Auto Industry: Hiring & salary hikes to nearly double, this yr
01 Feb 2010;economictimes.indiatimes.com:Nandini Sen Gupta:NEW DELHI: The automobile industry has held steady on the growth track in India, and both hiring and salary hikes are likely to nearly double this year, riding on domestic demand and economic recovery. With the economic slowdown eating into growth last year, salary increases averaged 5-7%. This year, that count is all set to hit anywhere between 10% and 12%, taking the effective top end for high-fliers to 16-17%. The global slowdown did not bite companies in India too hard, though, and hiring continued on domestic demand for cars, SUVs and motorcycles. With the recovery kicking in, the situation can only get better. The industry’s fortunes have been helped by market leaders Maruti Suzuki (cars), Hero Honda (motorcycles) and Mahindra & Mahindra (utility vehicles) notching up good growth. “Maruti took a long-term perspective on people strategies during the downturn so we didn’t disturb salaries. Now with a strong recovery, our compensation packages will be aligned to the market and the performance of the company,” says SY Siddiqui, MEO (administration, HR, IT & finance). the company, he says, will take a call in June on the new structures but “it will be a strong double-digit figure very competitive over last year and the overall market.” Maruti was an exception with its 9.5% average wage hikes last year. This year, that should go up to around 11-12% on an average, which means the high-fliers can expect around 16-17% or more though the laggards could be stuck with last year’s industry average of around 6%, according to automobile industry experts. Maruti also added 725 people to its roster last year; this year, the figure will go up to around 940. Like Maruti, M&M too is looking to “significantly improve” the payout this year said Rajeev Dubey, president-HR, aftermarket and corporate services. “Last year, it was subdued, and in line with the industry average of 6-8%.” M&M will finalise its wage plans by August. “Hiring last year was not as intense as it will be now as the economic environment is emphatically better. Salaries will also be on the higher side this time around,” Mr Dubey said.
01 Feb 2010;economictimes.indiatimes.com:SINGAPORE/NEW DELHI: South Korea's GS Caltex has emerged as the first refiner to buy new Russian ESPO (Eastern Siberia Pacific Ocean) Blend crude, as others from Japan to India hesitate to buy the grade before its quality stabilises and until prices fall. ESPO prices have oscillated, making it difficult to see a trend for the medium-sweet crude, which refiners are still waiting to test in a big way in refining system for its product yields. Most other untested crude have traded at discounts. Yet, a December-loading cargo traded at a premium of 50 cents to the Dubai benchmark, while those for early-February loading moved at discounts as deep as $1.30 a barrel. For late February, shipments fetched premiums up to 30 cents. Are more refiners ready to buy and process the middle distillate-rich ESPO Blend, while reduce purchases of rival Middle Eastern grades? Price the issue for untested crude Bears said that prices of the untested ESPO crude remained high, leaving most of the cargoes that have been loaded from Kozmino terminal since December in floating storages off South Korea. "We keep a close eye on it and have interest in it, but we are not active at the current price level," said a trader with a Northeast Asian refiner. "Probably smaller refiners are more eager to buy, but big refiners and majors tend to wait," he said, adding that an ideal price would be a discount that is deeper than $2.00 a barrel to Dubai. Russia has yet to provide refiners with an assay, or detailed quality characteristics for ESPO, and the quality is still evolving and could settle at a lower grade, traders said. "We don't know the properties of this crude as yet," said a trader with an Indian refiner. "We will wait for more information and then, depending on pricing and acceptability to our system, we may look at buying it." Assay release to stir demand Others who are more hopeful argued that Russia will release an assay on ESPO soon. One small Japanese refiner has gotten sample and is testing the crude. "I think refiners will get the assay or sample (of ESPO) soon and once it is found that its quality doesn't have a serious problem, refiners will start to buy," another trader with a Northeast Asian refiner said. The source with the Japanese refiner said that because the sulphur content is relatively high, it would likely take longer to enter the market and only limited volumes can be processed. "As it is, acceptability of Russian crude in Indian systems is very low because of pricing issues, particularly freight. And this will come from east Siberia, so I think this crude will best suit refiners in Korea, Japan and China," another source with an Indian refiner said. "But if we get at a right price then we would like to try it," he said. If more of the grade is taken, traders said it could have a big impact on Oman crude because the first indications are that the two crudes are similar in quality.
01 Feb 2010;business-standard.com:New Delhi: As the government mulls hiving off Oil and Natural Gas Corp’s (ONGC’s) Assam oilfields, state-owned Oil India Ltd (OIL) has said it is willing to take over the assets and can run the fields more efficiently than the current owner. “There is no probability, we will definitely be able to run them (Assam oilfields of ONGC) better than anyone else,” OIL Chairman and Managing Director N M Borah told a news conference here. The Ministry of Petroleum and Natural Gas has suggested that ONGC explore the possibility of hiving off its Assam assets into a wholly-owned subsidiary. The proposal is aimed at improving the productivity of ONGC’s Assam operations. ONGC produces 1.1 million tonnes of crude oil annually from the Assam fields, employing over 4,000 personnel. In contrast, OIL used 6,500-odd employees to produce 3.6 million tonnes of crude oil and is projecting annual growth of 3-5 per cent. OIL’s cost of production in the Northeast is under $7.5 per barrel, while that of ONGC is higher than that. “We will be in a position to run (the fields) better,” he said but hastened to add that OIL had not formally heard anything on hiving-off of ONGC’s Assam assets or their possible sale to OIL. “What we have heard is that the government of India is considering such a move. No one has proposed to OIL to take over... And (when that happens) the decision would be made based on detailed due diligence,” he said. “We haven’t yet reached that stage.”
31 Jan 2010;timesofindia.indiatimes.com:NEW DELHI: Honda India will recall 8,532 City sedans that were sold in 2007 to replace a faulty power window switch. The move is part of a worldwide recall of City and Jazz/ Fit cars that were fitted with the same faulty switch which, in certain cases, was catching fire. Honda Siel Cars India said in a statement on Saturday that no Jazz hatches would be recalled in India because the vehicle was introduced only in 2009 and none of them was fitted with the faulty switch. Honda announced a worldwide recall of 6,46,000 vehicles in Tokyo to replace a faulty power window switch. This came close on the heels of another Japanese automobile giant, Toyota, recalling as many as 1.8 million vehicles to fix an accelerator pedal problem. While recalls, generally speaking, are seen as a sign of a responsible auto-maker, the fact that two Japanese companies have detected defect in their vehicles could impact their hitherto impeccable quality record. HSCI said the replacement would be carried out free of cost and the company would communicate directly with the car owners through dealers. A spokesman said that dealers have already been told to track down City cars manufactured between May and Oct of 2007. "HSCI is proactively replacing the part in these vehicles related to the potential problem of smoke coming out from the power window switch if water enters the driver window when window is left open during rain or is exposed to any other liquid due to spillage," the company statement said, adding that the latest City model was not affected. "The third generation City, currently sold in India, is not affected and does not require replacement," the statement added.
29 Jan 2010;economictimes.indiatimes.com:WASHINGTON/DETROIT: Congressional investigators on Thursday sought documents on Thursday from Toyota Motor Corp and US safety regulators about a pair of safety recalls the automaker was racing to address. House Energy and Commerce Committee Chairman Henry Waxman said he would hold a hearing next month to consider "how quickly and effectively" the car maker responded to complaints about unintended and dangerous acceleration. "Like many consumers, I am concerned by the seriousness and scope of Toyota's recent recall announcements," Waxman said in a statement. The unusual action by the US government comes just hours after the Toyota recall for accelerator problems was widened to include China and Europe. The world's largest automaker and a company studied for its devotion to quality, Toyota has recalled about 8 million vehicles in recent months -more than the number of cars and trucks it sold worldwide in 2009. The recalls rank as the largest ever for Toyota. Analysts say the financial impact will depend on how long the safety problems shut production and whether Toyota's famously loyal customers begin to abandon the brand. Shares of Toyota have dropped 17 percent over the past week. The stock was down 1.5 percent in early Tokyo trading on Friday. "If I sat down to write the worst thing that could happen to Toyota, it would be very close to what is happening to them now," said Gerald Meyers, a University of Michigan business professor and veteran auto executive. "They are at the edge of a collapse of confidence in their products," said Meyers. "That means their brand is in jeopardy. If they lose their brand they lose the battle. That's why it's close to being as bad as it could get." Ratings agency Fitch, placing Toyota on watch negative, said the recalls and production suspension damaged Toyota's reputation for quality and could hamper its recovery. Toyota's troubles come as rivals Ford Motor Co and Hyundai Motor Co announced fourth-quarter results that beat analyst expectations. Both automakers lead a pack of rivals expected to gain ground from Toyota's missteps.
29 Jan 2010;dailypioneer.com:Rakesh Bihari Jha:New Delhi: Luxury car maker Mercedes Benz on Thursday said Tier-II and III cities are rapidly emerging as the powerhouse of the new India, as a result, the company will be extending its networks to these cities in a big way. “There is a significant movement in the Tier II and III cities and Surat is a shining example. We sold 17 cars in December there,” Mercedez Benz India MD and CEO Wilfried Aulbur told The Pioneer. “As we see great growth in these kind of cities compared to bigger ones, we will be opening our dealerships there. The company will extend its networks to Goa and Orissa very soon,” added Aulbur. Mercedes is undertaking a pan India dealer upgradation exercise, which entails an investment of up to Rs 200 crore, to be borne by both dealers and the company. When asked about what the company will do to get back its No. 1 position from its arch rival BMW, Aulbur said: “We don’t want to focus on leadership. We want to have a profitable growth so that we can reinvest in the country,” said Aulbur, adding, “Mercedes has been profitable for the last 10 years in the country.” Mercedes sold 3,247 units in 2009 as against 3,625 units in 2008 in India, while BMW sold 3,619 units in 2009. The company on Thursday launched all new S350 L and the S 350 CDI L BlueEFFICIENCY in the range of Rs 80.50 lakh to Rs 82 lakh (ex-showroom Delhi). “‘In India, the S-class is the clear leader with over 53 per cent market share. The new models will further carry the S-class leadership in this segment,” said Aulbur.
