Auto Industry News

CENTRE PLANS SECOND STIMULUS FOR AUTO SECTOR The Hindu Business Line (Web & Print Edition) Bangalore: The Government is considering another stimulus package for the automobile sector, which will lead to replacement of about 40,000 buses of State transport corporations (STCs). This is an initiative of the Society of Indian Automobile Manufacturers (SIAM); the Government is learnt to have held talks with the Election Commission on whether announcement of such a package will violate the code of conduct. According to the initiative, SIAM, in a study conducted for this purpose, found out that there are least 32 State corporations that run over 32,000 buses which are over 15 years old and fall under the overage category. These buses were not being replaced because since 1991 the Centre had stopped giving capital grants for the STCs for replacing the overage buses. The new stimulus package will be thrown open to all State transport corporations, which means replacement of a total of over 40,000 buses. All STCs will be given capital incentive of between 50 per cent and 75 per cent for replacing overage buses. These buses will have to be deployed in semi-urban, rural and in hilly areas. In the first stimulus package, under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) scheme, States will get financial assistance up to June for purchase of about 15,000 buses for the urban transport system. The SIAM study also found out that because of the paucity of buses, over 14 crore km have not been covered so far. With regard to the JNNURM scheme, some of the State road corporations have started floating tenders for purchase of buses. Sources in SIAM said that though these buses are for the semi-urban and rural areas, even companies such as Volvo and Mercedes Benz, which make high-end buses, can bid for the tenders, as individual States can take decisions regarding the type of buses they will require. Meanwhile, the SIAM Director-General, Mr Dilip Chenoy, said the Centre had been asked to standardise the bus code regarding the exact specifications on how transport buses should be built. http://www.thehindubusinessline.com/2009/03/13/stories/2009031350600200.htm Go To Top BIG-BANG AUTO ORDER PLAN FOR DEFENCE FORCES Nevin John & Swaraj Baggonkar Business Standard (Web & Print Edition) Mumbai: The slowdown-hit automobile industry is anticipating a bonanza, with the Indian defence forces planning to place immediate orders to buy vehicles to meet their requirements for two years. Sources said a suggestion to this effect came up during a meeting of the committee of secretaries, the government panel set up to discuss inter-ministerial issues headed by the cabinet secretary, late last month. If the government approves the plan, the auto sector is expected to get Rs 3,000 crore to Rs 4,000 crore worth of orders that will be spread over the next two quarters, the sources added. This defence procurement plan is part of a larger strategy by the government to push demand. It had already moved in this direction in the interim Budget on February 16, by announcing plans to buy around 15,000 buses for 63 cities under the second phase of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) scheme to boost the commercial vehicle market. The states, which will actually buy the buses, have already issued tenders for bus purchases. The slowdown has crippled sales of the automobile sector (see table). The Rs 1,00,000 crore automobile industry accounts for around 2 per cent of gross domestic product and directly employs 450,000 people. The automobile ancillary industry that services it is worth Rs 16,300 crore and employs 250,000 people. The plan for big-bang defence purchases is likely to benefit not just automobile producers but also downstream ancillary units and steel manufacturers. Mahindra and Mahindra (M&M), Ashok Leyland, Maruti Suzuki, Tata Motors and state-owned BEML (formerly Bharat Earth Movers Ltd) are the major vehicle suppliers for the three defence forces. The major domestic steel suppliers for the auto-makers are Tata Steel, JSW Steel, Ispat and Essar Steel. A senior BEML executive said the company had developed and tested new vehicles for the defence forces. There has been an increase of about Rs 20,000 crore in defence outlay this year to Rs 1,41,703 crore and 2 to 3 per cent of it will be spent by the government on procurement of armoured and other defence-related vehicles, the executive added. Last year, BEML bagged orders worth Rs 670 crore from the defence forces for defence vehicles. This year, the company is confident of bagging orders worth Rs 1,000 crore. http://www.business-standard.com/india/news/big-bang-auto-order-plan- for-defence-forces/351694/ Go To Top NANO MAY FIND IT TOUGH TO ENTER EUROPE: AUDI PTI See this story in: Daily News & Analysis (Web Edition), The Indian Express (Web Edition), Hindustan Times (Web Edition), mint (Web Edition) Ingolstadt (Germany): Tata's small car Nano may not be able to enter Europe due to stringent safety and emission norms, leading German luxury carmaker Audi said joining the list of auto players, who are sceptical about the prospects of the world's cheapest car. Nano has always elicited sharp reactions from rival carmakers, including Maruti Suzuki, about its compatibility with safety norms, which Tata Group chairman Ratan Tata has been challenging. "Entering (by any model) the US and European market is very tough due to very stringent security and consumption regulations. Many Chinese carmaker had earlier tried to enter Europe, but could not as they faced problems," Audi AG Member of the Board (Finance and Organisation) Axel Strotbek said. Asked if Nano could also face such difficulties in entering into Europe, he said: "Yes ... I don't think it will come here." Axel said that safety, fuel efficiency and emission norms are very important for the European customers, "which I am very apprehensive of getting in this price (Nano's price)." Last week, India's largest auto maker Tata Motors unveiled the European version of Nano at the Geneva Motor Show and received huge applause from car enthusiasts. The company plans to launch 'Nano Europa', loaded with additional safety features and complying with Euro V emission norm, by 2011. Nano would be launched in India on March 23, booking for which would start from the second week of April. It was originally to be launched in the second-half of 2008, but was delayed after the company was forced to shift manufacturing base from Singur in West Bengal to Sanand in Gujarat. The company's website featuring Nano has registered 30 million hits or visits since the car, with a base-price tag of Rs 1,00,000, was first unveiled. The company had announced the low-cost car project in 2006. The hatchback car features a 624-cc petrol engine and the company claimed that Nano would give a mileage of 20 km per litre. Its engine is located on the rear and the boot space in the front. Tata Motors chief Ratan Tata had last year said that he would retain the price tag at Rs 1,00,000 (for the base model) despite input costs shooting up. But since then, steel prices have plunged by up to 40 per cent from early 2008 levels and overall demand in the economy too has witnessed a slump. http://www.dnaindia.com/report.asp?newsid=1238458 http://www.indianexpress.com/news/nano-may-find-it-tough-to-enter-europe-audi/433683/ http://www.hindustantimes.com/Redir.aspx?ID=27365ab4-5107-444d-8c8a-0e6a2a5169d9&SectionName=BusinessSectionPage&add=test4 http://www.livemint.com/2009/03/12152830/Nano-may-find-it-tough-to-ente.html Go To Top JLR TO GET 27 MN POUNDS FROM UK GOVT FOR PRODUCING NEW CAR PTI See this story in: The Economic Times (Web Edition), The Hindu Business Line (Web & Print Edition), Asian Age (Web Edition) London: Tatas-owned Jaguar Land Rover will be getting about 27 million pounds from the UK government for production of a new greener car model. "Jaguar Land Rover is looking to invest some 400 million pounds in the project that would help safeguard jobs and lead to the production of a new greener model," the government said in a statement on Wednesday. Business Secretary Lord Mandelson on Wednesday said that the government would provide up to 27 million pounds to Jaguar Land Rover for the production of an all-new car based on Land Rover's LRX Concept. The funds to the tune of 27 million pounds for the greener car model would be given under the Grant for Business Investment scheme. According to the statement, this is separate from the 2.3 billion pounds worth Automotive Assistance Programme. The vehicle would be designed, developed and produced in the UK, securing production and employment at the company's Halewood facility, where it would be built. "The project would secure production and employment at the Halewood facility and maintain the design capability for Jaguar Land Rover in the UK. This is an important investment for the future and we are delighted to be able to offer this grant support," Mandelson said. http://economictimes.indiatimes.com/News/News-By-Industry/Auto/JLR-to-get-27-mn-pounds-from-UK-Govt-for-producing-new-car/articleshow/4257297.cms http://www.thehindubusinessline.com/2009/03/13/stories/2009031351551000.htm http://www.asianage.com/presentation/leftnavigation/news/business/uk-grants-27mn-to-jlr.aspx Go To Top

INTERVIEWS/FEATURES Go To Top HOOLIGAN IN A TUX! The Economic Times, ZIGWHEELS The German automaker of the four rings has launched its own scathing attack on its luxury performance rivals, with one of the most unique engines in contemporary automobiles. Abhishek Nigam gets behind the wheel of the W12 powered Audi A8! It was in the movie theater where my obsession for this car really began. Auto buffs would easily recall Jason Statham showing the A8 in all new light in 'The Transporter' series movies. I mean just looking at this mammoth of a luxury sedan doing things that would put a thoroughbred sportscar to shame gave me the goose bumps. Coming fact to face with this German beauty for the first time was surprising to say the least. Subtle aggression is what this 'big' Audi is all about. Unlike its competitors, there is none of the flared wheel arches which wouldn't be such a bad idea considering the massive 255 section 19 inch rims or for that matter any kind of complex lines. Clean, straight and elegant is what the designers were thinking and that's exactly how the A8 has turned out to be. Viewed head-on, the typical Audi beard gives the car oodles of presence with the W12 badging giving it the matching attitude. Even though our car came with the Impala Beige shade, the front three quarter view barely gives you an idea about the actual size of the car. It's only when viewed from the side profile that the gargantuan proportions dawn upon you. I mean we're talking about a car that is just over 16 feet in length which takes it straight into Limo territory. The rear follows the same subtle theme while massive twin trapezoidal exhaust pipes shout out the aggressive intent. Getting inside the car made me realize that ingress and egress are the only two things which are done manually in this car, everything else is automated. Our car came with dark brown interiors which of course can be specified according to individual tastes thanks to something called Audi exclusive. Leather is something which is of prime importance in a premium offering like the A8 and our car had it in abundance extending to the console and the upper and lower portions of the dashboard. Wood trim which again can be specified to individual tastes fits into the dashboard and the console. The wood also conceals the LCD, which pops up from the center of the dashboard when you turn on the car, similar to the Bang & Olufsen tweeters, which rise from the top of the dashboard. The A8 L uses the same Audi Multimedia Interface (MMI) found in the company's other models, with a click knob on the console surrounded by four buttons. Resting yours truly in the driver's seat is a kingly experience. The steering is small and sporty and is brilliant to grip. Staring in your face are the brilliantly lit up dials with an information display in the centre. The seats again are fantastic offering support at all the right places while keep you firmly in place when you are pushing the Quattro system to its limits. This A8 L is the long wheelbase version, as denoted by the L in the model name and is a full 13 cm longer than the regular A8 W12, generating extra legroom for the rear passengers. Although meant for two, the rear seats can accommodate a middle passenger with ease but cannot offer the same comfort as the one's on either sides. In case you want your car to be a strict four seater then the car is also optionally available with a centre console extending into the rear. Trimmed in the finest leather, the centre console divides the rear compartment into two separate luxurious passenger zones with the rear seats being electrically adjustable as well. Oh, and did I mention about the mini refrigerator hidden between the rear seats? Mentioning all the features and functions of this car is literally impossible while at the same time experiencing the kind of conveniences it offers gets one smiling from ear to ear. It is under the hood, however, where the real magic is. How do specs like a 6.0 L W12 sound? Sounds like something that is usually present at the centre of an Italian exotic. The W12 engine in the 2008 Audi A8 L is kind of like two six cylinder engines set sideby-side and then mashed together. Each of the 12 cylinders gets 4 valves, making 48 valves in all. This is a complex piece of work. Each of these cylinders also displaces half a liter, making the engine six liters in all. The result is a very powerful but smooth engine. Fitting the car's luxury status, the engine operates quietly and with minimal vibration. But you feel it when you step on the gas, as the A8's W12 engine puts out 450 PS at 6,200 rpm and a humongous 580 Nm of torque at 4,000 rpm. To put that kind of power on the road Audi has used a six-speed automatic with sport and manual shift modes. There are even small paddles attached to the wheel. The tranny works flawlessly in conjunction with the massive engine and promotes spirited driving to the hilt. For further dissipation of power on the road, there is also the ferocious Quattro system which helps all four wheels to lay down the power in the best manner possible. While the car makes a worthy alternative to the three pointed S-class and the recently launched Beamer 7 series, it's still not clear where the W12 version fits in. We simply lack the kind of infrastructure to enjoy this kind of a car the way it should be. But a car like this is never bought from the head and it's always the heart that decides. So if you prefer something that is not totally in your face and yet has the potential to make the competition's face go red, the Audi A8 L W12 should fit your image like a glove. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" Go To Top 2009 MERCEDES-BENZ M-CLASS LAUNCHED! The Economic Times, ZIGWHEELS Mercedes-Benz India has launched the 2009 version of its Sport Utility Vehicle, the M-Class. The SUV was launched internationally in March last year at the 2008 New York Auto Show, and this happens to be the car's first major makeover since 2005. The updated Mercedes SUV gets a redesigned front and rear end, new interior appointments and a new four-spoke multifunction steering wheel with added technology. Jazzing up the exteriors are new recontoured headlamps and an intricate new grille, while the back receives the smoked glass tail lamp treatment and elements to emphasise the behemoth's girth. The new car comes with the usual Merc SUVbling features like 19-inch alloys, a 7-speed GTronic automatic gearbox and a the 4MATIC permanent allwheel drive system. Mercedes-Benz India will be offering the new car with two variants, both with V6 engines - the ML 320CDI diesel and the ML 350 petrol. Pricing has been kept very competitive with major slashes as compared to the earlier version. The ML 320 CDI has been priced at Rs 54 lakh exshowroom Mumbai, while the petrol engined ML 350 comes with a price tag of Rs 53.77 lakh, ex-showroom Mumbai. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" Go To Top NEW SKODA SUPERB BREAKS THROUGH! Muntaser Mirkar The Economic Times, ZIGWHEELS The new car is a big departure from the existing Superb not only in terms of its exterior styling, but more so in its engineering and technical design itself. Well, Skoda India has finally made its intentions clear with the launch of the new Superb in India. The new model will carry on Skoda's USP of offering more for less and we're talking not only about the way it's priced. The new car is a lot more spacious than the outgoing Superb and also offers more gadgets and accessories. Standard with the car is a touch screen entertainment-cuminformation system located right in the middle of the dash which is backed by storage space from a 30GB hard drive. All the abbreviations are standard too - ABS, ESP and a whole lot of airbags for occupant protection all round While the international range of Superbs comes with six engine options to choose from, Skoda India is going to offer the new version with only three. The petrol engines that will be on offer include the 1.8 TSI, and the 3.6 V6 FSI. The real attraction in the Superb range is the 2.0 TDI diesel plant, as the company has shifted from Pump Dusse technology to a Common Rail unit, making this a superb drive (pun intended). The company also stated that their cutting edge 7 speed DSG gearbox will also be part of the package. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" Go To Top MAHINDRA SCORPIO REVAMPED! Vikram Gour The Economic Times, ZIGWHEELS Mahindra and Mahindra has launched a madeover version of its popular Scorpio SUV. A majority of the changes manifest themselves in the exteriors. Image is everything and the Scorpio has always benefited from this characteristic, for people literally move out of the way when the 'Stinger' makes its way down the road. The squared off multi reflector headlights merge well with the new grille look to give the front of the otherwise rounded Scorpio a squarish look. The front bumper now features integrated fog lamps and are a definite change for the better as compared to the bumper on the previous Scorpio. The bonnet scoop is now sleeker and gels with the overall design theme even better. On the sides, the body cladding now features an embossed Scorpio tag so that no one confuses the vehicle, even from side on! The rear remains largely unchanged, except for an integrated step in the rear bumper, which gives the vehicle a more completed look. The interiors have received little in terms of a makeover and the most prominent item being the black allure upholstery or the choice of going in for a two tone beige finish. Apart from that, Mahindra has included electronically adjustable OVRM's and a 2-DIN stereo system. Mahindra officials claim that the seating has been further optimized, so this just might be the most comfortable Scorpio yet! The new Scorpio range now comes fitted with the 2.2 mHawk engine, which was earlier available only in the top end variant. Mahindra has also introduced its micro hybrid technology in the VLX model at no extra charge. What Mahindra has done in terms of pricing is where the gold really lies, for the new Scorpio is priced around Rs 70,000 cheaper than the outgoing model! No doubt this is the best Scorpio yet from Mahindra, and the beauty lies in the fact that the company has made it even more affordable, talk about value for money! Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" Go To Top ASTOUNDING ACCORD! The Economic Times, ZIGWHEELS The Honda Accord has been a formidable luxury class contender in the Indian market from the day it first set foot on Indian terrain. The car has evolved with time and the all new Accord is literally a car lover's fantasy, be it design or the sheer opulence of the interiors. The 2.4 VTEC engine was silky smooth as ever, however in the new car it seemed as though the engineers had tinkered with it to make it more of a mileage muncher rather than a tyre burner. Enthusiasts have definitely missed the sheer surge of power but the good news is that the wait is over and judging by what Honda stuck under the hood this time, you will find yourself thanking the company for saving the best for last! The latest variant to enter the Accord line up is the tremendous 3.5 litre V6 powered sedan. The 3471cc engine is everything you can dream of when it comes to performance sedans. The refined mill churns out a healthy 271BHP@6200rpm and a phenomenal 344Nm@5000rpm. Capable of literally blowing the competition away in the dust, this engine is one smart cookie! To ensure great driving pleasure with ultimate performance the new engine has the ability to shut down cylinders depending on driver input and acceleration needs. If you are looking for rapid pick up, expect all 6 cylinders to burn and tug you forward like a locomotive, however if you are slowing down and coming to a read light, the engine senses this and shuts off 4 cylinders as they are not required at this time. The engine is also capable of shifting into 4 cylinder mode when cruising. Of course mere mortals cannot feel this transition taking place within the engine so the blokes at Honda have been nice enough to fit an 'ECO' light in the dash to tell you when your car is conserving the precious fuel! Available only as a 5-speed automatic with paddle shifts, the Honda Accord V6 makes for great driving pleasure. The silent engine literally launches the sedan forward and you are up to threedigit territory before you can spell your name! I didn't have any testing gear but I assure you that the performance figures are really going to get you thinking and just in case you are in go-green-savethe-planet-mode" then the mileage figures will surely get your attention for this tech-savvy car is here to deliver on both parameters. Honda has managed to bring the best of both worldls together, performance and mileage and it's almost like getting rain on a hot sunny day-perfection as desired, perfection at one's disposal and a name like Honda to make it real! Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" Go To Top THE BEAST IN THE BEAUTY Priyadarshan Bawikar The Economic Times, ZIGWHEELS After awing many-acar enthusiasts at various auto shows, BMW launched its genredefining Sports Activity Vehicle or SAV, the X6, back in the second quarter of 2008. While the name of the category might be confusing, it is important to understand the X6 is pretty much a standard crossover, or soft-roader, albeit one that looks like its shaped like a coupe. Though the car is based on BMW's hugely successful X5 platform, thanks to a body style inspired from the 6-series, the X6 manages to look totally radical - a bit akin to a sports car on jacked up suspension and large wheels. But thanks to all the advanced technology under that gorgeous body, the X6 actually manages to pull off the fine balancing act of munching mile on mile of tarmac, followed by ripping it out on the loose stuff. The BMW X6 comes with the company's patented allwheel drive system called xDrive, coupled with a brand new system called Dynamic Performance Control (DPC). While the xDrive system works to split the torque to the front and rear wheels, the DPC is an electronic system that reads data from accelerometers, steering lock and wheel slip and automatically distributes the engine torque between the left and right rear wheels, ensuring that the car has maximum traction when attempting hard cornering maneuvers. What makes the Dynamic Performance Control system unique is that it is effective both when the X6 is accelerating and when it is decelerating, giving optimum grip over all possible surfaces. Trick differentials are one thing, but they're of no use if the engine doesn't live up to their effectiveness. But when it comes to engines, BMW is really the best in the business, and their range of engines for the X6 is a reflection of that. A 4.4-litre twin turbo V8 petrol engine that produces over 410 PS of power and a monstrous 600 Nm of torque powers the top of the range variant. BMW offers the X6 in a choice of two six cylinder engines as well - a 3.0-litre inline-6 cylinder twin turbo petrol motor which can produce 400 Nm of torque right from 1,100rpm onwards, and a 6-cylinder diesel mill. The 3.0-litre diesel engine comes in two variants itself, a twin sequential turbo version capable of producing 580 Nm of torque and a standard turbocharged version which belts out a fuel efficiency figure of well over 12 kmpl. On the inside, its business as usual with the X6. The interiors are a standard BMW classy fare with all the toys we've come to expect. The sixspeed sports automatic gearbox comes with paddle shifters on the steering wheel and the driver and front passenger get to sit on seats that can be adjusted electrically. Optionally, BMW does offer fully adjustable electric sports or comfort seats. The unique body shell makes room for a lot of baggage space in the boot - a whopping 570 litres as a matter of fact, which with the rear seats folded increases to a cavernous 1,450 litres. Leather upholstery all around completes the car's executive look and the company also offers an 8-inch colour monitor in the center console to keep passengers in the back seat entertained for hours. While most sports cars fans would like to raise questions as to the X6's existence, they would be interested to know that a vehicle like this probably makes the most sense in a country like India. With ditches and bumps on most of our roads bad enough to ground low slung sports cars, the X6, with its raised suspension, powerful engine and electronic driving aids would be able to power through these obstacles with nary a worry. And enthusiasts would be even more interested to know that BMW has just launched this highly potent vehicle in India. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" Go To Top

CARS, SUVs, MUVs Go To Top SALES OF HYUNDAI MOTOR'S i10 CROSS 3-LAKH MARK The Economic Times (Web & Print Edition) See this story in: The Hindu Business Line (Web Edition), The Hindu (Web & Print Edition), mint (Web Edition), Business Standard (Web & Print Edition) Chennai: Hyundai Motor India said it has achieved yet another key milestone in its decade old journey in India by clocking the fastest three lakh i10 sales in the shortest span since its launch on October 31, 2007. Of the three lakh i10 cars sold, over 1.44 lakh were sold in the domestic market and around 1.56 lakh were exported to over 100 countries across Latin America, European Union, Middle East and South East Asia. The Ma de in India car went global in December, 2007 and since then its total export orders crossed 1.5 lakh plus units in 15 months, company said in a statement on Thursday. HMIL Senior Vice President, marketing, Arvind Saxena said, "The company has constantly focused on providing the best for its customers be it design, technology or the best value for money proposition. And the resounding success of the i10 just proves that our customers value these parameters as well and have reinforced our belief that, if we provide the best, we will always be on the fore front be it the domestic or the overseas market". Further, he said, the i10 which meets the stringent safety and emission norms even in the European market has become an undoubted segment leader in both the domestic and overseas market. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://economictimes.indiatimes.com/News/News-By-Industry/Auto/Automobiles/Over-one-lakh-i10-domestic-sales-in-2008/articleshow/4256496.cms http://www.thehindubusinessline.com/blnus/19121906.htm http://www.hindu.com/2009/03/13/stories/2009031351841500.htm http://www.livemint.com/2009/03/12195025/Hyundai-i10-sells-over-300000.html http://www.business-standard.com/india/news/saleshyundai-motor/s-i10-cross-300000/56538/on Go To Top HONDA SEES CAR DEMAND REVIVING Samar Srivastava mint (Web Edition) See similar story in: Hindustan Times (Web & Print Edition) New Delhi: Honda Motor Co.s Indian subsidiary expects car sales to grow in the coming months as falling interest rates and increased financing options bring back car buyers. Well probably have another record month, this month, said Masahiro Takedagawa, president and chief executive of Honda Siel Cars India Ltd on the sidelines of an event to launch the companys Accord V6 model. Last month the company had registered sales volumes of 5,579 cars, a 47% growth from a year ago. This was mainly due to demand for the new version of its City model. Even so the company has no plans to start production at its second plant at Tapukara in Rajasthan for the next two years, Takedagawa said. On 27 February, he had said that all expansions plans for the company had been indefinitely postponed. For now Honda makes about 60,000 cars at a factory at Greater Noida, which, last year, had its capacity expanded to make 100,000 cars. With the revival in car sales, the company expects to post single digit growth this year. Honda plans to go ahead with the launch of the Jazz hatchback this June. Based on the same platform as its City model, the Jazz would be sold as a premium hatchback. Takedagawa hinted that it would be priced below the City as the Indian market is extremely price sensitive. In Thailand, for instance, the Jazz retails for more than the City. Like its counterparts, Honda too has been hit hard with the rupees depreciation against the dollar. Last week it raised prices on all models by between Rs30,000 toRs101,000. Honda plans to increase local content in its India made cars, which presently stands at between 26% and 74% depending on the model. http://www.livemint.com/2009/03/12195556/Honda-sees-car-demand-reviving.html http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName= NLetter&id=280db1ca-7cce-49c6-bc25-3ced813aa56e&Headline=Honda+defers+production+in+Rajasthan+ Go To Top HONDA LAUNCHES ADVANCED VERSION OF ACCORD PTI See this story in: The Hindu Business Line (Web Edition), Deccan Herald (Web Edition), The Hindu (Web & Print Edition), mint (Web Edition), The Pioneer (Web & Print Edition), The Telegraph (Web Edition) Greater Noida: Honda Siel Cars India on Thursday launched an advanced version of its premium sedan Accord with a 3.5 litre i-VTEC engine, priced between Rs 24.8 lakh and Rs 25.35 lakh (ex-showroom, Delhi). The new car would be available in two variants - Accord V6 3.5 and Accord V6 3.5 Inspire - and comply with Euro IV emission norms. The company, however, expects that the demand for the old Accord would be higher than the new one. We expect the sales of earlier version of Accord with 2.4 litre engine in higher numbers than this new Accord, said Mr Jnaneswar Sen, the Vice-President (Marketing) Honda Siel Cars India (HSCI). The existing Accord comes with a 2.4 litre engine that generates 180 horsepower. The price of the car starts at Rs 16.72 lakh (ex-showroom, Delhi). The company, which is present in India through a joint venture with the Siel Group, claimed that the new A ccord would give a mileage of 10 km per litre as per Automotive Research Association of India conditions. http://www.thehindubusinessline.com/blnus/02121322.htm http://deccanherald.com/Content/Mar132009/business20090312123683.asp http://www.hindu.com/2009/03/13/stories/2009031355021400.htm http://www.livemint.com/2009/03/12133606/Honda-launches-advanced-versio.html http://www.dailypioneer.com/162089/Honda-to-launch-Jazz-in-June.html http://www.telegraphindia.com/1090313/jsp/business/story_10663529.jsp Go To Top FORD CFO'S CASH INITIATIVE PROVES PROVIDENTIAL Bloomberg See this story in: Business Standard (Web Edition) Mumbai: One of the first decisions Lewis Booth made after stepping into the job as Ford Motors chief financial officer (CFO) in November was tapping a $10.1-billion revolving credit line to preserve the companys access to cash. Some Ford executives didnt want to take on more debt and interest as sales plummeted. Others argued that the company should take the cash before it vanished as the credit markets deteriorated. Booth settled the debate, opting to tap the money. Executive Chairman Bill Ford cites that move as helping ensure the automaker would not have to accept federal aid to continue operating, as competitors General Motors Corp and Chrysler LLC have done. Our plan was, is and is going to be to thread the needle of not taking federal aid, Ford said in an interview. Lewis has pushed our company to get out ahead of our issues and not to react. Booth, son of a Liverpool car dealer, also drove the largest debt restructuring Ford has undertaken to retire as much as $10.4 billion. He is also helping to lead the effort to sell Volvo, Fords lone remaining European luxury car brand. Prior to becoming CFO, Booth, 60, spent the last 12 years running Ford carmaking operations around the world, starting in South Africa, moving to Asia and finally in Europe. He engineered a turnaround at Mazda in Japan and overhauled Fords European car lineup. He also led the sale of European luxury lines Jaguar, Land Rover and Aston Martin. He literally knows how the entire Ford world works more than any executive we have in the company, said Bill Ford, 51. Were in charge Booth sees his job now, as conservator of the cash, as the last line of defense against taking federal aid. We want to continue without the sort of government loans that GM and Chrysler have received and applied for, Booth said in an interview. The biggest benefit is that were in charge of our destiny. Were running our company. http://www.business-standard.com/india/news/ford-cfo/s-cash-initiative- proves-providential/351677/ Go To Top NOW, SHOWROOMS FOR USED MERCS, BMWS Swaraj Baggonkar Business Standard (Web Edition) Mumbai: A robust growth in demand for pre-owned cars and sports utility vehicles in the domestic market has enticed the countrys premium auto makers to join the party. Daimler Benz (owner of the Mercedes brand), BMW and Porsche are either looking to enter the used car market by the end of this year or next year or are expanding their customer reach. The luxury pre-owned car market is not very big but its rate of growth is much faster than the market for new luxury cars, say experts. Ashwin M Sanghi, director, Sanghi Motorcar Company (dealers of Mercedes Benz), says: The used luxury car market is a fast-growing segment with demand flowing from owners of small cars as well as those of mid-sized premium sedans. There has been no slowdown in demand for such cars despite the downturn. For every 100 new cars sold in the luxury segment, there is a demand for 15-20 used luxury cars, according to estimates. However, the growth of the new car market has been slower than the used car market, which has more than doubled in the past two years. The growth will be much higher when taking into account the unorganised sector, which accounts for 80 per cent of the market. Porsche India aims to sell 200 new cars this year, but the target for its used car business will be higher. Says Rod Wallace, managing director: Our aim is to let our customers get an opportunity to drive a Porsche. We have sold 600-700 cars till date and there is a sizeable number of people who would want to upgrade to a new Porsche. Our used car programme will help them achieve that. Porsche is planning to enter the pre-owned car business by the end of this year. It will also increase its dealerships to 11 from two at present. Similarly, BMW is looking to tap the used segment by next year. The company has a high brand value in India with solid demand in the unorganised market. Says Peter Kronschnabl, president, BMW India: Looking at the demand for BMW vehicles in India, we will enter the pre-owned market next year. Our cars will be thoroughly checked and serviced before being sold. Analysts say at the rate the used luxury car segment is moving forward, it will be as big as the market for new cars in the next few years. Knowing that the main concern of the buyers of used cars is maintenance and spare part costs, Daimler has been able to reduce prices of its spares significantly in recent years. Current owners, who have been regularly servicing their cars at a specified dealership, may also sell their car back to the dealer. BMW has, this financial year, sold 2,316 units, a growth of 51 per cent, while Mercedes-Benz has sold 2,474 units, a growth of 23 per cent. During the last financial year, ending March 31, 2008, BMW India sold 2,162 units, a six-fold growth from the previous year. Mercedes Benz, meanwhile, has sold 2,899 units, a growth of 48 per cent. http://www.business-standard.com/india/news/now-showrooms-for-used-mercs-bmws/351679/ Go To Top

COMMERCIAL VEHICLES Go To Top - - - - -

CONSTRUCTION & AGRI MACHINERY Go To Top - - - - -

2/3 WHEELERS Go To Top TVS LOOKS AT 36% INCREASE IN SALES WITH STREAK Business Standard Chennai: Two-wheeler manufacturer TVS Motor is looking at an increase of 36 per cent in sales with the launch of TVS Scooty Streak. The companys current sales stand at 22,000 and we are expect this to touch 30,000 a month in 2009-10 with the new launch, said R Dilip, vice-president (sales), TVS Motor Company after launching the scooterette model here recently. Scooty Pep is exported to 48 countries primarily in West and South Asia, Dilip said, adding they would start exporting Scooty Streak after meeting the domestic demand in a month or two. The model is manufactured at Mysore plant. Dilip said the domestic scooter market is 100,000 units a month, of which 35,000 units are in the women segment. Of this, TVS Motor has a market share of 24 per cent in the country. Commenting on the current market condition, he said, the two-wheeler market was still witnessing a positive growth. We have not seen a slowdown compared with last year as far as two-wheelers are concerned, with our growth touching double digit rates from the 5 per cent seen when the slump hit in September, said S Srinivas, general manager marketing, TVS Motor. The company also plans to launch a unisex scooter in the coming financial year. A unisex model is typically heavier than a scooterette (scooters designed primarily for women) and suited for driving longer distances, he added. TVS Motor Company posted a growth of 13 per cent in two wheeler sales in February at 107,301 units as against 95,235 units in the corresponding period of the previous year. http://www.business-standard.com/india/news/tvs-looks-at-36-increase-in-salesstreak/351591/ Go To Top VIBGYOR LAUNCHES 100CC MOTORBIKE Business Standard See this story in: Yahoo India, Daily News & Analysis Kolkata: Kolkata based Vibgyor Vehicles, a part of the diversified Vibgyor group of companies with interest in retail, realty, hospitality and eductaion among others, has launched a 100cc economy class motorbike 'Gallop' for the suburban markets, and targets to sell 1.4 lakh units in 2009. The company is eying an all-India presence banking on an extensive dealer and sub-dealer network of 521 and 1200 outlets respectively. Raja Bhadra, chairman and managing director, Vibgyor Vehicles said that the company planned to launch a 125cc motorbike in May this year that will be followed up by a scooter launch in September-October, the festive season in this part of the country. The net investment including the upcoming projects would be around Rs 660 crore, of which nearly 20 per cent has already been spent on the 'Gallop' project. "Around 35 per cent would come from internal accruals", claimed M Bannerjee, head, operations, Vibgyor Vechicles. "We are planning to have plants in north, south and west India as well and are currently scouting for locations", he added. Having local plants would substantially reduce the transportation costs which is crucial for a low-priced vehicle like the Gallop. The Gallop is priced at Rs 28,999 ex-showroom in Kolkata. "Our target customer is the suburban young male with an average monthly income of Rs8,000 and above", Bhadra said. The company plans to sell 1.5 lakh units of the Gallop in the very first year of the launch and take the numbers up to 2.5 lakh in 2010 and 3.5 lakh units 2011. Vibgyor's Dhulagori plant near Howrah is capable of manufacturing 17,000 vehicles per month in multiple shifts and Bhadra claimed that the company already had an orderbook of over 20,000 motorbikes. http://www.business-standard.com/india/news/vibgyor-launches-100cc-motorbike/351636/ http://in.biz.yahoo.com/090312/50/6zksm.html http://www.dnaindia.com/report.asp?newsid=1238578 Go To Top BIKE LANDSCAPE HEATS UP Shobhana Subramanian Business Standard (Opinion) Mumbai: Honda Motorcycles and Scooters India (HMSI) has made it clear that it doesnt intend to be a bit player in the Indian motorcycle market. The Japanese major plans to be right out there in the middle, and over the next few years motorcycles, it says, will bring in as much as scooters. The game plan: to be where the action is, making 100 cc bikes in what is popularly called the entry segment. That, incidentally, is the space that Rajiv Bajaj, chief at Bajaj Auto, said hed rather not be in because it wasnt as profitable as making bigger 125 cc and 135 cc bikes. Fair enough. But its a fact that Hero Honda has managed to ride out the current recession on the back of the small bikes that it sold. And its also a fact that small bikes count for a lot since they make up nearly two-thirds of the nearly six-million bike market in the country. Its possible that bigger bikes will become more popular but there are still plenty of people waiting to ride their first bikes and theyre in for a treat. Its not just HMSI thats trying to get a grip on the Indian motorcycle market. The other Japanese major Suzuki, which parted ways with TVS Motor way back in 2002, has just launched the GS150. The clash between the GS150 and TVS Motors bestselling Apache 160 cc, which does a run rate of close to 10,000 a month, will be interesting to watch. Of course, the GS150 will also be up against the very popular Pulsar 150cc, possibly Bajaj Autos biggest success story and its reason for being the market leader in the premium segment. Will these models withstand the competition? Bajaj Auto has had a great run in the premium space HMSIs Unicorn didnt exactly set the market on fire and although Hero Honda has made some inroads into the space with the Hunk, it hasnt been what you would call a runaway success. But thats just one part of the story. Bajaj Autos motorcycle sales have skidded in the ten months to January 2009 with volumes down 24 per cent. For sure, it hasnt been an easy time but even before the downturn really set in, the 125 cc XCD failed to take off. The new XCD 135 cc has got off to a great start selling 20,000 units in the first month but it should be remembered that both the Discover and the Platina showed promise but faltered somewhere along the way. So for Bajaj Auto to win back share, new launches need to deliver volumes consistently. As for TVS, even in a market without Suzuki or Honda, the company has only been losing market share. Apart from the Victor, which was launched in 2001, it hasnt come up with a model in the 110-125 cc segment, that sold substantial volumes over any length of time. On an already small base, the companys volumes were lower by about 8 per cent between April 2008 and January 2009 and in the December 2008 quarter, TVS actually posted a loss. With such numbers, where is it going to find the money for research and development? And for marketing and selling its products? One wonders what the game plan at TVS is; how does the company plan to take on the Japanese majors when it can barely fend off the challenge from local heavyweights? With the benefit of hindsight, it would now seem that TVS should have stuck it out with Suzuki. Look at where Hero Honda is today. Even if HMSI does take away share from Hero Honda in the 100 cc segment or even in other segments or even if the Japanese firm becomes the market leader Hero Honda can always be a strong number two. Take the case of scooters, a market where the two have been co-existing: HMSI resurrected the market that was abandoned by Bajaj Auto, which at one time made the Chetak the largest selling scooter in the world. But Hero Honda hasnt done badly selling nearly 14,000 scooters a month to HMSIs 54,000 and is actually nudging TVS Motors 17,000. Its true that a good part of Hero Hondas 56 per cent share of the motorcycle market in the country comes from its stranglehold on the entry segment. Also, technology from Honda is what has helped it remain the market leader for so many years. Its possible that Hero Honda may not always have access to Honda technology but that apprehension has been around for years now without it coming true. Thats not to say it wont happen. In the meanwhile, its making the most of its association after all technology is key to a product and Hero Honda has backed it up with a service and vendor network. Its not going to be easy to compete with the Japanese who are just warming up; the motorcycle landscape may not be completely altered over the next few years but there could be some significant changes. http://www.business-standard.com/india/news/shobhana-subramanian-bike-landscape-heats-up/351671/ Go To Top HYDROGEN-RUN THREE-WHEELERS PLANNED FOR INDIAN ROADS Sandeep Joshi The Hindu New Delhi: United Nations Industrial Development Organisation (UNIDO)s International Centre for Hydrogen Energy Technology (ICHET) on Thursday signed a memorandum of understanding with its Indian partners to run three-wheelers on Indian roads on the most advanced and clean fuel: hydrogen. Consortium ICHET joined hands with a consortium of partners in India to support, both financially and technically, their efforts to promote use of hydrogen as a fuel for mass transport in Delhi and elsewhere to help in checking environmental pollution. Under the project for Delhi, to be called DELHY-3W, a fleet of 15 hydrogen-fuelled three-wheelers would operate at Pragati Maidan in collaboration with the India Trade Promotion Organisation (ITPO) to begin with. The $1 million project, half of which is being funded by International Centre for Hydrogen Energy Technology, would be operated on a public-private partnership for two years. The hydrogen-operated three-wheelers will be used to transport visitors from the Delhi Metro railway station at Pragati Maidan to the exhibition areas inside the sprawling complex. United Nations Industrial Development Organisation hopes that the project would support establishment of hydrogen re-fuelling facilities and promote hydrogen vehicles in the Capital and gradually spread across India. A formal launch of hydrogen-fuelled vehicles for mass use is expected in mid-2010. The Indian partners of the project include Indian Institute of Technology-Delhi, Mahindra and Mahindra and Air Products, while the foreign collaborators are the United Nations, ICHET-Istanbul and the UNIDO Regional Office for South Asia. The consortium will be coordinated by Prof. L.M. Das of IIT-Delhi, a specialist in alternative fuels and hydrogen engines. Mahindra & Mahindra will build the hydrogen three-wheelers while Air Products will provide hydrogen fuelling. UNIDO India will be completing the consortium undertaking dissemination and liaison activities. Developing countries The Turkey-based ICHET, funded by the Turkish Ministry of Energy, aims at supporting developing countries leap-frog to hydrogen, the cleanest energy carrier, by helping the development and demonstration of such technologies through support to universities and industries. http://www.thehindu.com/2009/03/13/stories/2009031356940400.htm Go To Top

COMPONENTS Go To Top TVS MOTOR CONVERTS LOAN TO SUBSIDIARY TO EQUITY The Hindu Business Line See similar story in: Hindustan Times Chennai: TVS Motor Company has converted a loan of Rs 18.50 crore that it gave to its wholly-owned subsidiary, Sundaram Auto Components Ltd, last year, into equity. TVS Motor announced to the stock exchanges that it would get 37 lakh equity shares in SACL at Rs 50 a share. Upon enquiry, it was learnt that TVS Motor is making no fresh investment; it is only a conversion of last years loan into equity. Sources said that SACL, which produces plastic and rubber components for automobiles, has also been hit by the slowdown and would find payment of interest difficult. Even if it could pay, the interest turns up as income in TVS Motors books, giving rise to an incidence of tax. TVS Motor also announced that Mr R. Ramakrishnan has joined the companys board of directors as a non-executive member of the board, filling a vacancy caused by the resignation of Mr Gopal Srinivasan. Mr Ramakrishnan was earlier a dealer of TVS Motor Company. He is on the board of PT TVS Motor Company Indonesia, TVS Motors arm in Indonesia. http://www.thehindubusinessline.com/2009/03/13/stories/2009031350660200.htm http://www.hindustantimes.com/Redir.aspx?ID=4c5d4ab6-1384-461c-b496-5047d520a236&SectionName=BusinessSectionPage&add=test4 Go To Top

ALLIED INDUSTRY Go To Top - - - - -

FINANCE & INSURANCE Go To Top PSBs LIKELY TO OFFER CHEAPER TRACTOR LOANS Dheeraj Tiwari & Niranjan Bharati The Economic Times New Delhi: Leading public sector banks are expected to introduce cheaper loans for tractors for ploughing more investment into farm equipment rusting in a slowing economy. Nine out of every 10 tractors bought in India are financed by banks. The government is talking to Indian Banks Association (IBA), the apex banking body, for opening a window for this segment. A senior government official, who did not wished to be named, said the government has formed a special cell, comprising officials from the ministry of heavy industries and IBA, to examine credit flow into this segment. The government is in talks with all leading public sector banks to make sure loans are easily available. A formula can be worked out to lower the interest rate or a special scheme can be put into place, he said. An IBA official also confirmed that such a proposal was under consideration. Cheaper loans may come as manna for tractor manufacturers in the current slow down. We have been pushing for a special scheme for tractor loans as farmers are being denied credit. Apart from bringing down the interest rates, relaxing the borrowing norms is very important. If the norms are not relaxed, it would be difficult to give a boost to agriculture credit, said Tractor Manufacturers Association president LD Mittal. Bankers say loans through this facility may be available at 10%-11% compared to the prevailing rate of 14%-15%. Some banks such as State Bank of India and Punjab National Bank may initially introduce the offer. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://economictimes.indiatimes.com/News/News-By-Industry/Banking- Finance-/PSBs-likely-to-offer-cheaper-tractor-loans/articleshow/4257986.cms Go To Top TATA MOTORS TIE UP WITH STATE BANK OF MYSORE FOR AUTO LOANS Agencies See this story in: The Financial Express, The Hindu Business Line, Deccan Herald, The Hindu New Delhi: The country's largest auto maker, Tata Motors, on Thursday said it has tied up with public-sector lender State Bank of Mysore for financing facilities of its passenger cars. The company has entered into an understanding with State Bank of Mysore for financing its entire range of passenger cars, Tata Motors said in a statement. "This facility will be available at all branches of State Bank of Mysore and 329 sales touchpoints of Tata Motors. This tie-up will provide a single window for both cars as well as car loans and will make car buying easier for the customers," the company said. State Bank of Mysore has 673 branches across India and offers car loans up to 85 per cent of the on-road price of the car for up to seven years, the statement added. http://www.financialexpress.com/news/tata-motors-tie-up-with-state-bank-of-mysore-for-auto-loans/433654/ http://www.thehindubusinessline.com/blnus/02121408.htm http://deccanherald.com/Content/Mar132009/business20090312123686.asp http://www.hindu.com/2009/03/13/stories/2009031351821500.htm Go To Top

LUBRICANTS & ALTERNATIVE FUELS Go To Top OIL INCHES ABOVE $43 AFTER BIG DROP IN INVENTORIES AP See this story in: The Times of India Singapore: Oil prices inched above $43 a barrel Thursday in Asia after an unexpected rise in US crude inventories, suggesting demand remains poor, sparked a big drop in prices overnight. Benchmark crude for April delivery rose 69 cents to $43.02 a barrel by midday in Singapore on the New York Mercantile Exchange. Oil prices fell $3.38 on Wednesday to settle at $42.33 a barrel after the Energy Information Administration said crude supplies in the US climbed unexpectedly by 700,000 barrels for the week ended March 6. Analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., expected a drop of 1 million barrels. The report also said US demand for distillate fuel oil, which includes diesel fuel used by trucking companies, miners and manufacturers, dropped by 6.1 per cent. Crude inventories had fallen in two of the previous three weeks. ``Inventories in the last few weeks had a few traders believing that the excess supply was starting to vanish,'' said Toby Hassall, an analyst with Commodity Warrants Australia in Sydney. ``So the gain in crude inventories was catalyst for a sell-off.'' Traders are also trying to anticipate what OPEC may do at its next meeting on Sunday. Leaders of the Organization of Petroleum Exporting Countries have suggested for weeks that the group will likely announce a production cut. But oil officials from Saudi Arabia have said recently that they'll focus on making sure OPEC members are in compliance with the 4.2 million barrels a day of output quota reductions announced since September. U.S. Energy Secretary Steven Chu said Wednesday that he plans to try to convince OPEC not to make any further productions cuts, since higher crude prices could exacerbate a weakening global economy. ``If they force up prices at a time when many economies are deteriorating at quite a severe rate, it will prolong the slump,'' Hassall said. ``If they force up prices now, it might not be in their interests in the long term.'' Dwindling global trade, soaring unemployment and a plunge in consumer spending for big-ticket items such as cars have conspired to weaken oil demand. Chinese oil imports have dropped 13 per cent in the first two months of the year while the country's exports plunged 25.7 per cent year-on-year in February. Office supplier Staples Inc., department store owner Neiman Marcus Inc., teen-focused American Eagle Outfitters Inc. all reported dismal earnings Wednesday as American shoppers tighten their belts amid the worst recession in decades. ``I don't see a sustained rally given the flow of macroeconomic data remains weak,'' Hassall said. ``There's no indication that we're about to turn a corner.'' In other Nymex trading, gasoline for April delivery rose 1.28 cents to $1.24 a gallon, while heating oil gained 0.89 cent to $1.26 a gallon. Natural gas for April delivery was steady at $3.80 per 1,000 cubic feet. Brent prices rose 82 cents to $42.22 on the ICE Futures exchange in London. http://timesofindia.indiatimes.com/Business/International-Business/Oil-inches-above-43-after-big-drop-in-inventories/articleshow/4254427.cms Go To Top

INTERNATIONAL NEWS Go To Top GM SAYS IT DOESN'T NEED $2B FROM GOV'T IN MARCH Agencies See this story in: The Economic Times, The Times of India Detroit: General Motors Corp's chief financial officer says the company will not need the $2 billion loan installment for March that it requested from the US government in February. CFO Ray Young said Thursday in an interview with The Associated Press that GM told the Obama administration it won't need the money so soon because its cost cuts are starting to take hold. GM borrowed $13.4 billion from the government earlier this year. Last month, it said it would need up to an additional $16.6 billion to keep operating, including $2 billion in March and $2.6 billion in April. Young would not say when the company will need more government loans or whether it would reduce its total financing request. http://economictimes.indiatimes.com/International-Business/GM-Dont-need-2B-from-govt-in-March/articleshow/4256967.cms http://timesofindia.indiatimes.com/Business/International-Business/GM-wont-need-2bn-more-from-US-funds-/articleshow/4257060.cms Go To Top EU INVESTMENT BANK SAYS IT WILL LEND CARMAKERS 3BN AFP See this story in: The Times of India Brussels: The European Investment Bank said Thursday its board had approved plans to lend an additional three billion euros to auto makers and that more was on the way. The European Union's long-term financing arm said the loans were mostly aimed at helping car and truck makers improve fuel efficiency and cut CO2 emissions Auto makers are increasingly struggling to finance their operations as well as huge investments in environmentally friendly technology, required to meet tough EU CO2 reduction targets in the coming years. "We are aiming to respond to Europe's needs as rapidly and efficiently as possible, while continuing to ensure that the projects we fund are economically and environmentally sound," EIB President Philippe Maystadt said. The EIB said that BMW, Daimler, Fiat, PSA Peugeot-Citroen, Renault, Volvo Cars, Scania and Volvo Trucks would benefit from the loans. With further requests in the pipeline, the EU lender said that it could make loans worth seven billion euros available by mid-year. Earlier this week, Maystadt warned that the EIB could not lend much more than that to the auto industry because further increases would limit funds available for other sectors. In reaction to the announcement of extra loans, the ACEA European carmakers association cited the difficulties the industry is having getting credit in the midst of a recession. "Viable businesses are at stake and the EU risks doing too little too late," ACEA secretary general Ivan Hodac said. "This is not a question of 'bailing-out' but of securing a healthy and fundamental industry." With over 550 billion euros in annual revenue, the sector is one of the biggest employers in Europe. However, with demand for new cars collapsing as consumers struggle to get credit and worry about their jobs, the industry is ridden with massive overcapacity. Germany's Daimler auto group said on Wednesday it will lay off 18,000 workers at its German truck plants for several months while Swedish carmaker Saab said on Thursday it would cut 750 of its 4,100 jobs in Sweden. However, ACEA said that overcapacity was not the reason the industry was facing a crisis. "The cause of the current crisis is the unprecedented credit crunch and the rapid deterioration of all key automotive markets" Hodac said. "The European automobile industry is taking its responsibilities; now European policy makers must follow." http://timesofindia.indiatimes.com/Business/EU-investment-bank-says-it-will-lend-carmakers-3bn/articleshow/4257151.cms Go To Top VOLKSWAGEN SALES FALL 15% IN JAN, FEB AP See this story in: Mint Frankfurt: German carmaker Volkswagen AG said Thursday the companys sales fell 15% during the first two months of the year and that 2009 sales and profits wont match record levels in 2008. The Wolfsburg-based company, Europes largest carmaker by sales, reported record sales and profits for 2008 earlier this month. But it said the global economic crisis wouldnt pass it by, and that it wouldnt be able to match last years results in 2009. Volkswagen said earlier this month that its 2008 net profit rose 15.4% on record deliveries to 4.8 billion ($6.4 billion) from 4.1 billion in 2007. Sales were 4.5% higher, climbing to 114 billion from 109 billion. The company said despite the weak euro the first two months of this year, the company is poised to release 20 new models by 2010, which should spark sales. The companys brands include Volkswagen, Audi, Seat, Skoda and Bentley. http://www.livemint.com/2009/03/12154249/Volkswagen-sales-fall-15-in-J.html Go To Top VOLVO CARS IN DEAL WITH STAFF TO CUT PAY AP See this story in: The Times of India Stockholm: Ford-owned Volvo Cars AB said it has entered an agreement with employees to cut pay in a move to reduce costs by nearly 500 million kronor ($57 million) in 2009. Volvo said the agreement includes stops in production for 45 days in 2009, which will result in monthly pay cuts of up to 5 percent for plant staff. It will also delay the renegotiation of salaries for all employees until January 2010. Additionally, 40 leading executives will cut their salaries by 5 percent until December and all staff will lose their right to 7 days a year of so-called work-time compensation leave. The Goteborg-based company will also reduce the production volume at its plants in Gent, Belgium and Torslanda, Sweden. A similar agreement has never been made before,'' Volvo Cars Chief Executive Stephen Odell said in a statement. ``We are in a unique situation and need to take extraordinary measures. We believe this agreement is a good model to secure our operation and avoid new layoffs.'' Ford Motor Co. late last year said it is considering selling the Swedish brand, which it bought in 1999. Volvo last year cut around 6,000 jobs worldwide, of which about 1,200 were consultants as it struggled against a weak US dollar and declining demand. http://timesofindia.indiatimes.com/Business/International-Business/Volvo-Cars-in-deal-with-staff-to-cut-pay-/articleshow/4256202.cms Go To Top CANADIAN AUTO WORKERS APPROVE GM DEA AP See this story in: mint Toronto: Members of the Canadian Auto Workers union have voted 87% in favor of a new cost-cutting contract with General Motors. The deal is needed to qualify the struggling automaker for Canadian government aid. The agreement reached between the union and company last weekend includes a wage freeze to September 2012, the elimination of an annual bonus and a reduction in paid time off, among other concessions. GM has also promised workers that Detroit-based parent General Motors Corp. will keep 20% of its total North American manufacturing volume in Canada. CAW national president Ken Lewenza has said a key goal would be that Canada maintain its market share and that Sundays deal should help do that. These changes are difficult for our members and retirees, but CAW members at GM agree that accepting these changes is the best choice under the circumstances, Lewenza said Wednesday. Many workers who voted on the deal said they supported the agreement only reluctantly, calling it painful but realistic. Without government aid from Canada and the United States, General Motors has warned it could go bankrupt. The 10,000 workers covered by the contract held ratification votes Tuesday and Wednesday. The union said it plans to continue its practice of pattern bargaining with the three North American automakers and said talks will begin this week with either Ford Motor Co. or Chrysler LLC. Chrysler executives, though, have concerns that the wage freeze didnt go far enough because it is still higher than the average pay of auto workers in the U.S., according to a person briefed on the Auburn Hills, Michigan-based automakers bargaining strategy. The CAW reached a deal with Ford last May that freezes wages and cuts vacation pay but avoids changes to base wages. The CAW, though, did not allow a two-tier wage system used in the U.S. in a contract with the United Auto Workers, where new hires would be paid about half the hourly wages of older employees and get fewer benefits. In Canada, new hires would start work at 70% of the top wage, reaching the maximum three years later. The Ford deal eventually became the pattern for GM and Chrysler in Canada, but Chrysler officials are concerned that the costs are higher than U.S. wages, said the person, who asked not to be identified because the negotiations are private. GM Canada is eligible for loans of up to 3 billion Canadian dollars _ or $2.3 billion in U.S. dollars _ under a government aid package. It submitted a restructuring plan last month. Chrysler last year asked for $1 billion in bridge financing from the Canadian government. Last week, Lewenza said the Canadian union had reviewed the United Auto Workers tentative concessions agreement with GM and would negotiate its terms based on that agreement. http://www.livemint.com/2009/03/12092646/Canadian-auto-workers-approve.html Go To Top AGREEMENT WITH AUTO UNION TO SAVE FORD $500 MN YEARLY WSJ See this story in: mint Detroit: Ford Motor Co expects operating savings of $500 million per year from an agreement with the United Auto Workers that also will make its labour costs competitive with Japanese rivals, the company said on Wednesday. The agreement trims average wages and benefits for UAW hourly workers to about $55 per hour this year, from more than $70 per hour when Ford was negotiating a watershed contract with the union two years ago. That figure is expected to drop to about $50 per hour by 2011, or roughly on a par with what Japanese automakers led by Toyota Motor Corp will be paying their non-union US factory workers, Ford said. Labour costs represent only about 10% of the total cost of producing a vehicle in the United States, but Detroit automakers have faced increasing pressure to eliminate a wage and benefit gap with the US operations of their Japanese rivals, referred to in the industry as transplant automakers. Fords cross-town rivals General Motors Corp and Chrysler LLC are required to make wages and benefits paid to US factory workers competitive with Toyota and other Japanese automakers under the terms of their government bailouts. Chrysler, about 80% controlled by Cerberus Capital Management LP, and GM have received $17.4 billion of emergency government loans and have requested billions more in emergency loans to complete restructurings. GM and Chrysler also have reached tentative agreements with the UAW on labour issues, but have withheld details until talks are completed on the funding of their healthcare trusts. Wages and benefits in the GM-UAW agreement are patterned on the Ford contract, but the contracts differ in other areas such as employee placement and company-specific details, UAW Vice President Cal Rapson said in a letter to members on Monday. Fords agreement with the UAW, which workers ratified earlier in March, suspends some performance and bonus payments, reduces overtime costs and cuts a paid holiday, as well as restructuring funding of a union retiree healthcare trust. Joe Hinrichs, Fords global head of manufacturing, said the savings from the operating agreement and restructuring of the funding of the trust, the Voluntary Employee Beneficiary Association (VEBA), are critical to our future competitiveness. The annual savings could exceed $500 million if industry conditions allowed Ford to exercise all of the changes in the agreement, Hinrichs said. Ford has about 42,000 hourly workers covered by the contract. About half of the annual savings would come from the elimination of performance bonuses and the Christmas bonus and the suspension of cost of living increases. Ford restructured payments into the VEBA, including the option to contribute about half in company stock, to conserve cash. The plan to make payments in stock requires shareholder approval at the Ford annual meeting this year. Ford, which posted a record $14.7 billion net loss for 2008, has said it believes it has adequate liquidity to operate through the economic downturn without seeking emergency US government loans. One analyst said Fords deal with the UAW appeared to meet the cost savings targets set out by the Treasury Department for its aid to GM and Chrysler. Ford has announced salaried job cuts and executive pay reductions and last week launched an effort to reduce $25.8 billion of automotive debt by up to 40% through conversion of debt to equity and tender offers. Ford also has agreed to offer buyouts to UAW-represented workers from 1 April through 22 May. Ford has offered buyouts previously to hourly workers and the offers will be lower than those in the past due to the current economic conditions.

...