Discounts, auto cos strategy to tide over low volume
21 June 2011;business-standard.com:Sharmistha Mukherjee:New Delhi: Dip in sales of passenger cars, the lowest recorded over the past 20 months, has forced companies to take action. At a time when rising interest rates and soaring petrol prices are slowing automobile sales, companies are increasing marketing spends and doling out various discount offers to lure back customers. Sales growth of passenger cars had slowed to seven per cent last month, the lowest recorded in over 20 months, compelling car manufacturers to reconsider their marketing strategies. While the country’s largest car maker, Maruti Suzuki India Limited (MSIL), has increased its marketing budget by a fifth over the last two months, others like General Motors, Honda Siel Cars India, Hyundai Motor India and Volkswagen are offering incentives to rev up lagging sales. “As the market leader, we have undertaken a lot of below-the-line activities to kick-start sales. We are accessorising cars to generate sales at the showroom level,” MSIL Chief General Manger (marketing) Shashank Srivastava, said. “The fuel price hike has been a major deterrent to sales in the last two months. We have organised mileage rallies for Alto, Estilo and WagonR to highlight their fuel efficiency. Besides, special financing schemes across models are being offered at our dealerships to increase sales.” Industry sources indicate that with a rise in interest rates affecting the market sentiment, the conversion rate at showrooms has fallen to 15-16 per cent from the usual 20 per cent. MSIL is running four campaigns, each costing Rs 4-5 crore, to draw in buyers. “Besides the ‘Alto India Let’s Go’ and ‘WagonR Number 1 Car Sales’ campaigns, we are doing a campaign on television for the SX4 and Estilo. Another campaign is on air to highlight our low cost of ownership of Maruti cars,” added Srivastava. The company is also offering discounts in the range of Rs 15,000-26,000 on many its cars. Similar is the story at GM India. “Despite rising input costs hitting our bottom line, we have decided to continue with incentive schemes to generate volumes,” said Director and Vice-President (corporate affairs) P Balendran. The company is offering cash benefits ranging from Rs 43,700 to Rs 51,200 on small car Spark, and free insurance and accessories worth Rs 21,000 with hatchback Beat. Discounts on the Aveo range vary from Rs 10,000 to Rs 25,000, while for some variants of multi-utility vehicle Tavera, the cash benefit can go up to Rs 1.44 lakh. Japanese auto major Honda Siel, in the meantime, has slashed prices of its flagship sedan City by up to Rs 66,000 to keep off competition and boost sales. After petrol prices were increased by Rs 5 a litre last month, the sale of diesel variants have been rising. Honda City is the only car in the mid-size sedan segment (which has strong contenders like Hyundai Verna, Maruti Suzuki SX4 and Volkswagen Vento) that does not have a diesel option. MSIL Managing Executive Officer (marketing and sales) Mayank Pareek informed, “Nearly 65 per cent of sales use to filter in from the diesel variant for cars in which we have the fuel option earlier. However, after the latest hike in petrol prices, the proportion of sales coming from the diesel variant has increased to 80-85 per cent.” MSIL sells diesel variants of hatchbacks Ritz, Swift and sedans DZire and SX4. Industry experts said the sudden spurt in the sale of diesel vehicles had led to inventory of the petrol variants of cars piling up. Hyundai is now offering a fixed monetary package to the buyers of petrol variants of Santro and i10 to cushion the rise in the price of the fuel. Volkswagen, which has announced an increase of 2.2 per cent in the price of Vento due to rising commodity costs, has limited the hike only to the diesel variant. Neeraj Garg, member of board and director (passenger cars), Volkswagen India, said: “We are aware that customers who prefer petrol variants are already faced with the burden of increased fuel costs and, therefore, we decided to continue to absorb the additional costs for our petrol variants.” The company is further offering promotional interest rates of 6.99 per cent on the petrol variant of Vento till June 30. Another Japanese major, Toyota, is increasing direct marketing activities to boost sales. Sandeep Singh, deputy managing director (marketing and sales), Toyota Kirloskar Motor, said: “The sharp increase in petrol prices coupled with interest rate hikes has affected market sentiment. The number of enquiries and conversion to sales has come down over the last two months in the industry. We have not been affected as much due to new launches. We have asked our dealers to reach out to our customers and constantly communicate with them, inform them about the lessened waiting period for our cars to increase sales.”
ONGC to merge Russian assets with Bashneft, RussNeft: report
20 June 2011;business-standard.com:Mumbai: The cabinet has approved a merger of ONGC's Russian assets with Bashneft and RussNeft in a deal that will give the state-run explorer a 25% stake in the combined entity and access to one of the biggest discovered oilfields in Russia, the Economic Times reported. Oil and Natural Gas Corp (ONGC) has long been eyeing Bashneft as well as an involvement in the Arctic fields Trebs and Titov that the Sistema subsidiary acquired last year from the Russian state. The merger will give ONGC a quarter share in the Russian firm's annual oil production of 25 million tonnes besides partnerships in their refineries totaling 20 million tonnes capacity, the newspaper said on Monday without revealing how it got the information. Indian Oil Corp may also join ONGC in the venture, the paper said, citing officials in the oil ministry. ONGC and Indian Oil could not immediately be reached for comment. ONGC already has a stake in Russia's Sakhalin-1 oil and gas project in the Pacific, and in 2008 it acquired the Imperial Energy oil company in western Siberia. Last December, the Russian oil-to-telecoms holding firm Sistema and ONGC signed a non-binding agreement to consider assets swaps and joint tapping of Russia's energy deposits.
India’s largest solar power to go live in a fortnight
19 June 2011;hindustantimes.com:Manu P. Toms:India’s largest solar power project will be commissioned in a fortnight. Moser Baer’s 30-MW project in Patan in Gujarat is likely to be commissioned by the end of this month or in the following week. The twin solar projects at Patan of 15 MW each have entailed an investment of around R450 crore. “The combined capacity of our projects in Patan makes it by far the largest solar project. Many projects with similar size and slightly larger ones are coming up, but they make take time,” KN Subramanium, CEO, Moser Baer Solar Systems told Hindustan Times. “The Photovoltaic project using thin film technology is expected to give better yield. This requires 7-8 acres for generating one megawatt depending on technology of thin film and land profile available at a specific site,” he said. According to him, the Patan project will remain the largest in solar sector in the country at least till the end of this year. Recently, major electricity distribution company Torrent Power Ltd, entered the solar sector and is building a 50 MW project in Gujarat.
19 June 2011;hindustantimes.com:Sumant Banerji:New Delhi: The world’s largest carmaker, Toyota, has said it would be unfair to Japanese carmakers in India, who have invested more and for a longer time, if Europe-made cars get import-duty incentives under the Indo -European Union Free Trade Agreement. Unlike the Indo-Korean and Indo-Japan FTAs, where automo biles were strictly kept out of negotiations, import duties on cars figures in the FTA negotiations with Europe, which has been pressing for a duty cut. Toyota said the government should maintain a level playing; if there is to be any relaxation in duties, it should be applicable to all companies. “I dont think the government can take one decision on Japan and another one on Europe,” said Hiroshi Nakagawa, managing director, Toyota Kirloskar Motor Ltd. “I know cars is part of the ongoing negotiations (Indo-EU FTA), but if something happens it should be for the entire industry. It should be fair to all.” Japanese carmakers led by Suzuki account for almost 52% of the domestic passenger vehicle market. The Europeans have been latecomers and account for a mere 4% of the market. If import of bigger cars from Europe is incentivised, Japanese cars could be impacted. Even heavy industry minister Praful Patel has written to prime minister Manmohan Singh and commerce minister Anand Sharma, warning that such a reduction would give unfair advantage to the European car industry. An internal report of the European Commission has also said the pact could hit India’s car industry to the tune of as much as $1.3 billion (Rs6,000 crore).
Tata Motors bags order for 10 CNG-electric hybrid buses
19 June 2011;deccanherald.com:Mumbai: Tata Motors is eliciting a favourable response for its CNG-electric hybrid buses and has received orders from overseas markets, a top company official said.
The Ratan Tata-led company has secured an order for 10 buses from Spain, he said.
"We have received an order for 10 hybrid buses from overseas markets (Spain). We expect demand for these buses to increase, not only overseas but also domestically," Tata Motors President (Commercial Vehicles) Ravi Pisharody told reporters here.
The buses have also received a favourable response from the Delhi Transport Corporation (DTC), he said.
The home-grown auto major had presented four CNG-electric hybrid buses to the DTC during the last Commonwealth Games.
The company has also handed over two CNG-electric hybrid low-floor Starbuses to BEST on a trial basis in Mumbai.
Tata Hybrid Starbus offers substantial improvement in fuel economy compared to a conventional bus. The usage of this technology leads to lower emissions and is besides, environment-friendly.
The auto major is also preparing diesel-electric hybrid buses for trials by the State Transport Undertakings (STCs) by end-this year.
"We are developing a diesel-electric hybrid and we expect a good demand for hybrids from STCs," Pisharody said.
However, the company did not reveal the pricing of both products and capacity, but said the high import content makes the product very expensive.
"We have not decided the price of the product. We are awaiting some policy support from the Government on electric vehicles and hybrids," he said.
19 June 2011;economictimes.indiatimes.com:LONDON: A cocktail of factors, including ample US crude stockpiles, unrest in the Middle East and North Africa and keen Asian demand, has caused benchmark oil prices to trade more than $20 apart, the biggest ever gap. Last week, a barrel of Brent crude oil struck a record premium of $22.79 against the price of New York crude, or West Texas Intermediate (WTI). New York prices have mostly been weighed down by plentiful crude supplies in the key transit hub of Cushing, Oklahoma, in the United States -- which is the world's biggest global oil consuming nation. However, London Brent oil has found solid support from mounting supply concerns on the back of violent unrest in Libya and Nigeria, alongside falling North Sea production. "The current very high Brent prices reflect rising geopolitical risk and possible tensions on world supply/demand balances in the future," said Credit Agricole CIB analyst Christophe Barret. "WTI, more dependent on US mid-continent balances ... should remain largely isolated from the tightening in world crude markets," he added. Brent oil on Tuesday topped $121 on the back of upbeat economic data while New York crude languished almost $23 behind. Analyst Damien Cox, at consultancy EnergyQuote JHA, agreed that the gap existed because of the different supply pictures. "The spread between Brent crude and WTI has moved to very wide levels which reflect the differing fundamentals of the two markets," Cox told AFP. "US crude stocks and importantly those at Cushing continue to trend well above average at the moment -- indeed, they're above the upper limit of their average range for the time of year. "Given a very well supplied crude market in the United States, the European market is looking less so." Brent was also driven up by news of a fresh supply outage in Nigeria, which is Africa's largest crude producer and the eighth biggest in the world. Shell in Nigeria on Monday declared "force majeure"and warned it may not be able to meet its contractual obligations for Bonny Light crude -- a type of Nigerian oil -- after multiple pipeline fires and leaks blamed on sabotage. "The weakness in the WTI/Brent spread is possibly due to Shell declaring force majeure on Nigerian Bonny Light shipments," PVM Oil Associates analyst Tamas Varga said. The Brent July contract's expiry on Wednesday could have also played a role in the record price differential, Varga added. Another factor has been unrest in Libya, which erupted in February and has removed about 1.3 million barrels per day from the global oil market. Brent has also drawn strength from keen demand in emerging markets across Asia. "The explanation for the differential appears to coincide with Brent's use as a benchmark for Asian demand and WTI being more closely aligned with the US," Westhouse Securities analyst David Hart told AFP. "As such, Brent seems to be benefiting from the growth differentials in these regions and the outlook in the future. "There are also supply factors affecting the prices such as a re-opened oil pipeline from Canada to America and lower loading expectations in the North Sea in July."
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
