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| HEADLINES Tuesday November 10, 2009 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INDUSTRY Tata may roll out 200 Nanos daily by March INTERVIEWS/FEATURES COMPONENTS Sundaram Brake Linings to expand SEZ unit ALLIED INDUSTRIES Dunlop to restart plant, but wage issues persist FINANCE & INSURANCE HDFC Bank disburses Rs 3,000-crore retail loans in October OIL, LUBRICANTS & ALTERNATIVE FUELS Oil prices higher in Asian trade | CARS, SUVs, MUVs Renault to offer full range of products in India Toyota bets on huge product line-up for bigger market share ECONOMY & FINANCECOMMERCIAL VEHICLES Tata Motors to shut down Pune CV manufacturing plant for 3days CONSTRUCTION & AGRI MACHINERY Additional role for Pawan Goenka Rupee gains on positive equities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 INDUSTRYVimukt Dave & Sohini Das Business Standard (Web & Print Edition) Rajkot/ahmedabad: As Tata Motors gears up for test production, it is targeting 200 Nanos daily from its Sanand factory by March 2010, according to vendors. Local suppliers, who did not want to be identified, have said they had been asked by the company to supply components that would support production of 200 cars a day. The company plans test production of 50-60 cars per day from January. Currently, it is working on trial runs of Nano engines. While the plant will be operational in the last quarter of this year, production is likely to be ramped up by August next year. Tata Motors plans to roll out 72,000 to 80,000 cars from Sanand, close to Ahmedabad, in the next financial year. The plant will have an annual capacity of 350,000 units. It is currently producing the Nano from its Pantnagar facility in Uttarakhand, where 100-120 Nanos are being assembled every day, with the engines produced in Pune. The company had indicated a couple of months earlier that it plans to take up the capacity at Pantnagar from the present 2,500-3,000 cars a month to around 4,000 cars soon. Vendors sources also indicated that production at Pantnagar would continue even as the mother plant at Sanand becomes operational. Tata Motors has an order-book of around 200,000 Nanos. The company began deliveries of the worlds cheapest car from July this year and has delivered 7,500 vehicles so far. By the earlier schedule, Tata Motors was to complete deliveries to 100,000 allottees by the last quarter of 2010 and for 55,000 others within two years from the date of allotment. The Nano is selling at a Rs 10,000-25,000 premium in the used-car market, with many cashing on the initial interest on the most hyped car in the Indian market in the past couple of years. The company has not allowed transfer of allotments, to discourage bulk buying and illegal sale of allotments. Murali Gopalan The Hindu Business Line (Web & Print Edition) New Delhi: The entry of SAIC Motor Corporation (better known as Shanghai Auto) into the Indian market a few weeks from now is a clear signal that the Chinese are serious about going global. SAIC is learnt to have finalised a deal with General Motors where it will pick up a 50 per cent stake in its Indian arm. In the process, the company will bring to this part of the world light commercial vehicles which will compete with established players such as Tata Motors, Mahindra & Mahindra and Piaggio. Just a few weeks earlier, Premier Ltd (the former Premier Automobiles, one of Indias old carmakers) entered into a pact with the Zotye group of China to put together and retail its compact sport-utility vehicle in India. While the product will sport the Premier badge, Zotye will also end up building its brand here in the process. Nissan, which is getting ready with its small car for India, has indicated that certain parts like the engine control unit and headlamps will be sourced from China. As sources say, this is not a trifling matter since the engine is one of the most critical components in a car. Nissan believes it makes sense because it has already achieved economies of scale in China which will help its other global operations, particularly India and Thailand, from the viewpoint of cost-control. Till a few years ago, not many people took the Chinese seriously. When some Indian automakers began to fit their vehicles with parts from China, the first reaction was that these were cheap and would not last. There were concerns, though, that this cost structure could put Indian ancillary suppliers under pressure and the tyre industry, in particular, was (and continues to be) concerned about cheaper Chinese imports. At one level, this was still not a major cause for concern as it only concerned a clutch of auto components. And even when companies such as the Aurangabad-based Endurance tied up with Wanfeng of China to manufacture alloy wheels here, there was comfort in the fact that the Indian partner would have a bigger role to play. Global attention However, the last few months, since the Lehman crisis broke out in 2008, have clearly shifted global attention towards China. A tottering GM sold its Hummer business to Tengzhong, a Chinese construction equipment maker. A few weeks ago, Ford announced that Geely Automotive of China was its preferred choice to buy out its Volvo Cars division in Sweden. This could have implications for India where Volvo Cars is already present. Now, it is learnt that multinationals operating in China with local partners (the joint venture route is mandatory there for cars, unlike India, where the foreign partner will not be allowed a majority stake) will now have to set up another company with a local R&D base. Clearly, the goal is for local carmakers in China to improve their manufacturing standards to take on the world. What does all this imply for Indias automotive industry? Sources say that the coming years will see more and more Chinese companies enter this market and compete on their biggest advantage which is lower costs. The challenge could come in the light truck segment and even cheaper cars. There is no threat on the two-wheeler side since the likes of Hero Honda, Bajaj Auto and TVS Motor are well established, they add. Where the Chinese will try and make a dent is at the lower end of the pyramid where affordable products can generate demand. The Wuling trucks (from GM India and SAIC) will be the acid test as also Premiers Rio compact SUV. The lessons learnt will be used to make products that could be even more relevant to the Indian consumer. Indian companies such as Mahindra & Mahindra and Bajaj Auto are also using China to make tractors and two-wheelers (for markets like Africa), while component makers such as Bharat Forge and Sundram Fasteners see good business potential in terms of servicing bigger multinationals. For the moment, the Chinese are roaring ahead with monthly car sale of a million units which is marginally lower than what India produces annually. Shally Seth and Satish John mint (Web & Print Edition) Mumbai: The aftermarket arm of Mahindra and Mahindra Ltd (M&M), the company that sells two out of every three utility vehicles sold in India, is betting big on sale of second-hand cars, services and spares. The strategy is to gain revenues from businesses related to its core business. M&M is eyeing Rs6,300 crore revenue from these businesses by 2015, said Rajeev Dubey, president, human resources, aftermarket and corporate service. Created in April 2008, aftermarket wings revenue in the seven months to October was Rs689 crore. We want to create an ecosystem in the space of pre-owned cars, said Dubey. The Mahindra Group has a history of entering new businesses that are contiguous to its mainline operations. For example, its tractor engines are tweaked into electricity gensets under the Mahindra Powerol brand. Similarly, Mahindra Finance Ltd started off by financing tractors and utility vehicles and is now a full fledged non-banking finance company. Mahindra Systech, its component manufacturing and engineering services arm, is a significant player in the auto component business. Our groups pursuit for growth often comes from exploring adjacencies to our core business, said Dubey, who took charge of the aftermarket sector more than a year ago. The Boston Consulting Group Inc. drew the blueprint for this business. According to Dubey, the growth will be driven by branded stores, First Choice Wheels. M&M has close to 90 such stores across India, offering second-hand car customers services that include warranty, parts, finance and insurance. Till recently, the one million-plus unit second-hand car market in India, which typically mirrors the new cars market, was characterized by sundry dealers. With car makers sensing opportunity in offering certified pre-owned cars with warranty, its now a key focus area for allTata Motors Ltd, Hyundai Motor India Ltd, General Motors India Pvt. Ltd, Honda Siel Cars India Ltd. While the outlets of these firms sell their own brands, M&Ms business model is different. It buys, refurbishes, and sells second-hand cars of any make along with warranty and insurance. The foundation of Mahindras used car business was laid eight years back when Anand Mahindra, vice-chairman and managing director, saw merit in an idea that came from a Harvard Business School student who had joined the company as an intern. What started in 2001 as an online portal called Automart.com, for second-hand car sales, is now a full-fledged business for the company, transacted at branded stores. First Choice Wheels sold 10,000 second-hand cars in fiscal 2009 and targets doubling it in the current fiscal. The portal now supplements the physical sales. Dubey expects M&Ms used car sales to catapult to 100,000 units by 2015. Unlike the US market, where for every new car, there are two old cars sold, India sells one pre-owned car for every new one, and hence there is a lot of opportunity, he said. In a bid to strengthen the used car business and cash in on the high yielding vehicle service business, First Choice Wheels branched out to First Choice Services in April 2008. Experts say that given the healthy margins, spare parts for and service of cars that are outside the warranty period, and negligible presence of independent business entities, there is a strong business case for auto makers to tap this segment. Nobody makes margins by selling cars, said V.G. Ramakrishnan, transport and automotive practice head at global consulting firm, Frost and Sullivan. The average margin is 17-18% for spares and 25% for services. Currently, the organized spares and service business in India is estimated to be Rs15,000 crore and is growing at 18-20% per annum, according to the executives of car service firms. First Choice Services expects to draw synergies from Mahindra Spares, its spares division, for the services business. Currently it addresses the requirement of Mahindra vehicles but plans to expand the scope by going for other brands as well. It has seven service outlets in metros and plans to open 300 by 2015, a mix of company-owned stores and franchises. We would require huge experience in procuring parts for the sale and service of pre-owned cars, said Dubey. To be sure, M&M is not alone is chasing this segment. The vehicle maintenance and services business in India is either addressed by authorized company outlets or by roadside garages. Bosch Car Services, My TVS, Reliance Auto Zone (the car service arm of Reliance Retail Ltd) and more recently, Carnation Auto India Ltd, a brainchild of Jagdish Khattar, former managing director of Maruti Suzuki India Ltd, are targeting vehicles that are outside the warranty period. They are encouraged by the ownership of multiple cars by consumers in metros. With multibrand ownership in a household increasing, we see immense potential for organized firms in car servicing business, said K. Ravi, vicepresident automotive aftermarket, Bosch Ltd. TVS and Sons that presently has 60 My TVS outlets, plans to have an all-India presence in one year. It wants to grow its revenue from Rs30 crore to Rs350 crore in the next five years, said Srivat Chan, president, CCB (consumer centric business) at TVS and Sons. Bosch too plans to ramp up the number of service outlets to 500 by 2011 from around 300 now. But the car service business may not have a smooth ride as procurement of spares from car makers is not easy. The authorized company service stations enjoy hefty margins in the business and they may not like the idea of sharing it with outsiders. In a recent interaction with Mint, Khattar had said the big threeMaruti, Hyundai and Tata Motorshave refused to supply spares to Carnation and he is lining up imports from Taiwan and Thailand. Dubey too conceded it is an issue but First Choice Services has so far not embarked on imports. We will see how to overcome this, once we have the scale, he said. Dubey expects M&Ms used car sales to catapult to 100,000 units by 2015. Unlike the US market, where for every new car, there are two old cars sold, India sells one pre-owned car for every new one, and hence there is a lot of opportunity, he said. In a bid to strengthen the used car business and cash in on the high yielding vehicle service business, First Choice Wheels branched out to First Choice Services in April 2008. Experts say that given the healthy margins, spare parts for and service of cars that are outside the warranty period, and negligible presence of independent business entities, there is a strong business case for auto makers to tap this segment. Nobody makes margins by selling cars, said V.G. Ramakrishnan, transport and automotive practice head at global consulting firm, Frost and Sullivan. The average margin is 17-18% for spares and 25% for services. Currently, the organized spares and service business in India is estimated to be Rs15,000 crore and is growing at 18-20% per annum, according to the executives of car service firms. First Choice Services expects to draw synergies from Mahindra Spares, its spares division, for the services business. Currently it addresses the requirement of Mahindra vehicles but plans to expand the scope by going for other brands as well. It has seven service outlets in metros and plans to open 300 by 2015, a mix of company-owned stores and franchises. We would require huge experience in procuring parts for the sale and service of pre-owned cars, said Dubey. To be sure, M&M is not alone is chasing this segment. The vehicle maintenance and services business in India is either addressed by authorized company outlets or by roadside garages. Bosch Car Services, My TVS, Reliance Auto Zone (the car service arm of Reliance Retail Ltd) and more recently, Carnation Auto India Ltd, a brainchild of Jagdish Khattar, former managing director of Maruti Suzuki India Ltd, are targeting vehicles that are outside the warranty period. They are encouraged by the ownership of multiple cars by consumers in metros. With multibrand ownership in a household increasing, we see immense potential for organized firms in car servicing business, said K. Ravi, vicepresident automotive aftermarket, Bosch Ltd. TVS and Sons that presently has 60 My TVS outlets, plans to have an all-India presence in one year. It wants to grow its revenue from Rs30 crore to Rs350 crore in the next five years, said Srivat Chan, president, CCB (consumer centric business) at TVS and Sons. Bosch too plans to ramp up the number of service outlets to 500 by 2011 from around 300 now. But the car service business may not have a smooth ride as procurement of spares from car makers is not easy. The authorized company service stations enjoy hefty margins in the business and they may not like the idea of sharing it with outsiders. In a recent interaction with Mint, Khattar had said the big threeMaruti, Hyundai and Tata Motorshave refused to supply spares to Carnation and he is lining up imports from Taiwan and Thailand. Dubey too conceded it is an issue but First Choice Services has so far not embarked on imports. We will see how to overcome this, once we have the scale, he said Mahantesh Sabarad, an analyst at Centrum Broking Pvt. Ltd, a Mumbai-based brokerage, estimates ratio of revenue earned from services, spares and commissions from offerings such as finance and insurance, in the range of 48:28:24. But this is true for only those big dealers who offer the three Sssales, spares and service. For Carnation or any company-owned outlet like Mahindra First Choice Services, the revenue earned from services will be higher, he said. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| PTI See this story in: The Economic Times (Web Edition) New Delhi: Tata Motors said it will shut its commercial vehicle manufacturing plant in Pune for three days from November 13 to 15 due to shortage of a critical engine component. "Supply of fuel injection pump from one of our vendors has been affected due to the fire in Jaipur," Tata Motors spokesperson said. As a result, he said the company has decided to shut the Pune commercial vehicle manufacturing plant on November 13 to 15. He, however declined to name the supplier. Due to fire at oil depot of the Indian Oil Corporation (IOC) in Jaipur on October 29, factories in and around the area have been asked to shut down. Tata Motors to shut down Pune plant for 3days The Times of India (Web Edition) Tata Motors plant shut The Financial Express (Delhi Print Edition) Tata Motors Pune unit to shut down for 3 days Mint (Delhi Print Edition) Tata to shut CV plant for days Asian Age (Delhi Print Edition) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Hindu Business Line Mumbai: Dr Pawan Goenka, President, Automotive Sector, Mahindra & Mahindra, will hold the additional responsibility of the companys Farm Equipment Sector, as Mr Anjanikumar Choudhari President, Farm Equipment Sector, will retire on March 31, 2010. Dr Goenka will be re-designated as the President, Farm Equipment Sectors, with effect from April 1. Mr Choudhari has spent 10 years in the Mahindra Group, the last five years of which he was heading the Farm Equipment Sector. Pawan to head M&Ms farm equipment sector Pawan Goenka to lead M&M's farm equipment sector from April 1 Daily News & Analysis PTI See this story in: The Hindu Business Line Mumbai: HMT Ltd on Monday reported a net loss of Rs 30.90 crore for the half year ended September 30. The same was at Rs 28.50 crore in the year ago period. The company's net sales stood at Rs 86.50 crore for the six-month period ended September 30, 2009, against Rs 78.30 crore during the corresponding period a year ago, HMT said in a filing to the Bombay Stock Exchange (BSE). The diversified firm, in which the government holds a 98.88 per cent stake, has presence in the business of watches, tractors, printing machinery and metal forming presses among others. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| P. Narasimhan & S. Varadharajan The Hindu Chennai: Honda Motorcycle and Scooter India (HMSI), the fully-owned two-wheeler subsidiary of Honda Motor Company, Japan, will be investing Rs. 100 crore every year for capacity expansion, according to Shinji Aoyama, President and Chef Executive Officer. Speaking to The Hindu, Mr. Aoyama said the company had invested Rs. 900 crore so far and the aim was to achieve a growth rate of 17 per cent annually. The company was hopeful of selling 1.25 million two-wheelers in the current fiscal against 1.07 million vehicles in the previous year. The target for next year was fixed at 1.5 million scooters and motorcycles, he said. At present, the main growth was coming from the motorcycle segment. In the scooter segment, sales of Activa brand, the basic model, were growing fast. Mr. Aoyama was in Chennai in connection with the final round of Honda One Make Race. On future plans, Mr. Aoyama said the company would be launching 110-cc motorcycle in the Indian market in the current financial year targeting the youth. Though it would be in the 100-cc plus category, it would be a sporty bike, Mr. Aoyama added. On the expansion of dealer network, he said the company at present had 685 outlets. The plan was to reach 770 outlets in the current financial year. All Honda Motor vehicles would adhere to BS-III norms which would be in force from next near. On the export front, he said the company had exported 70,000 two-wheelers mainly to European countries and Latin America. About the competition in the two-wheeler segment, following the proposed entry of the U.S.-based Harley Davidson motorcycles into the Indian market, the launch of two new 125-cc category scooters and the proposed introduction of motorcycles by Mahindra 2-Wheelers, and the launch of super-bikes by Italy headquartered motorbike giant Ducati, (which had introduced five new superbikes in the Indian two-wheeler market), Mr. Aoyama said the two-wheeler market was very big in India and there would be enough space for all. Honda Motorcycle products include Activa, Dio and Aviator in the scooters segment and Unicorn and Stunner in the motorcycles segment. Roudra Bhattacharya, Manu P Toms The Hindu Business Line New Delhi/Mumbai: The Indian bike lovers dream seems to be coming true. Speed enthusiasts ogling superbikes in glossy magazines could now call these mean machines their own, as niche players such as Harley-Davidson and Ducati ride into the country to join the major global brands present here. The bikes do not come cheap; these niche brands are priced well above most mid-size cars, yet the companies remain bullish about the market. In the last two years, major bike makers such as Yamaha, Honda, Suzuki and Kawasaki have launched their premium range in the country. Last week, Fiat-owned specialised bike manufacturer Ducati set up its first shop in India. With bikes priced between Rs 9.6 lakh and Rs 43.37 lakh, Ducati aims to open six showrooms by 2010. One of the oldest bike manufacturers in the world, US-based Harley-Davidson aims to announce its range and pricing for India at the Auto Expo in January. We will be launching our dealerships initially in five cities and have already got about 80 applications for it, said Mr Sanjay Tripathi, Director Marketing, Harley-Davidson India. The company will also be starting the Harley Owners Group (H.O.G.) in the country. Popularly referred to as the H.O.G. world over, the owners association would organise cross-country adventure rides. Yamaha was the first to step into this market with its 1,000 cc superbike R1 and the 1,700 cc sports bike MT01 in December 2007. Priced at Rs 12.5 lakh, it has sold about 150 units till date. It launched the 1,700 cc V-MAX in August this year, priced at Rs 20 lakh. We have been out of stock for the last three months for both the R1 and the MT01, said Mr Pankaj Dubey, National Business Head, India Yamaha Motors Ltd. Suzuki entered the market with the Rs 12.5-lakh Hayabusa and Intruder in November last year. According to Mr Atul Gupta, Vice-President Sales and Marketing, Suzuki Motorcycle India, it has sold 105 units to date. Kawasaki, in partnership with Bajaj Auto, has launched the Ninja 250R. The bike, at 250 cc, is a sobered down version of its much more powerful namesakes sold abroad. At Rs 3 lakh, it is much more affordable, but doesnt quite qualify in the superbike range. Assembled at Bajajs Chakan plant, it has sold about 127 units. The company also has plans to bring in KTM bikes with capacities of above 690 cc. Adding to the appeal Says Mr Gupta, the removal of local homologation rules for bikes above 800 cc capacity has been a huge help. We can now bring in these bikes without modifying them to local conditions, saving both time and costs. Other reasons for the spate of launches include rising disposable urban incomes and improved road infrastructure. The Society of Indian Automobile Manufacturers (SIAM) puts the size of the market for premium bikes at about 500 units a year. It should increase to about 1,000 units per year by 2015, said Mr Sugoto Sen, Director, SIAM. He added that a boost in auto sales in the premium category generally comes when per capita income rises above $1,000. For India this would be around 2014. Swaraj Baggonkar Business Standard Mumbai: Sales of Bajaj Auto, India's second-largest motorcycle maker, surged 52 per cent in October to almost 250,000 units. The spike came after a long period of slowing sales. In fact, the company had recorded a fall of 33 per cent in sales in December last year, when it sold just 118,000 units. In an interview to Swaraj Baggonkar, the company's Chief Executive Officer (Two-Wheelers) S Sridhar explained the reasons behind the jump. Edited excerpts: Did you do anything special to increase sales? The reference point comes from the last quarter of the last financial year. We used to sell on an average 35,000 units of the Platina, 23,000 units of the mid-range bikes like XCD 125 and Discover 135, and 25,000 units of the Pulsar. Overall, the figure was 83,000 units in the last financial year, which meant a market share of 17 per cent. If you compare it with the current quarter, the same Platina's sales is around 26,500 units and that of Discover is around 85,000-90,000 units, while we sell about 50,000 units of the Pulsar. This gives us a total of around 160,000 units a 100 per cent growth in less than three quarters, with the market share being 27-28 per cent. We have not changed our strategy at all. Our focus remains on bigger and sportier bikes, but this should be seen as a means of upgrading the current customer. Can you elaborate on the success of the new Discover (100cc)? The company has been able to increase sales from 23,000 units to the extent of 90,000 units in the September-October period. This has to do with the strategy of bigger and sportier but targeted at the commuter the typical buyer who is used to buying a run-of-the-mill product. The Discover is bigger outside but frugal inside. Discover (135) is known as a bigger bike, for which we used to charge around Rs 48,000. This is what is known to the customer. So, we have changed the inside with frugal technology, while the customer had the familiarity with the premium imagery. We introduced, for the first time in India, a five-speed gear box on a 100cc bike. It gives a mileage of 80 km, while we charge only Rs 800 more than the competition. Is the demand for such bikes higher in the economy-conscious rural and semi-urban areas? The response to Discover was much more in smaller towns than in the big cities. That is the area which is responding very well for Bajaj Auto. Every additional number we sell can be seen in the overall numbers since we did not have any presence at all in the (Hero Honda's) Splendor/Passion areas as we either had an entry-level product like the Platina or the Pulsar. So, obviously, the additional numbers are coming from the competition. But it will be difficult to put a figure to that. So where would you put the total volume of the entry-level (100cc) bike segment? We also have the entry-level product called the Platina, but that is not the focus area for us. We haven't done anything for that bike. The entry-level segment will remain at 85,000 units per month for the industry. We sell somewhere around 25,000-27,000 units. Then Hero Honda is there, and so is TVS Motors. But the size is actually small. Would you continue with the Platina even if its sales is not matching your competition? Yes, we will as long as customers are asking for it. We admit it is not as hot an area as the other segments, which are the future. But at the end of the day, you've got to admit that the bike is selling some 25,000 units. You phased out the XCD 125. Does a similar fate await the Platina 125? We used to sell 8,000-9,000 units of the Platina 125 and we have decided to slow down this product. After the Discovery was added to the portfolio, the Platina 125's sales volume was not adding much. So, while the bike is still being sold, the numbers are very small. You have played the Pulsar and Discover brands very well in the market. Aren't you worried that some kind of fatigue may set in if new brands are not introduced? This is an area where we have to be extremely careful. Creation of new brands is not what customers are looking for. They are, instead, looking for form and familiarity. Familiarity comes through the brand. We are concentrating on technology. For instance, the earlier Discover used to give 55 km/litre, whereas the new model is giving 80 km/litre. This is our hard-earned lesson, that technology has to work. There will be an absolute resistance if there is any radical change in the form and brand. Any projections for the sales and profitability by this year-end? So far, it has been the best year in terms of profitability and, as far as sales goes, we will be exceeding whatever internal plans we had at the start of the year. The coming quarter is expected to be even better than the current quarter. This includes the demand which will set in for the new bike to be launched in the final quarter. You don't have too many pro-biking outlets in the country, though you are aiming to sell as many premium bikes as possible. Why don't you extend the sales of such bikes to your usual sales outlets? Three months ago, we decided to give all our products to non pro-biking outlets as well. But this exercise was limited to the cities where we already had pro-biking outlets. Now, we sell all our products in small towns, too. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Hindu Business Line Chennai: Sundaram Brake Linings Ltd, a TVS Group company, has announced plans to increase its production capacity of friction materials with an investment of Rs 21.50 crore. The company has informed the stock exchange that it has decided to increase the production capacity of friction materials by 3,000 tonnes from the present 20,000 tonnes. The company will borrow Rs 17.50 crore from banks to fund this investment and the balance will be from internal generation. The expansion work is expected to be completed by the third quarter of 2010-11. The expansion will enable Sundaram Brake Linings cater to the growing demand in the export and domestic markets. According to company officials, the expansion in production of brake linings and blocks will take place at its SEZ unit located in the Mahindra World City, about 50 km from Chennai on NH45. Sundaram Brake Linings has four production facilities with one unit in Chennai and two near Madurai. Sundaram capacity The Financial Express | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ALLIED INDUSTRIES DUNLOP TO RESTART PLANT, BUT WAGE ISSUES PERSIST Business Standard Kolkata: Although tyre maker Dunlop India announced that it would resume production at its West Bengal unit this month, the year-long impasse over wages seemingly remains unresolved. The Pawan Ruia-owned company said it had reached a settlement with the West Bengal State Electricity Distribution Company Ltd (WBSEDCL) over the issue of Rs 12.50-crore arrears at the Sahagunj plant. The Dunlop management has provided a bank guarantee of Rs 1.61 crore to the WBSEDCL after protracted deliberation on the terms of the letter of credit amounting to Rs 53.77 lakh. Production at the plant is expected to resume in about a couple of weeks and all the 1,060 workers on the payroll would be asked to report for duty very soon. The immediate target for the Sahagunj plant is processing about 40 tonnes of rubber a day, the company said in a statement. However, despite announcing the restoration of operations, the company said that it was yet to work out the payment for those workers who have been laid off since the plant shut down last November. Apart from the 229 workers who joined the maintenance programme in March, the remaining work force has not received their wages since last year. There have been no demands from their side and the matter is yet to be settled, a spokesperson said. Operations at the Sahagunj plant ground to a halt in November last year after some workers refused to accept the subsistence allowance Dunlop was offering during a proposed stoppage of production due to the global slowdown. Later, in March this year, when the company asked 229 workers to join the maintenance programme for reopening of the unit and applied to the WBSEDCL for restoration of power supply, the power utility demanded payment of the arrears accrued during the earlier closure of the plant. Dunlop Bengal unit may resume production soon The Hindu Business Line The Telegraph Dunlop's Sahaganj unit to resume output in 15 days Manas Chakravarty, Ravi Ananthanarayanan, Mobis Philipose and Vatsala Kamat mint After robust sales and profit growth during the September quarter, Apollo Tyres Ltd is all set to produce 14,000 additional tyres by the middle of next year. Despite this, even as the Nifty gained 102 points in Mondays trading session, Apollo shares shed around 7% to close at Rs53.60. This reflects the concerns about rising rubber prices, which could depress operating profit margins and the resultant earnings for the December quarter. As the chart shows, however, the stock has comfortably outperformed the Nifty in the past month. Apollo, like most other tyre makers, had passed on rising input costs to consumers by increasing tyre prices by 2-3% in October. According to an IDFC-SSKI report, The recipe cost (input cost) during the quarter moved up 4% quarter-on-quarter to Rs91 per kg as average rubber prices went up to Rs100 per kg (Rs98per kg in the first quarter of fiscal 2010), average NTCF (nylon tyre cord fabric) price went up to Rs180 per kg (Rs170per kg in Q1FY10) while carbon black prices rose to Rs 45 per kg (Rs42per kg in Q1FY10).” The uptrend in auto sales gave tyre companies the opportunity to pass on rising costs. But in October, Apollo reported a further 10% rise in rubber prices, which are now around Rs110 per kg. In fact, October-December being the rubber tapping season should normally see a softening of prices, which has not yet happened. According to an analyst, the difference between imported and local rubber prices has come down to Rs2-3 per kg against Rs15-20 per kg until six months ago. Input cost for tyres accounts for 70% of sales. An incremental 10% in raw material costs could result in 6-7% fall in operating profit margins, although, of course, this could be partly offset by a rise in tyre prices. But apart from the pressure on margins, Apollos operations continue to be impressive. It has around 65% share in the replacement market, which accounts for around 75% of its revenues. During 2008-09, the company operated at around 85-75% capacity producing tyres of around 830 tonnes per day. The company is now working at near full capacity, with an additional 300-plus tonnes per day coming from the new facility in the next six-eight months. For the September quarter, Apollo had surprised markets with a 62% rise in consolidated revenues. Operating profit margins (OPM) had gone up to 16.4% from 5.2% in the year-ago period. It revised revenue guidance from 11% to 15% for fiscal 2010, given that its overseas subsidiaries too are faring well, besides domestic market sales. However, future earnings hinge on the behaviour of rubber prices. The Financial Express The Supreme Court in a special leave petition filed by MRF Ltd and MRF Arkonam Workers' Welfare Union, stayed the judgment of the Madras High Court which had directed the state government/commissioner of labour to conduct an exercise as per the code of discipline to ascertain which of the two unions is the representative union of the workmen at the Arkonam Factory of MRF Ltd. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PTI See this story in: Daily News & Analysis Mumbai: Backed by strong credit demand mainly in the auto segment, private sector lender, HDFC Bank has disbursed Rs 3,000-crore of retail loans in October, its retail banking head said. The bank, which has a total retail portfolio of Rs 60,000-crore, expects to grow its retail loan book "faster than the industry" and has seen a major chunk of its business emerging from non-metros, HDFC Bank, country head, Retail assets, Pralay Mondal told reporters here. "For the full year, our retail credit growth is expected to be a little faster than the industry...The revival in economy and government stimulus have helped reviving the spending power of customers. We expect a pick up in loan growth moving ahead," Mondal said. Around 47-50 per cent of the total new incremental advances and 32 per cent deposits of HDFC Bank came from non-metros in October, he said. In October, the bank disbursed around Rs 16,00-crore of auto loans, around Rs 500-crore personal loans, around Rs 550-crore homeloans and the rest from business banking loans and other portfolios , Mondal said. The lender, which has a credit card base of 4.5-million and debit-card base of 9-million, saw a 22 per cent rise in card spends over the last month, Mondal said. HDFC Bank issues around 70,000 new cards every month and has seen non-performing assets in the segment less than 15 per cent, Mondal said. Nearly 30 per cent of HDFC Bank's retail asset portfolio is contributed by auto loans, around 16-18 per cent unsecured lending excluding credit cards, 10 per cent business banking and 7-8 per cent commercial vehicle advances amongst others, Mondal said. The Hindu Business Line Mumbai: Bank of Rajasthan has reduced interest rates on car loans by 100 basis points with effect from November 9. The salaried class and professionals can now get car loans at 9.5 per cent (from the earlier 10.5 per cent). The non-salaried class will get loans at 10 per cent (11 per cent). See this story in: Business Standard New Delhi: Shriram Transport Finance might raise another Rs 1,000 crore via a non-convertible debenture (NCD) issue, Chairman Arun Duggal said on Monday. A minimum issue of Rs 1,000 crore is possible, Duggal said. He, however, did not give any timeframe for raising additional funds. The company had earlier raised the same amount through a non-convertible debenture issue in July. We are expanding our operation into several new areas relating to vehicle financing. The areas we are expanding into buses, which we werent doing much earlier, but are now gradually moving into, Duggal said. Secondly, we are looking at expanding financing of infrastructure vehicles like dumpers, loaders, etc, he said. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| See this story in: The Indian Express Singapore: Oil was higher in Asian trade after falling at the end of last week in reaction to a surge in US unemployment figures, analysts said. New York's main contract, light sweet crude for December delivery, was up 81 cents to USD 78.24 a barrel. Brent North Sea crude for December delivery gained 71 cents to USD 76.58. Both contracts closed Friday lower after official data by the Labor Department showed the US unemployment rate jumped to 10.2 per cent in October as 190,000 jobs were shed. "I think it's a bit of a surprise.... Most of the traders were expecting markets to fall to the 75, 76-dollar level," said Jonathan Kornafel, Asian director of Hudson Capital Energy trading house. He added that the price surge was due to "panic buying" by traders in a market lacking liquidity after the unemployment data. The Labor Department report, seen as one of the best indicators of economic momentum, showed a rise in the jobless rate, up from 9.8 percent in September, to the highest since 1983. But the number of jobs lost narrowed to the lowest level in more than one year. The United States is the world's biggest energy user and is seen as key to perking up oil demand, which has been hit by the global slump. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Agencies See this story in: The Economic Times Shanghai: US auto giant General Motors said on Monday it had extended its record sales streak in China, selling more than 1.5 million units this year in contrast to weak sales at home since exiting bankruptcy. GM and its Chinese joint venture partners passed the 1.5 million mark Monday after strong October pushed sales for the first 10 months to about 1.46 million, the company said in a statement. The company has already passed its 1.3 million units sold in 2008. "This has been a year of records for GM in China," Kevin Wale, GM China Group president, said in the statement. GM said it sold 166,911 vehicles in October -- more than double the number sold in the same month a year earlier. The automaker sold 177,603 new vehicles in the United States in October, up 4 per cent from the same month in 2008 and its first year-on-year gain since January 2008. GM emerged from a 40-day bankruptcy reorganisation backed by the US and Canadian governments in July. China's overall auto market saw sales rise nearly 80 per cent on-year last month with 923,154 units sold, state media reported, citing the China Passenger Car Association. In the first 10 months, vehicle sales soared nearly 52.4 per cent over the same period last year to nearly 8.08 million units, state media reported. Last year, a total of 9.4 million units were sold in China, up eight per cent from the previous year, but market growth was slower than the on-year expansion of 21.8 per cent in 2007. China's total car sales outstripped the US for the first time in January to make the Asian giant the world's largest car market, helped by Beijing's efforts to stimulate domestic consumption. These measures included slashing taxes on cars with engines smaller than 1.6 litres and subsidising alternative-energy vehicles. Reuters See this story in: The Hindu Business Line Shanghai: Chinas passenger cars sales in October surged 75.8 per cent from a year earlier, official data showed, extending the growth in recent month as government incentive policies continued to lure customers. A total of 9,46,400 passenger cars were sold in October, up sharply from 5,38,500 units sold a year earlier, but slightly lower than 1.02 million units sold in September, the China Association of Automobile Manufacturers said on Monday. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ECONOMY The Hindu Business Line Mumbai: The rupee gained by about 35 paise against the dollar on positive equity markets and general dollar weakness. The rupee opened with a gain at 46.62 and closed at 46.46, against the previous close of 46.81. There was no substantial dollar demand from oil companies, as crude prices have come off their highs, said a forex dealer with a public sector bank. The dollar weakened against all other major global currencies as the US economy is likely to continue with its easy money policy and stimulus packages, while the economic indicators for the euro are good, the dealer said. In the forward premia market, the six-month closed at 2.71 per cent and the 12-month closed at 2.7 per cent. The rupee is likely to strengthen further as more capital inflows into the county are expected. But intermittently dollar may gain a bit, on demand from oil companies. PTI See this story in: The Hindu Business Line Mumbai: The benchmark Sensex on Monday jumped 340 points, extending gains for the fourth straight session, on a flurry of buying by funds and retail investors, sparked by the government's move to push financial reforms. The Bombay Stock Exchange barometer closed higher by 340.44 points, or 2.11 per cent, at 16,498.72 points. The index has risen by over 750 points in the last three sessions. The wide-based National Stock Exchange index Nifty spurted by 102.25 points to close at 4,898.40 points. Brokers said markets posted smart gains on a strong rally in most-weighted Reliance Industries and banking sector stocks after the government's move to push financial reforms. The Prime Minister, Dr Manmohan Singh, on Sunday, said the government would steadily pursue reforms to feed economic growth, while withdrawing the fiscal stimulus by next year. Reliance Industries regained Rs 2,000 level rising by 3.46 per cent to close at Rs 2,024.55. State Bank of India shot up by 5.19 per cent to Rs 2,318.55, ICICI Bank by 4.72 per cent to Rs 888.80 and HDFC Bank by 4.06 per cent to Rs 1,706.50. Strong global cues and a weakening dollar also influenced the trading sentiment, brokers said. Singapore shares closed up 1.32 per cent, Hong Kong's Hang Seng added 377.83 points to close at a two-week high, while Japan's Nikkei-225 index climbed 19.64 points. Among sectoral indices, the BSE Bankex was the best performer rising by 4.80 per cent to 10,155.67. The consumer durables index ended 2.44 per cent higher at 3,472.98, oil and gas index by 2.40 per cent to 9,861.12, metal index by 2.38 per cent to 14,852.90, realty index by 2.20 per cent to 4,081.54, FMCG index by 2.17 per cent to 2,825.02, PSU index b y 2.13 per cent to 8,982.07 and auto index by 1.58 per cent to 6,621.68. With the improvement in the trading sentiments, buying activity also picked up in small to medium cap stocks, lifting the small-cap index by 2.16 per cent to 7,325.63, while mid- cap index ended 1.97 per cent higher at 6,37.36. PTI See this story in: The Hindu Business Line London: Finance Minister Mr Pranab Mukherjee has said that India will not be able to sustain high fiscal deficit in the long run, but he did not give any timeframe for withdrawing the stimulus measures that inflated the deficit. As Prime Minister Dr Manmohan Singh shared with industry leaders in New Delhi on Sunday, his government's intent to wind down stimulus measures next year, Mr Mukherjee told reporters in St.Andrews, Scotland, that he had already told Parliament high fisca l deficit was not sustainable in the long run. India's fiscal deficit is projected to be 6.8 per cent of GDP this fiscal, consequent to duty sops given last year to the industry to insulate it from the effects of the global economic crisis. Mr Mukherjee said efforts would be made to reduce fiscal deficit to four per cent of the GDP and revenue deficit to 1.5 per cent by 2012. Echoing the sentiments expressed by the Prime Minister, he said that the economy would grow by more than seven per cent next fiscal. In the next year, we will have growth projection of more than seven per cent,'' he told reporters yesterday evening after a G-20 Finance Ministers meeting. With regard to the current fiscal, he said the country was likely to register an economic expansion of 6.5 per cent, less than the 6.7 per cent recorded in 2008-09. Last Financial closing
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Sunday, December 13, 2009
Indian Auto Industry Update, November 10, 2009
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