Auto Expo 2012: Fiat to supply diesel engines to Maruti Suzuki from February
06 Jan 2012;economictimes.indiatimes.com:Ketan Thakkar:New Delhi: Italian car maker Fiat is likely to start supplying multijet diesel engines to the Indian market leader Maruti Suzuki by February, following a deal expected to be inked by the end of this month. This will allow Maruti to clear faster its backlog of about 150,000 bookings, nearly 100,000 of which are for diesel-powered cars, mainly the Swift hatchback and the Swift Dzire mid-sized sedan. The two companies were expected to sign the agreement for 100,000 engines annually by the end of last year, but Fiat needed a nod from its joint-venture partner Tata Motors to supply engines from their Ranjangaon plant. Auto Expo 2012: Full Coverage A person familiar with the matter has told ET that Fiat has received the go-ahead from Tata Motors and it is likely to start by supplying 7,000 to 10,000 engines next month. "We are at the final stages of signing the deal," S Nakanishi, managing director of Maruti Suzuki told ET. "We are currently negotiating the prices and hopefully by the end of the month, we will be through with the agreement."
Honda aims to challenge market leader Hero MotoCorp with China made models
06 Jan 2012;economictimes.indiatimes.com:Chanchal Pal Chauhan & Lijee Philip:NEW DELHI: A year after they parted ways, the world's largest two-wheeler maker, Honda, has thrown down the gauntlet at its former partner of 27 years, the Hero Group, with a plan to launch motorcycles at game-changing prices. Hero MotoCorp, the new avatar of Hero Honda, which accounts for 46% of all bikes sold in India, dominates the market with models like the 100cc CD Dawn, Splendor, Passion and the 125cc Super Splendor. The Japanese giant, which operates in India through wholly-owned subsidiary Honda Motorcycle & Scooter India (HMSI), hopes to sell 125cc made-in-China models with an ex-showroom price in Delhi of a little over Rs 30,000 - almost Rs 4,000 cheaper than the CD Dawn and Rs 17,000-18,000 cheaper than the Super Splendor. Honda currently sells such models in African markets like Nigeria. Tatsuhiro Oyama, senior managing officer & director motorcycle operations at the Japanese giant, told ET: "We are working out plans to gain leadership in the Indian two-wheeler market." Honda has just launched a 110cc bike, Dream Yuga, to compete in the mass market. "Going forward we are conducting a feasibility study for our low-cost bike that is currently made in China and could be manufactured in India," added Oyama. RAMPING UP CAPACITY TO MATCH HERO Along with cost-competitive models, Honda is also busy ramping up capacity to match that of the Munjals-owned Hero MotoCorp. Oyama told ET the company plans to set up a fourth plant in India with an initial capacity of 1.2 million units, entailing an investment of Rs 1,000 crore. The fourth plant will take its cumulative capacity to 5.2 million, not far behind the Munjals, whose current capacity stands at 6.15 million per year. "We are aiming to sell 10 million two-wheelers in India by 2020 and target a 30% market share to achieve leadership in India. We are market leader in scooters and now the focus is to replicate the same in bikes," said Oyama.
Maruti to develop global products with parent Suzuki
06 Jan 2012;business-standard.com:Sharmistha Mukherjee:New Delhi: Suzuki Motor Corporation’s Indian subsidiary, Maruti Suzuki India Ltd (MSIL), is going to play an increasingly important role in designing and developing global vehicles for the Japanese auto company in the coming years. MSIL, which on Thursday unveiled a compact sport utility vehicle, XA Alpha, is likely to roll out two to three global products in collaboration with its parent company over the next two years. A senior MSIL executive said, “Our research and development (R&D) team is increasingly collaborating in developing products with Suzuki, which would be sold not only in India but also in markets overseas.” The multi-purpose Ertiga, to be launched globally at the Auto Expo, is one such product. Maruti Suzuki has 1,080 engineers at its R&D centre. It has acquired 700 acres in Rohtak and is setting up, what is says is a world-class R&D centre. It’ll begin exporting a completely knocked down (CKD) kits to Southeast Asian markets with the Ertiga. The Ertiga comes equipped with 1.4-litre petrol engine and 1.3-litre diesel engine. The sub-four metre Swift Dzire, to be launched next month, will follow Ertiga abroad. Suzuki is focusing on boosting exports volume in emerging markets such as Indonesia. Unlike in India, a fully imported car attracts a duty of 26 per cent in Indonesia, while CKD units are taxed at just 10 per cent. The CKD route works out as much more viable for car makers aiming to sell in Indonesia, rather than setting up a plant there. Going ahead, Suzuki Motor Corporation plans to export more cars under the Suzuki badge from India. Maruti Suzuki reported a drop of 16.6 per cent in sales at 773,361 units between April and December. It is expected to export 125,000 vehicles this financial year, compared to the 147,000 units sold abroad last year. Maruti Suzuki is developing newer markets for exports to offset the slowdown in car sales in Europe.
06 Jan 2012;business-standard.com:New Delhi: The Nano is not a flop, its creator Ratan Tata said on Thursday. He, however, acknowledged Tata Motors failed to capitalise on the early excitement surrounding the launch of the world's cheapest car. In a wide-ranging briefing with journalists, Tata, who will retire in December as head of the Tata Group, India's biggest business house, said the steel-to-software conglomerate had paid a price for not participating in corruption. Four years ago, Tata Motors unveiled the Nano in what was seen at the time to be a crowning achievement for the silver-haired Tata, but sales have considerably trailed early expectations following a series of setbacks. "We never really got our act together when the 100,000 were depleted," he said, referring to the first batch of Nanos sold through a lottery system when initial demand exceeded supply. "I don't think we were adequately ready with an advertising campaign, a dealer network," he said during a two-hour breakfast meeting with journalists on the first day of the India Auto Expo -- the same event where a euphoric Tata and his Nano stole the show four years ago. The entry level Nano now costs Rs 140,000 ($2,657), above the Rs 100,000 initially envisioned. Production delays, quality concerns following two voluntary recalls, and a stigma over the car's "cheap" image have all dented demand. "We've never pushed it as a poor man's car. We pushed it as an affordable all-weather family car. Period," said Tata, 74, who over two decades has built the Tata Group into an $83-billion conglomerate that generates two-thirds of its revenue outside India. While the Nano has failed to live up to expectations, Tata Motors' $2.3-billion purchase of luxury car-marker Jaguar Land Rover in 2008 has exceeded them. CLSA recently upgraded Tata Motors to outperform on the outlook for the two British brands. "In sum, I don't consider it to be a flop. I consider that we have wasted an early opportunity," said Tata. Tata is launching a Nano that runs on compressed natural gas at the car show, a company official said, but is at least a year away from launching a diesel version. Many critics say this is key to success in a country where petrol costs 56 per cent more than subsidised diesel. "I believe we will see a resurrection of this product as we move forward," Tata said. He said the company still wanted to develop a low-cost car for the European and the US markets, but such a car will need to be upgraded to meet safety and emissions standards and include the sorts of extras that Western consumers demand. The Tata Group is not family-owned and Ratan Tata is not on the Forbes list of billionaires. Tata Sons holds the bulk of shares in key companies, and philanthropic trusts endowed by the Tata family own 66 per cent of Tata Sons, and the group enjoys a reputation for integrity. India has been racked for more than a year by a series of corruption scandals, including over the award of 2G telecoms licences. Tata was among the corporate titans summoned to answer questions before a parliamentary panel, although neither he nor his group has been accused of wrongdoing. "I think the issues have shown that we were one of the victims of what took place and not the offenders," Tata said. The Tata Group, he said, "will deal with corruption the same way as they have, that is by not participating, sometimes to a great cost to the corporation". "The fact is one hopes for an India ... where no one is above the law, and there's no preferential permits or approvals or such that are available that all aren't considered on a similar basis," he said. Fallout from a series of scandals has battered India's ruling Congress party, stalled decision-making on project approvals, and scared off investors. Unlike most of India's big business houses, "We've never been asked to give a bribe because most of the agencies know that would not be possible for us to do," Tata said.
Oil rises after EU reaches Iran sanctions agreement
05 Jan 2012;business-standard.com:New York: Brent crude rose for the second straight day on Wednesday, touching a seven-week high after the European Union reached a preliminary agreement to ban imports of Iranian crude, escalating tensions in the West's standoff with Tehran that has gripped oil markets for weeks. European diplomats said they had a preliminary agreement but had yet to decide when an embargo would be put in place. The news sent Brent crude up nearly $2 a barrel. A senior Iranian official responded that the Opec member already has alternative outlets available to maintain its 2.3 million barrels per day (bpd) of oil exports, including sending more crude to China, the world's No. 2 consumer. The tensions stemming from Iran's nuclear ambitions have supported oil prices in recent weeks. Tehran last week threatened to cut off oil flows through the strategic Strait of Hormuz in the event of an oil embargo. About 35% of all seaborne oil moves through the strait. "India, China and some other Asia countries may end up getting a reduced price on Iranian oil and that could be good for their economies, but European countries will have to find other sources," said Gene McGillian, analyst for Tradition Energy in Stamford, Connecticut. By 1:25 pm EST (1825 GMT) , Brent February crude traded up 78 cents at $112.91 a barrel, off a session high of $113.97, highest for front-month Brent since November 14. US February crude was down 17 cents at $102.79, off the session high of $103.74, highest since May. Brent's premium against US crude widened to above $10, after closing at $9.17 on Tuesday. Brent trading volume shot up 30% above its 30 day average while US crude lagged, with dealings down 12% from the 30-day average, according to Reuters data. Iran supplies about 450,000 barrels per day to EU member states, making the bloc collectively the second-largest market for Iranian oil after China. While oil markets braced for a potential supply problem, a US Treasury official said the United States believes Tehran's oil revenues can be choked off through a well-timed, phased-in curtailment of purchases that will not disrupt global oil markets. New US sanctions signed into law on New Year's Eve envision such a phased-in approach, the official said. Supply risks, US inventory data: Potential supply disruptions in Africa and central Asia also supported prices. Nigeria's main trade unions called for a national strike and mass demonstrations to shut down sectors such as oil production starting from Monday, unless the government restores a fuel subsidy it scrapped at the start of the week. In Kazakhstan, President Nursultan Nazarbayev extended until January 31 a state of emergency in the western oil city of Zhanaozen, where at least 16 people were killed last month. In the United States, traders were awaiting the weekly inventory report from the industry group American Petroleum Institute scheduled after the close of oil markets. A preliminary Reuters poll of analysts forecast that crude stocks fell 1.8 million barrels in the week to December 30. Distillate stocks rose 700,000 barrels and gasoline stocks gained 1.4 million barrels, the poll also showed. The US Energy Information Administration will follow with its weekly report on Thursday at 11 am EST (1600 GMT).
05 Jan 2012;business-standard.com:New Delhi: German automaker Daimler is looking at launching 19 trucks in India by the first quarter of 2014, in an effort to make a mark in the world’s third-largest market for such products. The world’s largest commercial vehicle manufacturer will start rolling out the products, in the range of six to 49 tonnes, under the BharatBenz brand from the third quarter of 2012. “In some North Indian states, a commercial vehicle manufacturer has over 95 per cent market share. This is an unhealthy trend and shows the consumers do not have any choice. The Indian market will now graduate to better products and we will offer them a choice. We will be able to make a mark in the industry in three to five years,” said Marc Llistosella, managing director of Daimler India Commercial Vehicles Ltd (DICV). To keep prices competitive, DICV has initiated a localisation drive to bring down costs. “Our products have localisation content of 85 per cent, which we plan to increase to over 90 per cent in the coming months. This has been possible because we have developed a base of 400-450 suppliers,” said Llistosella. Apart from consolidating its position in India, DICV has also firmed up plans to commence exports by the end of the year. It declined to share specifics of its export strategy, but hinted it was looking at selling trucks in West Asia, Southeast Asia and Africa. DICV has decided to set up an exclusive pan-India distribution network for marketing BharatBenz products. It had finalised 70 locations for establishing these sales points, Llistosella said. “Along with a strong dealership and service network, we will also offer financing solutions to our customers. We have tied up with ICICI and HDFC for the same,” Llistosella said. In February, DICV unveiled the BharatBenz brand, especially designed for India. It has set up a 400-acre production plant at Oragadam near Chennai and is investing Rs 4,400 crore. The plant would start with an initial capacity of 36,000 units. It is likely to be expanded to produce 72,000 units a year, starting from 2013, which could entail an additional investment of Rs 350 crore in manufacturing, R&D, marketing and sales, and setting up dealership network.
Petrolstop is a division of Car Fuel Info Solutions, LLC Petrolstop.com is a registered trademark owned by Car Fuel info Solutions, LLC Website Design by Onazari Technical Solutions
