International Crude Prices Drop 5% since yesterday !
05 August 2011; Breaking News ! Crude oil dropped a little more then 5% in a single fall today, due to fear of global slowdown and double dip recession fear in United States.
Car owners may not get subsidised diesel: Government
04 August 2011;timesofindia.indiatimes.com:NEW DELHI: With passenger cars consuming about 15 per cent of the diesel, the government on Thursday indicated that it might do away with the subsidy enjoyed by such vehicle owners. "...we can accept your (Opposition) suggestion and try to work out what mechanism could be found out so that this section (diesel car owners) are not subsidised," finance minister Pranab Mukherjee said replying to a debate on price rise in the Lok Sabha. The government gives a subsidy of Rs 6.08 per litre on diesel. While the prices of petrol are linked to market rates, the government directly and indirectly compensates the oil marketing companies for losses on account of sale of diesel, kerosene and LPG through subsidies and oil bonds. Under pressure to keep its finances under control the government has already indicated that it was keen on freeing prices of diesel and cooking gas (LPG) but retaining subsidy on kerosene which was used by poor. In June, while increasing prices of kerosene, diesel and LPG, the government had slashed customs and excise duties on petroleum products to mitigate the impact of price hike on common man. It took a revenue hit of Rs 49,000 core per annum. India imports about 75 per cent of its total crude oil requirement. Mukherjee said out of total consumption of diesel, 10 per cent is used by industry, 6 per cent by railways, 12 per cent by the agriculture sector and 15 per cent by car owners. As much as 8 per cent is used for power generation, he said, adding buses and trucks consume 12 per cent and 37 per cent respectively. Mukherjee said that despite price increase of petroleum products in the recent past, the under recoveries of state owned oil companies was still around Rs 1.22 lakh crore. JD-U leader and NDA convenor Sharad Yadav had questioned the government's policy of providing subsidised diesel for consumption by luxury car owners, telecom tower companies, malls and restaurants.
04 August 2011;business-standard.com:New Delhi: Despite the recent steep fuel price hike, state-owned oil firms will lose a whooping Rs 122,000 crore on diesel, domestic LPG and kerosene sale this fiscal, Oil Minister S Jaipal Reddy said today. "We were compelled to increase prices," he said in Lok Sabha where members criticised the recent Rs 3 per litre hike in diesel, Rs 2 a litre increase in kerosene and Rs 50 per cylinder hike in LPG rates. Price of international oil, on which India is 80% reliant to meet its needs, is rising, he said, adding the average price of crude for the current financial year is $113 per barrel. The government has cut customs and excise duties on crude oil and products coupled with a "moderate increase", he said adding that in spite of the increase the oil companies' under recoveries would be Rs 1.22 lakh crore for the current fiscal. Replying to a supplementary, he informed the House that in last three years, the prices of diesel have been increased four times while prices came down twice. Similarly, in case of LPG, prices were increased four time and reduced only once. Giving a comparison of prices in the neighbouring countries, he said petrol price is highest in India. It is currently Rs 63.70 a litre (Delhi) compared to Rs 41.81 in Pakistan, Rs 50.30 in Sri Lanka and Rs 44.80 in Bangladesh and Rs 43.59 in the US. Prices, however, in European nation are much higher as compared to India. In case of LPG and Kerosene, prices in India are lowest compared to neighbouring nations. While diesel prices are comparable.
04 August 2011;deccanherald.com:New Delhi: For the first time in India, a recycling facility for used cars was launched in Tamil Nadu, the Society of Indian Automobile Manufacturers (SIAM) said Thursday. It is an attempt to recover scrap material and spur growth of the automobile industry, SIAM said in a statement. The facility is a part of global automotive research centre of the ministry of heavy industries in Oragadum near Chennai, the statement said. "With efficient recycling, India can hope to recover by the year 2020 over 1.5 million tons of steel scrap, 180,000 tons of Alumminum scrap and 75,000 tons each of recoverable plastic and rubber from scrapped automobiles," it said. "Currently, scrapped vehicles are cut and sold for scrap by low-tech units in the unorganized sector," the statement said adding, crude techniques used by the sector were polluting the environment and recovering low yields . The statement cited examples of US and Japan where recycling facilities help in the overall growth of automobile industry. The facility was launched Aug 2.
04 August 2011;business-standard.com:Sharmistha Mukherjee & Swaraj S Baggonkar:New Delhi:Mumbai: The dynamics of auto business will change if the government ends diesel subsidy to passenger vehicles. Smaller vehicle manufacturers such as Maruti Suzuki India Ltd (MSIL), Honda Siel Cars India (HSCI), General Motors India and Toyota Kirloskar Motors (TKM), are likely to gain from the government’s proposal to end subsidy on diesel for passenger vehicles. “If diesel is deregulated or a dual diesel pricing scheme is put in place, there would be a level-playing field for petrol- and diesel-driven cars. Demand for diesel vehicles would continue to be there, but the momentum would moderate,” said Abdul Majeed, leader, automotive practice, PricewaterhouseCoopers. “Because of the subsidy on diesel, sales of vehicles propelled by the fuel had gone up sharply in the last six months,” he said. According to industry estimates, sales of diesel vehicles make up a third of the total passenger vehicle sales in India. In fact, for models available in both variants, the proportion of sales coming from diesel variants increased by 75 to 80 per cent after petrol prices were raised by Rs 5 a litre in May. Honda Siel, which has an all-petrol portfolio, is likely to gain the most. Jnaneswar Sen, senior vice-president (marketing and sales), HSCI, said, “Diesel is subsidised for a specific reason and it should be limited to that. If an effective mechanism is put in place, the choice of which fuel variant is to be opted for would be back in the hands of the consumer.” Honda has lost out on sales of City because it does not have a diesel variant of the sedan and customers in the segment have shown increased preference for diesel-powered vehicles in recent months. General Motors (GM), which launched a diesel variant of its small car, Beat, late last Month, said the company was in favour of a market-driven price of the fuel. “We have diesel models, but diesel has other advantages than simply being a cheaper fuel. Diesel technology today is cleaner and fuel efficiency of diesel vehicles is higher. We would rather let the consumer choose according to his requirements,” said P Balendran, vice-president of GM India. “The benefit of owning a diesel car does not come in unless a consumer drives at least 2,500 km every month. So, the new cars have been introduced in petrol initially,” said Sandeep Singh, deputy managing director, marketing, TKM. Etios and Liva, both petrol-driven cars, contribute 50 per cent to Toyota’s overall sales. MSIL, India’s largest car maker, offers diesel variants for four of its 14 models. Diesel cars account for about 20 per cent of its line-up, with Swift and Swift DZire leading the company’s sales chart. But majority of its sales continue to come from petrol variants. A senior executive of the company said if diesel prices went up, the differential between the two fuels would reduce. There would be parity between sales of diesel and petrol cars, but high fuel pricing is likely to affect consumer sentiment, regardless of what variant is being opted for, according to him. MSIL offers diesel variants of compact cars Ritz and Swift, and sedans SX4 and Swift Dzire. Though the diesel versions are priced Rs 80,000-85,000 higher than the petrol variants, the company has seen sales of a model picking up on the introduction of a diesel fuel option. MSIL sells 30,000 units of these four models a month and the diesel variants account for three-fourth. Pawan Goenka, president, automotive and farm equipment division, Mahindra & Mahindra, said, “We are not against dual diesel fuel pricing. The mechanism needs to be carefully defined, so that it has the desired effect and cannot be misused. We are assuming that the dual pricing will be only for personal use diesel vehicles, and not for commercial applications.” The company has the highest concentration of diesel models in its line-up. Its entire utility and multi-purpose vehicle range such as Bolero, Scorpio and Xylo runs on diesel.
Despite drop in car sales, Global auto giants Volkswagen, Toyota, Ford convinced about prospects
04 August 2011;economictimes.indiatimes.com:Lijee Philip:Depending on whom you ask or what you read, China has between 100 and 250 carmakers. Joint ventures with the global biggies dominate the top 10 - think General Motors (GM), Volkswagen (VW), Toyota, Ford, Nissan, Hyundai - and a rash of domestic players makes up the rest of the pack. The sheer number of players may not come as a surprise considering China is the largest car market in the world - in 2010, 13.8 million units were sold. The Indian car market is roughly a seventh of the Chinese one, and at last count, there were a little over 20 major players - mostly multinational - in the race with close to 40 brands. The difference: the top three are not global leaders by any yardstick. There's no Toyota, GM, VW - the global one-two-three - at the top of the India grid. Rather, there's Maruti, the affiliate of world No 9 Suzuki at pole position, followed by Hyundai Motors (No 8 globally) and home-grown manufacturer Tata Motors in third spot. What's more, the top three rather remarkably control almost 70% of the Indian car market, with the Detroit giants GM and Ford (globally No 2 and No 4, respectively) relegated to 6th and 7th position, Toyota at No 5 and VW at No 8. Much of this, of course, has to do with Suzuki's early entry into India, via a joint venture with the government in the early 1980s when the competition at that time was sparse and outdated. Ford, GM, Toyota and Honda began Indian operations over a decade ago but have met with limited success thanks largely to their top-down approach of first launching cars at the higher end of the market where margins are fatter but volumes slim. A situation in which global leaders are also-rans with market shares in single digits is unimaginable in most other parts of the world. But that situation may not hold for too long back home. For, even though growth in car sales fell by 15% in July to touch a two-year low, global auto majors are convinced about prospects in the long haul. Abdul Majeed, auto practice leader at PricewaterhouseCoopers (PwC) expects the Indian car market to more than double to five million from 2.2 million units in five years. ON THE GROWTH PATH In contrast, growth in developed markets is subdued. In the Eurozone, growth in car sales is expected to decline by 2-4 % in 2011. The saviour for global Big Auto, as in the case in many other industrial categories, is of course the much-touted cluster of developing economies. The July skid notwithstanding, car sales are still expected to grow by 10-12 % in India in 2011. "The growth story is intact. This (drop in July) is just a temporary blip. All car manufacturers need to expand operations," says Sandeep Singh, deputy managing director, Toyota Kirloskar Motor, the joint venture in which the Japanese giant holds 89%. "If inflation is tamed, interest rates will come down. There is a huge opportunity and we have to move fast with our expansion plans," he adds. The world's largest carmaker by sales, Toyota, intends to boost its share of emerging markets from 40% in 2010 to 50% in two to three years on the back of growing sales of fuel-efficient small vehicles. That in a line sums up the name of the game for the auto majors: ramp up capacities at the entry levels with affordable and snazzier models. "The Indian market is much bigger for us now than in the past," says Hiroshi Nakagawa, managing director of Toyota Kirloskar Motor. The renewed focus on the mass market - more than half of the cars sold in India are compacts and hatchbacks - promises to change the name of the game. VW, one of the newer entrants into India - it began operations in 2007 - has achieved what many of its global counterparts could not do in more than a decade: a market share of 3% in four years. It has done so by launching competitively-priced models -the Vento that was priced lower than the hitherto bestselling Honda City in the mid-size segment; and the Polo premium hatchback is VW's cheapest car in India.
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