09 June 2009;business-standard.com:Sohini Das/Kolkata: After the launch of Audi’s crossover utility vehicle Q5, June will see two more heavyweight car launches within days of each other, making this month the one with the most number of launches in the last nine months. The launches indicate that the automotive industry is slowly coming out of the downturn, with most companies registering positive sales figures in May. Auto majors like Maruti Suzuki India and Hero Honda posted 10.4 and 22.5 per cent growth in domestic sales last month respectively. Upbeat from positive market conditions, car makers have lined up a series of launches during the second half of the year. Honda Siel Cars India will launch its popular compact car Jazz on June 10 and Fiat India bringing in its premium compact car Grande Punto into the Indian market just seven days later on June 17. “We are upbeat that the Grande Punto will create ripples in the B+ segment, which is growing at a 4 per cent right now”, Fiat India Automobiles Pvt Ltd’s President and CEO Rajeev Kapoor said. He added that the company was looking at a 14-15 per cent market share in the segment, which is dominated by Maruti. The supermini from the Fiat stable helped the Italian car major to perform against the downturn in Europe. The company achieved a 5 per cent rise in sales, together with increasing its market share to 10 per cent last fiscal when the European market actually contracted by 11.6 per cent. But the car’s fortunes in India will depend heavily on its pricing strategy. “We have an almost 85 per cent localisation in the Grande Punto and this will help us to have a competitive pricing,” Kapoor said. Sources close to development indicated that the Grande Punto could be priced at an edge above the Tata Indica Vista so that there was no cannibalisation amongst the two cars. Fiat India will sell the car through the 100-odd Tata-Fiat dealerships across the country. The Honda Jazz, on the other hand, is likely to be priced higher. “The Jazz is made on the City platform and that definitely defines the cost structure, if not the price. Moreover, we have decided to provide all amenities like airbags, anti-braking system and a powerful 1.2-litre iVTEC engine in the Jazz,” Honda Siel Cars India’s Vice-President (marketing) Jnaneswar Sen said.
08 June 2009;economictimes.indiatimes.com:NEW DELHI: Domestic passenger-car sales increased by 2.48 per cent to 1,13,490 units in May from 1,10,745 units in the same month last year. According to the figures released by the Society of Indian Automobile Manufacturers (SIAM) today, motorcycle sales in the country during the month was up 12.34 per cent at 5,76,541 units from 5,13,209 units in the corresponding month a year ago. The total two-wheeler sales in May surged by 12.45 per cent to 7,27,937 units compared to 6,47,358 units in the same period last year. However, commercial vehicle sales last month decreased to 30,800 units from 36,141 units in the year-ago period, a fall of 14.78 per cent, SIAM said.
07 June 2009;economictimes.indiatimes.com:NEW DELHI: Amid demand for servicing over 10 lakh cars in a month, Maruti Suzuki has said it has taken various initiatives, focusing on three critical aspects -- skilled manpower, system improvement and innovative practices -- to upgrade the area. Maruti Suzuki crossed the 10-lakh cars mark in May this year for the first time, a senior company official said. "In recent months, we have taken a number of initiatives to enhance the service capability of our network. We have focused on three critical aspects -- skilled manpower, system improvement for service by productivity and innovative practices. Our strategy is to increase service productivity as well as service quality at service workshops," Maruti Suzuki India Executive Officer (Service) Pankaj Narula told PTI. The company has a network of 2,774 workshops across 1,319 cities and it has upgraded around 600 dealer workshops to its specially designed Express format, while over 640 are 2-Tech workshops. "Around half of the gross profit of Maruti Suzuki sales and service dealership comes from workshops today. In 2007-08 this was around 40 per cent," Narula said. Maruti Suzuki has also gone for high service skill and productivity enhancement of manpower in the workshops. It has service training programmes that certify workshop technicians in various grades depending upon skill levels. "Over 4,000 service technicians have been certified for different levels so far. The company has plans to certify a similar number of technicians for their skills during 2009-10," it said.
ONGC okays Cairn's revised plan for oilfield in Rajasthan
07 June 2009;economictimes.indiatimes.com: NEW DELHI: The Board of Oil and Natural Gas Copr (ONGC) today approved the revised cost estimates for developing the nation’s most prolific on-land oilfield in Rajasthan and agreed to invest around $350 million more in the fields operated by Cairn India. The approval ends the uncertainty surrounding the development and the fields will now be put to production any time now. ONGC, which holds 30% interest in the fields, had previously withheld approval to Cairn’s revised field development plan as the state-run firm’s liability to pay royalty on the entire crude oil production, although it was only a 30% shareholder, had turned the project economically unviable for it. The board at its meeting approved the rise in cost of developing Mangala field in the Rajasthan block to $2.396 billion from $1.241 billion. Besides, the cost of smaller adjoining fields would also rise from USD 261 million to $275 million, a top company official said. ONGC will bear 30 per cent of this cost. The official, however, said that ONGC will continue to pursue with the government the reimbursement of the royalty it will pay on behalf of Cairn. There will be no change in the development cost of Bhagyam field, the second largest oilfield in the Rajasthan block, at $471 million. Also the cost of pipeline transporting the crude from Barmer district in Rajasthan to Gujarat cost would remain unchanged at $941 million. ONGC’s total exposure in the project will rise from $874.2 million to $ 1.22 billion, he said. The decision followed Petroleum Ministry pushing ONGC top management to approve the revised cost despite the project offering negative returns on investment. ONGC had previously approved its 30% share of investment at the original capital expenditure of $ 1.5 billion and operating expenditure of $ 1.43 billion for Mangala and adjoining smaller fields. But Cairn revised the capital cost to $ 2.67 billion and operating expenditure to $ 1.52 billion. The Bhagyam field cost would be $ 471 million $ 941 million being the cost of a pipeline to transport crude oil. “ONGC’s Net Present Value (the value today of anticipated future incomes and expenditures) with revised field investment plan works out to negative $ 1.435 billion and negative $ 1.471 billion at a crude price of $ 60 and 70 per barrel, respectively,” the official said. Negative NPV has been a result of ONGC being made liable to pay 20% royalty on the entire crude oil production while Cairn being exempt from payment of any levy. “(The) Petroleum Ministry today says that we signed the contract for the Rajasthan block fully knowing about the royalty liability. But the royalty at the time of signing of the production sharing contract was Rs 539.20 per tonne while it today comes to Rs 3,780 per tonne, considering a crude price of $ 60 per barrel,” he said.
07 June 2009;business-standard.com:Crude oil futures may fall from a seven-month high on speculation US stockpiles will increase as consumption tumbles. Twenty-three of 34 analysts surveyed by Bloomberg News, or 68 per cent, said futures would fall through by June 12. It’s the most bearish response since February 2008. Seven respondents, or 21 per cent, forecast that oil prices would rise and four said the market would be little changed. Last week, 50 per cent of analysts said prices would decline. Crude oil supplies climbed 2.9 million barrels to 366 million last week, according to an Energy Department report on June 3. The gain occurred as imports jumped 9.9 per cent and refineries increased operating rates to the highest in six months. Fuel demand fell by 900,000 barrels to 17.7 million barrels a day last week, the lowest since May 1999. Prices jumped 53 per cent this year as the stock market rebounded and the dollar weakened. A falling US currency bolsters the appeal of commodities as an alternative investment. “I really think you are going to see a reconsideration of this move higher,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. “It’s probably not wise to load up on futures at these price levels given the supply and demand picture. The flow of buying may soon be exhausted.” Crude oil for July delivery rose $2.13, or 3.2 per cent, to $68.44 a barrel this week on the New York Mercantile Exchange. Futures touched $70.32 on Friday, the highest since November 4. Prices have dropped 54 per cent from the record $147.27 a barrel reached on July 11.
05 June 2009;business-standard.com:Chennai: Nissan Motors said today it will start manufacturing light commercial vehicles (LCVs) along with its joint venture partner Ashok Leyland from mid-2011. Nissan has several joint ventures in India. The one with Ashok Leyland is for manufacturing light trucks for the domestic, as well as export markets. Executive Vice-President Colin Dodge said, to start with, the joint venture partners are looking at producing partially from Ashok Leyland’s unit as well as Nissan’s unit, which is under construction at Oragadam, near Chennai. He added that the company’s board will meet and discuss how to take the project further. Last month, Nissan’s joint venture partner Ashok Leyland had said the initial investment was Rs 2,000 crore, which has to be scaled down. Nissan did not comment on the cut in the investment. The joint venture partners initially were planning of produce 3-, 4- and 6-tonne vehicles. Now, in addition to that, Nissan is looking at producing some more products for overseas markets. The company has announced it would roll out its first car from Oragadam, near Chennai, in May 2010.
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