02 Sept 2011;business-standard.com:New Delhi: Passenger vehicle sales in the domestic market continued to show a downtrend, with 10 of the 19 major automobile manufacturers recording a decline of around eight per cent in sales last month at 178,442 units, as compared to the 193,371 vehicles sold during the corresponding period last year. This is the second time this year that passenger vehicle sales have fallen amid negative consumer sentiments, spurred by hikes in lending rates and increased fuel prices. Data available with the Society of Indian Automobile Manufacturers shows passenger vehicle sales last month registered the sharpest drop in over three years, falling by 8.95 per cent to 183,657 units. Abdul Majeed, leader, automotive practice, PricewaterhouseCoopers, says liquidity concerns persist. “Banks are not willing to lend, interest rates are high and there are fears they may go up further. Latent demand is there, consumers are postponing purchases,” he notes. “With new launches around the festive season, the market may revive. But growth is will be in single digits this fiscal.” Industry sales numbers were dragged down with three leading manufacturers — Maruti Suzuki India Limited (MSIL), Hyundai Motor India Limited (HMIL) and Tata Motors. They posted a drop of 16.8 per cent, 6.7 per cent and 33.3 per cent respectively. MSIL, which accounts for around 40 per cent passenger vehicles sold in the domestic market, recorded a 16.8 per cent decline in sales at 77,086 units. The Delhi-based company had sold 92,674 cars in August last year. Its bread-and-butter small-car segment posted a whopping 21 per cent decline in volumes, with sales of Alto, M800, WagonR, Swift, Ritz, A-Star and Estilo sliding to 53,539 units. MSIL said the disruption in production at its Manesar plant last month-end adversely impacted its August sales. “The Swift, SX4 and A-star are being manufactured at the Manesar plant,” it said in a statement. HMIL registered 6.7 per cent decline in domestic sales at 26,677 units. Arvind Saxena, director (marketing and sales), HMIL, says the market continues to be tough and he sees no immediate signs of recovery. “The rising fuel prices and interest rates have been instrumental in this sluggish market trend.” Interestingly, both for MSIL and HMIL exports showed an uptrend. While exports grew by 18.5 per cent for Maruti at 14,356 units, the country’s largest exporter of passenger cars Hyundai too posted 10.5 per cent increase in overseas sales at 24,353 units. For Tata Motors, which had stalled production for two weeks in August on account of maintenance and “rationalise and align inventory”, sales dipped by a third to 16,829 units. Wholesale volumes dropped across the Indica and Indigo range. Small car Nano recorded a decline of 85 per cent in sales at 1,202 units — the lowest since November 2010 when the company has sold a mere 509 units. Smaller manufacturers like General Motors and Toyota Kirloskar Motor (TKM) posted strong growth numbers on back of new launches. Of the 9,050 units GM sold, 50 per cent of the volumes came in from the Beat, a diesel version of which was introduced in late June this year. The Etios and the Liva accounted for 47 per cent of sales for TKM. Honda Siel, too, grew volumes by 25 per cent, driven by sales of the sedan City which had a price cut of up to Rs 66,000 recently. City sales stood at 5,819 units in August.
02 Sept 2011;timesofindia.indiatimes.com:Pankaj Doval:NEW DELHI: The fight between Mercedes and BMW has entered a different zone. The German luxury car makers are not only slugging it out for customers, but are also engaging in a verbal duel as they fight hard to protect their turf. After losing the luxury market leadership position to BMW in 2009, Mercedes has accused the fellow German brand of engaging in discounting and model stripdowns to gain volumes and numbers. BMW India president Andreas Schaff was quick to dismiss the view, and said the company has bagged the top position on the strength of its brand and products . "Also, it is wrong that we resort to discounting to gain volumes." Mercedes has a different take. "If I talk about my rivals, mainly BMW, their path to leadership has been built on discounting, model stripdowns and low-entry cars. This is not what Mercedes does. We are clear on maintaining our product quality and brand, while having an aggressive pricing," Debasis Mitra , director (sales & marketing ) of Mercedes Benz, said. BMW had gained significant volumes when it brought in a 'corporate edition' version of its 3-Series sedan into the retail market, which was priced relatively lower than competitors but lacked certain features like sunroof and its trademark on-board interface 'i-drive' . Schaff said this did not mean stripping down the model in any way but rather tuning them to what a section of customers wanted. Mitra said Mercedes did not believe in selling models that have luxury features missing. "A stripped down model really does not work for Mercedes and the luxury customers ." He added that Mercedes was not there in certain segments like the mini SUV category (where BMW has the X1) that gave rivals an edge in volumes . "Therefore it is unfair to compare the companies in terms of absolute numbers till the time we have a full portfolio ." In 2009, BMW drove to the top position by selling 3,619 cars against 3247 of Mercedes. The company repeated this in 2010 when it sold 6,246 units against 5,819 by Mercedes. Merc brings new version of C-class: Mercedes Benz launched an advanced version of its flagship sedan C-Class , pricing the car at Rs 29.79 lakh for petrol and Rs. 32.30 lakh for diesel (ex-showroom , Delhi). The company is planning to introduce three to four new products, comprising upgrades and new variants of the existing models, within the next two months, Debasis Mitra, director (sales & marketing), said.
Maruti aims to start ops of 2nd unit at Manesar in two days
01 Sept 2011;deccanherald.com:New Delhi/Manesar: Amid an ongoing tussle with its workers at Manesar facility, the country's largest car maker Maruti Suzuki India (MSI) today said it aims to start operations of the second unit in the plant within the next two days, thereby advancing it by almost a month. In the meantime, workers from various factories in the Gurgaon-Manesar-Dharuhera belt today held a protest rally in support of their counterparts at MSI's Manesar plant and condemned the actions of the company management for forcing its staff to sign a 'good conduct bond'. "Maruti Suzuki may commence operations at its second Manesar plant in a day or two. The company's engineers are working practically 24x7 to bring the second plant on stream. The second plant was planned to be commissioned by late September," Maruti Suzuki India (MSI) said in a statement. The second plant at Manesar has been set up with an investment of nearly Rs 1,700 crore, it added. "Since the company is short of manpower at this stage, starting operations at this second plant will be a shot in the arm for the company," MSI said. With no solution in sight to the ongoing stalemate between the management and workers, the company is hiring contract workers to run its operations. "Today, Maruti Suzuki further strengthened the production activities at the Manesar plant as it hired more skilled and experienced people yesterday. A fresh batch of 180 experienced and ITI trained workers joined the production activities this morning," the firm said. The company today rolled out 100 cars from the facility, a company spokesperson said. Yesterday, the company had brought in 120 ITI trained workers to the Manesar facility. In addition, it has already deployed 50 engineers from the company's Gurgaon plant and around 290 supervisors for production activities at the plant. "In all, the company now has 680 trained and experienced people available for production. All these people are being deployed to start and scale up production at the plant," the statement said. MSI will continue the recruitment drive for trained workers to normalise production in coming days, it added. Meanwhile, 1,500-2,000 workers assembled today at the gate of the Manesar facility to support the MSI employees and held a protest rally. The agitation in the industrial belt has been spearheaded by All India Trade Union Congress (AITUC), the Centre of Indian Trade Unions (CITU) and the Hind Mazdoor Sabha (HMS). Workers from various facilities such as Suzuki Powertrain India, Rico Auto and Omaxe Auto joined the stir.
01 Sept 2011;deccanherald.com:New Delhi: For the second time in one month, state-owned oil firms today cut jet fuel, or ATF, price in line with softening of rates in the international markets. Aviation Turbine Fuel (ATF) price at Delhi's T3 airport was cut by Rs 429 per kilolitre (kl), or 0.75 per cent, to Rs 56,260 per kl from today, an official of Indian Oil Corp, the nation's largest fuel retailer, said. The companies had from August 16 cut jet fuel rates by Rs 1,156 per kl or about 2 per cent. Jet fuel makes up for 40 per cent of an airlines' operating cost. ATF in Mumbai, home to the nation's busiest airport, will cost Rs 446 per kl less at Rs 56,978 per kl from today as against the old price of Rs 57,424 per kl. No comment could be immediately obtained from airlines on the impact of the price reduction on passenger fares. ATF prices vary from airport to airport, depending on the local sales tax or VAT. IOC and its sister public sector retailers, Hindustan Petroleum Corp (HPCL) and Bharat Petroleum Corp (BPCL), revise jet fuel prices on the 1st and 16th of every month, based on the average international price in the preceding fortnight.
Pay Rs 45 per month more in Delhi for PNG from today
01 Sept 2011;timesofindia.indiatimes.com:NEW DELHI: Indraprastha Gas Ltd (IGL), the city's sole supplier of natural gas, on Wednesday raised the price of fuel piped to households in Delhi by Rs 3 per unit, an increase of roughly 16%. The increase is estimated to push up the monthly cooking bill of a household with PNG by Rs 45 or so, assuming an average consumption of half unit of gas per day. This still works out some 2.5% cheaper than a 14-kg cooking gas cylinder that costs Rs 399 in the national Capital. Piped natural gas, or PNG as it is commonly called, in Delhi will cost Rs 22 per unit from Wednesday midnight against Rs 18.95 earlier. This rate will be charged for up to 30 units of gas consumed in two months. Beyond this limit, IGL will charge Rs 34 for each unit. Till now, consumers were being charged Rs 18.95 per unit for 45 units in two months, and Rs 26 per unit beyond that limit. Due to higher taxes in UP, PNG will cost Rs 23.50 per unit for 30 units in two months and Rs 34 per unit beyond this limit in Noida, Greater Noida and Ghaziabad. Now, PNG costs Rs 20.42 and Rs 26 per unit, respectively, in these downtowns. This is the second rise in PNG price this year. IGL had raised PNG price by Rs 2.10 per unit on January 1. The company has raised price of CNG, or gas used for fuelling cars and buses, by Rs 2.30 per kg in four installments. The steepest hike was of Rs 1.25 per kg on January 1. IGL MD Rajesh Vedvyas said the company is buying more and more gas imported in ships, which costs nearly three times the gas produced from domestic fields. Increased demand for the green fuel is forcing IGL to buy imported gas, especially to make up the shortfall in supply from Reliance Industries Ltd's showcase fields off the Andhra coast. ToI had on January 14 reported that cost of cooking and daily commuting in Delhi may rise periodically through the year since IGL was likely to raise prices some 8% as its dependence on imported fuel increases in the face of a 20% year-on-year growth in fuel demand. ToI had said IGl would raise retail price of the fuel sold to buses, taxis, autos and private vehicles by over Re 1 a Kg every three months or so. By December, then, CNG price will go up by over Rs 4 a Kg, or about 7%-8%. The increase is inevitable because the quantity of gas under government control earmarked for the company is insufficient to meet the growing demand. At the same time, supplies designated from the Andhra offshore fields of Reliance Industries too have dropped. Unless the government provides more domestic gas and Reliance restores supplies to the stipulated level, IGL will have to raise retail to stay in black and keep expansion plans on track. More and more vehicles are switching to the green fuel, which is 62% cheaper than petrol and costs 23% less than diesel at present price points. According to government documents, IGL is buying gas imported in ships (liquefied natural gas or LNG) which costs more than double that of the fuel from domestic fields. The Centre has set a base price of $4.2 per unit, excluding taxes and transportation charges, for gas from Reliance and domestic fields of state-run companies. In comparison, imported gas costs over $12 per unit, especially from international spot markets. IGL began the year by raising CNG price by Rs 1.25 per kg to Rs 29 per kg on January 1. It also raised price of gas piped to households to Rs 26 per unit as it bought more imported fuel. IGL has exhausted the 2 mcmd (million cubic metres per day) gas earmarked for Delhi from fields of state-run firms. While, Reliance has reduced supplies to 0.15 mcmd from the designated 0.308 mcmd as production from its fields has seen a temporary drop. Government sources said one way the price increase can be moderated will be to pool the allocations for the various territories of NCR.
IOC lanka arm losing market on higher selling price
01 Sept 2011;business-standard.com:Ajay Modi:New Delhi: Lanka IOC, the Sri Lankan subsidiary of state-run Indian Oil Corporation (IOC), faces the same fate as private sector oil marketers Essar Oil and RIL so far as diesel sale is concerned. Lanka IOC, which competes with Sri Lankan government-owned Ceylon Petroleum Corporation (Ceypetco), has lost 80 per cent of its diesel sale owing to higher selling price. Between April and August, the Colombo Stock Exchange-listed company’s share in the Sri Lankan diesel market was down from 25 per cent to 5 per cent. “The price of diesel at Lanka IOC outlets is SLRs 85 a litre, higher by SLRs 9 to the outlets of Ceypetco. We have, therefore, lost our sales volumes to Ceypetco. However, at the current price, too, we are incurring a loss of 20 Sri Lankan Rupee a litre,” Suresh Kumar, managing director, Lanka IOC told Business Standard. The situation reminds of the Indian private oil marketers like Essar Oil and Reliance which compete with the government-owned Indian Oil, Bharat Petroleum and Hindustan Petroleum. The private companies in India are almost out of the diesel market though they have some presence in petrol after it was decontrolled in June last year. Lanka IOC, which started operating in 2002-03, does not have a refinery and imports petrol and diesel for sale at its 158 outlets. Its annual fuel sales from these outlets is around 550,000 tonnes. The Sri Lankan government, which had freed controls on private oil companies, at times asks the government-owned Ceypetco to cap petrol and diesel prices to contain inflation. “The government here does not revise prices in tune with international price changes and we have to suffer,” he said. Diesel has impacted the Colombo Stock Exchange-listed company’s performance in the quarter ended June. On sales of SLRs 13 billion, the company incurred a net loss of around SLRs 36 million. The company’s saving grace is petrol, where it is able to compete with Ceypetco at a price of SLRs 125 and is still holding a market share of 25 per cent. While fuel retail usually accounted for around 80 per cent of the company’s revenues, it has now come down to 60-65 per cent. Kumar, however, said the revenues had been intact, as the company had managed to increase sales in its other businesses such as sale of lubricants and bitumen and bunkering.
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