25 Oct 2010;dailypioneer.com:New Delhi: The country’s largest car maker Maruti Suzuki India is planning to ramp up its service centres by a massive 1,500 outlets by 2015 in line with its expansion of production capacity to over 17 lakh units annually. This enhancement is expected to result in additional employment of about 22,000 people by the service network operators. “We expect service load at our network multiply manifold, as Maruti Suzuki scales up capacity to 1.7 million units in coming years,” Maruti Suzuki India (MSI) Executive Officer (Service) Pankaj Narula said. The company currently has 2,784 service points and it is planning to increase it to over 4,200 outlets in the next five years, a jump of more than 50 per cent. Last month, MSI had announced to invest about `1,925 crore to set up a third plant with an installed capacity of 2.5 lakh units inside the Manesar facility. Currently, it is investing `1,700 crore on a second plant at Manesar, having an annual capacity of 2.5 lakh units.
Oilspill on Goa runway as tanker turns turtle, operations hit
24 Oct 2010;hindustantimes.com:Panaji: A tanker carrying 6000 litres of highly inflammable aviation turbine fuel turned turtle on the Goa airport runway, forcing its partial closure and affecting operations. The runway was shutdown for two and half hours last night after the Indian Oil Corporation's tanker toppled on the runway at 2120 hrs spilling the fuel. "The tanker was heading towards civil terminal to refuel the parked aircraft," an Indian Navy spokesman. Goa airport is managed by Indian Navy, which operates its INS Hansa base from here. The spokesman said the incident left the wrecked tanker and thousands of litres of highly inflammable fuel on the runway making it unsuitable for operations. Naval personnel evacuated the tanker driver to safety and took steps to prevent the leaking fuel from catching fire. The runway was closed immediately. The tanker was lifted with the help of a naval crane and the fuel was removed from the runway surface, officials said. The runway is operational now, however with a reduced length, sources said adding, "we are using only 5,700 ft of the 8,000 ft runway". However, due to the reduced runway length, flights have been asked to lessen the load of passengers and baggage and the restrictions are likely to continue for next three days. A part of the runway surface was damaged due to the over turning of the dispenser and it is being repaired, sources said. "The leaked fuel is likely to cause damage to runway surface and naval authorities are investigating the implications," the spokesman said.
24 Oct 2010;hindustantimes.com:Sivaganga, TN: Describing the rise in prices of petroleum products as "unavoidable", Home Minister P Chidambaram on Saturday said that oil companies continue to sell fuel products, except petrol, at subsidised rates. "The rise in prices of petroleum products can not be avoided in developing countries," he said at a function late last night at Karaikudi in his native district of Sivaganga, Tamil Nadu, while noting that India imports 70 per cent of its fossil fuel requirement at present. Nevertheless, the government provides a subsidy of Rs 300 on domestic cooking gas cylinders and Rs 15 per litre of kerosene, he said while inaugurating a State Bank of India ATM at a petrol bunk. In June, the government had freed petrol pricing from its administrative control, allowing state companies to fix rates in line with the cost of production. Participating in a separate education loan disbursal function organised by Indian Bank at Vridhachalam in Cuddalore district on Saturday, Chidambaram said the scheme providing interest subsidy on educational loans would be available in the ongoing 2010-11 academic year as well. Giving away educational loans to the tune of Rs 20 lakh on the occasion, he said the Centre launched the interest subsidy scheme in 2009-10 to help economically poor students take up higher education. He asked students to fully utilise the scheme to pursue higher education. Chidambaram said the UPA government has provided monetary benefit to the tune of Rs 1,24,000 crore to various weak sections of society in the country. This includes farm loan waivers worth Rs 70,000 crore, educational loans totalling Rs 34,000 crore and Rs 20,000 crore of financial assistance for 30 lakh self-help groups. The beneficiaries should be thankful to late Prime Minister Indira Gandhi for her foresight in nationalising the country's banks, the Home Minister said.
23 Oct 2010;business-standard.com:Swaraj Baggonkar & T E Narasimhan: Mumbai/Chennai: Hinduja-promoted Ashok Leyland, the country’s second biggest commercial vehicle (CV) maker, has aborted talks with Japan’s fourth largest auto maker, Nissan Motor Company, for a low-on-cost compact car. Chennai-based Leyland has traditionally been a strong truck and bus making company. It was talking to Nissan earlier this year to build an entry-level car below the Nissan Micra, that would greatly support the Japanese company’s export ambitions from India. At present, Nissan has only the Micra in this segment and is keen on additions, as India’s personal vehicle demand is dominated by compact cars to the extent of 70 per cent. Other markets like Europe are also moving to such cars. Dheeraj Hinduja, the new chairman of Ashok Leyland, said in an interview to Business Standard, “The car project with Nissan is not happening. There is no progress with Nissan on it.” Carlos Ghosn, chairman and chief executive of Renault-Nissan, had stated in March that Nissan was in similar talks with Chinese and Indonesian companies, apart from Ashok Leyland for the car, which could be sold for $5,000 (Rs 2.3 lakh). The Chennai-based company presently wants to limit its focus to its commercial vehicle business, where it is undertaking several projects ranging from development of light to medium to heavy commercial units. This is being done through joint venture companies and in-house. Hinduja added, “(The) Small car segment is much more challenging, especially the technology. If any partner brings in, we will look into it. For now, we are not discussing with Nissan for the project.” Nissan In a e-mail statement, Nissan said, “As we have mentioned earlier, Nissan is seriously exploring to expand its presence and offerings in the cost-centric segment of our industry. We are considering many options and discussing with several partners at this moment of time and nothing has been finalised. Since it’s in a very early stage, we cannot anticipate any final decision.” Following Volkswagen’s entry into Suzuki last year, through a buy-out of nearly 20 per cent equity, questions have been raised on Maruti Suzuki’s car export relations with Nissan, under which Maruti makes and exports the A-star, rebadged for Nissan as the Pixo to the European market. Nissan sources more than 50,000 units of the Pixo from Maruti every year. With its withdrawal, Nissan would be left with just the Micra in European market, which could result in loss in substantial volumes. Volkswagen, which does not have much presence in the cost-effective small car segment, is banking on Suzuki for the same. The German company is said to have outlined ‘dozens’ of projects with Suzuki, pertaining to a variety of areas, including small cars. Meanwhile, Leyland said it was on track to launch light commercial vehicles for cargo and passenger applications under the Nissan joint venture programme, which it had signed in 2008. The first of such vehicles will hit the market in the second half of next year. Nissan has also signed an agreement with two-wheeler major Bajaj Auto for a sub-Rs 2 lakh car but has restricted itself to just marketing initiatives. Nissan is supposed to market the car, which will debut in 2012, in India and abroad.
23 Oct 2010;economictimes.indiatimes.com:Sanjay Dutta:NEW DELHI:Suddenly, black diamond is shining. The Street is bedazzled and finds glamour in an industry that has hitherto been seen only in the colour of the commodity it produced. Why has coal become sexy, considering most of it mined in India is high on ash and low in calorie . The mining methods too, for most, are old and often termed inefficient. Slippages and long-distance transportation are the norm rather than exception. And, the need to remove ash-producing elements only adds to the cost for industries. Dig a little deeper, however , and the picture is different . “Everyone has enjoyed coal by way of electricity, steel, fertiliser, cement. It is only now they are realising the worth,” Coal India chairman Partho S Bhattacharya told TOI. The numbers clearly work for Bhattacharya. India has an estimated reserves of 276.81 billion tonne of coal. With such abundant supplies , the Integrated Energy Policy sees coal feeding half of all energy needs till 2032. Not without some reason, since India produces only 30% of its oil needs and remains 30% short of gas. In 2009, for example, coal accounted for about 52% of the energy basket, while oil and gas made up 41%. Ironically though, India still imports coal as demand outstrips supply. Last year, the US Energy Information Administration predicted the construction of new power plants and an expansion of steel-making industry would triple imports from their 2007 level by 2030. This year, imports are seen at 100 million tonne, up from 80 million tonne in 2009, despite a 8%-10 % growth in production. Most of the import is low ash stuff that is used by steelmakers to blend domestic supplies and bridge supply gaps by power producers. “The Indian coal Industry is shaking off its historical baggage and modernising . But hurdles such as environmental clearances and people-land issues still remain. Coal mining has human interface — communities have to be moved and rehabilitated . So there will always be some resistance. But these are minor bumps compared to the huge upside ,” an analyst with an investment bank said requesting anonymity. If such a huge appetite for coal raises concerns over commitments given in Copenhagen and price competitiveness against imported fuel, Bhattcharya has his prescription ready. “Coal India is setting up 20 washeries with 111 million tonne capacity. All incremental mines of 2.5 million tonneplus capacity will have inbuilt washeries. By 2017, we will produce 300 million tones of washed coal, or 40%, of 646 million tonne estimated output.” This will keep domestic coal competitive. “We understand that coal will be consumed far from prduction site. The increased movement of washed coal will in net terms keep price competitive . One, lesser quantities will have to be freighted which will lower transportation costs. Two, reduced wastage —it now hovers around 5%-6 %. Three, reduced emission and higher efficiency for power plants which will save on technology . Together with a 15% discount on transportation and no substantial hike in prices , our coal will compare very well in price and quality with imports,” Bhattacharya says.
Better margins: Tata Motors' two top dealers move to rivals
22 Oct 2010:economictimes.indiatimes.com:Tata Motors, India’s second-largest automobile company, faces the prospect of a churn in its distribution network with rival companies luring away two of its top dealers by offering better margins. A slow pick-up in sales of Fiat Auto, whose vehicles are distributed in India by Tata Motors may also have contributed to the exits. Pune-based BU Bhandari Auto, which became a Tata Motors dealer more than a decade ago when the automobile major entered the passenger car market by launching Indica, will distribute products of German carmaker Volkswagen , which is eyeing a larger market share in the booming Indian automobile market. The promoter of Bhandari Auto, Shailesh J Bhandari is currently in Germany to get a feel of the operations of his new partner. Also, Delhi-based dealer, A-One , will distribute and service cars from Honda, BMW and Rolls Royce. These two dealers together contribute 5-6 % of Tata Motors’ passenger car sales, according to automobile industry executives . Tata Motors sold 1.3 lakh units for the period from April to September. The Tata Motors spokesman confirmed the exit of the two dealers but said that only seven dealers had left in the last three years. “This has nothing to do with their business or relationship with Tata Motors,” he added. Over the last six months, it has added ten new dealers, taking its total dealership network to 247 as its passenger car sales has been growing at the rate of 44% till September this year, the spokesman said. The company’s new CEO Carl Peter Forster is understood to be overhauling the entire passenger car segment by adding more dealerships to push volumes in a growing market. Some of the existing ones are expanding network. “Margins are improving and in the product schemes offered by the manufacturer, the contribution of the dealers has significantly reduced,” said Vinod Sharma, MD, Fortune Motors, a major distributor of Tata Motors vehicles in Maharashtra. Car sales in India are set to rise 12-13 % in 2010-11 . The Society of Indian Automobile Manufacturers (SIAM) forecast car sales to rise to 1.7 million units in the year to end March 2011. Stagnating sales from Fiat was an issue, said one of the dealers. “There has been stagnant margins with our A-One business which caters to Tata Motors, while they are much higher on our other dealerships. The overall effect is also coming from the Fiat cars whose sales have not grown as expected,” A-One promoter Yadur Kapur said. Sales of Fiat cars dropped 8% to 11,863 cars during the last six months. “When we take up dealerships, we never leave it. However, this is a commercial decision,” said a senior official at BU Bhandari. Multinational companies such as Volkswagen , BMW, Nissan and Audi, which are ramping up their India presence, are poaching dealers of incumbents Tata Motors, Hyundai and Maruti-Suzuki to access central locations in major cities. These players are offering 6-8 % of the price of a car as against 3-4 % being given by Indian majors. Not many new entrepreneurs are venturing into the auto dealership business as it involves heavy overhead costs. The dynamics of the auto dealership business is undergoing a change with companies forcing dealers to dole out freebies leading to major decline in margins.
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