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| INDUSTRY Maruti, M&M do not agree on stimulus rollback INTERVIEWS/FEATURES Scaling K12 COMPONENTS Small cos seek cover abroad on cloud over extension of fiscal sops to EOUs ALLIED INDUSTRIES Lower import duty on natural rubber: Tyre cos FINANCE & INSURANCE PNB to finance Bajaj commercial vehicles OIL, LUBRICANTS & ALTERNATIVE FUELS Oil prices down below $75 | CARS, SUVs, MUVs Maruti's iconic brand M800 set to drive into history in 13 cities COMMERCIAL VEHICLES CONSTRUCTION & AGRI MACHINERY TAFE gears up to launch small tractor next year 2/3 WHEELERS Honda to finalise location for 2-wheeler plant by March INTERNATIONAL NEWS Automakers must act quickly and decisively on complaints: Obama ECONOMY & FINANCE Forex reserves decline by $2.24 billion |
 INDUSTRYThe Times of India (Web & Print Edition) New Delhi: Two auto companies on Friday came out with divergent views over withdrawal of the government stimulus package with Maruti Suzuki seems to be prepared for a partial rollback, while Mahindra and Mahindra (M&M) opposing any such measure. RC Bhargava, chairman of Maruti Suzuki, said while the stimulus package had helped the auto industry return to positive numbers, the rising fiscal deficit an offshoot of lost revenues of the government is a cause of concern. The rising deficit, he said, could play spoilsport as it could result in higher inflation and even firmer interest rates, both of which have the potential to hit demand. Bhargava though admitted that a rollback would result in higher prices of vehicles and could impact the sales momentum temporarily. "It would affect sales for a short term. But experience shows that people gradually learn to live up to new set up." However, M&M MD Anand Mahindra was against any such move. "I think we have to be careful over withdrawal of the package. The stimulus package in India was not a very overwhelmingly large one like in China or in the US. It is a very very measured package," he said, adding that it should be continued. "We have to be very cautious." Car sales have been going strong since the government's fiscal stimulus package that included lower manufacturing duty as well as RBI's easier interest rate regime. Copyright 2010, Bennett, Coleman & Co. Ltd. All Rights Reserved" The Times of India (Web & Print Edition) New Delhi: The diversified Anand Mahindra group is all set for a big splash in multi-brand car service business, currently dominated by unorganized players and estimated at Rs 20,000 crore. It also targets foray into the motorcycle segment with a full range of products by this year. Mahindra & Mahindra (M&M), a leader in the utility vehicle space, is looking at a big play in the car service business as it expects demand for spares and service to rise in the coming years, in line with the rapid growth in car sales as well as new technology being strapped on to vehicles. "It holds enormous growth potential and we plan to expand in a big way," Rajeev Dubey, president of Mahindra's after-market division, told TOI here. Mahindra currently has seven multi-brand service outlets, and has chalked out plans to grow the network to 450 in the next three to four years. Dubey said the expansion would be both through company-owned outlets as well as franchisee ones. Organised multi-brand service outlets are not very prevalent in India, in contrast to markets in Europe where they account for as much as one-third of service business. In India, multi-brand service is offered mainly by unorganised players, mostly roadside workshops, while car dealerships cater to respective brands of their companies. However, organised multi-brand service is also picking up in India and is offered by companies like Carnation Auto (of Jagdish Khattar), Bosch and Castrol. Dubey said Mahindra has plans to grow the business along with the expansion of the group's used car division, FirstChoice. Khattar said the potential was high for organised players as currently there were few recognised brands in the market, while the car population was rising. "Also, there is a fair amount of dissatisfaction among many customers with the current set-up," he said. S Murlidharan, automotive after-market V-P for Bosch, said with more use of technology in cars, there was a need for specialised service outlets. "Most cars now have sophisticated technology on-board and we have high-end diagnostic machines to detect flaws," he said. Bosch plans to nearly double its reach to 700 outlets. Copyright 2010, Bennett, Coleman & Co. Ltd. All Rights Reserved" PTI See this story in: The Hindu Business Line (Web Edition) Chicago: After a long stint with declining sales, global automakers are now optimistic that the industry is gradually returning on the path of recovery and feel 2010 will be a better year for auto sales. The past couple of years have been tough for everyone but things are now definitely looking up. There are certain signs of life in the industry, General Motors Cos North American President Mr Mark Reuss told reporters on the sidelines of the Chicago Auto Show here. There is no question this year will be better, he said, adding that the situation is a lot better now than it was a year ago. Ford Motor President of the Americas Mr Mark Fields said the industry will see a gradual recovery in 2010. Our call for the industry this year is 11.5-12.5 million units, he added. The financial crisis that hit in September 2008 impacted not only the US car market but also the world markets. But the business is looking up a little bit better now, Hondas Assistant Vice-President Public Relations for America Mr Kurt Antonius said ad ding that compared to previous year, they are better days ahead for the auto industry. US auto sales rose six per cent in January. Ford, General Motors, Nissan and Korean automaker Hyundai Motor reported improved sales in January compared to a year ago. The Financial Express (Web Edition) Mumbai: Promoters of Tata Motors have offloaded close to 29% of their shares with differential voting rights (DVR) during the quarter ended December 2009. The promoters holding in the DVR shares has now slipped to 56.59% as on December 31, 2009, from the 79.66% levels held during the September-ended quarter according to the latest shareholding pattern available with the Bombay Stock Exchange. Trade analysts believe that the company could have well raised around Rs 700 crore through this stake sale. The Tata Motors DVR shares have limited voting rights of one for every 10 shares held but are entitled to an additional 5% dividend to the ordinary shares. During October and December 2009, the shares of Tata Motors with DVR shares were trading at a discount in the range of 25% to 35% compared to the price of the underlying ordinary shares. With DVR shares available at a steep discount and an added advantage of additional 5% dividend, long term domestic and overseas institutional investors found a good opportunity to increase their stake in the company. Moreover, globally such DVR shares usually trade at a discount of around 5% to 10% and with such a huge discount it was expected that the discount would thin down and allow for gains. And since Tata Motor promoters held around 79% of these shares there was low liquidity in the share and such frequent sell outs are expected to increase liquidity. Since the beginning of the year 2010, the DVR has fallen sharply by around 21% whereas the underlying ordinary share price has fallen by 17%, thereby the discount has now increased to around 42%. However, since its listing in October 2008 the DVR share price has appreciated by 30%. Major purchasers of the DVR include Prudential India Equity Fund which has a stake of 5.47%, Swiss Finance Corporation with 2.79%, DSP Blackrock with 1.26%, Nomura India Investment Fund of 1.09% and Dragon Peacock Investments picking up a stake of 1.54%. Tata Motors that came out with its rights issue in 2008 received lukewarm response from the public due to weak market conditions and the promoters had to subscribe close to 85% of the rights issue. The remaining portion was subscribed to by JM Financial (2.19%), who was also the lead managers to issue and 12.77% by IFCI. The issue was intended to fund its JLR acquisition and their planned capex. According to the terms of the issue, the company planned to raise Rs 2,186 crore through the issue of ordinary shares in the ratio of 1:6 priced at Rs 340 and Rs 1,960 crore through the issue of Class A shares having DVR in the ratio of 1:6 priced at Rs 305 a discount of 10%. | |
| Rohin Nagrani Business Standard, (Motoring) Mumbai: At last count, there were a dozen small cars sold in the country with a petrol engine under 1200cc. And nearly another half a dozen are set to enter the market in the next 18 months or so. Everyone is scrambling to engineer cars that conform to excise duty benefits, while also making a beeline to get their Euro-IV cars ready before the April 1 deadline. Surely, the one manufacturer who has a lot riding on it is Maruti Suzuki. With nearly all their small cars ready to meet the new emission norms, they turned their attention to one of the last the Swift. For all these years, Maruti Suzuki has found ways of making the G13BB unit work for them. Since its introduction in 1994 in the Esteem, it has found home in practically everything, from the Gypsy to the Versa and then adapted for application in the Swift and Swift Dzire. Ask tuners and they will tell you how brilliant an engine it is to work on and engines producing northwards of 120 bhp arent unheard of. But like they say, every good run has to have an end, and this was the G13BBs last gasp with the Swift before it made way for the K12M. You are probably thinking whats with all this nomenclature, but let me rephrase it to you in a simple manner. The Swift and Swift Dzire now get a 1200cc, K-series engine from the Ritz, instead of the 1300cc engine that powered it before. Meeting emission norms is one thing, but theres more to it. The K12 is one of the strongest reasons why the Ritz was crowned our Car Of The Year 2010. Its frugal, powerful and yet refined throughout the rev range. It's flexible in both the city and out on the highway. In fact, it is probably the best 1.2-litre engine in a car on sale in the country, such is its impact. But does it make an impact on the Swift and the Dzire? Well, on paper there is some effect. The 1.3-litre engine that used to make 87 bhp@6000 rpm is now replaced by one that makes 84 bhp at the same peak rpm. Torque is near identical at 11.5 kgm at 4500 rpm. There is no impact on the cars kerb weight though, so you are staring at a slightly lower power-to-weight ratio. The gearbox too, has been borrowed from the Ritz. Externally, there are no visual indicators to tell you that a new engine now resides in the car(s), but once you do open the bonnet, you realise that the engine is neatly packed in and theres a bit more empty space than before. Start them up and there is decidedly more refinement, especially in the Dzire where Maruti seems to have used some more deadening. The gears slot with the same confidence as before, but until 2000 rpm, this new engine lacks that little bit of driveability that the larger cubed 1.3-litre had. You cant upshift early into a higher gear like before, though that is a very small price to pay, because with the new engine there is a nice surge of torque past that mark. It also feels a bit more rorty as the revs start to climb, especially in the mid-range. Where the Dzire feels slightly hamfisted, the Swift feels a bit like a small rocket pack has been attached to its back. If you ask me, the tuners won't be crying at this prospect and we should be back with 120 bhp Swifts and then some more. But strangely, its the Dzire that delivered better acceleration timings than the Swift. Down to a slightly different engine mapping, the Dzire hit 60 kph in 5.91 seconds, the tonne in just 13.53 seconds and went on to a top speed of 165 kph before wind and tyre resistance came into play. This is a couple of tenths better than the outgoing Dzire whose numbers read as 6.35 secs, 14.04 secs and 162.9 kph respectively. The Swift registers slightly slower times, with the 60 and 100 kph coming up in 6.02 seconds and 13.88 seconds respectively, while top speed is 162 kph. These times are also slower than the outgoing Swift's numbers, which blitzed past 60 kph in just 5.8 seconds, go on to 100 kph in nearly 13 seconds and register a top speed of around 170 kph. Also, the Swift and Dzire now deliver 17.94 kpl (ARAI figures) versus the 15.9 kpl they used to deliver earlier. Does that mean that the Swift pair has become jaded in search of better efficiency? Hardly. In the quest for better efficiency, the engines have also improved in terms of in-gear acceleration times. These times matter the most in real world conditions, where overtaking and getting out of the situations becomes easier if the times are quicker. And thankfully, they are! Our testing equipment revealed that the passing speeds, especially from double to triple digit speeds, are quicker by about a second. However, where the older engine scored over the new one is at the top end, where it still had enough juice to go on, thanks to those extra cubes. Still, most of us wouldnt notice this on a day-to-day basis. Where the two engines benefit is also with regard to smoothness ,which was missing in the earlier power unit. Its completely unstressed even while youre redlining the engine on empty roads on Sunday mornings. While no changes have been made to either suspension or steering to account for the lighter-by-three kg engine, the Swift feels just as lively as before and if I may say, even better to tackle corners with. It seems more agile and with the revised rear suspension setup from its minor facelift in 2008, it feels more settled and seems to have better straight line stability. The Dzire always felt pretty stable in a straight line and that hasnt changed one bit. Both cars are good fun to drive on the whole and reward enthusiastic drivers in a manner that very few cars do in India. So, does the new engine leave its mark? Yes, especially with overall improved driveability and fuel efficiency making it even more practical than before while retaining the cars original traits that have made both such a success in our country. Maruti Suzuki lost a good opportunity by not giving the Swift a major facelift to go with the new engine heck, the cars almost five years old! Also, Maruti hasnt passed on the excise duty benefits that the Swift now falls under on account of increased input costs yes, its a pretty useful catch-all phrase. Besides, they would like the Swift to retain its premium over the Ritz. On the other hand, the Dzire has seen a marginal increase in price on account of the same. As for the K12M, well it still has a few more engine bays to go into, isnt it Maruti? | |
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| Vimukt Dave Business Standard Mumbai/ Rajkot: The country's second largest tractor manufacturer, Chennai based Tractors and Farm Equipment Limited (TAFE) is planning to introduce small tractor models in 2011. The company is examining the model for it.We are checking out the mini tractor model which will be less then 25 hp. It will not divert our focus from regular tractors and right now company is fully concentrated on regular business, said Cyril Rex Fernando, vice president, sales and marketing, TAFE. TAFE recently launched 47hp capacity MF 7250 power drive tractor in Gujarat at Rajkot. Commenting on the mini tractors segment as against bigger tractors general manager sales of TAFE, Arindam Maulick said, Total market share of mini tractor is about 6 percent and it is not hurting the regular tractors market. Both have its own customers and still most of the farmers prefer big size tractors as it has various uses. The Indian tractor industry is clocking a growth of 25 per cent every year. Around 3.05 lakh tractors had been sold last year and this year the number is expected to touch 3.80 lakh in the domestic market and 40000 in exports. TAFE enjoys a 22 per cent share in the Indian tractor market. It is among the top six largest tractors manufacturers in the world and exports to over 45 countries including developed countries like the US. A part of the Amalgamations Group of Chennai, it has business interests both directly and through its subsidiaries, in tractors, diesel engine, transmission components, panel instruments, hydraulic pumps, automotive water pumps, fasteners, farm implements and lubes, passenger car distributions and in Tea. | |
| PTI See this story in: The Hindu Business Line New Delhi: Japans auto major Honda will take a call on setting up the proposed new plant for production of two-wheelers out of Haryana by next month, a senior official of its Indian subsidiary said on Friday. Hondas wholly-owned two-wheeler subsidiary in India Honda Motorcycle & Scooter India (HMSI) has been scouting for a location to set up a new plant and had threatened to leave Haryana, where its existing factory is located, in the wake of labour unrest last year. We are studying very deeply on setting up a second manufacturing facility. By March we may take a final call on where the facility will be and what will be the investment, HMSI Operating Head (Sales and Marketing) Mr NK Rattan said. When asked about the possible locations that the company has zeroed in on, he said, We are considering all the three auto hubs Manesar-Gurgaon, Pune and Chennai for the facility. On whether HMSI will move out of Haryana, Mr Rattan said, We have not decided whether we will go out of Haryana. It will depend on many factors. Labour problem is everywhere in India. Last year the company suffered a loss of over Rs 300 crore after the workers went on a go-slow strike that had resulted in production dipping by over 50 per cent for nearly three months. In 2005 also, the firm witnessed a violent strike by workers that rocked the Gurgaon-Manesar belt. Business Standard Kolkata: Honda Motorcycle & Scooter India (HMSI) intends to set up its second plant in the country with an initial investment of up to Rs 400 crore. Currently, the firm is in talks with a number of states but is yet to finalise a location. Our existing plant is expected to reach 100 per cent capacity utilisation by 2010-11. But this can be stretched by the outsourcing of non-critical processes. We are doing an internal study on the second plant, which is likely to come up on 50 acres, HMSI Operating Head (Finance & Accounts) Sushil K Kabra said here at the launch of the firms 110cc bike, CB Twister. As of now, HMSIs sole manufacturing facility is located at Manesar in Haryana. The two-wheeler maker has invested Rs 1,300 crore in the plant. HMSI, which is a subsidiary of Japans Honda Motor, anticipates a sale of 1.25 million vehicles this financial year and expects the figure to rise to 1.5 million next year. Last year, the bike-maker had sold about 1.07 million units. Honda mulls second facility The Telegraph Business Standard Kolkata/ Bhubaneswar: Honda Motorcycle and Scooter India Limited (HMI), the 100 per cent two-wheeler subsidiary of the Japan-based Honda Motor Company, aims to sell 11000 units of its latest bike- CB Twister in the Orissa market in 2010-11. The two-wheeler major has set a pan-India sales target of 2.2 lakh units of the bike in 2010-11 which would be available to the customers by the end of this month. Prabhu Nagaraj, assistant general manager (customer service), HMSI said, We have targeted to sell 2.2 lakh units of CB Twister across the country in 2010-11. Five per cent of our overall sales of this bike is expected to come from the Orissa market. The two-wheeler major clocked sales of 23,000 units of all its models in Orissa in 2008-09. HMSI aims to record a pan-India sales volume of 12.5 lakh across all its models in the current financial year. In the next fiscal (2010-11), the company is eyeing sales of 15 lakh units. Presently HMSI has a 13 per cent share in the Indian two-wheeler market, the size of which is estimated at 80 lakh units per annum. Around 50 per cent of the bike sales in the country comes from the 100-110 cc segment. Asked on HMSI's plans to set up an all-new manufacturing facility, Nagaraj said, At present, we have a manufacturing plant at Manesar (Haryana) with a capacity of 1.5 million units per annum and we intend to expand its capacity to 1.8 million units per annum. The capacity expansion plan will be achieved in the near future. On introduction of new models, he said, We will be rolling out new models from time to time depending on the requirement of the customers. Right now, we are focused on expanding our range in the 100-110 cc segment and we will also be rolling out upgraded versions of our existing models in the next fiscal. HMSI is also looking to export around 80000 units of its different models in the current fiscal as against 55000 units exported in 2008-09. The company exports its models to Europe, West Asia, Australia, South America, Nepal and Bangladesh. PTI See this story in: The Hindu Business Line New Delhi: Mahindra & Mahindra on Friday said it will foray into the motorcycle segment with a full range of products by this year even as it will take a final call on continuation of its joint venture with French car maker Renault within the next 45 day s. We do have a plan to get into the motorcycle segment. This will happen this year, said Mr Anand Mahindra, Vice-Chairman and MD., Mahindra & Mahindra. We are going to be a full range player. We are simply not going to come out with one motorcycle pr oduct, he added. When asked about the joint venture with Renault, Mr Mahindra said, We will be coming out with a statement within 3045 days (on) how the Mahindra and Logan venture will continue in the future, what is the roadmap. Renault has recently announced to set up its own distribution network to sell the products which will be manufactured from the upcoming Chennai facility, being constructed with Japanese partner Nissan. M&M to enter bike segment M&M to foray into motorcycle segment Rediff India M&M to foray into motorcycle segment Deccan Herald M&M foray The Statesman M&M to foray into motorcycle segment The Financial Express M&M to foray into motorcycle segment The Economic Times M&M to enter motor bike biz Asian Age M&M to foray into 2-wheeler segment The Indian Express | |
| Gouri Agtey Athale The Economic Times Pune: A growing number of smaller Indian companies are setting subsidiaries abroad or are in the process. For instance, Rajratan Global Wires, an Indore-based manufacturer of high carbon steel wires, set up a wholly owned company in Thailand. Indo Schottle Auto Parts, a Pune-based manufacturer of precision engineered components for fuel injection systems and turbo chargers to global Tier I suppliers, is considering Sri Lanka as a destination. There are other manufacturers from the Indore belt which have set up units in Sri Lanka. This outward bound movement on the part of smaller Indian corporates is happening due to the uncertainty over extension of fiscal benefits to export oriented units (EoUs) after March 31, 2011. Under the current dispensation, such units get 100% benefits under Section 10B of the Income Tax Act, which means they pay no income tax. Should the sunset clause come into force from the end of the next financial year, EoUs will have to start paying 33% tax on profits which translates into a price rise of 10-12% on their products. We will not be able to pass that on to their customers, said Indo Schottle Auto Parts CMD Vijay Pusalkar. In effect, it will mean orders will go elsewhere, including to other countries, and units here will face hard times, even closure. Hence his preparations in scouting prospects outside India, something Rajratan Global did nearly 18 months ago. Supporting this view, K Venkatachalam, associate director, tax practice at PricewaterhouseCoopers (PwC) Pune, that with no clarity over the future, EoUs are being forced to look harder at the surrounding region. He, too, accepted that units could move out of the country to locations in Asia-Pacific where the tax regime is more conducive. This could be to countries like Sri lanka, Bangladesh, China, Indonesia, Thailand and the Philippines. Most software companies in STPI units and manufacturing companies with EoUs will shift their operating base if the tax break vanishes from India. The larger software companies may be able to absorb the tax and divert business to the domestic market while taking away the best talent from the smaller companies. In the manufacturing area, fresh overseas investment will go elsewhere, with no tax breaks in India, Mr Venkatachalam said. The worst-case scenario for existing manufacturing units was that they will have to close down, Mr Venkatachalam cautioned. Speaking from first-hand experience, Rajratan Globals MD Sunil Chordia said they began work in India as an EoU. We also looked at locating in an SEZ but eventually found that locating in Thailand was most competitive, he said. For Mr Chordia and Rajratan Global, in a contest between the multiplicity of taxes in India versus a seven-year tax holiday in Thailand, the latter was a hands down winner. We need a GST but found that there was no progress happening on that front and about 18 months ago, our Thai factory began production, Mr Chordia added. He said there were other issues, all related to tax, which made him look for an off-shore location, stating that we need an enabling environment for units to remain competitive. Indo Schottles Mr Pusalkar, who had considered re-locating his EoU plant to Dubai a few years ago, found that the Middle East lacked the environment to locate a precision manufacturing factory. We are serious about investing in Sri Lanka, specially now that they have peace on the island. Industry associations have repeatedly been asking for clarity over the sunset clause. We have suggested that in case of a withdrawal of the benefit, spread it over a few years, not in one shot, Mr Pusalkar said. Sources in government indicated that there is a possibility the government will extend the benefits to EoUs for a few more years. It is not just the auto component sector which will be affected. Sectors like textiles, gems and jewellery, leather, which are manpower intensive industries, are located in EoUs. Withdrawal of the benefit will adversely affect the employment of the millions who work in these sectors, industry players pointed out. TUF for auto parts sector on cards The central government is likely to accept the plea of the auto component sector of setting up a technology upgradation fund. Industry sources said the ministry of heavy industry is planning to set up a technology upgradation fund, like the ones for textiles and shipping, for this sector, too. The size of the fund is expected to be Rs 3,000 crore, with the government likely to borrow the amount at 1% from Japan, and onward lend to industry at 3-4%. As global auto companies set up plants here, they find Indian companies cannot produce what they want. There have been huge advances, globally, in materials, engines... We need to invest to keep up with tomorrow, said an industry source. Copyright 2010, Bennett, Coleman & Co. Ltd. All Rights Reserved" PTI See this story in: Business Standard Jamshedpur (Jharkhand): Adhunik Group of Industries has been in discussion for tie-up with major automobile companies to supply specialised steel and auto components, a top official of the company said. "Adhunik Metaliks Limited, a flagship company of the group, has been in discussion with automakers like Toyota, Honda, Bajaj and Maruti Suzuki to supply automobile parts and steel," President (marketing) of Adhunik Group of Industries, Vijay Kumar told reporters. He said, the technical discussion with Toyota and Honda is completed and discussions for commercial tie-up is in the final stages. Kumar said they have plans to supply specialised steel as well as auto components being produced by the subsidiary companies of the group to the automobile industry. "Similar discussion was in a satisfactory stage with Honda and Bajaj automobile companies while it was in the preliminary stage with Maruti Suzuki," Kumar said. Adhunik in talks with major auto cos The Hindu Business Line The Hindu Business Line Chennai: Tube Investments of India (TII), a leading manufacturer of bicycles, precision steel tubes, cold rolled steel strips and industrial and automotive chains, announced that it has acquired a controlling stake in Financiere C10, part of the Sedis Group of France, for about Rs 45 crore. The Murugappa Group company has acquired 77 per cent of equity of Financiere C10 (FC 10). TII acquired this shareholding directly from the financial investors in FC 10 and a few other shareholders. The management shareholders will continue to hold the remaining shares in FC 10 and be associated with Sedis for a period of three years. Sedis is a leading manufacturer of industrial and engineering class chains in France and possesses a product range covering the requirements of a whole range of industries including the high growth infrastructure sector. According to a press release from TII, the brand Sedis' client list includes Charles De Gaulle airport, Metronet, Cairo Metro, Otis, RATP (Paris Metro), Calcia, Tubelines, British Environment Agency, Birse Civils etc. The turnover of Sedis Group was 37 million for 2008 and the profit after tax was 1.35 million. During the first nine months of calendar year 2009 the revenue was at 21 million and the profit after tax was 0.55 million. Sedis has a presence in almost 100 countries through its vast distribution and sales network. It has two plants in France and a marketing company in the UK. Sedis possesses technology for manufacture of special and engineering class chains and this acquisition will enable TII to access these technologies and make products that are being imported into the country, says the release. Kotak Investment Banking, Mumbai was the financial advisor to TII in the transaction. Tube Investments buys 77% in Sedis The Times of India | |
| PTI See this story in: Business Standard Mumbai: Indian tyre companies said that they want the government to reduce import duty on natural rubber and incentivise making of radial tyres in the upcoming budget. Finance Minister, Pranab Mukherjee is slated to present the Union Budget on February 26. Leading tyre firm JK Tyre said they also expect the Centre to continue with the stimulus packages for some more time. "We seek a correction in duty anomaly through reduction in customs duty on natural rubber from 20 per cent to 7.5 per cent. Alternately, we have suggested an increase in customs duty on tyres from the existing rate of 10 per cent to 20 per cent," Automotive Tyre Manufacturers' Association (ATMA) Director General Rajiv Budhraja told PTI here. Currently, customs duty on natural rubber, the main raw- material for tyres, is 20 per cent, while the customs duty on tyres (the finished product) is 10 per cent, or even lower depending upon preferential or concessional tariff under various regional or bi-lateral trade agreements. If customs duty on natural rubber is not reduced, an increase in duty on tyres (finished product) would also benefit tyre companies, Budhraja said. Further, he added that "the government should earmark funds" to incentivise domestic production of radial tyres for trucks and buses. According to ATMA, rise in radialisation from the present rate of 8-10 per cent to 25 per cent can save fuel worth up to Rs 20,000 crore for the country. Therefore, policy support for radialisation in the commercial vehicle segment should be taken up as a priority area by the government, Budhraja said. JK Tyre & Industries said, "We expect the government to continue with its stimulus packages for some more time to fuel growth momentum in India's economy." "Withdrawal (of stimulus) means price increase of tyres which will, in turn, impact cost of transportation of every product," JK Tyre Director (Marketing) A S Mehta said. Any cost increase would push-up inflation, he said. "Further cost increase would accelerate inflation and that would adversely hit the economy in general," Mehta said. Kolkata-based Dunlop Group's Chairman Pawan K Ruia said the government should cut import duty on natural rubber at 10 per cent as demand for tyres are increasing every day. "If the government likes to promote the auto industry then why not tyres," Ruia asked. On tyre prices, he said "any change in tyre prices is an outcome of change in price of raw materials as well as taxes and duties". A duty-free natural rubber import would enable the Indian tyre industry to be competitive, another tyre maker Ceat said. "If duty-free on natural rubber import is not allowed, the competitiveness of the Indian industry will take a severe hit," Ceat's Managing Director Paras Chowdhary, said. At present, the tyre industry that consumes 57 per cent of the natural rubber produced in the country is facing its worst-ever raw material availability crisis. Tyre cos ask govt to check Chinese dumping The Economic Times Tyre cos call for check on Chinese dumping The Indian Express Pramugdha Mamgain The Economic Times New Delhi: Automotive and consumer durable companies may have to shell out more to buy steel under long-term contracts from domestic metal producers starting April 1. Top Indian steel makers are likely to increase price of the metal by 5-8 % sold under quarterly, six-monthly or annual arrangements on the back of rising costs of coking coal and iron ore, key inputs for steel production. The price of coking coal is likely to increase by 10-15 % in April, traditionally a month during which steel producers enter into supply contracts with their customers or the steel consumers. Majority of steel makers also sign longterm purchase agreement with coal suppliers every April. In April 2009, domestic steel firms had entered into longterm agreement with overseas coking coal suppliers at around $130 per tonne as against $300 per tonne in the yearago period. Japanese steel producers are currently negotiating coking coal prices with global suppliers, which would eventually become the benchmark price for Indian steel companies. Prices of coking coal are likely to be on a higher side next fiscal and so will the steel prices, JSW Steel joint managing director Seshagiri Rao said. He, however , did not comment on the quantum of price increase. Coking coal prices have been facing pressure, partly due to lower supplies after economic slowdown forced many mines to be shut in Australia, one of the top global sources of the mineral. Moreover , demand for coking coal has picked up in China, which is putting an upward pressure on raw material prices, said a Delhi-based steel analyst requesting anonymity. A senior executive at Bhushan Steel, one of the suppliers to top automakers Maruti, Tata Motors and Mahindra & Mahindra, said steel price could be hiked between Rs 2,000 and Rs 4,000/tonne for the April-June , 2010 quarter as demand for the metal is strong. The company makes cold rolled steel and sells a third of its annual production under monthly and quarterly contracts. Cold rolled steel is currently trading between Rs 42,000 and Rs 45,000/tonne. Another private Mumbai-based steel maker, that did not wish to be named, also confirmed it is looking to increase prices of steel sold under long term contracts. Auto cos fear car prices may rise, post-Budget New delhi: The automobile industry fears that Budget 2010 may make cars, both big and small, more expensive by anything between Rs 2,000 and a lakh, reports Nandini Sen Gupta. According to top auto CEOs, the government may roll back part of the stimulus package that helped boost car and SUV sales through 2009-10. Also expected is an upward revision in service tax as well as a 2% hike in Cenvat. But the biggest price push could come if the Budget rolls back the 4% duty cut on big cars. That would mean cars longer than 4 metre in length and with engine sizes larger than 1.2 litre in petrol and 1.5 litre in diesel could get dearer by Rs 12,000 to Rs 1 lakh depending on the price tag. The stimulus announced in December cut duty on small cars from 12% to 8% while prices of big cars came down from 24% to 20%. With the passenger vehicle market totting up 1.3 million units in domestic sales in the first 9 months of the fiscal at a healthy trot of around 23%, government could have a good reason to roll back part of the auto package. Copyright 2010, Bennett, Coleman & Co. Ltd. All Rights Reserved" | |
| The Hindu Chennai: Punjab National Bank (PNB) has entered into a memorandum of understanding with Bajaj Auto for financing commercial vehicles manufactured by the latter. Under the arrangement, PNB in association with dealer of Bajaj Auto, Khivraj Automobiles, has in the first stage identified around 80 persons for disbursing auto rickshaw loans. The State Government will be providing subsidy to the extent of 25 per cent of the cost of the vehicle, subject to a maximum of Rs. 25,000. The Tribune Mumbai: Home and auto loan customers will have to shell out more with several public sector banks, including the State Bank of India, Punjab National Bank and Bank of India (BoI) deciding to end the concessional or limited period loan regime, popularly called teaser rates. The public sector banks, which are offering low interest rates for the initial period of the loan to attract new customers, have decided not to extend the validity of their schemes beyond March. In certain cases, the schemes will discontinue during the course of this month itself. SBI chairman OP Bhatt had said recently that special home and auto loan schemes would continue only till March-end. The SBI had been trying to attract more customers by offering home and auto loans as low as 8 per cent with a limited period offer. As part of the special scheme under My home campaign, the SBI has been offering home loans (up to Rs 5 lakh) at 8 per cent interest rate during the first five years of a 10-year loan. For loans above Rs 5 lakh and up to Rs 50 lakh, the interest rate has been fixed at 8 per cent during the first year and 8.5 per cent during second and third years. Bank of India executive director M Narendra said, "Our scheme is valid till February. We may not continue the scheme post-February." The scheme, he added, was launched for a limited period and the product has served the purpose. Punjab National Bank chairman and managing director KR Kamath yesterday said the bank would take a call on the teaser rates later depending on the market conditions. Meanwhile, the Union Bank of India has said it will withdraw the concessional or limited period loan rates, popularly called teaser rates from February 15. "The scheme was launched at a time when there was no demand in the market. Besides, liquidity was sufficient at that time", Union Bank of India general manager for personal banking G Govindan said while announcing the decision. Liquidity position, Govidan said, would tighten with the central bank raising the CRR to 5.75 per cent in its third quarter monetary policy review announced on January 29. Axis Bank has already withdrawn its teaser home loan scheme two months before the schedule, following the CRR hike by the RBI last month. On the issue of teaser rates, the banking watchdog had said it was concerned that borrowers may find repayment difficult once the interest rates went up. Reserve Bank deputy governor Usha Thorat had said, "Teaser rates is a cause for concern. The banks must ensure that borrowers can service higher rates when rates return to normal." The RBI has also voiced its dissatisfaction on the discriminatory approach adopted by banks in not letting their existing customers benefit from the current low interest rates. | |
| Agencies See this story in: The Hindu Business Line Mumbai: Oil prices eased below $75 a barrel on Friday, due to a firmer US dollar on unhappiness among investors over lack of details from the European Union summit to help debt-laden Greece. US crude for March delivery fell 38 cents to $74.90 a barrel, after settling 76 cents cents higher at $75.28 a barrel on Thursday. London Brent crude for April shed 36 cents to $73.76. | |
| Bloomberg See this story in: The Financial Express Automakers have a duty to act quickly and decisively on safety complaints, President Barack Obama said in his first public comment on Toyota Motor Corps handling of defects that led to recalls of 8 million vehicles worldwide. Every automaker has an obligation, when public safety is a concern, to come forward quickly and decisively when problems are identified, Obama said in an interview at the White House. We dont yet know whether that happened with Toyota. Thats going to be investigated. My hope is that, moving forward, all automakers recognise that their brands are at stake when it comes to safety issues, Obama said. Toyota and US regulators are facing criticism from Congress, auto-safety advocacy groups and vehicle owners for not moving faster on sudden-acceleration reports. Representative Henry Waxman, a California Democrat, has said 19 deaths were linked to the defects in the past decade. The house energy and commerce committee, headed by Waxman, is among three congressional panels that have scheduled hearings on Toyotas recalls and their handling by the transportation department. We dont yet know all the facts, so I dont want to offer an opinion just off the top of my head, Obama said when asked whether regulators or Toyota moved too slowly to recall vehicles. White House spokesman Bill Burton said you bet last week when asked whether Obama still had confidence in transportation secretary Ray LaHood. The transportation departments National Highway Traffic Safety Administration, which investigates vehicle defects and coordinates recalls, was without an administrator for almost the first year of Obamas presidency. David Strickland was sworn in last month. Obamas first nominee for the post, Chuck Hurley, the head of Mothers Against Drunk Driving, failed to win Senate confirmation for the post. Toyota City, Japan-based Toyota will bounce back from its crisis, Obama said. Obviously, Toyota has been an extraordinary automaker for a very long time, and I suspect that they will continue to be, despite this recent glitch, he said. Bloomberg See this story in: Business Standard Paris: Nissan Motor Co, Japans third-largest automaker, said it may need to find a new partner to manufacture its European small cars after Volkswagen AG bought a stake in Suzuki Motor Corp, which supplies Nissans Pixo model. We dont know yet whether that strategy is still good with Suzuki joining Volkswagen, Nissan Executive Vice President Colin Dodge said in an interview. A lot of people believe not, and were thinking about it. Halting the Pixo would leave Nissan without a small, low- cost European model to compete with Fiat SpAs Panda and Volkswagens Lupo in one of the few vehicle categories that is still growing. It would create a new hole in Nissans product planning after Chrysler backed out of a deal last year to supply cars and pickups. That commitment was canceled after Fiat bought a controlling stake in the US carmaker. A spokesman for Suzuki, Takuma Mizuyoshi, couldnt immediately be reached for comment. Volkswagen, Europes largest carmaker, had no comment on whether the German manufacturer would try to cancel the Suzuki-Nissan partnership, according to spokesman Michael Brendel. Yokohama-based Nissan hopes the supply deal will continue and doesnt have the volume or vehicle designs to make European city cars profitably itself, Dodge said. The Pixo, a version of Suzukis Indian-made Alto model, plugged a gap at the bottom of Nissans European lineup when it was introduced in April as government incentives accelerated a shift in demand toward smaller, fuel-efficient cars. Nissan is unlikely to abandon the city-car category if the Suzuki supply ends, Dodge said in the February 10 interview. Affordable entry-level cars are going to become more relevant, and no big car company can afford to ignore that. Wolfsburg, Germany-based Volkswagen plans to make use of Suzukis small-car designs for its own future models and has drawn up 35 cooperative projects, Germanys Manager magazine reported January 21. Suzuki currently supplies Pixos at a rate of about 30,000 a year, Nissan spokesman Gilles Gautherot said. Thats less than half the annual consignment Nissan had said it hoped to negotiate. Frances Renault SA owns 44 per cent of Nissan. Nissans partnership with Chrysler was dissolved in August, less than three months after Fiat helped steer Chrysler out of bankruptcy in exchange for a 20 per cent stake in the Auburn Hills, Michigan-based carmaker. Chrysler was to have made a small car and a full-sized pickup for Nissan, while the Japanese company had agreed to build a compact sedan for Chrysler to sell in South America. Agencies See this story in: The Economic Times Tokyo: Toyota president Akio Toyoda is prepared to testify at US congressional hearings if he is formally asked to do so, a report by Kyodo news agency said Friday. The report cited company officials, who said Toyota was hoping that if Toyoda appeared in person at the hearings it would help revive trust in its vehicles amid growing criticism of the company in the United States. US officials and lawmakers are planning to haul in Toyota officials, including the embattled Toyoda, to explain massive recalls and answer accusations they were slow to respond to accelerator and brake problems. The House of Representatives plans to hold committee hearings with witnesses including Toyota's North America president Yoshimi Inaba on February 24 and 25, with the Senate set to hold a committee hearing on March 2. The Japanese auto giant said earlier Friday that it had been arranging a series of meetings between Toyoda and officials from the US Department of Transportation "around early March." Kyodo later quoted company officials as saying the automaker would change Toyoda's schedule if he was asked to testify at the congressional hearings. Toyota's under-fire chief postpones US visit Hindustan Times http://www.hindustantimes.com/business-news/auto/Toyota-s-under-fire-chief-postpones-US-visit/Article1-507929.aspx Toyota prez delays US trip The Financial Express Agencies See this story in: The Economic Times Tokyo: Toyota said Friday it's planning a new level of disclosure about car problems beyond what the automaker is legally required to reveal as it seeks to rebuild consumer trust. The move comes amid intensifying pressure for the automaker's president Akio Toyoda to testify before the US Congress about safety lapses at hearings scheduled later this month. Presently, the highest-ranking company executive slated to attend the hearing is Toyota's North American head, Yoshimi Inaba. Experts say it's vital that Toyoda appear at the Washington hearings to reverse the perception that the company has been slow to recognize and tackle the safety problems that have led it to recall 8.5 million vehicles. "The final authority needs to be there and explain the situation and say what the company is doing to resolve the problems," said Yoshinobu Yamamoto, professor of international relations at Aoyama University. If the hearing in Washington goes poorly - if Toyota executives come across as aloof or US politicians come down in a way perceived in Japan as excessively harsh - it could even hurt diplomatic ties between the two nations. Relations are already strained over a dispute about plans to relocate a US Marine base on the southern Japanese island of Okinawa. "This is Toyota's problem, but if it's mishandled, it could spread to other areas," said Yamamoto. Japanese media reports say Toyoda will attend the hearings in Washington, but the company declined to confirm that. Toyoda is expected to visit the U.S. in early March to meet with government officials and Toyota employees _ but that would come after the House Oversight Committee hearing set for February 24 and the House Energy and Commerce Committee hearing planned for February 25. Bloomberg See this story in: The Financial Express Former regulators hired by Toyota Motor Corp helped end at least four US investigations of unintended acceleration by company vehicles in the last decade, warding off possible recalls, court and government records show. Christopher Tinto, vice-president of regulatory affairs in Toyotas Washington office, and Christopher Santucci, who works for Tinto, helped persuade the National Highway Traffic Safety Administration to end probes including those of 2002-2003 Toyota Camrys and Solaras, court documents show. Both men joined Toyota directly from NHTSA, Tinto in 1994 and Santucci in 2003. While all automakers have employees who handle NHTSA issues, Toyota may be alone among the major companies in employing former agency staffers to do so. Spokespersons for General Motors Co, Ford Motor Co, Chrysler Group LLC and Honda Motor Co all say their companies have no ex-NHTSA people who deal with the agency on defects. Possible links between Toyota and NHTSA may fuel mounting criticism of their handling of defects in Toyota and Lexus models tied to 19 deaths between 2004 and 2009. Three congressional committees have scheduled hearings on the recalls. Toyota bamboozled NHTSA or NHTSA was bamboozled by itself, said Joan Claybrook, an auto safety advocate and former NHTSA administrator in the Jimmy Carter administration. I think there is going to be a lot of heat on NHTSA over this. In one example of the Toyota aides role, Santucci testified in a Michigan lawsuit that the company and NHTSA discussed limiting an examination of unintended acceleration complaints to incidents lasting less than a second. We discussed the scope of the investigation, Santucci testified. NHTSAs concerns about the scope ultimately led to a decision by the agency to reduce that scope. You say it worked out well for Toyota, I think it worked out well for both the agency and Toyota. In an e-mailed response to questions about possible influence of former NHTSA employees on agency Toyota decisions, transportation department spokeswoman Olivia Alair said NHTSA currently has three open investigations involving Toyota and is monitoring two major safety recalls involving Toyota vehicles. NHTSAs record reflects that safety is its singular priority. Toyota City, Japan-based Toyota on Jan 21 recalled 2.3 million US cars and trucks with a potentially defective accelerator pedals. That followed Toyotas decision in November to recall 4.48 million vehicles in the US and Canada because floor mats might trap gas pedals while they were depressed. Since that recall, Toyotas shares have dropped 17%, wiping out $27.7 billion in market capitalisation. The stock rose 2% to 3,460 yen at the close of trading in Tokyo on Friday. AFP See this story in: Yahoo India Washington: The crisis facing Japanese automaker Toyota has been a gift for joke-makers in the United States as the company recalled over eight million vehicles worldwide for faulty accelerator and brake systems. "Toyota has issued a recall of 8.1 million vehicles whose faulty gas pedals could cause them to accelerate out of control. In their defense Toyota's slogan is "Moving Forward" -- they don't say anything in there about stopping," quipped late night comedian Stephen Colbert on his eponymous show "The Colbert Report." The other night-time US talkshow hosts were quick to jump in, too. "Over the next two weeks, we're going to have the Winter Olympics... They're doing something this year that is going to add a little more excitement. All the bobsleds are made by Toyota," joked NBC host Jay Leno. Comedian David Letterman at CBS similarly couldn't help himself. "Critics of the automobile industry are saying that Toyota executives knew about the problems with the brakes years and years ago. And they're wondering, rightly so, why did they drag their feet? Well, trying to stop the car. That's what they were doing," he said. "Things are dangerous, and I'm coming to work in my car. Here's how scary it is. The navigation lady was actually praying," he laughed. On the Internet meanwhile, fun-making users of micro-blogging site Twitter were keeping up with their professional counterparts. User @evilray posted: "Hey, y'all! Check out my new Toyota keyboaaaaaaaaaaaaaaaaaaaaaa..." The technical problems have become a public relations nightmare for Toyota, one of Japan's greatest corporate icons, after millions of recalls were issued because of "sticky accelerators" that can cause cars to race out of control, and because of braking problems on Prius and other hybrid models. US officials this week said they were also reviewing complaints about steering problems on Toyota's popular Corolla cars. Agencies See this story in: The Economic Times Tokyo: Toyota says it's planning a new level of disclosure about car problems that would go beyond what the automaker is legally required to reveal as it seeks to rebuild consumer trust. Toyota Motor Corp., whose reputation has been battered by recalls of 8.5 million vehicles for gas pedal and brake problems, said it would announce details of the disclosure plan in the near future. Company spokeswoman Ririko Takeuchi said the automaker will disclose problems that are below recall-level seriousness. ``Some consumers are worried, so even if the information doesn't rise to the level of a recall, we are taking this step to restore the company's credibility,'' she said. Reuters See this story in: Hindustan Times Tokyo/Detroit: Toyota Motor said on Friday Chairman Akio Toyoda is planning a US trip early next month but would not confirm whether he would attend Congressional hearings probing the auto-makers safety recalls. US Representative Darrell Issa, the top Republican on the House Oversight committee, has said he would support a subpoena to try and force Toyoda to testify before a Congressional committee. Toyota has recalled more than 8.5 million vehicles globally for faulty brakes and accelerator-related problems. Its profits have suffered, its share price plummeted and its reputation for quality tarnished. Toyota spokeswoman Mieko Iwasaki said in Tokyo the company was making arrangements for Toyoda to visit the US in early March, but declined to comment on whether he would attend Congressional hearings. Issa invited Toyoda to testify and suggested another hearing could be held if the top executive could not make the February 24 session. Hearings are also planned for February 25 and March 2. Japans Asahi newspaper reported on Friday that Toyoda plans to meet US Transportation Secretary Ray LaHood and major lawmakers. Meanwhile, competitors have said they are not going to take advantage from the crisis faced by Toyota. "Toyota's problems are not good for the industry, General Motors North American president Mark Reuss said. The industry perspective on the Toyota recall is that no one likes to see another competitor being put through that." "We have a lot of compassion for what Toyota is going through. We do not take a lot of joy in it," Ford president of the Americas Mark Fields added. Toyota chief plans US trip as Congress seeks answers The Times of India Toyota chief plans US trip The Indian Express http://www.indianexpress.com/news/toyota-chief-plans-us-trip/578961/ PTI See this story in: The Economic Times Chicago: US automaker Ford sees great opportunity for its fuel efficient 'EcoBoost' engine technology for cars in India, which it considers a key market, a top executive said. The Detroit-based firm showcased its Ford Edge 2011 crossover, featuring the EcoBoost engine, at the Chicago Auto Show here. "Customers have embraced EcoBoost technology because of its ability to deliver power and performance with uncompromised fuel economy. The technology has a great deal of opportunity in India," Group VP global product development Derrick Kuzak told PTI on the sidelines of the auto show here. He said the technology is "ideal" for small displacement engines and will provide "exceptional fuel economy and great performance at the same time. In the future, ecoboost could be a great technology for India," he added. Terming India as a "very important and one of the largest growing markets in the world," he said Ford will continue to expand its portfolio in the country. The firm is "pleased and excited" about launching 'Figo', its first small car for the Indian market, he added. "Figo fits right in the Indian market in terms of its affordability," he said. Ford's EcoBoost engine technology, featuring turbo charging with direct injection, was introduced a year ago. Good opportunity for EcoBoost engine: Ford The Indian Express http://www.indianexpress.com/news/good-opportunity-for-ecoboost-engine-ford/578949/ Good opportunity for EcoBoost engine in India: Ford Deccan Herald Agencies See this story in: Hindustan Times Sao Paulo: The Brazilian division of German auto giant Volkswagen issued a recall for 193,620 of its popular Gol and Voyage models due to problems with rear wheels. The company said late on Wednesday that the rear-wheel bearings on the affected units may lack sufficient lubrication, which, in extreme cases, could lead to the loss of a wheel while driving. At no cost to owners, recalled vehicles will undergo inspection, application of grease and, if necessary, the replacement of the bearings, Volkswagen do Brasil Ltda said in a statement. The Gol is the best-selling car in Brazil. Both the Gol and its sedan version, the Voyage, were designed in Brazil and are exported from VWs Brazilian factories to other countries in Latin America. "It's important to note that this recall only concerns some vehicles in the 2009-2010 lot. Cars made after July don't have this lubrication problem. From July to now, all other vehicles are OK," a Volkswagen spokesman said. Volkswagen is the second biggest carmaker in Brazil after Italian group Fiat. Volkswagen recalls nearly 200,000 cars in Brazil Deccan Herald | |
| ECONOMY The Hindu Business Line Mumbai: The country's forex reserves declined for the third consecutive week due to currency revaluation and foreign funds' selling spree in the domestic equity markets. According to bank officials, foreign institutional investors are selling on fears that Indian equities are overvalued and on risk aversion arising out of the uncertainty in the European markets. For the week ended February 5, the total foreign exchange reserves fell by $2.241 billion to $278.714 billion, according to Reserve Bank of India's Weekly Statistical Supplement. According to data from SEBI, FIIs were net sellers to the tune of $219.34 million as on February 5, 2010. In the earlier week forex reserves had declined by $1.983 billion to $280.955 billion. Foreign currency assets In the week under review, foreign currency assets fell by $2.187 billion to $254.175 billion. Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies such as Euro, Sterling, Yen held in reserves. Gold was unchanged at $18.056 billion. SDRs fell by $42 million to $5.082 billion. The reserve position in the IMF fell by $12 million to $1.401 billion. The Hindu Business Line New Delhi: Indian industry has registered a record growth of 16.8 per cent in December, beating all expectations and throwing up the possibility of the country's GDP growth for 2009-10 turning out higher than the 7.2 per cent projected earlier this week. The 16.8 per cent year-on-year increase in the official Index of Industrial Production (IIP) in December has been partly on account of a low base; the same month of 2008 actually saw a negative growth of 0.25 per cent. But even after factoring in the base effect, the recovery is perceptible since around June, following almost three successive poor quarters in the wake of the global economic crisis unleashed in mid-September 2008. On a month-to-month basis (relative to November 2009), too, the IIP growth stood at an impressive 10.9 per cent. The cumulative industrial growth for April-December comes to 8.6 per cent, which is more than the 3.6 per cent for the corresponding three quarters of 2008-09. And with the base effect likely to be pronounced in the coming months as well (due to lower IIP increases in January-March 2009), the current fiscal may well end up with an overall 9 per cent-plus growth figure. Reacting to the December growth figures, the Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia, said that we thought it might be (only) 13 per cent. Both he and the Finance Minister, Mr Pranab Mukherjee, felt that this could result in the GDP growth for 2009-10 topping the Central Statistical Organisation's advance estimate' of 7.2 per cent made on Monday. Sector-wise break-up Among the IIP's major constituents, the Index for Manufacturing grew 18.5 per cent in December (against a 0.6 per cent year-on-year decline in the same month of the previous fiscal), while the corresponding rates amounted to 9.5 per cent (2.2 per cent) for Mining' and 5.4 per cent (1.6 per cent) for Electricity'. Within manufacturing, 14 out of the 17 industries at a two-digit level of classification recorded positive growth in December, ranging from 0.5 per cent and 2.6 per cent for beverages and tobacco' and cotton textiles' to a whopping 44.6 per cent for machinery and equipment' and 82.2 per cent for transport equipment and parts'. The struggling industries included food products' (minus 6.9 per cent) and leather products' (minus 0.1 per cent). For the first nine months of the current fiscal, manufacturing' recorded a growth of 9 per cent year-on-year (against 3.6 per cent in April-December 2008-09), mining' 8.5 per cent (3.2 per cent) and electricity' 5.8 per cent (2.7 per cent). A positive feature of the present turnaround has been the performance of capital goods. This sub-sector within manufacturing, a proxy for investment activity in the economy, grew by 38.8 per cent in December (compared to 6.6 per cent for the same month of 2008) and 11.1 per cent in the three quarters of the fiscal (8.2 per cent during April-December 2008). Likewise, the growth rates in December stood at 21.7 per cent for intermediate goods (minus 8.9 per cent in December 2008), 7.5 per cent (2 per cent) for basic goods, 46 per cent (minus 4.2 per cent) for consumer durables and 3.7 per cent (3.2 per cent) for consumer non-durables. Consumer durables have particularly benefited from the base effect. For the April-December period, production of intermediate goods rose by 12.5 per cent (against a decline of 1.7 per cent in the corresponding three quarters of 2008-09), while these stood at 6 per cent (3.4 per cent) for basic goods, 24.4 per cent (4.1 per cent) for consumer durables and 1.5 per cent (6.7 per cent) for non-durables. | |
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Friday, February 12, 2010
Indian Auto Industry Update February 13, 2010
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