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| INDUSTRY Auto Expo is 2 months away, but fully booked INTERVIEWS/FEATURES COMPONENTS Asia-Pacific has high bearing for SKF ALLIED INDUSTRIES JK Tyre to double exports from Mexican plants FINANCE & INSURANCE SBI may withdraw 8% home, car loan offers OIL, LUBRICANTS & ALTERNATIVE FUELS Oil edges further above $78/barrel | CARS, SUVs, MUVs Mercedes, BMW, Hyundai, Maruti plan new diesel launches COMMERCIAL VEHICLES One year on, commercial vehicle sales rebound Ashok Leyland sales up 57% in Oct ECONOMY & FINANCECONSTRUCTION & AGRI MACHINERY Mahindra tractor sales up 21.4% in October Rupee ends down on FII outflows | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 INDUSTRYAUTO EXPO IS 2 MONTHS AWAY, BUT FULLY BOOKED Murali Gopalan The Hindu Business Line (Web & Print Edition) Mumbai: If anyone needed proof that the Indian automotive industry is on a roll, they would only need to check out the availability of space at Pragati Maidan in New Delhi, the venue for Auto Expo 2010. There are still two months to go before the event kicks off but every inch of the venue is already booked. There is absolutely no space and it is going to be a Herculean task accommodating new requests, people associated with the event told Business Line. Compare this to the recently held Tokyo Motor Show, which was largely confined to Japanese carmakers as a host of big names in the global business dropped out citing financial viability especially in a year when their fortunes had tanked in most countries. Delhis Pragati Maidan, in contrast, will house the likes of Volkswagen, Skoda, Audi, Mercedes-Benz, BMW, Porsche, Renault, Ford, General Motors, Hyundai, Toyota and Honda. In addition are Indias own jewels in the crown like Maruti-Suzuki, Tata Motors, Mahindra & Mahindra and Ashok Leyland. From the two-wheeler side, Hero Honda, TVS, Honda Motorcycle and Scooter India, Bajaj Auto and Yamaha will be participating. The country is the second largest producer of bikes and scooters after China with over 850,000 units annually and could even emerge the largest in the coming years. The rush for the Expo clearly shows that India, like China, is critical to multinationals. The growth paradigm has completely changed and Asia is now the hottest destination for business, sources said. This is borne by the fact that a sizable part of Pragati Maidan will be earmarked for component manufacturers who use the occasion to network with potential customers and end up striking deals in the process. To the glamour-struck crowds at the Expo, only cars and bikes will strike a chord. However, the unsung heroes are these ancillary suppliers who are shipping parts to vehicle makers across the world and are actually key to Indias reputation in quality and cost-competitiveness, sources said. The Expo begins on January 5 and goes on for a week. It is held every two years and is an useful platform for manufacturers to showcase their products to the public. Even the 1998 Expo is considered the most memorable as this was the time the Indica and Santro were unveiled. In 2008, the biggest draw was the Tata Nano, which caught the fancy of the world and spawned enormous interest in the low-cost car segment. Auto Expo 2010 is expected to have its own share of surprises. VW will, of course, have on display the Polo that will roll out of its Pune plant in mid-2010. The fact that it has booked a hall of over 1,500 square metres reflects the German carmakers interest in India. Tata Motors, keeping with tradition, will take up the largest space of 5,500 sq.m with Maruti Suzuki not too far behind with nearly 4,700 sq.m. Hyundais is pretty significant with 2,000 sq.m while M&M, which is expected to focus on its commercial vehicle range, has booked space for nearly 2,100 sq.m. Volvo of Sweden will showcase its buses and trucks (through the newly created company with Eicher). IANS See this story in: Deccan Chronicle (Web Edition) London: British union leaders are to meet lawmakers from a key manufacturing belt on Wednesday in what has been dubbed an MPs summit to discuss the fate of thousands of workers facing job losses at Tata-owned Jaguar and Land Rover (JLR) factories. Although unions are not seeking to involve owners Tata Motors at this point in the negotiations, they will express strong reservations about reported long-term plans to outsource parts of JLR production to India and China, according to union officials. The meeting, which comes after JLR announced plans to close down one of its factories by 2014, is expected to be attended by many of the 20 ruling Labour Party MPs representing the West Midlands and Northwest regions, the heartland of British manufacturing and a Labour votebank. We are concerned at JLR plans to outsource production development to India and China, and the possibility of a production facility in China, which could pose a long-term threat to JLR in the UK, Mr Des Quinn, Regional Industrial Organiser for Britains largest union Unite said on Tuesday. Mr Quinn also expressed concern about reported moves to integrate the JLR brandname, saying, The Tata management assured us two years ago [before acquiring JLR] that Jaguar and Land Rover are iconic brands and that the brand names will be protected. Mr Quinn described the summit as an information meeting, but it assumes added political significance as it comes some six months to the next British general elections, in which the Labour Party will be counting on votes from West Midlands workers. In the first half of next year, decisions will need to be taken on [JLR] investments. We will be looking for the government to support us. If they dont, then they wont get our support in the elections, he warned. UK unions to discuss JLR Asian Age (Delhi Print Edition) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| The Indian Express (Delhi Print Edition) New Delhi: For the first time in over thirteen months a period of economic decline and the global credit crisis all major commercial vehicle (CV) manufacturers have recorded booming sales growths across sectors signaling that the economy is back up and running. Sales have grown by about the same percentage in October as they had declined in the same month in 2008, bringing the industry back on track after a tumultuous year. In October 2008, segment leaders Tata Motors total CV sales had declined by 29 per cent having sold 19,154 units. This October, having sold 30,541 units, sales have grown 59.45 per cent over last year, their highest growth in over 14 months. LCV sales were up by 57.40 per cent the company having sold 18,625 units in October 2009 against 11,833 units during the same period last year. After a brief slip back into the red, MHCV sales have rebounded this October. The company sold 11,916 units where 7,321 units were sold in October of last year giving them a 62.76 per cent growth in the sector. What signals a change for the better is that even smaller players like Ashok Leyland did not have to rely on CV sales that have been doing well since the beginning of last quarter to cut a growth deficit. MHCV sales grew 64.55 per cent for the first time in over a year. With their small base, though LCV sales have been growing steadily since September 2009, they have never been able to make an impact on the total growth of the company. This October, with 83 units sold, the company has registered a growth of 196.43 per cent as only 28 units were sold in October 2008. Swaraj Baggonkar Business Standard (Web & Print Edition) Mumbai: Tata Motors, India's biggest auto company by revenue, has speeded bus production at its massive Dharwad facility, primarily to avoid any delay in honouring its commitment to supply low-floor buses to the Delhi Transport Corporation (DTC). Both Tata Motors and Chennai-based Ashok Leyland have been asked to accelerate the supply of 2,500 buses an order placed by DTC at the start of this year. While Ashok Leyland has already overshot the original delivery deadline of September, Tata Motors said it is confident of meeting its February 2010 target. However, Tata Motors was earlier slammed by the Ministry of Urban Development for failing to honour its responsibility of supplying buses ordered by a few states under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) within the set timeline. Buses ordered by DTC hold greater significance for both companies, as these will be used during the Commonwealth Games due to begin on October 3, 2010, in the national capital. Tata Motors managed to bag the major share of the DTC order, comprising 1,625 ultra-modern buses with a mix of air-conditioned (AC) and non-AC buses. Ashok Leyland got the order to supply the balance 875 ultra low-entry buses, comprising 350 AC buses and 525 non-AC buses. The total purchase value of the 2,500 buses stood at Rs 1,380 crore, while the value of a 12-year maintenance contract for the vehicles, which both companies agreed to provide, was worth an additional Rs 2,010 crore. Tata Motors' contract was valued at Rs 2,200 crore (Rs 900 crore for buses and Rs 1,300 crore for maintenance), while Ashok Leyland's contract was valued at Rs 1,190 crore (Rs 480 crore for buses and Rs 710 crore for maintenance). Tata Motors Managing Director (India Operations) P M Telang said: "We are ramping up the Dharwad plant capacity to 700-800 light buses per month. Parallelly, we are also setting up a line for heavy buses, which will produce 200 buses every month. We are hopeful of clearing the DTC order by February." Tata Motors, along with Brazil-headquartered Marcopolo, one of world's largest manufacturer of bus bodies, had set up a 30,000-unit-per-annum bus making facility at Dharwad in Karnataka with an initial investment of Rs 200 crore. Similarly, Ashok Leyland had said that it would supply the required buses to DTC by February 2010, its revised timeline, from its plant at Alwar in Rajasthan. Ashok Leyland Executive Director (Marketing) Rajeev Saharia said: "Of the 875 buses, we have delivered the first 40 buses to them. We were not able to meet their earlier deadline of September, but have since ramped up our capacity to 300 per month (from 200 per month)." Ashok Leyland also has a separate order of 4,800 buses under JNNURM, of which 350 buses have already been delivered to various states. Each bus is priced at Rs 55-70 lakh, depending on individual specifications. Meanwhile, a clutch of bus body builders and some Chinese bus manufacturers offered to supply DTC the required number buses after both Tata Motors and Ashok Leyland failed to meet the earlier deadline. However, as the DTC offer carried a rider which made it mandatory for bus supplying companies to provide a 12-year maintenance support for the vehicles, the Chinese companies were forced to back out. DTC Managing Director Naresh Kumar said: "They (the Chinese companies) were not ready for the 12-year maintenance clause, so they backed out. Although Tata Motors and Ashok Leyland have delayed the supply of buses, they have agreed to complete the delivery by February-March." PTI See this story in: Business Standard (Web & Print Edition) New Delhi: Hinduja Group flagship company Ashok Leyland reported a jump of 56.99 per cent in its commercial vehicle sales at 5,333 units in October as compared to the same month in 2008. The company had sold 3,397 units in the same month last year, Ashok Leyland said in a statement. Domestic sales stood at 4,934 units in October as against 2,976 units in the same month last year, up 65.79 per cent, it added. Exports, however, fell 5.22 per cent to 399 units in the month compared with 421 units in the year-ago period. The company reported an increase of 64.55 per cent in its total domestic sales of medium and heavy commercial vehicles at 4,851 units from 2,948 units in the same month last year. Ashok Leyland boosts output, sales in Oct The Economic Times (Delhi Print Edition) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PTI See this story in: The Hindu Business Line New Delhi: Mahindra & Mahindras Farm Equipment Sector reported a 21.38 per cent rise in its total tractor sales in October at 18,772 units compared with 15,465 units in the same month last year. Domestic sales grew by 20.24 per cent to 17,796 units against 14,800 units, the company said in a statement. The company registered 38.03 per cent growth in its cumulative sales during April-October period this fiscal at 1,02,639 units compared with 74,358 units during the same period last fiscal. Cumulative domestic sales stood at 98,407 units during the first seven months of this fiscal, a jump of 41.91 per cent over 69,343 registered during the same period last fiscal. http://www.thehindubusinessline.com/blnus/02031601.htm Mahindra Tractors sales rise 21.38% The Indian Express The Economic Times | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Financial Express New Delhi: Driving high on robust growth during the first half of the current fiscal owing to higher penetration in rural areas and new products, Hero Honda Motors, the countrys largest two-wheeler manufacturer, has revised its sales target upwards for the current financial year. We are going to exceed 40 lakh units handsomely this fiscal, not by a small number but by a big number, Anil Dua, senior vice-president (sales & marketing), said. The company, which had sold 37.22 lakh units in 2008-09, was earlier eyeing a 7.5% growth this fiscal at 40 lakh units. While Dua refused to give the new target for 2009-10, it is expected that the company will register over 10% growth this fiscal. This comes close on the heels of the Society of Indian Automobile Manufacturers (Siam), the auto industry body, revising the growth targets for 2009-10. Siam said in October that the auto industry would grow by 10% in 2009-10 as against the earlier target of 5%. Hero Honda has recently launched a premium bike, fuel-injected ZMR, along with a new version of Hunk in the premium segment, and a special edition of Splendor+. Hero Honda scales up sales target for 2009-10 Yahoo India Hero Honda revises sales target upward The Economic Times CAN WE MAKE A CAR WITH A BIKES DNA?: RAJIV BAJAJ Sumant Banerji Hindustan Times Having championed Bajaj Autos shift from scooters to motorcycles, and been the force behind the twin successes of the Pulsar and Discover, Rajiv Bajaj told Hindustan Times that he is now looking at replicating the companys success with bikes in the car space with his maiden small car in 2011. Excerpts from an interview. Things are looking up for the auto industry. Is it the end of the downturn? My own view is the factors that caused the upheaval such as commoditisation, overcapacity etc, continue . They have just been suppressed for the time being by easy liquidity, incentives of subsidies. Since the causes are still thriving, I am sceptical of the depth of the recovery. How bad was the recession for Bajaj Auto? You posted very good results in the July-September quarter. Have you finally turned the corner? I am a firm believer that problems or solutions all lie more inside us than outside. About three years back we were close to leadership position. The last two years have been difficult. The difficulty is less because of external factors and more due to internal failings: not sticking to our core strategy and complicating our execution. The minute we put that right, the business has grown again. Your core business is in the 150cc segment and with the Pulsar. But you are trying to re-enter the 100cc segment. How does that fall in line with your overall strategy? In the 60s, 70s and the 80s, Chetak was the centre of Bajaj. Now that the market has moved to motorcycles, we have moved to motorcycles. The Chetak at the centre has been replaced by the Pulsar. We are known for it, and in order to establish that we decided to be the opposite of market leader Hero Honda. Instead of making small, sober, affordable motorcycles, we made bigger, faster, sexier and somewhat more expensive bikes. There are two sets of consumers those who want the faster, sexier bikes and those who want commuter bikes. For the former we have the Pulsar, for the latter we have the Discover. Discover is not really different from the Pulsar in terms of styling, features or patented technologies, and the consumers see the link. So long as we get to make and sell more Discovers and Pulsars, Bajaj will do well. In all of this where does your small car feature? The world does not need another automaker. There are too many people trying to make cars, and unfortunately, most are trying to make every possible type of car. This has commoditised the market where people directly or indirectly keep competing on price. Our car will be derived out of skills vested in us by virtue of making motorcycles. Can a car be made with a motorcycle DNA that is acceptable to the market? The jury is still out on that. If we succeed, it will be interesting. Our aim is to not compete on price but on fuel economy... we are targeting double of what any car gives on the road. Is the car ready or still under development? It is still under development, because what we are trying to do has no precedent. Technology is fairly mature in the automobile industry, so it is not easy to simply double the fuel economy without any fancy technology. We have to also keep it affordable and ensure it remains profitable to the company. We have some ideas and we are hopeful, but at this point in time we cannot say whether we have cracked this. This sounds more like an experiment. Chances that the car may not be ready for its 2011 launch?... 2011 is certainly the target for the launch. We are not entirely at an experimental stage. To do something new, a few months here and there do not matter. What matters is that the product has to be right. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Hindu Business Line Pune: The Asia-Pacific is a high growth region for Swedish bearings maker SKF, which has appointed Mr Rakesh Makhija, at present Managing Director, SKF India, to oversee business opportunities in the geographic area. He will be based in Shanghai. The Asia-Pacific region contributed 19 per cent of the groups global revenue in 2008, replacing North America as the second largest revenue generator after Western Europe, Mr Tom Johnstone, President and CEO, SKF AB, said. We see Asia will grow both in sales and development, he said. Globally, SKF saw its manufacturing down 34 per cent and sales down 27 per cent year-on-year at the end of 2008, Mr Johnstone said, adding that the situation appeared to be improving. It will stabilise, but at a whole new level as compared to what it was two years ago, he remarked. SKF has invested Rs 450 crore in India in setting up two new manufacturing facilities in Ahmedabad and Haridwar. Production of large bearings for the railways has begun at Ahmedabad, and wind energy sector is expected to drive further growth here. We had put the brakes on the Haridwar plant, but pushed the go button at the end of last year. Production will begin here by January-end, Mr Johnstone said. The company has an agreement with Hero Honda to supply bearings for a 5-year period. When fully operational, the two new facilities will jointly provide employment to 600 people. Though serving the domestic market will be a priority, exports may also be possible at a later date, he added. Solutions Factory The company inaugurated its seventh SKF Solutions factory worldwide, and the first in India. Located on the premises of its Pune factory, the new facility will give customers access to SKFs technical competencies, specialist competencies, process know how in various sectors and capabilities all under one roof. To begin with, the Solutions Factory is launching a spindle servicing centre and remanufacturing of (large) bearings, in addition to offering sealing and lubrication services. The plan is to establish ten of these factories during 2009, and 30-40 in the next couple of years, Mr Johnstone said. Mr Sudhir Rege, head of service business, SKF India, said, The Solutions Factory allows us to offer more than just products in a box. We can also help customers cut operational costs and improve efficiency and productivity. The Hindu Business Line Coimbatore: Containing cost seems to have paid good dividend to the Coimbatore-based air compressor and automotive equipment manufacturer Elgi Equipments Ltd (EEL) which has seen a jump in profit after tax, though sales grew by about eight per cent, in the second quarter of current fiscal compared to the corresponding quarter last year. It also expects to do well in export markets such as China and Brazil, though overall recovery in the domestic market has been quicker compared to the export market. The board has recommended payment of interim dividend of 75 per cent (75 paise per share of face value of Re 1). While the net sales/income from operations on a standalone basis jumped to Rs 137.98 crore in the second quarter from Rs 127.47 crore, the net profit went up to Rs 16.38 crore from Rs 11.48 crore. The EPS was higher at Rs 2.61 (Rs 1.83). Both compressors and automotive equipment divisions saw good increase in turnover, though compressor manufacture is its core business. According to the consolidated results, the total income during the quarter was Rs 161.52 crore (Rs 146.66 crore) and the net profit was Rs 17.27 crore (Rs 12.68 crore). The share of compressor business in the turnover was Rs 137.75 crore and automotive equipment Rs 22.32 crore. Dr Jairam Varadaraj, Managing Director, EEL, in a release, said that the compressor business grew by 8 per cent in the quarter ended September this year. Elgi Equipments recommends interim The Hindu Business Line Hyderabad: Pennar Industries Ltd has posted sales of Rs 194.72 crore and profit of Rs 12.01 crore for the September quarter, with the latter going up 20 per cent over the corresponding quarter last year. For the half year ended September 30, 2009, the company recorded revenues of Rs 390.17 crore and net profit of Rs 22.79 crore. The annualised cash EPS for the half year is Rs 5.29 per equity shares of Rs 5 each. The company has received all approvals to buy back 65 lakh shares from the open market and has started picking up shares. The company management expects to complete the required buyback during the third quarter of the current fiscal. Additional facilities According to a statement, in order to cater to the expanding market for Railways, the company is putting up additional buildings and manufacturing facilities at its Chennai plant and installing automated rotary compressor shell manufacturing facility at its Ishnapur plant. Pennar Engineered Buildings Systems, the company subsidiary, has completed the construction of its new manufacturing facility at Sadasivapet near Hyderabad. The trail production has started and commercial production is expected to commence during the third quarter. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ALLIED INDUSTRIES JK TYRE TO DOUBLE EXPORTS FROM MEXICAN PLANTS PTI See this story in: The Economic Times Mysore: JK Tyre and Industries is aiming to double exports from its Mexican subsidiary, Tornel, within a year, and is looking at the Central and Southern American markets for expansion. The tyre major had acquired Tornel in 2008, and currently about 75 per cent of Tornel's annual production of 66 lakh units is sold in the Mexican domestic market. "Currently, only 25 per cent of Tornel's annual production is sold overseas. Our target is to increase the share of exports to 50 per cent within one year," JK Tyre and Industries Vice Chairman and MD R P Singhania told news agency. He said the three plants of Tornel presently have a capacity utilisation of around 85-90 per cent, and the company is looking at further enhancing it. "We are looking closely at the markets in Southern and Central American countries. We are already selling some products of all our three brands -- JK Tyre, Vikrant and Tornel -- in those countries and now we are looking to increase our exports to these countries from our three plants in Mexico," Singhania said. He said the Brazilian market would be one of the major targets for expansion. "In the region, our main focus will the Brazilian market. Brazil is one of the three countries along with India and China, which witnessed growth during the recent economic recession," he added. At present, JK Tyre has 230 dealers across the Central and Southern American region. "Our next goal is to strengthen the supply system to these dealers and strengthen our position in these markets," Singhania said. George Joseph Business Standard Kochi: The apprehension flows from the current slow growth in the internal production of rubber and the sharp increase in domestic consumption. The trade says India would require 1.2 million tonnes of rubber by 2015, but the production is unlikely to exceed a million tonnes, given the current growth in production. The country achieved a 4.7 per cent rise in production, at 864,500 tonnes, in 2008-09 and consumption grew by 1.2 per cent to 871,720 tonnes. Consumption has been higher than production for the past few years and the shortage is being met through imports. The average rate of increase in production is estimated at 3.54 per cent for the next five to six years. During AprilAugust this year, production fell 13 per cent to 273,575 tonnes, but consumption increased by 2.1 per cent to 376,350 tonnes. In AprilSeptember, production dropped by 12.4 per cent, while consumption rose by 2.5 per cent. It is also estimated that India would require two million tonnes of NR by 2020. The main reason for the low growth in production is slow rise in acreage in Kerala, where 92 per cent of Indias rubber is grown. There is a problem in getting vast areas of land for plantation crops like rubber; fresh planting is also low in Kerala. Realising this, the Rubber Board now concentrates more on the northeast states. However, productivity is lower there. In 2008-09, the estimate of total area under rubber cultivation in India is 662,000 hectares, with 4.2 per cent annual growth. The average per hectare productivity is 1,867 kg annually. But in the northeast, this is below 1,000 kg. Another issue is the ageing of trees in most parts of Kerala. Due to a number of reasons, re-plantation has also been affected. And, it requires six to seven years after replantation before tapping can be renewed. A serious shortage of labourers is another problem in Kerala; handling labour is not easy there and the wages are high. R Ravichandran The Financial Express Chennai: Apollo Tyres Limited has decided to enhance its investment at its upcoming manufacturing plant at Oragadam near Chennai to Rs 2,000 crore, against its earlier commitment of Rs 500 crore to manufacture truck, bus and car radials for both domestic and overseas markets. The initial capacity is planned to be 110 metric tonnes per day, to be scaled up to 440 metric tonnes a day by 2013. The company, which entered into a MoU with the Tamil Nadu government in 2006, has almost completed its project on 135 acres and is set to go for trial production by the end of this year, said company sources. The manpower of the Chennai plant will be increased to over 1,000 from the current 500, sources added. Neeraj Kanwar, managing director of Apollo Tyres, said, "The main reason for this increased investment is because we have decided to nearly double the capacity of truck-bus radial tyres that we had planned to produce here. We see radialisation in the Indian commercial vehicle segment gaining a certain amount of traction and, therefore, the increased outlay and capacity to cater to domestic market needs." "The all-radial Chennai plant will by far be one of the most modern facilities in this part of the world with a high level of IT usage. We are looking at production from Chennai in the last quarter of this financial year," he added. An official said the company has so far invested over Rs 700 crore in the Chennai plant and is likely to invest close to Rs 1,000 crore by the end of this fiscal. Upon further expansion, the balance amount would be invested before 2012, the official said. By the time the market revives fully, the Chennai plant will be in a position to meet overall demand from across the industry. Apollo Tyres shores up investment in TN Yahoo India | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Times of India New Delhi: As RBI has signalled an end of soft interest rate regime, the State Bank of India is considering to withdraw its special home and car loan schemes, carrying an interest rate of 8% for the first year of repayment period of loan. SBI's current special scheme will expire on November 7. A senior SBI official said the bank will take a final view within this week. Other PSU banks are also considering to withdraw special schemes, announced to revive the demand for houses and cars in Q1 of 2009, when the country was facing one of the worst economic slowdown in the last five years. To counter slowdown, RBI had also announced a number of measures to infuse liquidity, leading to fall in interest rates. The measures helped in putting the economy back on revival path. Since inflationary pressure is also mounting, RBI governor D Subbarao, while unveiling review of monetary policy, said central bank's main focus will be on checking inflation and for this monetary policy could be tightened. But this gave a signal to bankers that interest rates are likely to go up, prompting them to consider to withdraw offering loans at lower rates under special schemes. The apprehension is RBI may increase CRR the proportion of deposits that banks need to keep with central bank by half a percentage points to 5.5%, sooner or later, to mop up excess liquidity from system. Bankers say special schemes were launched in February to attract new borrowers to kick-start economic revival. At that time banks were saddled with old deposits at high interest rates, making cost of fund high. If banks had cut the enchmark rates, interest rates on existing loans would have come down, making yield from loan lower than cost of fund. So, to insulate overall yields on loans, banks announced schemes at lower rates, without cutting benchmark rate. Over a period of time, high cost deposits have been re-priced at lower rates, lowering overall cost of fund. This enabled banks to cut benchmark rates. When SBI had announced its special schemes in February, its benchmark rate was around 13.25% and home loan at around 12%. Now, PLR has declined to 11.75% and home loan at 9.25%-10%. Even if special schemes are withdrawn, there would not be much escalation in the overall cost of borrowing, a senior banker said. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" The Hindu Business Line Thiruvananthapuram: Car services company MyTVS organised a familiarisation meet for agents of Oriental General Insurance in Thiruvananthapuram recently, a press release said. Mr Suresh Chander, Senior General Manager of MyTVS, made a presentation on the customer-centric business and cost-effective, quality services of the company. Mr K.S. Ananda Murthy, Divisional Manager of Oriental Insurance, said the two companies would work together to enhance customer satisfaction. Oriental Insurance is already offering round-the-clock emergency roadside assistance to its policy holders all over the country, he added. A team of 60 agents and senior officials of the two companies attended the programme, the release added. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Hindu Business Line Mumbai: Oil edged further above $78 a barrel on Tuesday, after rising more than 1.5 per cent a day ago, as traders weighed the impact of a possible rise in US crude stocks against positive manufacturing and home sales data. The continued strength of commodities-linked currencies such as the Australian dollar also offered support to oil, with the weak US dollar also sending gold to its highest in almost two weeks. US crude for December rose 22 cents to $78.35 a barrel by 0318 GMT, after settling up $1.13 on Monday. London Brent crude gained 21 cents to $76.76 a barrel. Agencies | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reuters See this story in: The Economic Times Detroit/Paris: Ford, Renault, Peugeot, Toyota and BMW signaled on Monday that the automotive sector is stabilising, but most stopped short of predicting a rebound next year. Ford Motor Co surprised Wall Street with a quarterly profit and raised its 2011 outlook to solidly profitable. The US automaker said the third-quarter results were helped by cost cuts, improved credit results and increased North American market share. Ford executives are optimistic about next year, but acknowledged the near-term uncertainty. Were just not sure mainly about the strength of the recovery, just like everybody else, Ford chief executive Alan Mulally said on a conference call. At the Reuters Auto Summit in Paris, Renault and Peugeot SA said they see a strong end to 2009 as drivers flock to take advantage of government incentives to trade in old cars. However, they agreed that questions remain about 2010 with sales slumping as much as 10%. At the summit in Detroit, Toyota Motor Corp's US brand chief, Bob Carter, said a gradual recovery for the industry was taking shape, with total US industry sales seen rising 4.8% or more next year to more than 11 million. "We believe the bottom of the cycle occurred in the first two weeks of April," he said. "In the month of September and closing out October, we see ourselves back on the slow and steady improvement track." Jim O'Donnell, president of BMW North America, also said US industry sales would be close to 11 million units next year, but that was down from the 11.5 million he had expected as recently as September. It will be a slower recovery than I had originally anticipated," he said. "There is still a lot of consumer debt out there. That is keeping the average consumer from going out and making big purchases." Group 1 Automotive's CEO, Earl Hesterberg, said he saw no signs of a rebound in consumer confidence and held no significant optimism for U.S. vehicle sales in November and December. He called 11 million units a reasonable U.S. sales forecast for 2010. Meanwhile, Jerry York, a former General Motors director, said he saw US auto sales remaining flat next year. "I just can't fathom anything that's going to cause a material increase in auto sales in this country in 2010," he said. Still, more optimism is circulating in the auto world. Penske Automotive Group Inc said on Friday it had received offers from foreign automakers to sell their brands in the United States through Penske dealerships. Automakers in the US market are set to report October sales on Tuesday. Analysts expect the strongest results of 2009 excluding July and August, when sales received a boost from the US government's "cash for clunkers" trade-in incentives. Agencies See this story in: The Economic Times Washington: General Motors said on Tuesday its board decided to keep Opel, scrapping an on-again, off-again plan to sell its big European division. GM said in a statement the board made the decision because of "an improving business environment for GM over the past few months, and the importance of Opel/Vauxhall to GM's global strategy." It said the GM board "has decided to retain Opel and will initiate a restructuring of its European operations in earnest" and seek aid from the German government. "GM will soon present its restructuring plan to Germany and other governments and hopes for its favorable consideration," said Fritz Henderson, president and chief executive. "We understand the complexity and length of this issue has been draining for all involved. However, from the outset, our goal has been to secure the best long term solution for our customers, employees, suppliers and dealers, which is reflected in the decision reached. "This was deemed to be the most stable and least costly approach for securing Opel/Vauxhall's long-term future." Henderson said the restructuring costs have been estimated at three billion euros (4.4 billion euros) "significantly lower than all bids submitted as part of the investor solicitation." "GM will work with all European labor unions to develop a plan for meaningful contributions to Opel's restructuring," he added. "While Opel continues to outperform against its viability plan assumptions and immediate liquidity is stable, time is of the essence." GM had announced plans to sell a 55 percent stake in German-based Opel to Canadian firm Magna and its Russian partner Sberbank. European Union regulators last month cast doubt on the deal, saying there were "significant indications" that German aid of 4.5 billion euros (6.6 billion dollars) for the deal had been proffered only if Magna and Sberbank won the bid, which had been bitterly contested. The saga has dragged on since February, with the fate of at least 10,500 of GM Europe's workforce of around 50,000 hanging in the balance. That is the number of jobs Magna said it would cut, while GM is believed set to eliminate more in the restructuring of the ailing carmaker. Workers in Belgium, Britain, Poland and Spain had slammed Magna's decision to maintain all German factories in operation, charging that more efficient plants would suffer because Berlin was providing state aid. Berlin had asked other European countries to contribute to the rescue package as well. In October, a GM executive pushed back the signing date again and a press report said GM wanted to hang on to the company. Bloomberg See this story in: The Hindu Business Line Adam Opel GmbH, the German carmaker being sold by General Motors Co., won a commitment from labor leaders to reduce expenses by 265 million euros ($389 million), helping pave the way for a purchase by Magna International Inc. Employees agreed to cut Christmas and vacation pay, delay a wage increase until 2011 and suspend pension contributions for two years, Opels works council said in a statement. The cuts are hard for us all, but were prepared to accept responsibility, Klaus Franz, Opels top labor leader, said in the statement. We have done our part so that the contract between Magna and General Motors can be signed. The concessions are part of Magnas terms for buying Ruesselsheim, Germany-based Opel and its Vauxhall brand in the U.K. Job cuts arent part of the current agreement and will be negotiated after Magna signs a deal, Franz said. Opels workers said the measures are conditional on GM signing a contract with the bid group led by the Canadian auto-parts supplier. GMs board is meeting to reconsider the offer by Magna after the German government said Oct. 17 that it would be willing to back other investors. The European Commission had expressed concern that Germany improperly favored Magnas bid. Todays meeting is likely to confirm the decision to sell to the Canadian company, Carl-Peter Forster, GMs European chief, said at an auto-industry conference in Berlin. The deal is the best solution and offers very interesting possibilities for expansion in Russia and elsewhere, he said. Sberbank Magna, Canadas largest auto-parts maker, is partnered with OAO Sberbank, Russias biggest lender, and will invest 500 million euros in Opel in return for a combined 55 percent stake. Germany is providing 4.5 billion euros in financing for the deal, which Opel will repay by 2015, Siegfried Wolf, Magnas co- chief executive officer, said Sept. 14. Opels workforce, currently about 50,000 employees, would receive a 10 percent stake in the carmaker in exchange for the concessions, according to Aurora, Ontario-based Magnas initial purchase agreement. Detroit-based GM will retain 35 percent. Bloomberg See this story in: mint Beijing: Chinas biggest domestic auto maker SAIC Motor Corp. Ltd expects to reach an agreement on cooperating with General Motors Corp. in India by year-end as it seeks to boost sales overseas. Talks are still going on, chairman Hu Maoyuan said on Tuesday in Beijing. We should be able to let you know details by the end of the year, Hu said. GM and SAIC are discussing introducing Wuling vehicles in India as economic growth spurs demand for inexpensive vehicles. SAIC may also buy a stake in GMs India operations. Reuters See this story in: The Economic Times Detroit: Ford Motor Co said on Tuesday that its US sales rose 3.1 per cent in October from a year earlier among all of its brands, supported by sales of cars and crossover. Ford, which posted a nearly $1 billion third-quarter profit and positive cash flow in a quarter for the first time in more than two years, said US sales rose 2.6 per cent for its Ford, Lincoln and Mercury brands. Including Volvo, US sales rose to 136,920 in October from 132,838 a year earlier, the automaker said. Ford said it expects its U.S. retail share to be up for the 12th time in the past 13 months in October. On Monday, Ford said it expected U.S. auto sales overall to come in at about 10.6 million vehicles in 2009 including medium- and heavy-duty trucks. It has not revisited yet forecasts for 2010 industry sales at 12.5 million and 2011 at 14.5 million. US auto industry sales were propped by the government "cash for clunkers" program in July and August, but demand slumped back in September with the program expired. Ford shares were down 6 cents, or less than 1 percent, at $7.52 Tuesday on the New York Stock Exchange. The automaker late Monday announced plans to repay or extend $10.7 billion of secured debt and issue $3 billion of stock and equity-linked securities to improve its balance sheet. Ford US auto sales rise 3% in October The Times of India Agencies See this story in: The Economic Times Frankfurt: Sales of new cars in Germany surged 24 percent in October on a 12-month basis, as the market continued to benefit from a cash for-clunkers bonus that expired in August, the trade federation VDA said on Tuesday. It said 321,000 new cars were registered last month, 24 percent more than in October 2008 and beating September's annual gain of 21 percent. In the first 10 months of the year sales were up 26 percent from a year earlier at 3.3 million vehicles. While the bonus for trading in old cars for new expired in late August, many new vehicles ordered in the summer were delivered only in October. At the end of October orders outstanding came to 394,300 vehicles, up 16 percent from the figure at the same time last year, according to the federation. Under the bonus scheme, for which the government allocated a total of 5.0 billion euros (7.3 billion dollars), consumers were entitled to 2,500 euros toward the purchase of a new car if they traded in a vehicle at least nine years old. Reuters See this story in: mint Frankfurt: Germanys BMW gave a tepid markets outlook and predicted the euro would stay strong after third-quarter earnings before interest and tax (EBIT) shrank 86% amid a global economic slump. Shares in worlds biggest maker of premium cars fell 6.2 % by 1:27pm, the biggest decliner in the DJ Stoxx European car sector index which was down 3.5%. Analysts cited disappointing third-quarter results - its core automobiles business lost 76 million euros ($112.3 million) before interest and tax in the quarter - and a lack of apparent impetus to inspire confidence in the stock. We still see several risks at BMW from currencies, especially euro/sterling, and lower residuals in the future and therefore confirm our negative view on BMW, DZ Bank analyst Michael Punzet told clients. BMW said on Tuesday it still saw positive 2009 earnings thanks to cost cuts even as it repeated sales volume was set to fall 10-15%. We expect that the markets will make a gradual recovery over the coming year, chief executive Norbert Reithofer said. But the company said the traditional big three markets - North America, Europe and Japan - were expected to generate low and below-average growth in the quarters ahead and saw scant relief on the foreign exchange rate front. Given the current high levels of state and trade balance deficits and banks needs to record high levels of write-downs in those two countries, there is a risk that the U.S. dollar and the British pound will weaken further in the medium term. BMW posted its first year-on-year volume gain this year in September and has forecast this would become a trend during the rest of 2009 thanks to launches of new models such as the BMW X1 and 5 Series Gran Turismo. BMW had said on 7 October that 2009 sales volume might drop by only 10-155 - a key forecast since its finance chief had said in September there was a good chance the group could post a 2009 profit if volumes were not worse than that level. In the first nine months of 2009, group volumes fell 15.7% to 939,554 vehicles. Daimler AG, whose Mercedes-Benz Cars premium division is BMWs archrival, reported third-quarter group EBIT of 470 million euros. Volkswagen, the parent of premium brand Audi, made an operating profit of 278 million. Shares of BMW trade at around 25 times 12-month forward earnings, a discount to Daimler on 36 times but a premium to VWs multiple of nearly 17, according to StarMine, which weights analysts estimates by their forecasting accuracy. BMW posts dismal earnings, cautious on outlook Deccan Herald BMW profit drops 74% The Financial Express Yahoo India See similar story in: The Financial Express After months of delay, French tyre major Michelin has got approval from the Tamil Nadu government to set up a manufacturing unit near Chennai with an estimated investment of Rs 4,000 crore initially. The Cabinet in a recent meeting approved the Michelin s proposal and the government is in the final stage of acquiring land for the project. Work on the project will start soon and the plant is expected to start functioning in two years, said government sources. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ECONOMY The Hindu Business Line Mumbai: The rupee fell 0.95% against the US dollar on Tuesday on outflow from foreign funds as share indices plunged over 3%. The rupee ended at 47.40/41 a dollar compared with 46.96/97 a dollar on Friday. On Monday, the markets were closed on account of Guru Nanak Jayanti. The Hindu Business Line Mumbai: Domestic stocks slipped for the sixth consecutive day on Tuesday as global cues remained negative. Opening after an extended weekend, the Sensex dived 491 points to a two-month low of 15,404.8 points, while the Nifty fell 3.14 per cent to 4,563.9 points. The Sensex in the last six trading sessions has fallen 1404 points or 8.35 per cent. Many investors triggered stop/loss (an order placed to buy/sell when the markets reach a particular level) when the Nifty slipped below 4,600. There was a major sell-off, said Mr Alex Mathew, Head of Research at Geojit BNP Paribas Financial Services. The key European markets were down more than one per cent when they opened on Tuesday, which dragged down stocks here. Another reason for the dip was the interest rate hike by the Reserve Bank of Australia on Tuesday. FIIs/P-NOTES Foreign Institutional Investors were net sellers for Rs 874 crore. Since last Monday, they have been net sellers for Rs 4,720 crore. It looks like the RBI will tighten the monetary policy ahead of other emerging market central banks. This, for the time being, has made the markets here unattractive to the FIIs. And to a certain extent, they feel the markets here are a little overvalued, said Mr Sanjeev Patni, Head of institutional broking at Centrum Broking. There was a lot of selling of Participatory Notes, said the head of research at a top brokerage: It is learnt that one particular FII has been violating certain P-Notes regulation in Mauritius which might lead to a change in P-Notes regulations there. This led to selling by other FIIs holding P-Notes. Domestic institutions were net buyers for Rs 752 crore. Retail investorswere net buyers too. The market seems very attractive now. Even though I could not buy, I did put my money in seven SIPs (Systematic Investment Plans) which start, Mr John DSouza, a retail investor from Mumbai who sold his shares during the recent rally to buy himself a new car! The market breadth was negative as 2,171 scrips declined and only 534 scrips advanced. Reliance Industries was one of biggest losers of the day another reason for Tuesdays massive market fall. The scrip fell 5.73 per cent ahead of the apex court hearing in the RIL-RNRL case and also as the Comptroller and Auditor General set up a panel for special audit of RILs capital expenditure on its Krishna-Godavari gas project. Realty stocks too fell, with the sectoral index crashing 9.7 per cent. Last Financial closing
Metals
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Sunday, December 13, 2009
Indian Auto Industry Update November 04, 2009
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