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| HEADLINES Wednesday November 11, 2009 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INDUSTRY SC fiat on Tata Motors plea to quash CST ruling INTERVIEWS/FEATURES This is not the right time to pull back stimulus package: Chairman, Eicher Group, VP-SIAM COMPONENTS Sundaram Brake to invest Rs 21 cr in capacity expansion ALLIED INDUSTRIES Natural rubber output falls 9.5% FINANCE & INSURANCE IOB signs MoU with Asia Motor Works OIL, LUBRICANTS & ALTERNATIVE FUELS Advik to make oil pumps for 4-wheelers | CARS, SUVs, MUVs Renault-Bajaj small-car will cost lower than any other made in India COMMERCIAL VEHICLES Stimulus for bus makers takes a curious turn Volvo-Eicher semi low-floor buses to hit the roads next year ECONOMY & FINANCECONSTRUCTION & AGRI MACHINERY 2/3 WHEELERS Royal Enfield plans to double sales, exports in 3 years Rupee ends flat against $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 INDUSTRYPTI See this story in: The Hindu Business Line (Web Edition) New Delhi: The Supreme Court has issued notices to 23 States and three Union Territories on a petition filed by Tata Motors seeking quashing of the Central Sales Tax Appellate Authoritys decision asking the company to pay around Rs 14-crore Central Sale s Tax for the sale of bus chassis to the Andhra Pradesh Government. A Bench headed by Mr Justice S.H. Kapadia while refusing to stay the impugned judgment, issued notices on Monday to the Central Sales Tax Appellate Authority, 23 States and three Union Territories. While the Appellate Authority, which has been constituted to resolve conflicting findings relating to supply of similar goods attracting local sales tax or CST, had held that such sales constituted sales in the course of inter-state trade. It had asked Tata Motors to pay CST without any further directions for refund or adjustment of the local taxes paid to Andhra Pradesh on such sales. However, the Authority had partly allowed the companys plea to remand the matter back to the Commercial Taxes Tribunal, Jharkhand, for examining the transactions made to other States. According to the assessee, it was a fit case for grant of stay of recovery of CST in order to avoid double taxation as local sales tax had already been paid in respect of all supplies to various States, which was almost equal to the CST demanded. Mumbai: The Tata Nano bandwagon got a diplomatic edge, when British High Commissioner in Mumbai, Vicki Treadell, took possession of her car. Tata Group Chairman Ratan Tata handed over the keys to her car on Tuesday. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INTERVIEWS / FEATURES THIS IS NOT THE RIGHT TIME TO PULL BACK STIMULUS PACKAGE: CHAIRMAN, EICHER GROUP, VP-SIAM Shweta Bhanot The Financial Express Though the dark clouds of slowdown seem to be lifting, it is not sunrise time yet. That is how S Sandilya, chairman, Eicher Group, and vice-president, Society of Indian Automobile Manufacturers, described the current situation to FEs Shweta Bhanot during the course of a recent interview. He hoped that the government will continue with the stimulus package for the automobile industry and that the new emission norms that come to force in 11 cities in April next year will cast the same kind of magic as did the 2009 festive season. Excerpts: The talk of government looking at pulling back the stimulus package is catching momentum by the day. Is this the right time? Is the automobile industry ready for such a move? This is not the right time to pull back but I do not know the governments compulsions. The revenue creation through these taxes is an issue for the government and they may look at some kind of correction. The automobile industry is yet to move out of the woods and the stimulus package should continue for some more time. Till the introduction of the goods and services tax (GST), which will bring some sort of rationalisation of taxes, we need to look at other methods of boosting the economy and creating demand at the grassroots level. The stimulus package is helping the industry but thats not the only thing thats going to help. What will help is fundamental demand creation which will happen with the government spending on infrastructure, roads, rural housing and in making money available in the hands of the public at large. How has the stimulus package actually helped the industry, specifically in terms of the demand for buses under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM)? It is difficult to quantify how the stimulus package has helped. As far as demand for buses under the JNNURM is concerned, it is true that the industry could not cope with the sudden demand that came from the state transport units. The growth in the bus segment has been stagnant over the last few years since the state units did not have enough funds. And it is these units that overnight got a push under the stimulus, spurring the demand for buses which the industry could not cope up with. The festive season spelled good news for the auto industry. What is your outlook on the industrys growth in the coming months? The automobile industry is showing signs of improvement. The festival season has just got over and we saw some pull for products. However, we need to wait and watch till the beginning of the next year as there are some other drivers like the new emission norms in the beginning of April next year that will lead to higher pull for products. A 6.5% economy growth is good, but we have seen much better days. How the overall economy grows from here will determine the way forward for the auto industry. http://www.financialexpress.com/news/This-is-not-the-right-time-to-pull-back-stimulus-package/539867/ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Praveen Kumar Singh, Yogima Seth The Financial Express (Web & Print Edition) New Delhi: It was a key element of the fiscal stimulus package unveiled in January, but seems to have got lost in translation. To draw down rising inventories of commercial vehicles, the Centre had announced a Rs 4,735-crore package for states to buy 15,000 buses for urban transport under the Jawaharlal Nehru National Urban Renewal Mission. But the urban development ministrys technical specifications for these buses and states desire for high-tech features have meant that instead of ridding itself of inventories, the industry is now trying to scale up capacity. The net effectthe Centre is being forced to extend the deadline for the buses delivery further to March 2010 from the rescheduled date of December 31, 2009. Car sales have improved, but commercial vehicles are picking up slowly. Most of the 63 cities have asked for low-floor buses, as they are good-looking and high-tech, irrespective of whether they are suitable for local roads. The industry is still developing the capacity to supply such buses, so their delivery will take more time, heavy industries secretary Satyanarayana Dash told FE. The stimulus measure envisaged the purchase of standard conventional buses. As a result, bus suppliers like Ashok Leyland and Tata Motors, which had enough capacity for standard buses, are now developing capacity for low-floor buses. So it wont be possible for them to supply the buses before March 31, 2010, Dash said. Ironically, the Society of Indian Automobile Manufacturers (Siam) had alerted the urban development ministry about the industrys capacity constraints on low-floor buses as early as February. Yet, the final guidelines for the buses issued by the ministry asked for high-tech ultra low-floor (400 mm height) and semi low-floor buses (650-700 mm height). Though standard buses, with a floor height of 850-900 mm, were also included, the other technical specifications by the urban development ministry meant even those couldnt be delivered fast. Most of the additional features are standard features in ultra low-floor buses such as audio and video cameras, vehicle tracking system and integrated common controls. From Rs 20 lakh a bus, standard buses that meet these tech specs cost over Rs 30 lakh while low-floor buses cost between Rs 45 lakh and Rs 60 lakh. The buses being ordered by the states are of all types, low-floor, semi low-floor and conventional. Within the broad categories, each state and very often cities within states have their unique specifications,a Tata Motors spokesperson told FE. Tata Motors has requisite capacity and the company, in any case, is acting with alacrity to deliver the buses, the spokesperson added. According to the latest data, over 11,000 buses have been ordered with various manufacturers under the JNNURMover 7,000 are standard buses, while the rest are in the low-floor category. Of these, a mere 1,500 buses have been delivered till October, with several hundred standard buses ready but languishing due to confusion over specifications. We are ramping up production at Alwar by 50% from 200 units a month to 300 units a month as well as start manufacturing 200 buses a month at our luxury buses facility near Tiruchirapalli to cater to the demand from southern states, Rajiv Saharia, executive director (marketing), Ashok Leyland, said. While major players are scurrying to scale up low-floor capacities, passenger carriers sales continue to see negative growth. According to Siam, sales of medium and heavy passenger carriers declined by 13.1% at 3,424 units in September 2009 against 3,938 units sold in last September. Sales of light passenger carriers or mini-buses also declined marginally at 2,360 units vis--vis 2,384 units in September last year. On behalf of the industry, Siam has asked the ministry to further extend the delivery period, in the light of a varying range of specifications to be met. Stimulus for bus makers takes a curious turn Yahoo India (Web Edition) The Hindu Business Line (Web & Print Edition) New Delhi: Volvo-Eicher Commercial Vehicles (VECV) said on Tuesday that it plans to roll out its semi low-floor buses by the second half of next year. By the second half of 2010, we will have a range of buses in the semi low-floor category, produced under the joint venture with Volvo. Some will also wear the Eicher badge, said Mr Siddhartha Lal, CEO and Managing Director, Eicher Motors. He was speaking to newspersons on the sidelines of the World Economic Forums India Economic Summit. He added that buses will conform to the 650 mm height requirement of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) order for semi low-floor buses. VECV is believed to have an order for around 150 buses under the Governments JNNURM programme. Mr Lal said that size of the city bus market is currently around 3,000-5,000 units a year. We will see the scale moving towards 20,000 buses a year. At the start, we will be producing 100 buses per month and will later go up to much more than that, he said. The company is also in discussion with various State Governments and city authorities to provide these buses for public transportation. Eicher-Volvo The Statesman (Web Edition) Eicher JV to roll out buses Asian Age (Delhi Print Edition) Eicher, Volvo JV to roll out buses by next year mint (Delhi Print Edition) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Standard Mumbai/ Ahmedabad: Royal Enfield, niche motorcycle maker and a division of Eicher Motors, that has sold around five lakh bikes in its 54-year history now plans to take up its annual sales figures to one lakh by 2013. The Chennai-based company is also targeting to more than double the share of exports in its turnover from a current 5 per cent to 10-15 per cent in the next three years. Royal Enfield bikes are now exported to 29 countries and the company currently taps only metros and a few of the tier-2 cities in India through just 10 retail outlets. "There is huge untapped potential for us to grow even in the Indian market and we are definitely looking at increasing our penetration", said Shaji Koshy, divisional general manager for sales and marketing of Royal Enfield. He was talking at the sidelines of the launch of two new Enfield models, the Classic 350 and the Classic 500, priced at Rs 98,086 and Rs 1.25 lakh ex-showroom in Delhi respectively. The Classic range was launched by the company in European countries in October 2008. The retro-look bike has been designed keeping in mind Royal Enfield's British character with the company's design team worked in close collaboration with Xenophya Design, UK. The engine was engineered in Italy while the fuel-injection system has contributions from Japan. Royal Enfield is looking to increase exports of bikes to countries in Latin America, Africa and the Middle East, besides strengthening its presence in Europe and the US. Besides, this year the company expects total sales to be around 50,000 units, compared with 43,298 units last year. The current focus is on the 350 cc bikes for the Indian market and 500 cc Classic range bikes for the international market. The bike maker has registered a revenue of Rs 300 crore in the past nine months and currently enjoys only a 0.7 per cent share of the Indian two-wheeler market. The company has indicated earlier that it plans to invest over Rs 65 crore in the next three years to double production capacity to one lakh units in its Chennai plant. It has already invested a similar sum in the existing facility so far. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Standard Chennai/ Hyderabad: Chennai-based automotive components manufacturer Sundaram Brake Linings Ltd (SBL) is planning to invest around Rs 21.50 crore in expanding the capacity of its friction material unit. The company has decided to increase the capacity of friction material to 23,000 tonnes from the existing 20,000 tonnes. Of the proposed investment, the company would borrow around Rs 17.50 crore from banks and the balance would be met through internal accruals. The expansion is expected to be completed by the third quarter of 2010-11. The expansion will enable SBL to cater to the growing export and domestic demand, the company informed the Bombay Stock Exchange on Tuesday. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ALLIED INDUSTRIES NATURAL RUBBER OUTPUT FALLS 9.5% Business Standard Kochi: Boosting chances of a further increase in prices, natural rubber (NR) production in the country dropped 9.5 per cent during the first seven months of the current financial year. The production fell to 435,125 tonnes during April-October, as against 480,230 tonnes in the same period last year. According to latest estimates of the Rubber Board, consumption edged up 3 per cent to 536,100 tonnes. The ongoing mismatch between production and consumption is likely to strengthen the bull phase in the NR market. The price of benchmark grade RSS-4 is currently ruling at Rs 109-110 a kg. The fall in production is a serious concern for rubber-consuming industries since import is not a viable option in the present situation. Though local traders expect prices to come down, as rubber production would be at its peak during the November-January period. There would be a good supply to the market due to which prices may fall, said a leading Kochi-based trader. The Hindu Business Line Mumbai: Falcon Tyres Ltd has informed BSE that the board meeting will be held on November 12 to take on record and approve the audited financial results of the company for the financial year ended on September 30, 2009, and to consider the final dividend for the period ended September 30, 2009. The Hindu Business Line Mumbai: Steel Strips Wheels Ltd has informed BSE that the company has received an open export order worth Rs 7.9 crore from Renault for the supply of about 1.8-lakh steel wheel rims per annum. Renault is one of the largest manufacturers of cars in Europe and is a leading manufacturer of light commercial vehicles. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Hindu Chennai: Indian Overseas Bank has signed a memorandum of understanding with Asia Motor Works for purchasing trucks and heavy commercial vehicles. According to a release, the objective of the MoU is to extend quick and hassle-free finance to buyers of trucks, tippers and other commercial vehicles. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Hindu Business Line Pune: The Advik group of companies, a manufacturer of components for two-wheelers, is foraying into oil pumps for four-wheelers in technical collaboration with Trochocentric GmbH, and has formed Advik Precision Pvt Ltd for the purpose. Advik is setting up a new facility at Chakan, near Pune, for the manufacture of four-wheeler components. This will become operational by the end of 2010. It is also investing another Rs 15 crore to expand its present business by setting up a new facility near its plant at Pantnagar and an additional unit at Manesar. Mr Aditya Bhartia, Managing Director, Advik Group, said, Our companys vision to design, develop, manufacture and supply automotive products to vehicle manufactures globally has led to the formation of Advik Precision. Our exclusive long-term technical collaboration with Trochocentric for design, development and manufacture of oil pumps will provide us access to cutting-edge technologies. Mr Cristof Haerle, General Manager, Trochocentric GmbH, said, the demand in the Indian automotive industry made it logical for us to enter into a formal technical collaboration with a young company. The plant at Chakan will have an installed capacity to manufacture half a million oil pumps in phase-I and one million in phase-II. It will be equipped to manufacture oil pumps, water pumps and hydraulic tensioner for four-wheelers. The group expects to export 20 per cent of its production and touch a turnover of Rs 160 crore by 2013. Agencies See this story in: The Hindu Business Line Mumbai: Oil prices eased to below $79 a barrel on Tuesday, as tropical storm Ida that cut US oil and gas supplies was downgraded from a powerful hurricane and US crude oil stockpiles were forecast to rise slightly. US crude for December delivery dropped 50 cents to $78.92 a barrel by 0311 GMT, after settling up $2 on Monday. London Brent crude dipped 46 cents to $77.31. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ECONOMY The Hindu Business Line Mumbai: The rupee was flat against the dollar on Tuesday, after giving up some of its opening gains, said dealers. The domestic currency opened at 46.41 and weakened to touch an intra-day low of 46.61. It ended the day at 46.48, against the previous close of 46.46. The rupee opened with a positive gap tracking the positive global equity indices, said a dealer with a public sector bank. However, dollar purchases by oil companies after crude touched $75.8 exerted pressure on the rupee. The rupee touched its days low when the pound weakened by almost a 100 basis points after Fitch Ratings lowered its rating for UK. However, the domestic currency recovered due to dollar selling by exporters, added the dealer. In the global markets, the greenback was weak against other major currencies. In the forward premia market, the six-month premium ended higher at 2.8 per cent (2.71 per cent) and the one-year premium ended at 2.75 per cent (2.7 per cent). PTI See this story in: The Hindu Business Line Mumbai: Snapping a four-day rally, the Bombay Stock Exchange benchmark Sensex on Tuesday declined over 58 points on profit-selling even as the government said stimulus measures would continue till robust global economic recovery. The Sensex, which had gained 1,094.78 points in past four trading sessions, fell down to end with a loss of 58.16 points at 16,440.56 profit-selling at existing higher levels. Brokers said a steep rise in share prices in the past four days attracted profit-booking by traders. Similarly, the wide-based National Stock Exchange index Nifty lost 16.70 points at 4,881. 70. Marketmen said sentiment for profit-selling was so strong that even Finance Minster Mr Pranab Mukherjee's positive remarks on stimulus measures did not boost the sentiment. There is need of generating strong domestic demand till robust recovery takes place all over the world, particularly the developed economies'', Mr Mukherjee said. A higher trend in Asian and European stock markets also failed in support the market, they added. In the 30-BSE Sensex-linked stocks, eight shares, including Reliance Industries, closed higher while 22 ended in negative zone led by Infosys Technologies. Sensex heaviest RIL gained 1.39 per cent to Rs 2,052.60 while the second heaviest Infosys Technologies lost 0.71 per cent to Rs 2,218.20. Realty, teck, IT, capital goods, power, consumer durable, auto and FMCG sector stocks declined. Business Standard New Delhi: Finance Minister Pranab Mukherjee said India could achieve growth levels of 9-10 per cent in the 2012-13 financial year, and would grow by about 8 per cent in the preceding year. The government expects a 7 per cent growth rate for 2010-11. We can expect over 7 per cent growth in 2010-11. After the Eleventh Five-Year Plan, we may be able to reach that magical figure, Mukherjee said on the closing day of the India Economic Summit here. After growing at over 8.5 per cent for five years, Indias economic growth slowed to 6.7 per cent in 2008-09. The economy grew at 5.6 per cent in 1980s and 6.5 per cent in 1990s. Mukherjee said 6.7 per cent was a modest growth in the given circumstances. Mukherjee also made it clear that the government would focus on driving domestic demand until key developed markets recovered and would not exit fiscal stimulus measures until necessary. However, he added, this (stimulus measures) cannot continue for a long period of time...I have stated a number of times that in due course we shall have to take corrective measures. The finance minister said the government would continue to provide fiscal stimulus to boost domestic demand until recovery was seen all over the world, especially the developed economies like North America, Europe and Japan. Prime Minister Manmohan Singh had on Sunday indicated that a phaseout of the stimulus measures might happen next year. Mukherjee himself last week stated that he would relook at the fiscal incentives that formed part of the stimulus measures during the Budget. We need to ensure strong local demand till there are clear signs of recovery in the developed world, he added. The finance minister added that the government needed to invest heavily in infrastructure, especially power, to boost local demand and economic growth. He also said massive investments were required in agriculture and infrastructure sectors, and acknowledged that it would not be easy for the domestic economy to compensate for the loss in exports through domestic demand. Tax pacts India said it would renegotiate with all the 77 countries with which it has double tax avoidance agreements (DTAAs) to track tax evasion, following allegations of black money being stashed by many Indians in Swiss banks. I have asked the Revenue Department to reopen negotiations for all 77 DTAAs, so that we can have real time exchange of information on tax evasion and tax avoidance, Finance Minister Pranab Mukherjee said. Last Financial closing
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Sunday, December 13, 2009
Indian Auto Industry Update November 11, 2009
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