525933/#
MERCEDES LUXURY COACHES FOR APSRTC The Hindu Business Line (Web Edition)
Hyderabad: Mr V. Dinesh Reddy, Vice-Chairman and Managing Director of Andhra Pradesh State Road Transport Corporation (APSRTC), received the keys of the first Mercedes-Benz Luxury Inter-city Coach.
Apart from APSRTC, other Government-owned State transport undertakings such asMSRTC (Maharashtra State Road Transport Corporation) and KSRTC (Karnataka State Road Transport Corporation) have used the Mercedes-Benz Luxury Coaches on trial in their inter-city fleet.
Dr Wilfried Aulbur, Managing Director and CEO of Mercedes-Benz India, in a statement said, We are happy to establish APSRTC to enable customers to experience luxury travel in Mercedes-Benz style. Our buses have been utilised and well appreciated by MSRTC and KSRTC.
Apart from the suave exteriors, the plush and airy interiors sport well-designed passenger seats with amenities such as personalised speakers, lights and AC controls.
Indian market Commenting on the Indian bus market, Dr Aulbur said, the bus market in India is witnessing a tremendous change aided by Government-driven infrastructure projects which are dedicated to redefine the mass transportation industry.
Large-scale projects like the NSEW corridor and the Golden Quadrilateral are already under way and close to completion.
As links between far-flung places strengthen, there is an increased demand for mass transit systems to move the people with solutions that are reliable and passenger oriented. It is this need that the Mercedes-Benz buses will fulfil, he said. http://www.thehindubusinessline.com/2009/10/07/stories/2009100751021700.htm
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| 2/3 WHEELERS Go To Top Murali Gopalan The Hindu Business Line
Mumbai: Honda Motorcycle & Scooter India, which is grappling with a labour issue at its Manesar plant in Haryana, estimates its two-wheeler production to crash by 50 per cent this month.
As a result, the projected numbers will be barely 50,000 bikes and scooters at a time the company has been posting sales of over one lakh units. This may well continue into November and December too if no solution is found to the labour issue.
HMSI is the leader of the gearless scooter segment led by the Activa and also makes motorcycles such as the Unicorn, the Shine and the Stunner. The slowdown in production will now increase the waiting list for its products especially the Activa.
The Gurgaon-Manesar belt is caught in labour problems at the plants of ancillary suppliers such as Rico Auto, Sunbeam Auto, and Hema Engineering. In contrast, the HMSI issue has not reached the level of any violent protests yet and is still more of a slowdown in work to seek higher wages. Consequently, there is no activity happening on the third production line while the output on the other two lines is down 50 per cent.
Talks underway Talks are on for a long-term settlement (LTS) of wages over the next three years though indications are that the company will hold its ground and not yield to any pressure tactics on this front. Nearly the entire workforce is committed to HMSI and its future. It is only a handful of people scaring the majority away, sources said.
HMSIs workforce at its plant is reportedly around 1,500 where the average age is 28 and wages are in the region of Rs 25,000/month. The other vehicle manufacturers in this belt are Maruti Suzuki and Hero Honda, which have been around much longer. HMSI is less than a decade old and sources say the wage structure is more than reasonable given that it is still a relatively young company.
Things have not gone out of control yet and there is every reason to believe that a mutually acceptable solution will be reached soon. The company is also clear that it will not enter into any confrontation, sources said. Yet, there is this lurking fear that if the impasse continues, production will be severely hit and only cause more tension in the region.
Poll angle The problem has been aggravated by the fact that the Haryana Assembly elections are around the corner which means that all key official decisions will just have to wait till the results are announced.
According to sources, the Gurgaon-Manesar belt has, lately, become a haven for hugely influential and wealthy people who are literally throwing their weight around. This was not the case till a decade ago when this area was relatively isolated with access remaining a concern.
All that changed when the land sale surge happened with the SEZ (special economic zone) boom and a whole nouveau riche crowd emerged in the Manesar region. Some of these people have tremendous political aspirations and literally splash money all over the place. In the process, the law and order machinery has gone for a toss, sources say.
All this is causing a lot of tension in this industrial belt and companies are increasingly weighing the options of alternative locations when it is time to expand capacity.
HMSI, for instance, will reach saturation point in its Manesar facility less than two years down the line when capacity touches 1.4 million units. It remains to be seen if it will look elsewhere, say Uttarakhand or Pune, for a second plant. http://www.thehindubusinessline.com/2009/10/07/stories/2009100750060200.htm
BSA MOTORS UNVEILS ELECTRIC SCOOTERS IN DELHI PTI See this story in: The Hindu Business Line
New Delhi: Murugappa Group Company Tube Investments of India's strategic business unit BSA Motors on Tuesday unveiled five models of its electric scooters here priced at Rs 19,450-27,200 (ex-showroom Delhi). The models' engine capacity is between 250 watts and 800 watts.
The electric scooter market is currently a Rs 400-crore market in India and the industry is expected to double in a year's time. The initial market response for our product has been positive in the southern region and by the extending sales and services network into Delhi we hope to grow rapidly, Tube Investments of India Managing Director, Mr L Ramkumar said here.
BSA Motors had launched these scooters earlier this year and they are now marketed in 10 states. The company's Rs 30 crore Chennai plant has an initial production capacity of 150 units a day which can be ramped up to 300 units daily. http://www.thehindubusinessline.com/blnus/19061606.htm BSA Motors to double production in six months http://www.dailypioneer.com/207162/BSA-Motors-to-double-production-in-six-months.html BSA Motors unveils 5 models of electric scooters See this story in: Business Standard http://www.business-standard.com/india/news/bsa-motors-unveils-5-modelselectric-scooters/75195/on BSA Motors launches new electric scooters The Hindu
BSA TO TIE UP WITH FOREIGN FIRM Deccan Herald
New Delhi: The Chennai-based BSA Motorsmanufacturer of electric scootersis exploring for tie up with reputed overseas firms to produce key components required for making high-performance electric two wheelers.
We are looking for technological tie ups with overseas firms, who have pioneered in producing components for manufacture of improved versions of electric scooters, BSA Motors, Vice President, K B Srinivasan told newspersons while launching series of electric two wheelers here. http://www.deccanherald.com/content/29053/bsa-tie-up-foreign-firm.html
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| ALLIED INDUSTRY Go To Top mint
New Delhi: The Union government has ended an investigation into imposing duties on passenger car tyre imports.
This follows a decision by the Automotive Tyre Manufacturers Association to withdraw its application seeking the imposition of anti-dumping duties against Chinese tyre imports.
In May, the association had asked the Directorate General of Safeguard Duties to initiate an investigation into Chinese tyre imports. http://www.livemint.com/2009/10/06223636/Govt-stops-probe-intoChinese-t.html
PTI See this story in: Business Standard
New Delhi: Indias natural rubber production fell by over 9 per cent to 73,000 tonnes last month as heavy rains affected the tapping process, the state-run Rubber Board said.
Similarly, the production of the rubber variety so far this year declined to 347,000 tonnes, compared with 396,000 tonnes a year earlier.
Natural rubber output dipped to 73,000 tonnes last month from 80,000 tonnes a year before mainly because of heavy rains, a senior official with the Rubber Board said. Drought till August and heavy rains in September jeopardised the tapping process of natural rubber, pulling down its production so far this financial year, he explained. Export also dipped to 400 tonnes in September from 2,300 tonnes in the year-ago period. The country exported only 1,350 tonnes so far this financial year, compared with 31,000 tonnes a year before as domestic prices exceeded global rates.
Domestic prices have been ruling above global rates, prompting bulk consumers such as tyre makers to import more, making export a less profitable option, the official said. However, the gap in domestic and global prices was reflected in the import of natural rubber, which surged by 50 per cent last month to 15,000 tonnes. India imported 114,000 tonnes of the natural variety so far this year against 38,000 tonnes in the corresponding period last year.
Natural rubber price stood at Rs 10,750 a quintal at Kottayam on Monday, while the rate of the RSS-3 variety of rubber was ruling at Rs 10,548 a quintal at SICOM in Singapore. http://www.business-standard.com/india/news/rubber-output-dips-9-in-sept/372391/
DUNLOP TO REOPEN TN PLANT THIS YEAR Madhumita Mookerji Daily News & Analysis Kolkata: Tyremaker Dunlop India is likely to reopen its Ambattur plant in Tamil Nadu within this calendar. The plant has a production capacity of 90 tonnes per day.
Earlier, Dunlop had been harbouring plans to relocate the plant and chairman Pawan Ruia had even been open to the idea of a sell-off. However, the latter option wasn't viable since realty prices have been depressed. And the management hasn't been able to reach an agreement on the final separation scheme with the 700-odd workers at Ambattur, which was necessary for relocation.
Production at Ambattur was suspended in early 2008 over a property dispute, but "this has been resolved and there are no encroachments on the 100 acres on which the plant is situated," sources told DNA Money.
Sources said the Dunlop management now feels that resuming production at both units -- the mother plant at Sahagunj (West Bengal) and Ambattur is the way forward, with tyre production having inched up 1.2 per cent in April-July 2009 and experts upbeat on the sector's prospects.
As regard the Sahagunj factory, which has been plagued by closures since it re-opened in 2006, sources said resumption of work was imminent. Production is likely to be at 30 tonnes per day once it resumes operations.
When the Ruia Group acquired Dunlop from M R Chhabria's family in 2005, the company had electricity-bill arrears of Rs15.5crore and the West Bengal State Electricity Development Co had suspended power. Dunlop has paid Rs2.5crore and the balance is to be paid over nine years in 108 installments, sources said. http://www.dnaindia.com/money/report_dunlop-to-reopen-tn-plant-this-year_1295734
SAINT-GOBAIN USES SLOWDOWN TO REFLECT ON IMPROVING BIZ N. Ramakrishnan The Hindu Business Line
Chennai: The corner room is cool, as its occupant. Letting in adequate light, the high-performance, solar-controlled glass neutralise much of the heat from the blazing sun, and the roar of the vehicles speeding down the national highway.
It is like being in detox, jokes Mr B. Santhanam, Managing Director, Saint-Gobain Glass India, as he talks about the impact of the slowdown and how the company is using the time to improve efficiencies. He is not unduly worried about the slowdown in the real-estate sector, which accounts for a bulk of his sales.
For Saint-Gobain Glass India, the slowdown has provided a breather to improve and innovate a whole lot of processes and practices, which it would have found difficult to do if the market were going ahead full steam, he says.
Reinvention time There is no major revival in sight yet in the real-estate sector that accounts for the bulk of Saint-Gobains sales. There is some activity in the residential segment, but nothing major in the commercial sector for offices and malls that consume a lot of glass.
However, the Commonwealth Games in Delhi next year will provide a major boost to the glass industry, as all the structures are supposed to be Green buildings.
From the middle of 2008, when the slowdown hit the real-estate sector, Saint-Gobain Glass India, a subsidiary of the French multinational Saint-Gobain, has used the time to focus on re-inventing itself, says Mr Santhanam.
Saint-Gobain Glass India has its float glass plant at Sriperumbudur, about 50 km west of Chennai on the national highway to Bangalore. The two float lines have a combined capacity of 1,500 tonnes a day.
The commodity end of the business clear glass will account for less than 40 per cent of Saint-Gobains business. In the value-added segment, where the company has a much wider range of high-performance glass compared with the competition, it is better placed than other players. The company has used this advantage in this slowdown to deepen its market presence.
Despite the slowdown, Mr Santhanam says the company has grown in 2009. Its exports are also profitable, he says, without going into specifics.
Focus on customer Saint-Gobain Glass India has focussed on the customer this year, he says. Our service levels have improved. In the commodity end, the retailers want a range of products in one shipment. For instance, they ask for as many as 18 different products in one truck. In the high value-added segment high-performance reflective glasses customers are now asking for price-performance solutions. No longer are they merely negotiating on price but want the company to offer products that provide superior performance and help in saving costs.
Cost reduction programme The company, according to Mr Santhanam, embarked on a major cost-reduction programme, not just in terms of inputs. Using the lean Six Sigma methodology, this programme covered energy consumption, yield improvement, wastage, packing and transportation. This helped the company save as much as Rs 30 crore. There are nearly 110 cost- reduction projects, all of them tracked on IT systems. Saint-Gobain Glass India, like its parent, concentrated on free cash flow (profit before depreciation and tax, change in working capital minus capex), which has also helped it stay in shape during a difficult period.
The company invested in generating 1.2 MW from waste heat. It has applied for benefits under the Clean Development Mechanism, for which it has obtained host country approval.
Towards energy efficiency Saint-Gobain has been working with glass processors that are its direct customers, to help them improve their efficiencies and processes. It has introduced over 10 new products in the solar control space, each better than the other in terms of energy efficiency at different price points.
Along with the company-specific initiatives, Saint- Gobain has been working on industry-wide initiatives, including on green buildings, energy code for buildings, improving energy efficiency in buildings and building materials. http://www.thehindubusinessline.com/2009/10/07/stories/2009100750010200.htm
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| TATA CAPITAL TO OFFER AUTO LOANS AT LOWER RATES PTI See this story in: The Hindu Business Line
Mumbai: Tata group company, Tata Capital, on Tuesday announced the introduction of its auto loans at attractive rates.
Tata Capital auto loans will be offered at very attractive rates to the discerning customer. Customers looking out for a quick and hassle-free way of getting an auto loan will now be able to avail the same through Tata Capital's offices across leading markets in India, a press release issued here said.
As a part of the offer, the auto loans will be available at an interest rate of as low as 10.5 per cent on all new car loans plus special waiver on processing and foreclosure charges. The offer will be available till October 31 on all fresh auto loan proposals, the release said.
Tata Capital's Consumer Finance and Advisory Business Head, Mr Jamshed Daboo, said that while taking an auto loan seems simple enough, people are often left wanting for relevant advice and available finance options. Our well-trained advisory team will empower our customers with accurate information to help them take informed decisions. http://www.thehindubusinessline.com/blnus/17061506.htm Cheaper auto loans from Tata Capital The Statesman http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=270711 Tata Capital cuts auto loan rate Business Standard http://www.business-standard.com/india/news/tata-capital-cuts-auto-loan-rate/372445/
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| OIL, LUBRICANTS & ALTERNATIVE FUELS Go To Top The Hindu Business Line
Chennai: Shell Lubricants feels that for a larger play in the growing Indian market, it is indispensable to have more blending centres. It has only one in Mumbai. Accordingly, Shell is examining whether to build a new blending plant, takeover an existing one or outsource blending operations. A decision on this will be taken in the next one year, Mr Donald Anderson, Country Head, Lubricants, Shell India Markets Pvt Ltd, told Business Line.
Mumbai facility Shells Mumbai facility has a capacity to blend 80 million litres a year. The Indian lubricants market of 1.7 billion litres a year is growing close to six per cent annually. Shell has eight per cent share of the market, which fetched it sales of Rs 800 crore in 2008. Mr Anderson sees a need to double the companys blending capacity.
Mr Tim Ford, Vice President Sales, Asia, Shell Lubricants, said that last year Shell entered into an agreement with Hyundai of South Korea, by which it became the OE supplier of lubricants of all Hyundais plants. Shell will consequently start supplying to Hyundai India also soon.
More tie-ups on cards The global oil major intends to enter into similar tie-ups with Indian automobile OEMs also, especially for their exports. A beginning has been made with Mahindra and Mahindra and Shell is in talks with others too, Mr Ford said. In India, automotive lubricants account for 60 per cent of the companys sales, rest comes from demand from industrial machines.
Mr Anderson said that Shell is also keen to increase its retail sales, which it intends to take forward through 1,500 franchise workshops and tie-ups with independent mechanics shops, supported by a slew of promotional events that will begin to happen soon. http://www.thehindubusinessline.com/2009/10/07/stories/2009100750080200.htm
See this story in: The Indian Express Singapore: Oil eased in Asian trade on Tuesday as traders continued to evaluate the pace of recovery in the US economy, the world's biggest energy user, analysts said.
New York's main contract, light sweet crude for November delivery dropped five cents to USD 70.36 a barrel. Brent North Sea crude for November delivery fell nine cents to USD 67.95 a barrel.
Market players continued to digest economic data from the US that could help indicate demand prospects. New data released on Monday by the Institute of Supply Management showed the US services sector grew in September for the first time in a year with its non-manufacturing index rising to 50.9 per cent from 48.4 per cent in August.
Any number above 50 per cent indicates growth. Services makes up the lion's share of US economic activity and employment, and is therefore critical to recovery from the long recession. The ISM index had declined for 11 consecutive months.
"It was its highest reading since May 2009 and the first time since August last year that this part of the US economy was growing," said Dariusz Kowalczyk, chief investment strategist with SJS Markets financial house.
The ISM data on Monday followed last week's figures by the Labor Department showing job losses accelerated to 263,000, sending the unemployment rate to a 26-year high of 9.8 per cent in September. http://www.indianexpress.com/news/oil-lower-in-asian-trade/525662/
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| INTERNATIONAL NEWS Go To Top Agencies See this story in: The Economic Times
Tokyo: Toyota unveiled on Tuesday a new lightweight, sporty concept car inspired by an iconic coupe from the 1980s, saying its vision of the future was both mean and green.
TOYOTA HYBRIDS FACE POTENTIAL US IMPORT BAN Bloomberg Business Standard
Washington/ Los Angeles: Toyota Motor Corp, the worlds largest maker of hybrid vehicles, faces a potential US import ban on Prius and other hybrid models as trade officials begin a patent-infringement investigation.
The US International Trade Commission will start a probe into a claim by closely held Paice LLC that some Toyota vehicles infringe a patent for a way of supplying torque, or force, to a cars wheels from both an electric motor and internal combustion engine, the agency said yesterday.
The ITC has the power to block imports of products that infringe US patents, potentially disrupting Toyotas sales in the worlds biggest auto market. Paice won a 2005 civil patent suit against Toyota, which was upheld on appeal. In that case, a federal judge rejected Paices request to halt sales of the cars and instead ordered royalty payments.
The earlier Paice verdict related to the Prius, hybrid Highlander and Lexus RX400h sport-utility vehicles. The new ITC complaint claims the hybrid Camry, third-generation Prius, Lexus HS250h sedan and Lexus RX450h SUV infringe the same patent.
Since 2000, when Toyota introduced the Prius in the US, the Toyota City, Japan-based company has sold more than 1.1 million hybrids in the market, including more than 750,000 Prius cars.
In the complaint, Paice said Toyota is precluded from arguing that the additional vehicles dont infringe the patent or challenging its validity because of the 2005 verdict. The hybrid drivetrains of the vehicles in the ITC case are materially the same as those in the Lexus and Toyota models in the civil case, Paice said in the complaint.
Paice claims in lawsuits in federal court in Marshall, Texas, that the Camry infringes the patent. That case may go to trial in January. A second case involves claims of infringement of another patent by the Highlander and Lexus models.
To be able to win at the ITC, Paice must show that it has a market to protect. In the complaint, Paice says it has made substantial investments in vendors and suppliers and in research and licensing.
The company is based in Bonita Springs, Florida, and has offices in Maryland, Michigan and Virginia, according to the complaint.
The ITC, in an unrelated case, is currently considering the standard that must be met before patent owners who dont make products can file complaints.
Toyota has many patents on the hybrid technology and believes it has strong defenses against all of Paices claims and that it will prevail in the ITC proceeding, said Celeste Migliore, a spokeswoman for the carmakers US sales unit in Torrance, California, restating comments made last month.
In the earlier case, the jury awarded $4.3 million in damages and the verdict was upheld on appeal. US District Judge David Folsom in Marshall rejected Paices request to issue a court order to halt sales of the Toyota vehicles.
Instead, in April he ordered Toyota to pay royalties based on the wholesale prices equal to 0.48 per cent for a second- generation Prius, 0.32 percent for each Highlander and 0.26 per cent for each Lexus RX400h. Toyota is appealing that order.
The ITC case is In the Mater of Hybrid Electric Vehicles, 337-688, US International Trade Commission (Washington). The civil cases are Paice LLC v. Toyota Motor Corp., 04- cv-211; 07cv180 and 08-cv-261, U.S. District Court, Eastern District of Texas (Marshall). http://www.business-standard.com/india/news/toyota-hybrids-face-potential-us-import-ban/372464/
TOYOTA RECALLS 3.8 M VEHICLES IN USA PTI See this story in: The Tribune
New York: In its largest safety recall in the United States, Toyota Motor Corp. has asked 3.8 million vehicle owners of seven popular models to remove the floor mat of their car that could jam the accelerator pedal and cause a crash.
The worlds number one automaker informed the US National Highway Traffic Safety Administration (NHTSA) that it would write to owners of the vehicles asking them to remove the floor mat while it works on a countermeasure.
The safety recalls concerns the Camry sedan, the top- selling passenger car in the United States, as well as the Pirus hybrid car, Lexus ES350, IS250 and IS350 luxury sedans. The safety recall may deal a blow to the Japanese auto giant, Kyodo news agency quoted industry sources as saying.
The NHTSA said it had received reports of 100 related incidents, including 17 crashes and five fatalities involving Toyota vehicles.
In an earlier advisory, the NHTSA had urged owners to make sure the driver-side floor mat is properly secured to the retention hooks on the floorboard. http://www.tribuneindia.com/2009/20091007/biz.htm#3 Toyota recalls 3.8 mn vehicles in US The Indian Express Toyota recalls 3.8 mn US vehicles over problem mats Hindustan Times Toyota recalls 3.8 million vehicles in US http://www.dailypioneer.com/207164/Toyota-recalls-38-million-vehicles-in-US.html Toyota recalls 3.8 mn cars over floor mat risk Rediff India http://business.rediff.com/report/2009/oct/06/auto-toyota-recalls-3-point-8-mn-cars.htm
DELPHI EMERGES FROM BANKRUPTCY Agencies See this story in: The Economic Times
New York: Auto supplier Delphi said on Tuesday that it has completed a deal with its lenders to allow it to exit bankruptcy nearly four years to the day it filed for reorganization.
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| RUPEE STRENGTHENS TO FOUR-MONTH HIGH AT 46.88 Remya Nair The Hindu Business Line
Mumbai: The rupee on Tuesday breached the psychological level of 47 to the dollar on robust dollar inflows and the greenbacks weakness against the euro.
After opening strong at 47.34, the currency gained 60 paise to close at the days high of 46.88/89, against the previous close of 47.52. In fact, the rupee tested a four-month high during the days trading. It has gained more than a rupee in three consecutive trading sessions.
Dealers attribute the rupees strength to sustained dollar inflows, the greenbacks weakness against the euro, absence of intervention by the Reserve Bank of India, and dollar selling by banks to take advantage of the arbitrage opportunity in offshore markets.
Steady dollar stream With companies accessing the offshore market for debt and equity, there is a huge amount of money waiting to come in . This will ensure a steady stream of dollar supply, said Mr J. Moses Harding, Executive Vice-President, Head-Global Markets, IndusInd Bank.
NDF market at discount The offshore non-deliverable forward (NDF) market is trading at a discount. On Tuesday, there was a 10-15 paise difference between the one-month NDF and the spot market, which led to dollar buying in the NDF market and selling in the spot market, a dealer said.
Banks, mainly foreign ones with international operations in such markets as Hong Kong and Singapore, usually try to take advantage of the arbitrage opportunity. Going ahead, market players expect the rupee to appreciate and touch 45-levels soon.
The rupee should gain in the next few days with support seen at 46.50 levels. If the rupee goes beyond the 46.50 levels, it could go all the way up to 45, said a forex advisor with a broking house.
According to Mr Sudarshan Bhat, Chief Dealer, Corporation Bank, with the rupee breaching the 47- mark, it could test 46.50 levels in about a fortnight. The currency may, however, see some correction in the coming few days. If the RBI increases key rates in the next few months, the rupee could head northwards, he added.
In his speech yesterday in Istanbul, the Reserve Bank of India Governor, Dr D Subbarao, pointed out that because of inflationary pressures, policy rates in India may have to be tightened ahead of those in advanced economies. The resulting interest rate differential may lead to larger capital inflows, making exchange rate management difficult, he said. In the overseas markets, the dollar gained against the yen and the sterling, but weakened against the euro.
In the forward premia market, the 6-month premium closed higher at 3.15 (2.98 per cent) and the one-year closed at 3.3 per cent (3.18 per cent).
Our New Delhi Bureau reports: The RBI has been expecting a rise in capital inflows for about six months now because of the huge increase in global liquidity that the various fiscal stimuli have induced. It had suggested a few months ago that the surge would come around October 2009. Its expectation has not been belied.
The key issue now is how far it can go in allowing the rupee to appreciate. There has been pressure on it to let the rupee find its own level which, given the expected inflows, could mean a rapid strengthening.
Some analysts believe that over the next 6-9 months the rupee could go to Rs 40 to the dollar. However, in keeping with its overall approach, the RBI is likely to let the process be gradual.
Its headroom for sterilisation on the scale witnessed between 2003 and 2006 has been considerably reduced because of the Governments large borrowing programme. http://www.thehindubusinessline.com/2009/10/07/stories/2009100751810100.htm
SENSEX RECOVERS FROM DAY'S LOW, CLOSES 92 POINTS UP PTI See this story in: The Hindu Business Line
Mumbai: Reversing the decline in early trade due to tumbling of telecom stocks, the Bombay Stock Exchange benchmark Sensex on Tuesday ended over 92 points higher as funds started buying blue-chip stocks across FMCG, metal and banking counters.
The 30-share Sensex, which was down 244 points during intra-day, bounced back to end with a gain of 92.13 points at 16,958.54 as stocks in FMCG, metal and banking segments recorded handsome gains.
Yesterday, the benchmark index had ended down by over 268 points or 1.56 per cent. Similarly, the wide-based National Stock Exchange index Nifty closed 24.20 points higher at 5,027.30, after touching the day's low of 4,921.05.
The market recovered as foreign and domestic funds returned to pick up fundamentally strong stocks at existing low levels, triggered by a firming global trend and a better opening in European stock markets this afternoon.
Report that the US service sector expanded for the first time in a year in September, signalled investors for an early global economic recovery and boosted trading sentiment globally.
In the 30-BSE index stocks, 16 closed with gains while 14 others led by Bharti Airtel and Reliance Communication ended with losses. Both the stocks recorded losses of over 10 per cent each. http://www.thehindubusinessline.com/blnus/05061901.htm
CONTINUE STIMULUS AS GLOBAL RECOVERY SEEMS LONG-DRAWN: PRANAB PTI See this story in: The Hindu Business Line
Istanbul: India on Tuesday asked the global community to continue with the stimulus packages as economic recovery is likely to be a long-haul and called for reforms in the IMF and the World Bank to give a bigger role to emerging economies in economic pol icy making.
It appears that recovery will be unsteady and long-drawn with growth in employment lagging behind. Maintaining policy stimulus is crucial for anchoring the recovery,'' Finance Minister Pranab Mukherjee said at the annual meeting of IMF-World Bank in the Turkish city. He said balancing the stimulus against the risks of inflation and threats to fiscal viability is a key short-term challenge.
The timing and sequencing of exit strategies assume importance,'' Mr Mukherjee said. Mr Mukherjee was speaking as both the IMF and the World Bank began their two-day meeting looking beyond the crisis and at managing a global economic system in a way t hat will make it less prone to downturns.
Pointing out that there is an unfinished agenda on repairing the financial system, he said the perimeter of regulation has to be expanded. The Finance Minister said the IMF and the World Bank cannot emerge from the crisis unchanged, adding the role of de veloping countries as drivers of future global economic growth needed to be recognised. Resistance to the overdue change will only detract from the legitimacy, credibility and effectiveness of these institutions,'' he said. http://www.thehindubusinessline.com/blnus/14061902.htm
Last Financial closing
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Tuesday, October 6, 2009
Indian Auto Industry Update October, 07, 2009
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