07 July 2008, Lesie D'Monte; business-standard.com: Pune: Volkswagen, Europe's biggest car maker, has sold around 10,650 passenger cars in the first half of this calendar year in the country, and expects to close the year with a sale of 20,000 units."This implies 69 per cent growth in volume sales in India, which is a very important market for us. Our intent is to have at least a 10 per cent market share in the coming years," asserts Jochem Heizmann, member of the management board, Volkswagen. He was here to conduct an employee group meeting, besides inspecting the progress and conducting "detailed technical discussions" at the company's Chakan plant in Pune, which is expected to start production by July 2009 (the other is in Aurangabad that assembles the Skoda family of cars). The plant has an annual production capacity of 110,000 cars. The company has invested €580 million (around Rs 3,600 crore) in the country so far. This includes product-specific investments, besides the capex for the Chakan plant and building of a dealer network. The company has around 15 major dealers currently, and plans to increase the number to over 100 by 2010. At present, the auto major is only catering to the domestic market, and has no plans for exports at least for the time being. The ‘Polo' and Skoda Fabia models are expected to drive volumes for the company, while the ‘UP' models (when introduced) are expected to be an answer to the low-cost cars in India, including Tata Motors' ‘Nano'.
06 July, 2008, Aman Dhall & Dheeraj Tiwari; economictimes.indiatimes.com: NEW DELHI: Petro dollars are now finding their way into India. Surprising it may sound but High Networth Individuals (HNIs) and financial institutions (read sovereign wealth funds) in the Middle-East are now routing their money to India through private equity firms.
According to sources in the private equity space, Middle-East based investment houses such as Global Investment House (Kuwait), Abu Dhabi Investment Authority (ADIA) and Dubai Investment Group (UAE) are in talks with various India-focused private equity firms to invest in their funds. In fact, the investments from the Middle-East in the last six months has seen a whopping surge of more than 300%. Already Anil Dhirubhai Amabani Group (ADAG) holding, Reliance Communication, is in talks with global private equity and Middle East sovereign wealth funds, on sourcing capital for the proposed MTN deal.
With the International Monetary Fund (IMF) expecting oil and gas exports to bring in $940 billion to the region this year, private equity players are expecting a windfall of petro dollars in the country. "The Middle East funds are growing very rapidly, thanks to the petro dollars. All these investment houses have deep pockets. The free fall of dollar has made these private equity firms in the Middle East diversify their risks and there is a greater propensity to invest outside the US, where traditionally they've been investing," a source told SundayET.
Funds from Middle-East countries such as Oman, Abu Dhabi, Qatar and Dubai are currently on a lookout for Indian PE companies which have exposure in realty, infrastructure, healthcare, retail, and education sector. "It is not only the existing funds but personal funds, supported by HNIs in countries such as Brunei, the United Arab Emirates, Kuwait and Oman, which are looking to tap opportunities in India," the source said.
06 July, 2008, Mythili Bhusnurmath; economictimes.indiatimes.com:
Hum do, hummer do? In case you’re wondering, no, that’s not a typo! It’s just a wacky Sunday morning take on how the Tatas or the Mahindras could tweak the ubiquitous hum do, hamare do family planning slogan if they buy Hummer, General Motors’ (GM) outsized military vehicle adapted for civilian use!
Sadly even as the West’s love affair with big cars, the bigger the better, seems to be waning, ours seems to be gathering steam. Or so it would seem going by news reports of the dramatic surge in sale of large cars in India even as the West is fast ending its obsession with them.
Why else would GM think the Tatas (according to unconfirmed reports) or the Mahindras might be interested in a model that is finding few buyers even in the developed world? The Hummer is notoriously fuel-inefficient — it gives only 14 miles a gallon — while its size of 16 feet long and 7 feet wide, wider than most Indian roads, makes it completely impractical for Indian conditions.
One reason, of course, is that Tata Motors have just bought two iconic brands, Jaguar and Land Rover and might have appetite for more. Another is that changes in consumer behaviour in response to spiralling oil prices and greater concern for the environment, so much a part of the emerging consumer landscape in the West, are yet to be seen in India. Spiralling prices of petrol — up to $4 a gallon — are ‘changing consumer behaviour in the US and rapidly,’ says GM’s CEO Rick Wagoner.
But there’s little sign of anything similar happening here. On the contrary! Not only are large cars widely regarded as a status symbol — owner’s pride, neighbour’s envy, to borrow the famous Onida TV ad — concern for the environment is noticeably absent.
The net result is that even as car sales, especially of big cars, has fallen in the US, we are seeing exactly the opposite here. In the US sales of SUVs and pick ups sales slumped to 22.3% of total retail sales in May 08, down from 37% in late 2006 while oil demand is expected to shrink by 330,000 barrels a day as the US obsession with driving fades. The number of miles driven in March 2008 fell for first time since 1979.
The US is not alone. In the UK registrations of 4x4 vehicles tumbled more than 18% in May this year, suggesting Europeans are joining the headlong scramble out of large gas-guzzlers seen in the US. Meanwhile, registrations of the smallest, “mini” segment cars were up 120% year-on-year in May. Daimler’s diminutive Smart cars were one of Britain’s fastest-growing brands last month, with sales up 147% year-on-year.
The main problem is most of us as individuals are not concerned with larger societal needs. There is also no social opprobrium attached to those who pollute. Rather there is admiration for those with big cars. The tragedy of the commons is never as fully played out as in the context of the auto industry.
World oil markets to remain tight until 2013: IEA chief
05 July, 2008; economictimes.indiatimes.com: BERLIN: International Energy Agency chief Nobuo Tanaka has predicted that world oil markets will remain tight until 2013, according to an interview with the German economic daily Handelsblatt.
The market willl initially relax from now until 2009/2010 due to a foreseeable increase in supply brought about by new production sites, said Tanaka who is the IAE's executive director.
But the supply will then drop and demand increase, in particular in developing countries, he added in the interview due to be published on Monday.
Tanaka observed that some countries such as Russia were taxing foreign companies heavily.
"This discourages investors," he said, adding that some state oil companies should dedicate a part of their revenue to social measures and investment in production.
On consumption, the IEA chief said he was against the lowering of taxation on petrol products because this would send the "wrong signal" on the subject of the battle against waste.
The price of oil is currently at a historic high at close to 150 dollars a barrel, an increase of more than 100 percent in the past year.
04 July 2008; timesofindia.indiatimes.com: BANGALORE: 'No Stock' boards and empty petrol bunks. Relaxed employees of fuel stations in Bangalore gestured to vehicles driving in on Thursday that there's no supply. Several bunks across the city went dry on Thursday. While many outlets did not have stock, several did not have the 'normal' petrol, forcing people to buy 'premium' fuel. According to a petrol bunk manager near Jayanagar 4th Block, there has been no fuel supply for the past three days. This bunk, among the highest-selling IBP outlets in the state, used to get around 20 kilolitres of fuel every day. With the severe scarcity, the bunk has been promised at least 10 KL, a 50% drop in supply. The estimated loss is more than Rs 3-4 lakh per day and they are requesting the company to at least provide 50% of the supply, he said. The same situation across many bunks forced consumers to flock to outlets which had some stock. Though some bunks didn't display the 'No Stock' board, they still turned customers away. According to Bhushan Narang, president, Karnataka Petrol Dealers' Association, with oil companies not supplying enough fuel, the bunks are closing once the stocks are over. "If situation persists for some time, we might adopt a 7 am to 7 pm business policy and will sell fuel till the prescribed stock for day gets over," Narang said. He explained that there is a demand for about 5 lakh litres of fuel per day but the oil companies are supplying only about 3-3.5 lakh litres, an almost 30% reduction. As the demand is growing due to panic buying among consumers, supply is being reduced. This shortage may lead to rationing of fuel in the city.
