Oil falls below $69 to 8-month low on Europe fears
19 May 2010;economictimes.indiatimes.com:SINGAPORE: Oil prices fell to below $69 a barrel Wednesday in Asia, extending losses to an eight-month low as mixed US crude supply figures failed to stem a two week sell-off. Benchmark crude for June delivery was down 81 cents to $68.60 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 54 cents to settle at $69.41 on Tuesday. Oil has plunged more than 20 per cent from $87.15 a barrel on May 3 on investor concern that efforts to contain Europe's debt crisis could fail and deep government spending cuts will hurt economic growth and oil demand. Oil inventory data from the American Petroleum Institute late Tuesday was mixed. Crude and distillate supplies fell while gasoline stocks rose. Supplies at the key storage terminal in Cushing Oklahoma rose to a fresh record high. The Energy Department's Energy Information Administration announced its weekly inventory data report later Wednesday. ``The recent selling pressure that has gripped the oil market continues to hinge on factors external to oil-specific fundamental developments,'' Barclays Capital said in a report. ``Market perceptions over possible developments of the sovereign debt crisis are set to remain an important pricing factor.'' Traders are closely watching the euro since oil becomes more expensive for investors holding the European currency as the US dollar strengthens. The euro was steady at $1.2183 on Wednesday after dropping to a fresh four-year low of $1.2146 earlier in the session. ``As long as the euro continues to sink like a rock in water, the price of oil will remain on the defensive,'' Mike Sander of Sander Capital Advisors said. In other Nymex trading in June contracts, heating oil fell 1.22 cents to $1.9493 a gallon, and gasoline dropped 1.2 cents to $2.0314 a gallon. Natural gas was down 4.2 cents at $4.300 per 1,000 cubic feet. In London, Brent crude July contact was down 52 cents to $73.91 on the ICE futures exchange.
18 May 2010;timesofindia.indiatimes.com:Oil & Natural Gas Corp, India's biggest energy explorer, said subsidy given to state refiners in the form of discounts on crude oil sales surged in the fourth quarter as higher prices widened revenue losses on fuel sales. State-run ONGC has been asked by the government to pay Rs 5000 crore ($1.1 billion) to cover refiners' losses from selling auto fuels below cost in the three months ended March, chairman R S Sharma said by telephone on Tuesday. That's an almost six-fold increase from Rs 852 crore paid a year earlier, according to a June 24 statement to the Bombay Stock Exchange. "The subsidy has gone up but so has our selling price for crude," Sharma said, without giving details. "We are happy as long as we are asked to give subsidy only on auto fuels." Indian state refiners including Indian Oil Corp, the nation's second-largest, sell automobile and cooking fuels below cost to help curb inflation in the world's second-fastest growing major economy.
19 May 2010;economictimes.indiatimes.com:Nandini Sen Gupta:NEW DELHI: Maruti Suzuki is pressing its vendors to speed up their investment plans as a looming capacity crunch threatens to scupper its plans of growing sales and maintaining share in a hyper-competitive market. India’s largest car maker has designed a new programme under which it is working with vendors to identify fund-raising problems, chalk out investment plans and plan capacity schedules, senior officials told ET. “We have been talking to vendors and telling them that it is time they looked at capacity in a somewhat proactive manner and invested earlier. Generally the tendency of a lot of vendors is that they wait till the demand is actually there and then they put new investments in place. They don’t always trust what the management is telling them. In that situation, we are telling vendors ‘you better start investing now because all indicators are that the market will grow so if you don’t invest now, you will be in trouble and we will be in trouble along with you,” Maruti Suzuki chairman RC Bhargava said. Maruti’s new vendor engagement project was kicked off at a recent vendor conference in Hong Kong earlier this month. Its twin goal — help vendors analyse and use their balance sheet for investments and free bottlenecks in the existing capacity to better manage vendor factories. Maruti is facing a sharp capacity crisis this year. India’s largest car maker produced one million cars last year and has announced plans to increase it to 1.2 million through more efficient production management. But its new assembly, which will add 5.5 lakhs, will be ready only in about 12-18 months. “We are short of capacity in the conventional sense but our production team says they can give up to 12-13% extra capacity over last year,” Mr Bhargava said. Maruti’s programme looks at both the vendor balance sheet as well as their factory lines. Top Maruti officials analysed the balance sheets of 60 key vendors at the conference looking at everything from EBITDA margins to the debt:equity ratio. “We are stressing on the need for building stronger balance sheets so investment needs can be met by our vendors,” said Mr Bhargava. “The company shared its future plans with us and asked us to chart out investment, education, training and production plans to stay ahead of the demand curve,” said Sona group chairman Surinder Kapur, a key Maruti vendor, who attended the Hong Kong conference. The balance sheet survey was followed by a capacity analysis. “We did a thorough check of how many of our vendors were working 24x7 on three shifts,” said S Maitra, managing executive officer (supply chain), Maruti Suzuki. Typically capacity planning in the automobile industry works on a six day, two shift basis with the third shift acting as an emergency buffer. Maruti officials are now “going one-by-one to all those vendors that are having to work 24x7 at current demand levels and trying to work with them to see how capacity can be expanded,” Mr Maitra added. The target is to cover the company’s top 60 vendors in the next three months. “The programme has just started. It will involve us examining our vendor factories to look at processes which be debottlenecked and see where additional equipment needs to be put in place,” said Mr Maitra. Once the company and vendor teams work out the problem spots, investments will follow. Maruti has earlier engaged vendors in lean production and just in time management as well as in quality audits and systems. But this is the first time the company is collaborating with its vendors on capacity and investment issues.
18 May 2010;business-standard.com:Mumbai:Bangalore-based Reva Electric Car Company (RECC), one of the world's most recognised electric car manufacturing companies, may see a change of ownership, with its current promoters holding talks with an international automotive investor for a sell-out. According to VCCircle, a financial news portal, the Maini Group, AEV LLC of California and US-based investors Global Environment Fund and Draper Fisher Jurvetson are nearing a strategic sale of their stake in the company, whose valuation is believed to be around $100 million (Rs 457 crore). The Reva is sold or test- marketed in 24 countries and has the largest deployed fleet on electric cars in the market, with over 3,000 vehicles on the road. Its business model includes vehicle design, development and manufacture, technology licensing and vehicle manufacturing. The company entered into a collaboration agreement with General Motors India (GMI) last year to develop electric vehicles for the Indian market. GMI today said it was on course to launch the electric version of the Spark, being developed by the two companies, by the end of this year. Mumbai-based Mahindra & Mahindra, India's largest SUV maker, had reportedly shown interest in RECC. In an email reply, a company spokesperson stated, "As a matter of company policy, we do not comment on speculation." Despite multiple attempts, Chetan Maini, deputy chairman of RECC, remained out of reach. An email sent to the company remained unanswered at the time of going to press. However, Maini, in a email reply to VCCirlce, stated, "As any growing company in the midst of a very exciting business landscape we are constantly evaluating opportunities that will allow us to scale, innovate and provide the best offerings to the customers. We will, however, not speculate on market rumours". In November last year, RECC forged an agreement with Northern Lights Energy, a provider of infrastructure and services for electric vehicles, for the market of Iceland. The country was also being considered by RECC for a possible assembly plant. Due to its high impracticality under modern day usage, the compact two-seater has failed to generate any significant demand in India. Demand suffered due its high initial cost (the car costs Rs 3-3.5 lakh in Mumbai) and low mileage. The company is, therefore, looking at the licensing segment, like the one with General Motors, in a big way. The company will look to create kit and technology to put into other platforms that GM makes in other parts of the world. About 50 per cent of the business for the promoters will be generated through licensed technology and licensed manufacturing. The company is currently working on the Reva NXR, which was showcased at the Frankfurt Motor Show, and follow-up models such as the sports coupe NXG. While the NXR will be launched in the first quarter of 2011, the NXG will is available from the middle of 2012. The Reva NXR will be a four-seat, three-door hatchback for urban driving. The top speed of this car will be 104 kmph with a range of 160 km per charge. A 30,000-unit per annum plant is currently under construction in south India.
Nissan to sell Leaf electric car for under 30,000 euros
18 May 2010;economictimes.indiatimes.com:LONDON: Japanese carmaker Nissan announced on Monday that the company's Leaf electric car will be sold in Europe for under 30,000 euros. (37000,dollars) after various government incentives. The Leaf, which stands for Leading, Environmentally Friendly, Affordable, Family car, is billed by Nissan as the world's first mass-produced electric vehicle with zero emissions. The car will go on sale in Portugal and the Netherlands in December, and will arrive at Britain and Ireland in February 2011, Nissan announced at a London press conference on Monday. Reservations can be made from July, while the car will be rolled out every major western European country by the end of next year. "Nissan leads the industry by being the first automaker to offer an affordable zero-emission car," said Simon Thomas, Senior Vice President, Sales and Marketing, adding the price will include the cost of a lithium battery. "It's a pure electric vehicle, with no tailpipe emissions and very low running costs." The vehicle will cost 29,955 euros in Portugal and 29,995 euros in Ireland after government incentives. In Britain, the Leaf will sell for 23,350 pounds (27,338 euros, 33,750 dollars) after a state incentive of 5,000 pounds. The price in the Netherlands will be 32,839 euros -- but there will be extra subsidies that will slash the cost by between 6,000-19,000 euros. The Japanese firm, which is 43.4-percent owned by France's Renault, forecasts that electric vehicles will account for ten percent of worldwide car sales by 2020. The five-seater hatchback Leaf has a range of 160 kilometres (100 miles), can be rapid-charged to 80 percent of its battery capacity in 30 minutes, and travels at a top speed of more than 140 kilometres (90 miles) per hour. Nissan added that its electric car will cost around the same as a diesel or hybrid vehicle, like Toyota's Prius.
17 May 2010;timesofindia.indiatimes.com:NEW DELHI: In a sudden development, Rajiv Dube — one of the main architects of Tata Motors' passenger vehicle business — has resigned, surprisingly at a time when the company is getting prepared to play a bigger role in the car market with products like the Nano and new versions of the Indica hatchback and Indigo sedan. The departure of Dube, who was the president of the company's passenger car business unit, also saw Nano creator Girish Wagh moving to a bigger role in Tata Motors, as he now gets charge of manufacturing operations and product development activities of the passenger car business. "Dube has communicated his decision to resign from the company to pursue other interests outside the Tata Group. His request has been accepted," Tata Motors said in a statement. S Krishnan, Sr V-P responsible for sales, marketing and customer support functions of the business, will also now take charge of the Premier Car Division in addition to his current responsibilities. Both he and Wagh will report to PM Telang, managing director of Tata Motor's India Operations. Dube had been with the passenger car division of Tata Motors since the beginning, when it was formed in 1998. After joining the Tata Group in 1983, he began his career in the manufacturing operations of Tata Motors at Jamshedpur. Later, he joined the Tata Administrative Services in 1990 and was assigned to Tata Industries in 1991 before his assignment with the passenger car division in 1998. When contacted by TOI, Dube said he wanted to pursue opportunities outside the Tata group, though adding that not much should be read into his resignation. "I think all good things have to come to an end and you have to move on. It is difficult to keep doing the same things for years. Thus, it is natural for me to explore options of a different nature." Dube, one of the key people to launch the Indica in 1998, has been the force behind the passenger car launches of Tata Motors, including Nano. But while the company has managed to hold on to its dominance in the commercial vehicles space, it still needs to do a lot in the passenger car business. While sales of cars have been on an upsurge recently in line with the growth of the industry, Tata Motors has never really been able to emerge as a very strong marketer of cars in the passenger segment, though emerging a dominant player in the taxi segment. Even with the Nano, the going has not been very smooth after repeated incidents of fire on the car, forcing the company to go in for a thorough probe. Even the company's joint venture with Fiat has met with limited success, and has not been able to really build big volumes despite very price-competitive products.
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