30 Dec 2008;business-standard.com:New Delhi: Hyundai Motor India (HMIL), the manufacturer of the iconic i10 and i20 compact cars in the country, faces a steep drop in export orders for 2009. “I’m concerned at the low export orders we have got so far for the next year. Since, we contribute to over 90 per cent of the total volume of passengers vehicles exported from India we need help from the government,” said HS Lheem, managing director & CEO of HMIL during the launch of the i20, a premium compact car, in the capital today.
Hyundai’s advanced export orders for 2009 for the first three months, according to the company, stands at 24,000 units, which is over 50 per cent down compared to the exports achieved during the same period in 2008.
Between January and November 2008, HMIL exported about 2.21 lakh cars to over 95 countries from its manufacturing plant in Chennai, which is a 92 per cent growth over the last year. In the face of uncertainty in markets across Europe, which is the company’s biggest export market, Lheem wants the government to extend the benefits under “market-linked focus product scheme ”, reserved for exports to Latin American and African countries.
Under MLFPS and focussed market scheme, car exporters get a duty rebate in the range of 1.5 to 2.5 per cent. This duty rebate is not available for Hyundai’s exports to Europe. Hyundai, recently, cut its three-shift production schedule to two-shift and in the process laid off about 2000 temporary workers at its plants in Chennai.
29 Dec 2008;timesofindia.indiatimes.com:Harit Mehta:AHMEDABAD: Dream car Nano, now parked in Gujarat, may have also found a port in Gujarat? Shapoorji Pallonji, which is building the Nano plant in
Sanand, has put its port project at Simar in Junagadh on fast track. Afcons, a marine infrastructure wing of Shapoorji Pallonji, is poised to sign an MoU with Gujarat Maritime Board (GMB), during the Vibrant Gujarat meet in January 2009, to develop a greenfield port at Simar. With 18.5% stake, Shapoorji Pallonji is the largest private shareholder in Tata Sons Ltd which, in turn, holds 21.91% in Tata Motors. Afcons was given a letter of intent to develop a port at Simar, one of 9 greenfield sites in Gujarat. Shapoorji Pallonji plan to invest Rs 800 crore to develop and handle bulk cargo at the all-weather direct berthing port. First phase of the project will be complete by 2012, following which additional capacities will be built by 2020.
29 Dec 2008;dailypioneer.com:Mumbai: Private air carriers Jet Airways and Kingfisher on Sunday announced reduction in fares following steep fall in Aviation Turbine Fuel prices.
While Jet Airways said it was reducing airfare ranging 15-40 per cent from Monday, Kingfisher Airlines said it would effect fare cut across its network from January 1.”Jet is reducing basic fares ranging from 15-40 per cent across most of the domestic flights with effect from Monday,” a spokesperson said.
29 Dec 2008;Rakesh Bihari Jha:New Delhi: Year 2008 started on a buoyant note for the auto industry as India stunned the world by displaying people’s car — Nano at the Delhi Auto Expo in January. Nobody would have thought that the year, which started on such an inspiring manner would end on such a disastrous note because of global financial meltdown and consequent drying up of auto loans.
Industry body for automobile SIAM, which hoped a growth of 10 per cent in April now expects a decline of 7 per cent at the close of this fiscal as auto sales continued to suffer after July-August because of hardening of interest rates and high inflation figures. Actually, the global meltdown, triggered by the collapse of Lehman Brothers in September caused liquidity drying up across the world and auto and real estate sectors were the worst sufferes in want of loans at affordable rates.
Such is the effect of global financial crisis that Indian automobile companies failed to lure customers to their doorsteps as the latter thought worst is yet to come and chose not to buy cars.
Every car makers, be it Maruti Suzuki India, Hyundai Motors, Tata Motors, Toyota Kirlosakar, Mahindra and Mahindara or premium car maker Honda Siel — have admitted that even 2009 will be a tough year. While MSI reduced its production by 6 per cent in November and may further cut the same if uncertainties continued, its competitor Hyundai Motors also said the company is going to reduce three shifts to two from the next week to fight slump in demand.
But the recession in the world and its affect on Indian markets is not holding auto companies to launch new products as Hyundai Motors will be launching its five-door hatchback “i20” on December 29.
Tata Motors’ Jamshedpur plant has not functioned in better part of December to avoid inventory pile up, while Toyota Kirolskar said they have cut 30 per cent of its production in December and may further cut the same in next year also if demand doesn’t pick up.
Honda Siel Cars decided to reduce production at its Greater Noida plant in view of the negative growth in the Indian automobile industry. The company also postponed capacity expansion at its second plant in Tapukara, Rajasthan.
But the year will also be remembered for acquisition of British brands Jaguar and Land Rover for $2.3-billion in March by Tata Motors and launch of Swift D’Zire in March and A-Star in November by Maruti Suzuki India.
It was an eventful year for Maruti Suzuki not only because the company completed its 25 years of existence on Indian roads in December, but it also sold its one-millionth Alto to Indian customers.
The year witnessed the launch of superbikes in the country. While Italian superbike major Ducati launched its products priced between Rs 15 lakh and Rs 50 lakh, Suzuki did not lag behind and introduced its iconic superbikes, the Hayabusa (1300cc) and cruiser Intruder M1800R in the price range of Rs 12.5 lakh .
Even Yamaha India wisely changed its course and launched its much awaited 1000 cc R1 and 1670 cc MT01 in India in a price range of 10.5 lakhs.
27 Dec 2008;economictimes.indiatimes.com:Mayur Shetty:MUMBAI: India, which has the lowest motor insurance rates in the world, will continue to enjoy cheap cover in the coming year as well. Thanks to a
slowdown in auto sales and the entry of new joint ventures eager to grow their marketshare, insurers admit that pricing will remain under pressure next year. At present, the overall cost of buying insurance for a private car in India is a little below 3% of the value of vehicle. Internationally, the cost of insurance cover is closer to 5% on an average but varies greatly, depending on the individual’s driving history. For Indian companies, the margins were even lower considering that they pay huge commissions to auto dealers and other agents. Given the sharp fall in underwriting margins, some companies were hoping that prices would be maintained or even hiked.
However, in recent months, new companies have been aggressively quoting rates in a bid to increase marketshare. In the next few months, more new entrants, including State Bank of India’s joint venture with IAG, Raheja QBE and Universal Sompo, will enter the fray. Given that the Indian non-life market is turning out to be dominated by motor insurance, all companies will have no choice but to grow their motor portfolio. The entry of online aggregators — insurance brokers who provide competitive quotes from various companies on the net — will also put pressure on pricing.
According to Future Generali India MD & CEO Deepak Sood, motor underwriting margins are already down. But he admits that pricing pressure is likely to continue. “New entrants are likely to quote aggressively. Also, if there is a slowdown in auto sales in the last quarters, auto manufacturers may start looking at insurance incentives again. A couple of years ago, free insurance for new cars was very popular with the dealer, the manufacturer and the insurance company subsidising the cover.
Another development that could possibly lead to cheaper cover is the additional freedom that insurance companies will have in designing motor policies. This dispensation allows companies to increase the deductible — the share of claim that has to be borne by the insured. By asking the insured to accept a deductible, of say Rs 5,000, the insurance company can substantially reduce its claims and administrative costs and in return, charge a lower premium. There is also a possibility that in order to increase the marketshare, companies may start offering products with add-on covers without any additional charges.
27 Dec 2008;business-standard.com:Mumbai: Hyundai Motor India (HMIL), a wholly-owned subsidiary of South Korea’s Hyundai Motor Company, today announced a 20-25 per cent cut in production, starting December 29. At the same time, the company said it would increase prices across modles by a minimum of 2 per cent in January.
Almost three weeks ago, the company had slashed vehicle prices by up to Rs 44,792 on account of the 4 per cent reduction in the central excise duty.
H S Lheem, managing director of HMIL, said, “We tried to absorb whatever increase was there in various categories but we cannot take it anymore. We are not in a position to avoid the rise and hence we will pass it on to the consumer”.
The firm sells seven models currently in India in the price band of Rs 2.67 lakh-Rs 16.97 lakh (ex-showroom Mumbai).
Other companies who have also declared price hikes in January include Japanese car makers Toyota and Honda. Both companies have stated that high cost of import, thanks to the weakening rupee, has forced the upward revision in prices.
On the output reduction, the company said its plant in Sriperumbudur near Chennai will witness a cut in production shifts from three to two as demand has slackened.
The company will, however, go ahead with the launch of its latest model, i20, which is also scheduled for December 29.
“We are cutting production at Chennai as demand has declined. We do not see any major change in demand until the second half of 2009. Banks have cut rates only marginally but more action is required for demand to pick up,” Lheem said.
However, he did not specify till when the company plan to cut production.
Although HMIL recorded a fall of 23 per cent last month in sales, the company was so far thought to be secluded from the demand slowdown in the domestic market as its models, including i10 and Santro, continued to gather strong response.
The company has also downsized its sales target for the financial year by 7.5 per cent to 490,000 units, including exports, as compared to 530,000 units projected earlier. Company officials refused to give details of sales target for 2009.
“We may not be able to post a significant increase in sales in the first half of next year as demand is expected to remain sluggish but the second should see an upsurge,” said Ashok Jha, president, HMIL.
i20, to be launched on Monday, will be available in diesel and petrol options. It will be a premium hatchback model that will be costlier than the Getz.
