Indian Auto Industry Update October 28, 2009

automobile energy metal & minerals infrastructure insurance & MF banking
HEADLINES Wednesday October 28, 2009
INDUSTRY Nano mishaps prompt booking cancellations Excise duty cut saves the day for Tata Motors Tata Motors: Home alone won't do INTERVIEWS/FEATURES COMPONENTS ALLIED INDUSTRIES Ceat rolls in to profits of Rs 61.5 cr Amara Rajas batteries get BSNL recognition FINANCE & INSURANCE OIL, LUBRICANTS & ALTERNATIVE FUELS Oil steadies at below $79	CARS, SUVs, MUVs Maruti tops in J D Power survey for 10th year Hyundai takes Mahindra Renault to Delhi HC over 'Sandero' Hyundai bets big on used car business Nissans India small car to have key Chinese parts Nissan to price sedan at the premium end COMMERCIAL VEHICLES Fiat may manufacture LCVs in India Hino Motors to focus on Indian market CONSTRUCTION & AGRI MACHINERY 2/3 WHEELERS Hero Honda, Bajaj Auto ratings upgraded Honda Motorcycles upgraded Aviator Honda Motorcycles production hit by labour unrest Honda Motors close to deal with workers Truce in auto belt INTERNATIONAL NEWS Chrysler to drop own models, bring in Fiat cars: Report Honda Q2 net dips 56%; banks on China, Japan sales for profit ECONOMY & FINANCE Rupee ends down Sensex tanks 387 points FM goes with PMs panel forecast on GDP growth
INDUSTRY NANO MISHAPS PROMPT BOOKING CANCELLATIONS Yogima Seth The Financial Express (Web & Print Edition) New Delhi: The two recent incidents of parked Tata Nano cars catching fire have created panic among the prospective buyers resulting in cancellation of bookings. While 12-15% of our bookings were earlier cancelled because of the long waiting period, there has been higher number of queries, and the rate of cancellation has gone up to 20% following the fire incidents were reported last week, an executive with one of Tata Motors biggest dealerships in Delhi said on condition of anonymity. We have received bookings for 2,000 vehicles. But by now, nearly 400 people have cancelled their bookings. A few are even asking for re-sale of the vehicles, he added. However, Tata Motors has denied any cancellations post the fire incidents. We have not received any cancellation requests post the incidents that have been reported on Tata Nano, a Tata Motors spokesperson said, adding that there had been some cancellations by those whose deliveries were slated for late in 2010 or by retainees, whose deliveries are scheduled after completion of the allottees. Tata Motors had in July announced the names of 1,00,000 people who would get the car till March 2011. While the exact numbers are not available, considering a cancellation rate of 15-20%, bookings for nearly 15,000--20,000 vehicles have already been cancelled within less than four months since the first car hit the Indian roads. There is panic and some degree of dissatisfaction at the customers end who are yet to get their cars, a dealer in Chandigarh said. This panic comes despite the assurance from Tata Motors that it would undertake pre-emptive checks on 7,500 Nanos that have been delivered till date. According to analysts, while this will affect the future rate of bookings for Nano, it is also helping dealers to make money by facilitating resale of the vehicle to other customers. People have become extra cautious about the car. While those who already own it now are taking their vehicles to the workshop for check-ups, people on the waiting list are preferring to cancel the bookings rather than buy it and get into trouble later, a Mumbai-based analyst said. People have got so scared after the recent mishaps that 5-10% of those who are about to get the car are talking to dealers for immediate sell off even if it fetches them a premium of Rs 10,000 to Rs 15,000, said a dealer in Ludhiana. http://www.financialexpress.com/news/nano-mishaps-prompt-booking-cancellations/534121/ Nano mishaps prompt booking cancellations Yahoo India (Web Edition) http://in.biz.yahoo.com/091027/50/baufsx.html EXCISE DUTY CUT SAVES THE DAY FOR TATA MOTORS Krishna Kant The Economic Times (Delhi Print Edition) The excise duty cut on automobiles earlier this year as part of the economic stimulus package is turning out to be a bonanza for local automakers. Last week, Maruti Suzuki doubled its net profit, thanks to huge savings on account of lower excise duty. Now, Tata Motors has managed to do the same as its indirect tax payment fell by nearly third or Rs 26,450 per unit of vehicle sold during the September 2009 quarter. This fiscal stimulus led to a better-than-expected 110% rise in the companys net profit at Rs 729.14 crore during the September 2009 quarter. Earlier ET Intelligence Group had estimated 77% y-o-y growth in Tata Motors net profit during the quarter. The total excise duty savings accounting for Rs 266 crore flowed directly into its operating profit excluding other income and resulted in improvements to the tune of 574 basis points in its operating margin to 13.2% of net sales during the second quarter. If not for the duty cut and vehicle sales remaining the same, company would have reported a marginal 93 basis points improvement in operating margin while the reported net profit would have been lower by 11%. One basis is equivalent to onehundredth of a percent. The lower excise duty helped the company more than offset a sharp rise in its interest burden which nearly doubled to Rs 286 crore in the last quarter against Rs 148 crore during the second quarter of the past financial year. In the past six months, the company has been on a debt-raising spree and is also running a public deposit scheme offering higher than bank rates to potential investors. Tata Motors is, however, more than done with its fund-raising programme for now and investors see a fall in its interest burden in the forthcoming quarter. The numbers suggest that the company has gained only partially from y-o-y fall in metal prices. The auto makers raw material cost declined by just 135 basis points to 60.4% of net sales during the quarter. This is much lower than Hero Honda, which earlier reported a 680-basis point improvement in its raw material cost last quarter. Continuing with the trend visible in the past few quarters, the company reported a 4% fall in its sales realisations to around Rs 5 lakh per unit. This is on account of higher volume growth in passenger cars and light commercial vehicle, which have a lower sticker price than its heavier trucks and buses. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" TATA MOTORS: HOME ALONE WON'T DO Shobhana Subramanian Business Standard (Compass) Mumbai: Business is brisk in the home market but concerns about Jaguar and Land Rover remain. Indias biggest auto company Tata Motors is now on a much firmer ground in its home market and seems to have regained pricing power. Tata Motors took a couple of price increases and as a result has managed to earn better per unit realisation on its vehicles. This has helped it post a strong operating profit margin (opm) in the September quarter. While revenues were up 13.2 per cent driven by a 12 per cent growth in volumes, the opm increased 200 basis points sequentially to 13.4 per cent. The better top line apart, the company has efficiently managed its inventories and raw materials purchases. In the September quarter, raw material costs, as a percentage of sales, came off by 120 basis points over the June 2009 quarter. The company has been talking of cost-cutting initiatives and it has clearly delivered on this front. Not surprisingly, the stock closed up 1.6 per cent at Rs 548 on Tuesday in an otherwise weak market which lost 2.3 per cent. Of course, the stock has retreated from its 52-weak high of Rs 621 that it hit on September 22 this year. While the company is now out of the trough as far as the home market is concerned, it is the consolidated balance sheet, which includes the financials of Jaguar and Land Rover (JLR), that makes the Street cautious. The JLR business, located in the UK, posted a loss of 64 million in the June 2009 quarter on revenues of 1.1 billion. It could be while before JLR starts making money, though losses for the June 2009 quarter were about half of what was reported in the March 2009 quarter. What helped was mainly lower expenses on marketing overheads and raw material costs, but that could change now as prices of both steel and aluminium have started firming up. JLRs dealer volumes in the June quarter dropped 52 per cent year-on-year implying that while the global economy may be on the mend, demand for expensive cars may take a while to revive. Nevertheless, a slew of cost-cutting measures is expected to help JLR break even possibly in 2010-11. Losses this year are expected to be restricted to 200 million, far lower than the 307 million posted in 2008-09. Thus, Tata Motors is expected to post consolidated losses of around Rs 1,000 crore in the current year on estimated revenues of Rs 75,000 crore, less than half the loss of Rs 2,276 crore reported in 2008-09. Unless JLR posts some good numbers for the September quarter, the stock may consolidate around current levels. http://www.business-standard.com/india/news/tata-motors-home-alone-wont-do/374477/
INTERVIEWS / FEATURES - - - - -
CARs, SUVS & MUVs MARUTI TOPS IN J D POWER SURVEY FOR 10TH YEAR PTI See this story in: The Hindu Business Line (Web Edition) New Delhi: Maruti Suzuki India has topped the list for the tenth consecutive year for customer satisfaction in the country, a survey by global market research firm J D Power said. In a survey, 'J D Power Asia Pacific 2009 India Customer Service Index (CSI) Study', Maruti Suzuki India (MSI) scored 824, on a scale of 1,000 points, followed by Honda Siel Cars India (HSCI) at 791 and Mahindra & Mahindra (M&M) at 757. For the tenth consecutive year, MSI ranks highest in customer satisfaction with authorised dealer service in India.MSI performs particularly well in the service advisor and service facility factors, J D Power said. Only MSI and HSCI bettered the industry's average score of 785. The other major car makers in the top ten are Toyota (754), Mahindra-Renault (750), Tata Motors (750), Chevrolet (748), Hyundai (743), Ford (733), Fiat (727) and Skoda (722), J D Power added . The leading brands differentiate themselves in the service quality and vehicle pickup factors, J D Power Asia Pacific Senior Director Mr Mohit Arora said. The study measured overall satisfaction by examining five factors - service quality, vehicle pick up, service advisor, service facility and service initiation. http://www.thehindubusinessline.com/blnus/02271820.htm HYUNDAI TAKES MAHINDRA RENAULT TO DELHI HC OVER 'SANDERO' PTI See this story in: The Economic Times (Web Edition) New Delhi: Hyundai Motor India has taken Mahindra Renault to the Delhi High Court objecting to the latter's plan to launch a compact car in the country with the name 'Sandero' alleging that the rival was trying to cash in on its popular brand Santro with a similar sounding product. "They (Mahindra Renault) are planning to launch Sandero, which is very similar sounding to our Santro. Both are hatchbacks and Santro is an established trademark and they are trying to get mileage out of it," a senior Hyundai Motor India (HMIL) official told PTI. HMIL's plea requests the court not to allow Mahindra Renault to launch the car under the name Sandero, he added. Neither a call made to Mahindra Renault Chief Executive Officer Nalin Mehta nor an e-mail sent to Mahindra & Mahindra group spokesperson seeking comments on the development got a reply. 'Santro' is HMIL's flagship brand and a total of over 15 lakh units have been sold both in the domestic and the overseas markets since its launch in September 1998. On the other hand, Mahindra Renault has been struggling to mark its presence in the Indian car market with its sole product Logan failing miserably sparking speculations of a break-up of the joint venture between Mahindra & Mahindra and French auto major Renault. Market analysts pointed out that the firm desperately needs another product to keep the JV alive. The Logan sold only 510 units in September compared to 1,752 units in the same month last year. In the first six months of this fiscal, the JV sold 2,901 units compared to 9,217 units in the same period last year. Last week Renault President and CEO Carlos Ghosn had said that falling sales of the Logan was a matter of concern and hinted that all was not well in its relationship with M&M and the ties could even be broken. "I am not saying we will, I am saying we can. I don't want anybody to be surprised. We have three partners (in India). Our intention is to continue with the three partners, but if it is not possible, I can tell you that we need at least one," Ghosn had said at the Tokyo Motor Show. Renault has other alliances with Bajaj Auto for a small car project and Ashok Leyland through Nissan for light commercial vehicles in India. He had stated if things didn't work out Renault could eventually bring its future product with a new partner. "It is a matter of concern, every time your sales go down on any model not only in India, we always check why ... We are going to try sometime, if it does not work we will go for a second time with a decent car and eventually with a different partner, does not matter. We are in India to stay," Ghosn had said. http://economictimes.indiatimes.com/news/news-by-industry/auto/automobiles/Hyundai-takes-Mahindra-Renault-to-Delhi-HC-over-Sandero/articleshow/5168163.cms Sandero rings a Santro bell in Hyundai Business Standard (Web & Print Edition) http://www.business-standard.com/india/news/sandero-ringssantro-bell-in-hyundai/374548/ Hyundai takes Mahindra Renault to court The Hindu Business Line (Web Edition) http://www.thehindubusinessline.com/blnus/02271301.htm Hyundai takes Mahindra Renault to HC The Statesman (Web Edition) http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=273196 Hyundai takes Mahindra Renault to Delhi HC over 'Sandero' Deccan Herald (Web Edition) http://www.deccanherald.com/content/32710/hyundai-takes-mahindra-renault-delhi.html Santro vs Sandero: Hyundai drags Mahindra Renault to court Rediff India (Web Edition) http://business.rediff.com/report/2009/oct/27/auto-hyundai-drags-mahindra-to-court.htm Hyundai-Mahindra row The Financial Express (Delhi Print Edition) Hyundai moves court Hindustan Times (Delhi Print Edition) Hyundai takes Mahindra Renault to Delhi HC Mint (Delhi Print Edition) Hyundai takes Mahindra Renault to Delhi High Court The Times of India (Delhi Print Edition) HYUNDAI BETS BIG ON USED CAR BUSINESS The Economic Times (Web & Print Edition) New Delhi: With its used car business growing faster, Hyundai Motor India has taken a fresh initiative to focus on Hyundai Advantage the arm dealing with the used car business. Hyundai buys all the cars of any make and any model under the exchange scheme. With the aim to cater to the needs of exchange customers, Hyundai Advantage was launched in 2006 with six dealers across six prominent locations in India. Hyundai Advantage boasts of 69 operational dealers across 49 locations in India and the plan is to take the number up to 108 across 59 cities by the end of 2009 and to 200 operational dealers by the end of 2010, sais Arvind Saxena, Sr V-P, marketing & sales, HMIL. Saxena said, The size of the used car business in India is approximately 1.3 million cars per annum. This number is expected to grow exponentially in the next few years. We want to aggressively focus on Hyundai Advantage, as it will not only help us retain our old customers through exchange and upgrade schemes but will also make an interesting business proposition given the phenomenal market for used cars in India. According to him, strict quality standards are maintained to ensure that the used cars sold are of a superior quality and the buyer gets complete peace of mind. Each used car is put through a rigorous series of checks, which covers every aspect of the cars functioning. Hence, each customer is assured of a certified used car in very good condition, he said. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://economictimes.indiatimes.com/news/news-by-industry/auto/automobiles/Hyundai-bets-big-on-used-car-business/articleshow/5168989.cms Hyundai bets big on used car business The Indian Express (Web Edition) http://www.indianexpress.com/news/hyundai-bets-big-on-used-car-business/533986/ Hyundai to expand its used car business Deccan Chronicle (Web Edition) http://www.deccanherald.com/content/32801/hyundai-expand-its-used-car.html NISSANS INDIA SMALL CAR TO HAVE KEY CHINESE PARTS Murali Gopalan The Hindu Business Line (Web & Print Edition) Mumbai: Nissans small car for India, scheduled to roll out in May 2010, will have a small proportion of Chinese parts, which include the headlamp and engine control unit. In addition, some components for the diesel engine and manual transmission will be imported from Europe. Apart from this, most of the parts will be sourced locally. This will also include those for the petrol powertrain, top company sources told Business Line on the sidelines of a press meet to discuss Nissans global V-platform strategy. China is familiar territory for Nissan contributing to over half a million of its vehicle sales. And even while India has a quality-driven supplier base, China has had a head-start and is particularly competent in the powertrain department. This will come in handy for the new platform strategy where India, China and Thailand have been identified among the five manufacturing hubs. There will be interchange of components from one region to another and Nissan officials believe it is only a matter of time before India takes the lead here. Till that time, China could still play a more pivotal role largely because of the scale Nissan has achieved in the country over the years. Cars produced in India will be exported to Europe, Africa and West Asia. The fourth hub for the global platform, according to Mr Vincent Cobee, Corporate Vice-President and Program Director, could be one of the Americas while the fifth country of manufacture has not been finalised yet. Indications are that Brazil could occupy the fourth slot and Russia the final one given the growing role of the BRIC (Brazil, Russia, India and China) countries. Nissan is looking at one million units from these five countries though no timeframe has been set as yet. Compact option There will be three cars produced on this platform and India, like Thailand (whose rollout is scheduled in March 2010), will be the launch pad for the compact option. Indications are that the sedan will be produced in China first, when manufacturing begins in July 2010, though Nissan officials declined to comment on the subject. The sedan version has been planned for India in 2011, while the third car is expected to be a lot sportier. Nissan has paid a lot of focus on commonality of components between the three cars to keep costs in check. For instance, the common platform parts on an average are nearly 85 per cent, while in the case of body parts, this is closer to 50 per cent. Mr Noritaka Tsuru, popularly referred to as the Godfather of the new platform, said that Nissan had set itself the goal of making the worlds best compact car. The focus was on optimising costs while keeping weight to the minimum and delivering maximum value in terms of mileage and speed. Internal slogans such as Simple is smart, smart is cool and use your brains, think differently became the guiding principles. Smart technology The net result was new a three-cylinder car which was fast, stable and had achieved a breakthrough in noise and vibration. Costs were trimmed thanks to use of smart technology and in markets such as India, the car was actually engineered to suit the raw material available, as was the case with sheet metal. Mr Tsuyoshi Kobayashi, Chief Vehicle Engineer, said that on an average, 40 per cent reduction had been achieved in the number of parts which had also pulled down costs as a result. Over 100 engineers from India, China and Thailand had been trained for the new platform strategy. http://www.thehindubusinessline.com/2009/10/28/stories/2009102851561800.htm Nissan to make 2 cars based on V-platform The Economic Times NISSAN TO PRICE SEDAN AT THE PREMIUM END Swaraj Baggonkar Business Standard (Web Edition) Mumbai: Japanese auto maker Nissan Motor Company, which plans to launch a compact car in India after six months, showcased a sedan. The car is to be built on the same platform as the compact car, but will not serve the low-cost concept. Senior officials of Nissan Motor stated that the company had largely frozen the design and concept of the sedan, which will be positioned as a premium product that would perhaps take on the likes of Chevrolet Cruze, Honda Civic and Toyota Corolla Altis. The sedan would be launched in 2011. It incorporates futuristic styling, including large swooping headlights, tight lines running on the side doors, aggressive front facia and a sporty-looking but compact boot. The company also displayed pictures of its yet-to-be-named compact car to reporters. Nissan is gearing up to launch the new compact car in May 2010 from the Chennai manufacturing facility, which is equally owned by French car maker Renault. The trial production of the small car which will compete with Hyundai i10, Maruti Suzuki A-star and Chevrolet Spark, among other models will begin next month. Reporters were also shown pictures of a third model which would be positioned as a multi-purpose vehicle. This third vehicle, also to be made on the same platform, may or may not be sold in India as the company is yet to take a decision on the same. http://www.business-standard.com/india/news/nissan-to-price-sedan-atpremium-end/374549/
COMMERCIAL VEHICLES FIAT MAY MANUFACTURE LCVS IN INDIA Business Standard (Web & Print Edition) Pune: Italian automobile giant Fiat is exploring options to manufacture light commercial vehicles (LCVs) with a load carrying capacity between 0.8 tonnes and 1.8 tonnes in India. Stating this at Fiat India Automobiles plant in Ranjangaon near Pune on Tuesday, Fiat Group Automobiles Internationals Chief Operating Officer Silverio Bonfiglioli added: We have sufficient capacity to build light commercial vehicles in India. Our passenger car segment is growing at a good rate and, as the market develops for Fiat vehicles, we might think of manufacturing light commercial vehicles in India. Bonfiglioli made the comments after flagging off the Fiat Diesel Drives India, a 10,000-kilometre drive organised by Fiat to promote its diesel engines and vehicles across India. He confirmed the project would meet domestic as well as international market requirements. The capacity of light commercial vehicles would be in the range of 0.8 tonnes to 1.8 tonnes. But all this will take a lot of time to start, he pointed out. Meanwhile, Fiat Group Automobiles International Chief Operating Officer Silverio Bonfiglioli said the group is in the process of developing a low-cost small car for the Indian market. The car would be priced between Rs 3 lakh and Rs 4 lakh. http://www.business-standard.com/india/news/fiat-may-manufacture-lcvs-in-india/374541/ Fiat may manufacture LCVs in India Rediff India (Web Edition) http://business.rediff.com/report/2009/oct/28/fiat-may-manufacture-lcvs-in-india.htm HINO MOTORS TO FOCUS ON INDIAN MARKET The Hindu (Web & Print Edition) Chennai: Hino Motors of Japan has turned its focus on India in marketing its range of trucks, tippers, reefer and vans. The Japanese company has signalled its commitment to this initiative with Masakazu Ichikawa, Executive Vice- President and a team of officials visiting India on the occasion. Addressing presspersons, Amol J. Sandil, Executive Vice-President said Hino Motors Sales India Private Limited (HMSIPL) will bring from Hino Plant in Thailand its globally popular 500 Series vehicles as cabin and chassis in SKD forms, FM RANGE for 6x4 applications and FL Range for 6x2 applications. HMSIPL will also be introducing a super luxury bus built in India on Hinos top of the line RM1E chassis platform. Significant value additions by way of application bodies such as tippers, trucks, containerised vans, refrigerated trucks and buses will be done in India, Mr. Sandil said. Toyota Motor Corporation has acquired a majority ownership of Hino Motors. . The company already has dealerships in Bangalore, Hyderabad, Delhi, Maharashtra, Chattisgarh.It has opened its dealership network in Chennai on Monday in association with the Kerala based Popular group. http://www.hindu.com/2009/10/28/stories/2009102852081400.htm
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TWO & THREE WHEELERS HERO HONDA, BAJAJ AUTO RATINGS UPGRADED Bloomberg See this story in: mint Singapore: Indias two biggest motorcycle makers Hero Honda Motors Ltd and Bajaj Auto Ltd had their ratings raised at Goldman Sachs on the expectation earnings forecasts will increase for the next four quarters. Hero Honda, the market leader, was raised to buy from neutral, while Bajaj Autos rating was increased to neutral from sell, Goldman Sachs analyst Sandeep Pandya said in a report on Tuesday. Hero Hondas price estimate was raised to Rs1,912 from Rs1,399, the brokerage said. Bajaj Auto was raised to Rs1,566 from Rs705. http://www.livemint.com/2009/10/27231554/Hero-Honda-Bajaj-Auto-ratings.html HONDA MOTORCYCLES UPGRADED AVIATOR The Hindu New Delhi: Two-wheeler manufacturer Honda Motorcycle & Scooter India on Tuesday launched an advanced variant of its scooter Aviator. Priced between Rs. 42,160 and Rs. 47,160 (ex-showroom, Delhi), Aviators new version is targeted at younger generation. We hope to sell 1.1 lakh units of the new scooter in this fiscal. This new offering will also help in expanding our pan-India presence and offer customers more choice, President and CEO Shinji Aoyama said after launching the new scooter. According to Honda Motorcycle Operating Head (Sales & Marketing) N. K. Rattan, We are aiming to grow by around 17 per cent this fiscal and achieve a sales figure of 12.5 lakh units, up from 10.7 lakh units last year. Referring to the ongoing labour problem at its plant, Mr. Rattan said the go-slow by workers was still not completely over. However, some progress had been made and things were moving towards restoring normality. http://www.hindu.com/2009/10/28/stories/2009102859211300.htm Honda rolls out new Aviator Deccan Herald http://www.deccanherald.com/content/32824/honda-rolls-aviator.html HONDA MOTORCYCLES PRODUCTION HIT BY LABOUR UNREST The Hindu Business Line New Delhi: Honda Motorcycles and Scooters India (HMSI) said on Tuesday that it has a 1.4-lakh order backlog due to the continuing labour unrest at its Manesar plant. However, with its third production line becoming operational, the company expects production to go up substantially. This morning we started the new production line and are hopeful that our daily production will now go up. There is a long waiting line at our dealers because of short supply, so we have stopped taking orders for some models, said Mr Shinji Aoyama, President and CEO, HMSI. With a majority of the 5,500 workers going on strike for around a month, production at the Manesar facility had slowed down to about 50 per cent. Moreover, the newly commissioned third production line had also come to a halt. The company has since been holding tripartite discussions with Government officials and the labour union on long-term settlement of wages. The discussions are almost over and it will take about five more days to get into full production. Currently, the output for the third line is 300-400 units a day, which should reach about 1,000 units a day in a few weeks, said Mr N.K. Rattan, Head Sales & Marketing, HMSI. He added that the current daily production of all three lines adds up to 2,200 units, which is half the maximum installed capacity of 4,400 units. New Scooter HMSI launched a new version of the Aviator scooter, which priced between Rs 42,160 and Rs 47,160, is being sold at a premium of about Rs 2,900 over the previous model. We are launching this new product because we feel that we need an expansion of variety. We already have products for every market segment, said Mr Rattan. According to the company, the scooter is powered by a new 110 cc engine, which has increased its fuel efficiency by 15 per cent over the previous model. Besides all new styling, other features include a maintenance-free battery and the Combi-brake, which ensures that both brakes are simultaneously applied when the left lever is pressed. The company plans to sell 10,000 units of the new scooter a month and expects to sell 1.1 lakh units over the fiscal. http://www.thehindubusinessline.com/2009/10/28/stories/2009102850440300.htm Hondas backlog increases The Telegraph http://www.telegraphindia.com/1091028/jsp/business/story_11667589.jsp HMSI order backlog reaches 1.4 lakh units on labour issues The Financial Express http://www.financialexpress.com/news/hmsi-order-backlog-reaches-1.4-lakh-units-on-labour-issues/534082/ HMSI order backlog reaches 1.4 lakh units on labour issues Yahoo India http://in.biz.yahoo.com/091027/50/baufsp.html HMSI order backlog reaches 140, 000 units Business Standard HMSI takes Rs 300-cr hit due to staff agitation The Economic Times HMSI production loss 75K units since Aug The Indian Express Honda labour row resolved The Times of India HONDA MOTORS CLOSE TO DEAL WITH WORKERS The Indian Express New Delhi: As a relief to district administration, an agreement was reached between the management and labour union of Honda Motorcycles and Scooters Pvt. Ltd in Gurgaon on Tuesday. Though there was no strike by workers in Honda Motorcycles and Scooters Pvt. Ltd, but the situation had been tense for the last about two months as the workers remained adamant on demands. On the direction of Deputy Commissioner Rajender Kataria, Deputy Labour Commissioner G S Thakur was instrumental in bringing both the management and labour union to the negotiation table and the matter was resolved after a long discussion. The company, however, clarified that the go-slow by workers has not yet been formally withdrawn. After the 2005 strike at HMSIs Gurgaon plant, the management and workers union had signed a long-term agreement in 2006, which expired this July. The two parties are re-negotiating the terms and conditions to cover issues such as higher wages and better facilities. http://www.indianexpress.com/news/honda-motors-close-to-deal-with-workers/534256/ TRUCE IN AUTO BELT Sanjeev K. Ahuja Hindustan Times New Delhi: The nearly two-month-long stand-off between the management and workers of Honda Motorcycle and Scooter India (HMSI) ended on Tuesday after a marathon 17-hour meeting. The third production line at the Manesar-based HMSI plant finally started production early on Tuesday after the two sides signed a wage pact during discussions that started at 2 pm on Monday and ended only at 7 am on Tuesday. Haryana labour department officials were present at the talks. Plagued by workers unrest and the dip in production by over 50 per cent, HMSI had recently threatened to shut its scooter plant at Industrial Model Township, Manesar and move to an alternate location. The plant employs 5,000 workers. The company had sought the state governments intervention in the matter. Workers had resorted to go-slow tactics since August 31, causing the company losses worth a couple of crores, sources said. State government officials said efforts were on to end the labour crises at auto component factories owned by Rico Auto Industries and Sunbeam Casting as well. Our third production line has finally started functioning after we entered into an amicable pact with our workers. Production would now go on at full swing, said Harbhajan Singh of HMSI. All 5,000 workers, including 1,850 regular ones, had stayed away from work on October 20 and joined the shutdown call given by All India Trade Union Congress (AITUC). Deputy labour commissioner J.S. Thakur said the HMSI Employees Union had put up its general demand notice for pay revision on July 1 but resorted to a go-slow from August 31. Negotiations between the management and workers were on for the last two months, but nothing came of them, he said. According to the terms and conditions of the pact, HMSI would increase of Rs 4,400 in the fixed component of a workers salary in next three years, he added. http://www.hindustantimes.com/rssfeed/newdelhi/Truce-in-auto-belt/Article1-469952.aspx
AUTO COMPONENTS - - - - -
ALLIED INDUSTRIES CEAT ROLLS IN TO PROFITS OF RS 61.5 CR The Hindu Business Line Mumbai: Tyre maker Ceat, part of the Rs 13,500-crore RPG Group, has posted record net profits of Rs 61.5 crore for the three months ended September 30, against a net loss of Rs 28.8 crore last year making this its best-ever quarter. Total sales for the quarter were up by 9.3 per cent at Rs 714.5 crore (Rs 654 crore). The good showing was a result of low raw material costs, better sales mix with higher demand vis--vis last year, better working capital management and lower interest payments, said Mr Sunil Sapre, Chief Financial Officer. Dearer raw materials The first half of the fiscal has been extraordinary and that level will not be seen for the second half, he added. Ceat posted strong profit margins of 13 per cent for the first two quarters but, going forward, expects these to taper off with raw materials getting dearer. Price increases in October will not be sufficient to maintain the margins of the first half, Mr Sapre said. Radial capacity The company plans to add radial capacity by setting up a Rs 500-crore plant in Vadadora to meet increasing demand from domestic markets. The facility is scheduled to kick off production in September 2010 and will have a capacity of 92 tonnes of radial tyres daily. The project will produce both tyre and car radials on a 50:50 basis and will be funded by Rs 300 crore in loans and Rs 200 crore in internal accruals. http://www.thehindubusinessline.com/2009/10/28/stories/2009102850480300.htm AMARA RAJAS BATTERIES GET BSNL RECOGNITION The Hindu Chennai: Amara Raja Batteries has been awarded the Best telecom equipment manufacturer by Bharat Sanchar Nigam Limited (BSNL) for 2008-09 under the category VRLA batteries. The award was presented by the Chairman and Managing Director of BSNL, Kuldeep Goyal, at a function in Bangalore recently. http://www.hindu.com/2009/10/28/stories/2009102852011400.htm
FINANCE & INSURANCE - - - - -
OILS, LUBES & ALTERNATIVE FUELS OIL STEADIES AT BELOW $79 Agencies See this story in: The Hindu Business Line Mumbai: Oil steadied at below $79 a barrel on Tuesday, pausing after three straight days of decline, as investors awaited fresh leads from the equities market as well as more economic data to gauge the pace of the global economic recovery. US crude for December delivery crept up 5 cents to $78.73 a barrel by 0302 GMT, after settling down $1.82 at $78.68 on Monday. London Brent crude was up 9 cents at $77.35. Although crude prices have risen nearly 77 per cent so far this year, they are still almost 47 per cent below the record of more than $147 per barrel attained last July. http://www.thehindubusinessline.com/blnus/05271001.htm
INTERNATIONAL CHRYSLER TO DROP OWN MODELS, BRING IN FIAT CARS: REPORT Agencies See this story in: The Economic Times Washington: US automaker Chrysler is to drop some of its own models in favor of vehicles from Italy's Fiat, its strategic partner as it recovers from bankruptcy, the Wall Street Journal reported on Tuesday. The newspaper, citing people familiar with Chrysler's plans, said the US automaker will announce on November 4 that it will drop several models from its Dodge and Jeep lines, and phase in the Fiat 500 and the Alfa Romeo brands. The companies are also aiming to bring Fiat's technology to Chrysler's US operations, including for a mid-size sedan slated to be ready by 2012. The Italian group plans to build a new line for the small Fiat 500 in Mexico to be ready by 2011, the report said, while the first Alfa Romeo models, made in the United States, will be ready by 2012. Chrysler and Fiat sealed a deal in June to create a new global auto giant in a milestone for the industry after the Italian champion stepped in to salvage the bankrupt US firm. Fiat will at first hold 20 per cent of Chrysler Group, with its equity stake rising to 35 per cent and eventually to a majority as long as targets set out in the the deal are achieved and US government funds are repaid. http://economictimes.indiatimes.com/news/international-business/Chrysler-to-drop-own-models-bring-in-Fiat-cars-Report/articleshow/5168142.cms Fiat Models to Drive Chrysler http://online.wsj.com/article/SB125659536562909009.html?mod=rss_Today's_Most_Popular HONDA Q2 NET DIPS 56%; BANKS ON CHINA, JAPAN SALES FOR PROFIT AP See this story in: The Financial Express Tokyo: Honda Motor Co raised its full year profit forecast despite earnings diving by more than half last quarter with green car incentives and growth in markets like China expected to further boost vehicle sales. Net profit for the July-September quarter fell 56.2% from a year earlier to 54 billion yen ($587.0 million), the company said on Tuesday, hit by a strong yen and the weak global auto market. But Honda, Japans No 2 automaker, now expects a net profit for the fiscal year ending March of 155 billion yen ($1.7 billion), nearly four times its initial outlook for a 40 billion yen ($435 million) profit. The automaker also raised its forecast for sales this fiscal year to 3.4 million vehicles. It expects more sales in emerging Asian markets and also in the previously sluggish Japan where tax breaks and government-backed discounts for green vehicles are helping along a recovery. Honda in July forecast vehicle sales of 3.29 million but the new projection does not reach the nearly 3.52 million vehicles it sold globally the previous fiscal year. Honda, which makes the Insight gas-electric hybrid, Asimo robot and Accord sedan, said quarterly sales fell 27.2% from a year earlier to 2.057 trillion yen ($22.4 billion). A strong yen weighed on Hondas results. Unfavorable currency exchange rates erased 79.7 billion yen ($866 million) from Hondas quarterly operating profit, it said in a statement. The dollar bought 106 yen the previous year but has fallen to 90-yen levels lately. Honda said auto sales grew in China and India, as well as in Japan during the quarter. Honda as well as rival Toyota Motor Corp, with their reputation for green cars, are enjoying the benefits of government incentives for fuel efficient and gasoline-electric hybrid cars. Even in the US, where vehicle sales fell during the quarter, a cash for clunkers programme also helped sales, Honda said. Honda, which has focused on smaller fuel-efficient models, has fared relatively better than some rivals in weathering the global auto slump. It stayed in the black in the fiscal year ended March 2009, while Toyota and Nissan Motor Co slipped into losses. Toyota reports earnings November 5, Nissan on November 4. Honda has also been helped by its strong motorcycle business, which has been enjoying growth in Vietnam and India. Honda now expects to sell 665,000 vehicles in Japan for the full year, up 19.6% from the previous fiscal year. It hopes to sell 910,000 vehicles in the rest of Asia, up 14.8 %. Sales are expected to decline in North America to 1.31 million vehicles, down 12.8% from the previous year. http://www.financialexpress.com/news/honda-q2-net-dips-56-banks-on-china-japan-sales-for-profit/534066/2 Honda earnings beat expectations Mint http://online.wsj.com/article/SB100014240527487043359 04574498541516582738.html?mod=googlenews_wsj Honda Motor net profit dips 56% The Hindu Business Line
ECONOMY RUPEE ENDS DOWN The Hindu Business Line Mumbai: The rupee ended down at a three-week low on Tuesday against the US dollar on month end dollar demand. The local unit ended at 46.91/92 a dollar compared with 46.64/65 a dollar on Monday. The rupee swayed in the 46.7700-47.0050 a dollar band intraday. Though the fall in Mumbai stock market triggered some FII outflows, there was no direct impact of the RBI policy on the rupee. http://www.thehindubusinessline.com/blnus/05forex.htm SENSEX TANKS 387 POINTS The Hindu Business Line Mumbai: The Monetary Policy seems to have disappointed the stock market. The bellwether Sensex shed 387 points on Tuesday to close at 16,353.4 points and the broader Nifty ended the day lower by 2.5 per cent at 4,846.7. Though there was no rate hike, the RBI signalling the end of its easy money policy led to heavy selling in banking and realty stocks, brokers said. The BSE Realty index fell by 6.24 per cent, the biggest loser among the sectoral indices, followed by Bankex by 3.82 per cent. The RBI has made funds more expensive for some sectors. The feeling that inflation is weighing on the minds of policy-makers and a rate hike is likely in the near future unnerved investors. Global cues were also negative. All these pulled the market down sharply, said Mr Avinash Gupta, Assistant Vice-President for Research Equity at Bonanza Portfolio. Traders booking profits ahead of this months Futures and Options expiry on Thursday also drove down the market further. FII were net sellers of equity for Rs 548.7 crore, while domestic institutions were net buyers for Rs 141.5 crore. The market breadth was negative as 2,287 scrips declined while 442 advanced. All sectoral indices on the BSE ended the day in the red. Wipro, Tata Motors and Hindustan Unilever were among the few Sensex gainers. The biggest losers included Hindalco, Tata Steel, Bharti Airtel and Reliance Communications. http://www.thehindubusinessline.com/2009/10/28/stories/2009102851640100.htm FM GOES WITH PMS PANEL FORECAST ON GDP GROWTH PTI See this story in: The Hindu Business Line New Delhi: The Finance Minister, Mr Pranab Mukherjee on Tuesday said he would rather go with the economic growth projection of the Prime Minister's economic panel, saying the six per cent forecast by RBI was way too conservative. The RBI always makes very hard and conservative assessment... The GDP growth I am inclined to accept (is) the figure of Prime Minister's Economic Advisory Council, headed by Dr C Ranagarajan, that means from 6.5 to 6.75 per cent, he said. In its monetary policy review, the central bank retained its earlier forecast of six per cent growth for FY'10. Asked whether stimulus measures will continue, he said, As I mentioned that until the economy is on a firm recovery path, it will continue. The Finance Minister said figures for second quarter economic growth are yet to come, but the industry has started picking up. The Indian economy grew by 6.1 per cent in the first quarter. On inflation, Mr Mukherjee said the government has taken steps to ensure that the adverse impact of inflationary pressures is reduced by strengthening supply management. The Reserve Bank has projected wholesale price inflation to reach 6.5 per cent by this fiscal-end, higher than its earlier estimate of five per cent. http://www.thehindubusinessline.com/blnus/01271606.htm Last Financial closing Sensex 16,353.40 US$ spot Rs.46.87 US$ Y.92.0298 US$ 6 months Rs.47.68 Yen Rs.0.51 Euro spot Rs.69.78 LIBOR 6 months % Call % GOI sec. 10 years - - - - Aluminium (per kg) Rs. Aluminium Ingot Rs. Copper (per kg) Rs. Gold (10gm) Rs.15,885 Lead (per kg) Rs. Mild Steel Ingots (Mumbai) Rs. Nickel (per kg) Rs. Nickel Cathode Rs. Silver (1kg) Rs.27050 Sponge Iron (per tonne) Rs.14115.00 Steel Flat (per tonne ) Rs. 30330.00 Steel Long GVD (per tonne) Rs. Steel Long BVN (per tonne) Rs. 22270.00 Tin (per kg) Rs. Zinc (per kg) Rs. Zinc Ingot Rs.- - - - Crude Oil (WTI) - - - - Crude Oil (Brent) $77.16 Automobile Scip on BSE Face Value (Rs) Last traded Value (Rs) Apollo Tyres 1 50.80 Asahi Ind 1 65.75 Amara Raja B 2 149.70 Ashok Leyland 1 42.25 Bajaj Auto 10 1441 Bharat Forge 2 258.10 Denso 10 88.40 Eicher Ltd 10 - - - - Eicher Motor 10 526.45 Escorts 10 105.75 Exide Ind 1 100.20 Force Motors 10 188.95 Gabriel India 1 25.70 Hero Honda 2 1591.05 Hind Motors 10 21.65 Hi-Tech Gear 10 101.10 Jay. Bh. Maruti 5 47.45 Jamna Auto 10 51.75 JK Tyres & Inds 10 150.25 Kinetic Motors 10 22.85 Kinetic Engg 10 88 KOEL 2 135.40 Kirloskar Br: 2 228.70 LML Ltd 10 9.40 L&T 2 1556.80 Lumax Ind 10 169.80 Lumax Tech 10 57.15 M&M 10 898.65 Maruti Suzuki 5 1481.40 Motherson SS 1 112.80 Minda Inds 10 194.55 MRF 10 5511.75 MICO 10 - - - - Omax Auto 10 51.90 Perfect Circle - - - - - - - - - - Rico Auto 1 23.40 Sona Koyo St 2 16.75 SKF Bearing 10 - - - - SRF 10 196.35 Swaraj Mazda 10 224.15 Tata Motors 10 547.75 TVS Motor 1 57.65 Metals Scrip on BSE Face Value(Rs) Last traded Value (Rs) Bhushan Steel 10 1241.35 Essar Steel 10 - - - - Hindalco 1 126.15 Hind Zinc 10 890.05 Ispat Inds 10 20.90 Jindal Iron 10 - - - - Jindal Stain 2 - - - - JSW Steel 10 761.40 Jindal Steel 5 678.10 National Aluminium 10 356.95 SAIL 10 175.25 TISCO 10 501.30 Visa Steel 1 37.25