14 Dec 2011;business-standard.com:Sharmistha Mukherjee:New Delhi: Use non-posh outlets to serve non-metro and rural customers who reflect rising income levels and unmet demand. Car makers are reaching out to consumers in rural centres as high lending rates slow urban demand. Though overall passenger vehicle sales are down over the first eight months of the current financial year, sales from rural markets are up 10 per cent, encouraging automobile companies to strengthen their distribution in non-metro areas. “Market conditions are extremely sluggish. High interest rates have dampened consumer sentiment. Entry-level buyers are deferring purchases,” said Mayank Pareek, managing executive officer (marketing & sales) of market leader Maruti Suzuki India Ltd, while noting the contrast with sales in non-urban centres. Most car companies are responding to this by opening regional sales centres or non-metro sales centres and touch points for specific products, non-posh outlets that keep one or two cars on display. Hyundai Motor India Ltd, second largest seller after Maruti, set up 750 sale touch points to retail its new small car, the Eon. Tata Motors, which has 80 sale touch points for the Nano, in non-metro centres, is working on putting in place another 120 outlets by the end of the financial year. Why in rural? Analysts say rural demand is looking up due to rising income levels and low penetration of passenger vehicles. “There has been a hike in the minimum support price (for produce). Moreover, most districts have seen above-average rainfall,” said Abdul Majeed, partner in PricewaterhouseCoopers in charge of the automobile practice. “Both central and state governments have been pushing a lot of housing schemes in these areas. The rising income levels have boosted confidence among consumers in rural areas.” Though India is the world’s second-fastest growing car market after China, passenger vehicle ownership here is among the lowest in the world, at 12 vehicles for every 1,000 people. While nearly a third of people living in metros own personal transport, the penetration in rural areas is half, at 15 per cent. This has led industry observers to believe a major proportion of growth would come from these areas. “Tier II, III and IV cities are increasingly becoming significant. As many as 60 cities in India will have a population of over a million people by 2020. Our strategy from dealer, distribution, sales and service perspective is to grow aggressively there,” said Michael Boneham, president and managing director of Ford India, subsidiary of Ford Motor Company, USA. Ford India sells four models, with the Figo proving a game-changer for it last year. As much as 60 per cent of Figo sales come from semi-urban areas.
Air India owes Rs 4,170 crore to public sector oil companies
13 Dec 2011;hindustantimes.com:New Delhi: National carrier Air India (AI) owes over Rs 4,170 crore to the public sector (PSU) oil companies in unpaid jet fuel (ATF) bills, minister of state for petroleum and natural Gas R P N Singh said on Tuesday. “As on November 30, total dues outstanding on account of aviation turbine fuel (ATF) supplied to Air India by public sector oil marketing companies is Rs 4,170.5 crore,” he said. Of this, Rs 3,588.2 crore is the principal and Rs 582.3 crore is the interest. Air India owes Rs 2,380.9 crore in the principal amount to Indian Oil Corp (IOC), Rs 635.1 crore to Bharat Petroleum Corp Ltd (BPCL) and Rs 573.0 crore to Hindustan Petroleum Corp Ltd (HPCL). Besides, it also owes an interest of Rs 423.4 crore to IOC, Rs 92.7 crore to BPCL and Rs 66.2 crore to HPCL. “Oil marketing companies have reported that they had requested Air India for payment of dues, failing which they could take appropriate action for recovery of dues, including restriction of supplies,” Singh said. The government has decided to extend credit facility of three months on ATF supplies to provide Air India with some time to complete its financial restructuring exercise which is currently going on, he said.
Our bikes will get more 'accessible': Harley Davidson
13 Dec 2011;business-standard.com: Harley Davidson Inc's chief operating officer Matt Levatich said the company will offer motor bikes that are more "physically and financially accessible" to buyers both in the United States and abroad, but it will continue to keep its manufacturing operations almost entirely in the country. Levatich said at the Reuters Global Manufacturing and Transportation Summit that the company is striving to appeal to a broader array of buyers, from women and minorities in the United States to those in emerging markets. While volume and market share for several of its bikes has grown in 2011, the company's products still appeal to a narrow band of buyers. In the past, our market was predominantly core customers in the United States," Levatich said. "We see an opportunity, not to make [scooter-sized] bikes by any stretch, but to make Harley-Davidsons that are physically and financially accessible for emerging markets, for international markets, for the United States for that matter." The least expensive bike Harley-Davidson offers is priced at about $8,000. Levatich said the company may consider making smaller and less expensive bikes. However, he said the company will continue to do the bulk of its manufacturing in the United States, where it assembles nearly all the bikes it sells in the world. It also does some "complete-knock-down" assembly of motorcycles in Brazil and India due to tariff issues in those countries. To date, Harley-Davidson has taken a largely go-it-alone strategy in places such as China and India, instead of finding a partner to develop or sell bikes. That is partly because the company has been held back by international partnerships before, Levatich said, citing the example of a former Italian distributor which promoted lower-cost Harley sportster bikes over its upper-end models. "We feel we were aided in waiting a little bit and not getting in early with a JV partner that had a different idea of what the Harley brand could be or should be," Levatich said. "Part of the decision to go in on our own was because of the cleanup work we've had to do, a lot of the cleanup work was where we were buying out distributors and resetting the market." If the company should some day sell a bike that appeals only to emerging markets, he said the company would keep its options open on where to build it. But for now, it has no plans to open production plants outside the United States. Levatich said India represents a considerable opportunity for Harley-Davidson bikes -- which he considers to be strictly a "leisure" product -- given the acceptance of motorcycles in that market.
12 Dec 2011;deccanherald.com:Bangalore: German premium automobile manufacturer Porsche, on Monday, announced the opening of its Porsche Centre Bangalore on Lavelle Road. The showroom is its third location in South after Chennai and Hyderabad, and the seventh in the country. “The facility offers close to 4,000 sqft of space, with scope to exhibit three cars. In addition, a 7,000 sq ft area of service space has also been put up on Hosur Road to aid after sales service,” Porsche Centre Bangalore Chief Executive Officer Raghu Chaitanya Y Nayak said. The showroom will house Porsche’s entire product range including the Boxter, 911, Panamera and premium SUV Cayenne in different variants. The cars are made to order, which would take three to eight months depending on the customisation. On India as an important market, Porsche India Director Ashish Chordia said, “In 2010, we sold 134 cars and this year, we plan to complete 500 deliveries. In the next two years, we hope to complete deliveries reaching 3-digit figures.” There are already 70 Porsches across Karnataka, and the new showroom is expected to boost that figure.
12 Dec 2011;hindustantimes.com:New Delhi: The government may soon come out with a scheme urging affluent consumers to volunteer against buying subsidised cooking gas (LPG) cylinders that are currently being retailed at almost Rs 300 less than market rates. The idea is to replicate what happened some years back, when people who could afford it stopped buying food grains from public distribution system (PDS) despite having ration cards. A 14.2-kg LPG cylinder costs Rs 399.26 in Delhi and Rs 398.45 in Mumbai. Oil firms lose about Rs 75 crore per day on selling the fuel below its market price of Rs 686.26. Petroleum ministry officials said that under the scheme, modalities of which are still being worked out, it is proposed to first ask the ministers, members of Parliament, bureaucrats and the senior management of public sector companies to give up subsidised LPG voluntarily. Taking the cue, other sections like corporate honchos and businessmen who can afford market price would then also be asked to give up subsidised LPG. Taking the lead, the minister of state for petroleum, RPN Singh said, “I will be the first person (to give up subsidised LPG) the day the scheme comes into being.” “Subsidised domestic LPG was meant only for the poor and the needy and the rich should take the initiative voluntarily to give up subsidised LPG.” The minister said modalities of how his suggestion can be implemented are being discussed within the petroleum ministry and with stakeholders before it is implemented. One way could be that affluent continue buying subsidised LPG and pay the difference between the market price to the oil companies directly through cheques. The other way would be that the rich start buying the blue-coloured 19-kg cylinders that are currently being sold at market price. Singh said the fuel subsidy bill for 2011-12 fiscal is projected at Rs 1,32,000 crore and such bold moves are needed to cut this down. Besides LPG, diesel is also sold at discounted rates, with the difference between the retail price and the market price being Rs 13.53 per litre, while kerosene is sold at a discount of Rs 29.99 a litre. “We need to do away some subsidies... a lot of people do not need subsidies in LPG,” he said.
Nissan launches diesel variant of mid-size sedan Sunny
12 Dec 2011;timesofindia.indiatimes.com:New Delhi: Japanese car manufacture Nissan Monday launched the diesel variant of its mid-size sedan Sunny, priced between Rs.7.98 lakh and Rs.8.78 lakh (ex-showroom Delhi) with a mileage of 21.64 km per litre. The company thinks the new variant would help in capturing the growing diesel car market in the country. "At a time, when the Indian market is witnessing an increase in demand for diesel cars, Sunny diesel with Nissan technology of high performance and fuel economy will be the right choice for our valued customers," said Kiminobu Tokuyama, managing director and chief executive, Nissan Motor India. The car, manufactured at Nissan's Chennai plant, comes with a five-speed manual transmission with K9K diesel engine developed under the Renault-Nissan alliance. The sedan also sports high levels of active and passive safety features, such as anti-lock braking system (ABS), electronic brake-force distribution (EBD), brake assist (BA), engine immobilizer and airbags, says a company statement. The car is available in two variants of XL and XV. Nissan had launched the petrol variant of the Sunny last September.
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