09 Feb 2010;business-standard.com:Swaraj Baggonkar:Mumbai: France’s second-largest car maker Renault is ready to make an aggressive solo entry with seven or eight new models, ranging from a 1.1 litre hatcback to a luxury sedan. The French major will officially announce its solo India plans on Tuesday. The move comes after Renault's troubled five-year partnership with Mahindra & Mahindra (M&M) failed to provide the French company with a platform to become a serious player in the country. The joint venture, in which Renault owns 49 per cent, has been able to sell only 7,000 cars annually of just one model, the Logan. Renault and Japanese car maker Nissan — which share a common global CEO in Carlos Ghosn — have also tied up with Bajaj Auto to work on a low-cost car (in which Bajaj will hold 50 per cent, and Nissan and Renault the rest). This project has been delayed by over a year with the new deadline fixed for 2012. Renault's small car is expected to compete against the Hyundai i10, a version of its luxury car Fluence which will take on Honda Civic and the Skoda Octavia, a model of the Koleos, a sports utility vehicle, will compete with the Honda CRV, and a version of the Kangoo, a utility vehicle, that could lock horns with Maruti's low-priced Eeco. At least two or three of these cars are expected to be launched in the next 12 months. The new models, will be produced by Renault Nissan India Ltd at the Chennai facility, owned in equal proportions by the two companies. The two car makers, which have cross holdings in each other companies globally, will only share the manufacturing facility but make and sell their own cars. M&M had expressed dissatisfaction over investing in a new vehicle manufacturing plant in Chennai (along with Renault and Nissan) and had opted to move out of the tripartite joint venture in January 2008. This renewed approach by Renault towards India marks a turnaround by the French giant from last year's decision of putting its India plans on hold indefinitely, after it suffered a $3.8 billion loss in the first half of 2009. Although the Logan is currently being sold through dealerships appointed by Mahindra Renault Private Limited (MRPL), these new models from the French company will be sold through a new set of dealers chosen by Renault India. The Chennai facility will be made operational before May this year when Nissan will also launch its newly developed compact car from the facility. The platform of this model will be used by Renault to make its own compact car as well as a mid-sized segment sedan. Both companies are also checking the feasibility of setting up an engine facility. The Chennai facility, which has a peak capacity of 400,000 units a year, will witness a combined investment of about Rs 4,500 crore from both partners. So far Renault has invested about Euro 100 million (Rs 650 crore) into the new plant. The Logan facility based in Nashik is currently operating at just 10 to 12 per cent of its peak capacity of 50,000 units a year. Mounting losses and reduced demand for the car forced both Indo-French company to reconsider the partnership. Although plans of having a shorter Logan to take advantage of the lower excise duty on hatchbacks was being worked out, nothing concrete has taken place. Sources say M&M has developed a shorter version of the model which falls just below the mandatory four meter length, allowing it to qualify for the eight per cent excise duty against 20 per cent levied on bigger cars.
08 Feb 2010;timesofindia.indiatimes.com:DELHI: The country's largest carmaker, Maruti Suzuki India, today said it expects to double its exports to about 1.6 lakh units this fiscal, while it is aiming over 20% growth in its overall sales. "Last fiscal we exported 80,000 units. We are expecting 100% growth in export this fiscal," Maruti Suzuki India (MSI) Executive Officer Marketing and Sales Mayank Pareekh told reporters on the sidelines of an AIMA event here. The company's overseas sales growth was driven mainly by the export of its flagship model A-Star, which clocked sales of over one lakh units till December 2010, within 11 months of launch. MSI aims to cross the two lakh units of exports by 2010-11. The A-star, which is produced only in the company's Manesar facility, is exported primarily to Europe and other countries such Chile, Angola, Saudi Arabia, Morocco, Algeria and the UAE, where it is sold as Suzuki Celerio. It also contract manufactures the model for Japanese car major Nissan, which sells it in the European market as Pixo. Recently, MSI had kick started exporting its latest model Ritz to South East Asia as well to expand its export portfolio, besides exploring the Middle East market. Commenting on the overall sales growth of the company, Pareekh said: "So far on an average we have been growing at about 20-22% this fiscal and we expect this to continue and overall for the entire fiscal we expect this level of growth."
BPCL to convert 60 In&Out stores into food courts by FY11
07 Feb 2010;business-standard.com:Mumbai:PSU oil firm Bharat Petroleum Corporation (BPCL) plans to convert 60 'In&Out' outlets into profit making ventures such as food courts and coffee shops by the next fiscal, a senior company official here said. "The company has tied-up with leading food chains like McDonalds in the West, Subway in the South and Nirula's in the Delhi-NCR to revamp the stores and has earmarked an investment of Rs 20 crore for the purpose," BPCL General Manager (Brand and Allied Business) George Paul told PTI. "Many of these outlets were incurring losses. We have shut down a few while converting a few into food courts, coffee shops and book stores. We propose to have 60 such converted outlets next fiscal," Paul said. The state-run petroleum major has 300 'In & Out' outlets across the country and has already revamped 50 of them so far. The company is targeting a revenue of Rs 400 crore (post revamp) this fiscal from its 'In&Out' outlets against Rs 290 crore in the last fiscal, he said. BPCL's total turnover last fiscal from retail business, including loyalty programmes stood at Rs 85,000 crore, Paul said, adding that it targets a 20 per cent growth in FY10. Besides, the company also plans to expand its Petro and Smart Fleet cards base and is in talks with a few corporates for this purpose, he said. "We are planning to revive our old customers and issue more such cards to corporate customers, especially IT companies, banks and healthcare institutions," Paul said. The PSU also plans to install 80 more ATMs at its petrol pumps by March this year and scale it up to 1,000 over the next 3-4 years. Currently, the company has a 220-strong ATM network.
Tata Motors may reopen Nano bookings before December
07 Feb 2010;business-standard.com:Swaraj Baggonkar:Mumbai: Customers who missed the Nano bus in 2009 will have something to cheer later this year, when Tata Motors reopens bookings for the world’s cheapest car, perhaps before December. The company had got 100,000 bookings in the first phase. Production of the mini-car at the hitherto sole manufacturing unit at Pantnagar, Uttarakhand, is being raised, while the mother plant at Sanand, Gujarat, is being readied for operations. Even as the deadline for delivering all the bookings is the last quarter of the current calendar year, the company is expected to complete this well before December. Asked about reopening of bookings, Prakash M Telang, managing director (India operations) of Tata Motors, said, “We will open bookings when we come closer to completion of delivery. However, we will have some surprises this time.” Since mid-July last year, when the first customer got his Nano, the company has delivered 17,537 units. From producing 70 units a day from the excise-free zone of Pantnagar, the company now produces almost 150 units a day. This is expected to become 200 units per day in the next few months. The installed annual capacity of 50,000 units created in Uttarakhand will, therefore, be raised to 72,000 units. Sources say production can be stretched further to 90,000 units a year. The plant in Gujarat will add significant volumes once commercial production begins in March. A gradual rise to 20,000 units a month at Sanand will help the company meet the delivery target well before December, say market experts. The price will be an issue, considering the significant rise in key raw material prices lately. The company had frozen the price of the first lot of 100,000 units but stated that the next batch might come with revised prices. Prices of key materials such as steel, aluminium, copper and rubber, among other things, have moved north over the past six months. Tata Motors, like other vehicle manufacturers, raised prices of its cars, SUVs and MUVs by Rs 1,500-3,500 per unit this month. This, however, did not cover the entire increase in input costs, said officials.
06 Feb 2010;economictimes.indiatimes.com:MUMBAI: Reliance Industries (RIL), India’s largest private sector company, has submitted an expression of interest (EoI) to acquire Canadian oil sands company Value Creation (VCI), as it looks to expand its global footprint in the oil exploration business. RIL may be willing to pay as much as $2 billion (Rs 9,250 crore), according to persons familiar with its plans. The Calgary-headquartered company’s subsidiary Technoeconomics is the owner of a technology, which helps to produce oil from sand and upgrade bitumen — a major feedstock for petroleum — at a relatively lower cost, according to oil industry experts. RIL’s oil and exploration business head PMS Prasad and group CFO Alok Agarwal are understood to have had initial discussions with VCI’s management, ahead of submitting the EoI, according to a person close to the development. VCI was founded by its CEO and chairman Columba Yeung in 1999 after a long career with Shell Canada and Royal Dutch Shell, where he held various executive positions in technology and project development. “BA Energy, a subsidiary of VCI, has filed for bankruptcy, which could bring the valuation down,” said an oil industry official close to the transaction. The first commercial application of VCI’s technology was by BA Energy, the bankrupt subsidiary, which is currently constructing an upgrader that processes bitumen, in Strathcona County north-east of Edmonton, Alberta. An RIL spokesperson said: “The company is reviewing a number of global opportunities for growth in its core business. The difficult operating environment of the past year has made available several interesting opportunities, where an investment by a strategic operator of industrial assets can add substantial value. The review is ongoing and there can be no assurance that any approach will be made with respect to the opportunities under review or that any such approach will result in a transaction.” RIL has raised Rs 9,300 crore so far through sale of treasury stocks, as it builds up a warchest for overseas acquisitions. It is also sitting on a cash balance of $4.65 billion or around Rs 18,000 crore.India’s largest private sector company, which is looking to expand its global footprint, has targeted loss-making companies. According to media reports BA energy filed for bankruptcy in early-2009 after it failed to repay a loan its parent, VCI. This default led to creditors recalling loans to VCI. RIL is also in discussions to take over bankrupt petrochemical major LyondellBassell. “RIL has been trying to expand its footprint across the global, as it has already consolidated its presence in India. The sharp fall in valuation of overseas assets, especially European ones, offers opportunity to the company,” said Deven Choksey, managing director, KR Choksey Securities. RIL, has raised its bid for LyondellBasel by 13% to $13.5 billion, is facing resistance from the LyondellBasell board, which is controlled by Access Industries. The board has valued the company at about $15 billion. Analysts forecast the asking price to keep rising given the improving prospects for companies, as the developed world emerges out of the recession.
Freeing fuel price will help tame inflation: Montek
05 Feb 2010;business-standard.com:New Delhi: The Planning Commission today said that decontrolling fuel prices would not flare up inflation rather it will soften generalised rise in prices. "It (decontrolling fuel price) will not flare up the inflation. I just think that it is not sustainable to have prices those are not line with the world prices," Planning Commission Deputy Chairman Montek Singh Ahulwalia told reporters here. "By keeping the price of petroleum down you are actually bearing a subsidy that causes a generalised rise in price ... if you get rid of the subsidy there will be rise in petroleum prices but it will soften the generalised rise in prices," Ahluwalia said. "It (freeing fuel price) is there in the integrated energy policy, we had said that any policy that does not link petroleum and diesel price to evolving trend in world price is absolutely unsustainable. So I agree with the recommendation of the (Kirit Parikh )committee," he said. Earlier on Wednesday, an expert group, headed by former Planning Commission member Kirit Parikh, suggested freeing of fuel prices. At present, the government does not allow state-run fuel retailers to fix petrol, diesel, kerosene and LPG prices in line with international cost, resulting in huge revenue losses for the companies and subsidy burden on the government.
