Maruti to hire 3,000 employees for expanded service network
26 Nov 2010;business-standard.com:Sharmistha Mukherjee:New Delhi: In what could be one of the largest recruitment drives in the auto sector, Maruti Suzuki plans to hire 3,000 employees directly in the next four months to support its massive service network expansion. Maruti Suzuki India will set up 200 new company-owned service centres across the country by the end of the financial year, after which it will have over 3,040 such centres. The new recruits will man these centres. Currently, competing carmakers together have only 2,227 service centres across the country, as of November 1. India’s second-largest auto company, Hyundai, has 10,000 employees — a third of Maruti’s. The new recruits will account for over 10 per cent of Maruti’s current workforce of over 33,000 employees. With this expansion, Maruti hopes to have a service centre within 25 km of every Maruti car owner. It will also strengthen its service network, especially in south India.
Pankaj Narula, executive officer (service), Maruti, said, “We expect to sell around 1.2 million cars by the end of the fiscal. To service the increased number of cars and also take care of our existing customers effectively, we have designed a programme to establish 200 centres across the country. This year, the maximum number of service outlets will come up in southern states.”
While 61 centres are being added in south India to take the total tally to 787 by the end of the financial year, 51 are being added in the northern zone. Networks in eastern and western zones are being beefed up by adding 46 and 48 centres, respectively.
The move is significant as Maruti faces tough competition from several international carmakers, which are set to launch new small cars. Toyota will launch the Etios hatchback in January next year and priced at an aggressive Rs 4.3-4.8 lakh, analysts say it could dent Maruti’s Swift.
In December, Toyota is also launching the Etios sedan (priced at Rs 5-5.5 lakh), which will be pitted against the Swift Dzire. Maruti sells about 23,000 units of these two models, which constitutes about a fifth of sales and is key to its bottom line.
Hyundai is working on a new 800cc car that could challenge the domination of Maruti's various low-end models like the Alto and Maruti 800. Even General Motors is working on a small car, but the timeline for its launch is not known.
Maruti, which sells one out of every two passenger vehicles in the country, registered an increase in sales of around 28 per cent in the April-October period. The company sold 715,886 units, compared with 558,332 units in the corresponding period last year.
On the back of robust demand, the company is investing over Rs 3,600 crore to set up two plants at its Manesar facility to increase capacity by 0.50 million units a year.
'ONGC paid over Rs 1 lakh cr since 2003-04 to subsidise fuels'
25 Nov 2010;timesofindia.indiatimes.com:NEW DELHI: State-owned Oil and Natural Gas Corp (ONGC) has paid a phenomenal Rs 105,246 crore since 2003-04 to subsidise auto and cooking fuels. Since 2003-04, ONGC has been subsidising petrol, diesel, domestic LPG and kerosene by giving discounts on crude oil (raw material for producing fuel) it sells to state retailers. The company "has provided a total assistance of Rs 96,711 crore and Rs 8,535 crore during the period between 2003-04 and 2009-10, and April-September 2010 respectively, through price discounts to oil marketing companies," Minister of State for Petroleum and Natural Gas Jitin Prasada said in a written reply to the Lok Sabha. During July-September quater, ONGC sold crude at USD 62.75 a barrel after giving subsidy discounts. Its gross realisation on crude oil sold (pre-subsidy discount) was USD 79.21 per barrel. State retailers Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp sold fuel below imported cost on government dictat aimed at controlling inflation. Petrol price has been freed from government control since June 26 but other three products continue to be subsidised. The retailers now lose Rs 3.85 per litre on diesel, Rs 16.50 per litre on kerosene and Rs 209.94 per 14.2-kg domestic LPG cylinder. During April-September, 2010, oil marketing companies lost Rs 31,367 crore in revenue on selling fuel below cost. Of this, Rs 10,456 crore was made up by upstream firms ONGC, Oil India and GAIL India through price discounts on crude oil and products. Besides, Ministry of Finance has confirmed a budgetary support of Rs 13,000 crore. The budgetary support was less than the Rs 15,683.30 crore that the oil ministry had sought to cover for the public sector oil companies' revenue losses in the first half of the current fiscal. For the full fiscal, IOC, BPCL and HPCL are projected to lose 61,634 crore in revenues on fuel sales.
25 Nov 2010;business-standard.com:Swaraj Baggonkar:Mumbai: Despite pressure on margins, the company wants to maintain its pricing edge by absorbing the rise in input costs Maruti Suzuki India Ltd (MSIL) is not contemplating any price raise, despite a 20-30 per cent surge in raw material prices in recent months. Despite pressure on margins, the country's largest car maker — which sells three out of every five compact cars in the domestic market —wants to maintain its pricing edge by absorbing the rise in input costs, as rivals prepare to expand sales operations and launch new models. Shinzo Nakanishi, managing director and chief executive officer of MSIL, said, "Right now, I am not thinking of any price increase." "We will absorb the raw material price hike as much as possible. Definitely, there is pressure on margin. The competition is tough but because of it, the market is moving. There is always pressure on market share and we will defend it." Maruti's rivals like General Motors and Tata Motors, had earlier signalled that a rise in car prices was on cards. A senior official at General Motors recently said that the company would definitely look at an upward revision in prices in January. Industry watchers say the prices of key raw materials like auto grade steel, rubber and copper have risen sharply over the last eight-nine months, compared to the same period last year. Auto component suppliers are also under pressure. Domestic steel makers have sounded out a hike in prices by three to five per cent in December. Japanese car maker Toyota Motor Corporation is launching its much-publicised compact car, Etios, in India next January. The car is expected to be slotted in the space where Maruti's successful models like Swift and Ritz are sold. In addition, Ford India and Volkswagen are also expanding dealer network to extend the reach of their recently-launched compact cars, Figo and Polo. Both models enjoy an order backlog of more than three months. Nissan Motor India recently added a diesel variant of its Micra compact car, launched earlier this year. Almost 50 per cent of compact cars sold in India run on diesel engines. Nakanishi also mentioned that Maruti would stick to its plan of launching one model every year, in addition to offering upgrades and face-lifts. The company is also working towards launching its new plant at Manesar to address the waiting period. "This year, we should be doing about 1.23-1.25 million vehicles. Then, there will be an addition of 250,000 capacity coming in from Manesar. Then, there will be a third plant, which will add a further 250,000 capacity." MSIL is collectively investing more than Rs 3,600 crore for adding an annual capacity of half a million units, which would take its total capacity to 1.7 million units. Its newer models like Eeco, WagonR, Swift, Ritz and Swift Dzire are facing huge retail demand and according to company executives, all efforts are being made to bring down the waiting period. Maruti sales rose 31.5 per cent in the eight months through October at 628,378 units, against 478,049 units in the corresponding period last year. Nakanishi also said he did not expect the company's exports to breach last year's level of 147,000 units, following a fall in demand in the European nations. Maruti will explore markets of Australia, South-East Asia and South America to make up for the dip. Meanwhile, the contract manufacturing tie-up with Nissan, which forces Maruti to supply 35,000 units of the A-star (rebadged as Pixo) per year, will be valid till 2013.
25 Nov 2010;business-standard.com:Detroit: Ford Motor Co is cutting its debt by $1.9 billion in a bid to strengthen its balance sheet and get itself rated investment grade again. In Ford's tender offer to reduce its automotive operations debt, holders of some $2.55 billion of senior convertible notes due in 2016 and 2036 accepted cash and company stock for debt. That reduces Ford's annual interest expense by about $180 million, the automaker said on Wednesday. Ford borrowed heavily in late 2006, allowing it to avoid the bankruptcies that felled rivals General Motors and Chrysler last year, but leaving it with a heavy debt load. The automaker expects a solid profit in 2010 and has cut its automotive operations debt by about $12.8 billion this year, reducing annual interest expense by nearly $1 billion. Ford also expects to be net cash positive in its automotive operations -- meaning it would have more cash than debt -- by the end of 2010. It would be the first time that this would have happened since the second quarter of 2008. Ford will pay $534 million in cash premiums and on November 30 issue 274 million shares of common stock to convert the notes. Ford has included the stock in its diluted earnings per share since the start of the year. The automaker expects to take a $960 million charge in the fourth quarter because of the offer. There were nearly $3.5 billion of senior convertible notes eligible for the conversion offer. Nearly all of the 2036 notes were tendered as were roughly two-thirds of the 2016 notes. Ford shares were up 14 cents at $15.84 Wednesday on the New York Stock Exchange
25 Nov 2010;dailypioneer.com:Rakesh Bihari Jha:New Delhi: Keeping in mind strong growth in the light commercial vehicles (LCV) segment, which grew even in the face of global financial meltdown, home grown major Tata Motors on Wednesday said that the company is expecting 50 per cent jump in the sale of its Ace family LCVs. 50 per cent jump translates into sales of upto 2.5 lakh units. As the segment has grown even in the face of global recession, this is the pretty reason that companies like Ford, General Motors and Hyundai Motors are planning to enter commercial vehicle segment. “Last year, we sold about 1.6 lakh unit of our Ace family. This fiscal we are targeting upto 2.5 lakh unit, including exports,” said Tata Motors Sales Commercial Vehicles Head Sandeep Kumar. Tata Motors will launch two light commercial vehicles -Venture and Iris-early next year. The Ace family comprises light commercial vehicles Magic, Winger and Ace. These are manufactured at the Pant Nagar facility. When asked about whether the company is planning to expand its capacities, Kumar said : “In the last five years the company has seen its volume growing double fold as a result we keep looking at expanding our capacities.”
Toyota still in 'crisis' one year after recalls: report
25 Nov 2010;hindustantimes.com:Tokyo: The world's top automaker Toyota remains in "crisis" mode a year after being hit by the first wave of more than 12 million recalls, a report said Thursday. Shinichi Sasaki, the board member at the car giant responsible for quality, told the Financial Times, "I don't think the crisis is over. If we step down the level of our efforts at this point in time, it may mean we are sowing the seeds of crisis once again." The automaker, which was heavily criticised for its slow response to the crisis, was actively seeking foreign or female members for its all-male board as it looks to broaden its corporate culture, Sasaki said. He added that Toyota was the world's largest automaker because of recent problems at General Motors and would not "despair" at losing the title. The firm is working to rebuild an image plagued by safety recalls in the past year over unintended acceleration, engine, steering and brake problems. The recalls affected more than 12 million vehicles in total. The crisis prompted US congressional investigations as Toyota was hit with a record 16.4 million dollar fine to settle claims it had hidden accelerator pedal defects blamed for dozens of deaths. It still faces lawsuits in the US. Last month Toyota announced a global safety recall of about 1.5 million vehicles to fix a brake fluid leak that it warned could gradually diminish braking performance. Analysts say Toyota has become more aggressive in catching possible defects as part of a campaign to improve its consumer image, but warn that continued frequent recalls continue to damage its branding as a quality carmaker. Since the crisis Toyota has appointed regional quality control officers, introduced measures to respond more quickly to reports of vehicle problems and has expanded training. Last week it unveiled plans to launch 11 new hybrid models by the end of 2012 as the race to build more environmentally friendly vehicles heats up. The planned vehicles, consisting of all-new and redesigned models, will expand Toyota's hybrid-engine range - which runs on gasoline and electricity - at a time when rivals such as Nissan are developing all-electric vehicles.
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