11 June 2009;business-standard.com:New Delhi: Honda Siel Cars launched its first small car — the Honda Jazz — in the capital today. The Jazz falls in the super premium category of the A2 segment which, until now, was occupied by Skoda’s Fabia. Available in three variants, the Honda Jazz is priced in the range of Rs 6.98-7.33 lakh. Market researchers say this super premium price tag, which is around Rs 2 lakh more than Maruti’s Swift and Ritz (also A2 premium segment), occupies a niche segment which sells few numbers. According to one estimate, of the 6,000 units of Fabias sold in the financial year 2008-09, less than 10 per cent would have come from the top-end Fabia compact cars, which cost around Rs 7.39 lakh. “We expect the customer of a Jazz to be an owner of an executive car looking for a second car, which will probably be a compact car. It’s unlikely the Jazz customer will be a first-time buyer. It’ll take time for this premium segment to gain acceptance. We are willing to wait for three-four years for this to happen,” Honda Siel President and CEO Masahiro Takedagawa said. The Jazz, which shares Honda City’s platform, is expected to sell about half as much as Honda City, of which about 2,500 are sold each month. Industry executives say the Honda Jazz’s numbers will remain subdued due to two reasons. First, traditionally, the Indian customer has always preferred a car with a boot. “Since the customer cannot afford a sedan, the choice gravitated towards a hatchback. At Rs 7 lakh, the customer has a range of options from the mid-size cars, beginning with Maruti’s Dzire, the price of which begins at Rs 5.36 lakh,” said one analyst. The other concern, which the company has to address, is the limited range of engine options. According to one market researcher, the petrol version of the Jazz may not sell that much in the market. “Despite all the bells and whistles the Honda Jazz may incorporate, it lacks a diesel engine, which makes the price tag of Rs 7 lakh hard to justify,” said one industry analyst. Maruti’s diesel-powered Dzire models cost between Rs 6 lakh and Rs 7 lakh. Honda Siel plans to launch another small car in the next two years.
11 June 2009;business-standard.com:New Delhi: Reliance Industries Ltd (RIL) has increased LPG supplies to Indian Oil, Bharat Petroleum and Hindustan Petroleum from its twin refineries at Jamnagar, forcing state-run firms to sell cooking fuel cargoes that they had contracted from overseas suppliers. RIL’s production has to be necessarily sold to state-run firms and is not allowed to export LPG. At the beginning of 2009 calendar year, RIL had indicated availability of 2.7 million tonnes of LPG from its Jamnagar refineries, but in May the company indicated that an additional 700,000 tonnes was available, a government official said. “The increase in LPG availability forced cancellation or re-export of planned imports,” he said. “Till now, 200,000 to 300,000 tonnes of contracted LPG has either been re-exported or cancelled. RIL is helping dispose of the contracted cargoes.” India’s total LPG requirement is around 13 million tonnes but state-run refiners do not produce adequate quantities to meet this demand. RIL supplies 2.7 million and the balance is imported. RIL spokesperson could not be reached for comments. The official said RIL had last year told the petroleum ministry and the three fuel retailers that it would cut LPG supplies by up to 1 million tonne to 1.7 million tonne from March 2009. It wanted to crack LPG to produce gasoline (petrol) for export to the US and Europe. Accordingly, the oil firms contracted term supplies of LPG from companies like Saudi Aramco. But the economic downturn and slowdown in fuel demand in the US and Europe led to reversal of plans to produce more gasoline and instead RIL restored the original LPG production. The official said RIL’s second refinery at Jamnagar had added to the LPG production and the company had indicated availability of around 3,80,000 tonnes a month of the fuel from June to August. “The PSUs had to cancel or re-export their contracted LPG cargoes as RIL is not allowed to export the cooking fuel and all of the quantity they produce has to be necessarily sold to the state firms,” the official said. Reliance Petroleum, a subsidiary of RIL, commissioned its new 580,000 barrels per day refinery in December, adjacent to the parent company’s 660,000 plant, making it the world’s biggest refining complex. RIL had at the beginning of 2009 said it would supply 2.693 million tonnes of LPG to state refiners, but shortly thereafter raised the volumes to 2.965 milllion tonnes, including supplies from the new refinery. It plans to build a 85,000 bpd alkylation unit that will process butane to produce alkylates with a high octane number. That should enable the firm to produce superior quality gasoline to tap US and European markets.
10 June 2009;economictimes.indiatimes.com:HOUSTON: Oil prices surged again on Tuesday to a new high for the year with investors pouring money into crude markets as hedge against inflation. Adding to crude's advance was new government data showed an uptick in U.S. demand for gasoline, and a report from oil giant BP PLC that said the world's proved oil reserves fell in 2008, the first drop in a decade. Benchmark crude for July delivery rose $1.06 to $71.07 a barrel in trading on the New York Mercantile Exchange after earlier touching $71.79. On Tuesday, it jumped $1.92 to close at $70.01. As the US currency has lost value over the past several months, crude prices have doubled largely from the influx of cash from Wall Street. Equity markets have rebounded as well on the belief that the worst of the recession is over, and that has helped to pull energy prices higher, said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates. ``That kind of economic optimism easily feeds into expectations that oil demand will be coming back sooner than expected,'' Ritterbusch said. Supporting that view, crude and gasoline held in U.S. storage facilities tumbled last week as Americans took to the road for the summer driving season, the government said Wednesday. But the country is still flush with gasoline and oil, and it is the weak dollar that has driven crude prices higher. Already, there is concerns about how energy prices, while far below last year, may slow any economic recovery. The Energy Department's Energy Information Administration said Tuesday that crude prices will likely average $67 a barrel in the second half of 2009, about $16 higher than the first six months of the year. A month ago, the EIA's price-per-barrel forecast for the second half of 2009 was $55. The EIA also predicted consumers will be paying $2.70 for a gallon of gasoline by July before prices level off. In other Nymex trading, gasoline rose by 3.2 cents to $1.9989 a gallon while heating oil fetched $1.8273 a gallon _ up 2 pennies. Natural gas for July delivery fell 2 cents to $3.71 per 1,000 cubic feet. In London, Brent prices rose in tandem with Nymex crude, gaining 81 cents to $70.43 a barrel on the ICE Futures exchange. Trader and analyst Stephen Schork noted that ``for the thirteenth time in the last 15 sessions, London crude for July delivery posted a new year-to-date high.''
10 June 2009;business-standard.com:Swaraj Baggonkar:Mumbai: Toyota Kirloskar Motors, the Indian subsidiary of the Japanese giant, Toyota Motor Corporation, will make multiple use of the new compact platform its parent company is developing for the launch of a small car in India later next year. Since the company is developing a completely new platform from scratch, it will use it to build a sedan, in addition to other models, which perhaps could be compact cars. Toyota is launching a compact car by the end of next year from its new production facility close to its existing plant in Bangalore, a senior company official said today on the sidelines of the launch of the new Land Cruiser, a luxury sports utility vehicle. Sandeep Singh, deputy managing director (marketing), Toyota Kirloskar Motors, said” “We can make more than just the small car from that new platform. We will bring out a sedan based on that platform, apart from other options.” Experts say the use of a common platform amongst cars brings down the cost of development of a new vehicle substantially. Toyota will be able to position the new sedan at an attractive price, lower than its current model, the Corolla Altis (priced at Rs 9.65 lakh, ex-showroom Mumbai, for base variant), experts said. The company wants localisation content of at least 70 per cent for the small car, which will be ramped up later. It also said today that the decision of having an engine manufacturing plant in India is pending. “Earlier there was a plan of sourcing the engines from outside India, but after putting up the second car plant with such a huge capacity, it does not make sense to not make the engines for the small car here. However, we are yet to take a final call on that,” added Singh. The company has an installed capacity of about 100,000 units at the new plant, where Toyota has invested Rs 3,000 crore. However, the company recently informed that it has reduced its targeted capacity to 70,000 units, following the slump in the auto sector, without any reduction in capital expenditure. Hiroshi Nakagawa, managing director of TKM, said: “All our global (new) projects were frozen due to the meltdown, except the Indian project. The Indian market is showing signs of recovery and we are expecting great potential from India.” TKM was also forced to bring down its production levels by 20 per cent last year, to little more than 50,000 units from the 65,000 units at its current plant, to adjust to falling demand. The company sells four models in India - Innova, Corolla Altis, Camry and Prado. However, with demand slightly better than in earlier months, Toyota is raising monthly production from about 4,000 to 5,500 units. It has set itself a target of selling at least 50,000 units this year. Last year, the company sold 51,800 units. The Land Cruiser, launched today in two versions, is the most expensive vehicle from the company, priced at Rs 81.64 lakh and Rs 83.10 lakh. The model will be brought to India in a completely built unit (CBU) and initially sold through only select outlets in the metros.
09 June 2009;hindustantimes.com:Sumant Banerji:New Delhi: Maruti Alto retained its top position amongst cars for the fifth straight year in 2008-09, but there have been widespread changes in the pecking order beneath it. Nine-year-old Alto’s contemporaries, Indica and Santro, suffered at the hands of its siblings Wagon R and Swift to relinquish the 2nd and 4th positions, respectively. Maruti now has five models in the top 10 and three in the top 5 best selling cars of 2008-09 in the domestic industry. The performance of the cars by and large mirrors that of the companies during the year. While the i10, which was launched late in 2007, has been a success and finds itself in the fifth position, has eaten into Santro’s marketshare which has for the first time in a decade slipped out of the top five. The two major gainers during the year remain the Swift, which is now selling more than some of its lower priced competitors, and the Dzire. The latter is now the undisputed leader in mid size sedans displacing the Honda City and has expanded its predecessor Esteem’s presence in the segment. Maruti, however, also figures prominently in the list of laggards with its Zen Estilo and the once hot selling SX4 losing their sheen during the year. Honda’s Civic also lost its numero uno position in the executive A4 segment to arch rival Toyota Corolla. There are some surprises in the sports utility vehicle segment with the Endeavour and CR-V retaining their top two positions, while new entrant Chevrolet Captiva has captured the third spot ahead of Mitsubishi Pajero.
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