Hero MotoCorp to launch its own bikes ahead of schedule
28 Dec 2011;business-standard.com:Sharmistha Mukherjee:New Delhi: Within a year of having parted ways with Honda Motor Corporation, Hero MotoCorp plans to launch its own range of two-wheelers before 2014 without its former partner’s help. Hero promoters, the Munjals, have an agreement for sourcing technology and two-wheeler models from Honda till 2014. While the leader, Hero MotoCorp, has 45 per cent market share of the two-wheeler market, its now rival Honda is the fourth largest player with 13.8 per cent. Top Hero executives said they had tied up with technology providers globally and commenced work on the company’s first product to be developed mainly at its own research and development centre. president (marketing and sales), Hero MotoCorp, said, “We had been scouting for several potential partners globally and have now started work with some of them. There are collaborations in progress.” While Hero’s local research and development team has been mandated to evaluate consumer requirements in the domestic market, technical tie-ups have been forged with firms worldwide to source expertise in specific areas. Before the termination of the joint venture, Hero-Honda, Honda supplied it technology while the Munjals-promoted Hero Group marketed the products. “The local R&D team has an interface with the market here. We will put the concept together for all future products and then source the technology required from experts globally for developing synergistic output,” added Dua. While Dua declined to specify the timeline for the first product to be developed indigenously by Hero, he said the company was working towards attaining all targets to operate self-sufficiently before the licensing agreement with Honda would end in June 2014. “We have the right to use the Honda brand till June 2014. However, we are not taking a breather. We have already launched our new corporate identity and introduced Impulse, the first product under the Hero brand. We would work faster than has been outlined. The first product developed independently would happen much faster than expected,” said Dua. The company has finished extensive market surveys and started modifications of products for launch in foreign markets in 2012. Hero has identified 30 countries to scale up its international business. The company expects 10 per cent of its business to come from international operations by the end of the decade.
27 Dec 2011;deccanherald.com:New Delhi: The government, on Tuesday, said the country is likely to import 194 million tonnes (MT) of coal in 2017, as against 135 MT at present, to meet the demand of the power sector. “In the current year, we have to import 135 MT of coal to meet our power sector requirement. The demand will increase further as we are setting up new power plants. It is expected that we will have to import 194 MT of coal in 2017,” Minister of State for Coal Pratik Prakashbapu Patil said.
27 Dec 2011;economictimes.indiatimes.com:Pankaj Doval:NEW DELHI: Macho wheels will take centre-stage at the upcoming Auto Expo as SUVs are set to emerge as the watch-outs at the week-long automobile extravaganza that kicks off on January 5. On display will be a host of new SUVs that are set for a run on Indian roads even while some of the existing ones get upgrades. The SUVs that will be unveiled include Audi's Q3 mini, Ford's Eco Sport, Renault's Duster, Tata's new Safari (codenamed Merlin), Mercedes' new M-Class and the Rexton and Korando from Mahindra-owned Korean-maker Ssangyong. Apart from these, there will be upgrades to some of the existing models including the Toyota Fortuner, Chevrolet Captiva and Force Motors' Force One. So what is the reason that SUVs have emerged as the focus segment at the Delhi expo. "The SUV segment has witnessed fantastic growth rate in India over the last few years and holds the maximum potential in terms of demand," says Abdul Majeed, who tracks the auto industry at PricewaterhouseCoopers India. Better road connectivity between cities has been among the reasons fuelling the growth. "Also, people want bigger cars as they travel from one city to the other with families," says Debasish Mitra, director (sales & marketing) at Mercedes Benz India. Another factor that has been fuelling the growth in the segment is the aspirational value of SUVs. "There is a desire among most car owners to own an SUV. So the moment they think about upgrading their car, SUV is something that they always consider," Majeed says. And the expo is sure to spoil them for choice. While Ford is still not forthcoming to reveal details about the Eco Sport, the mini 5-seater SUV is expected to be based around its Fiesta sedan. On the other hand, Renault will bank a lot on the Duster which will be manufactured at its Chennai plant. The vehicle is expected to be priced aggressively, around Rs 8 lakh if initial estimates are to be believed, and the company will hope to make some real inroads into the Indian market. The Merlin is also an eagerly-awaited vehicle from the Tata stable, and will offer refinement over the Safari. But one of the game-changer will be the Q3 mini SUV from Audi, a model that will compete with BMW's entry-level hot-seller X1 which costs Rs 22.4 lakh (ex-showroom all-India). Audi has always dominated the luxury SUV segment in India and the Q3, which is expected to debut around the middle of next year, is seen as the vehicle that will take Audi ahead of Mercedes Benz in India and become the second-biggest luxury maker, behind BMW. It will also be interesting to see what strategy Mahindras adopt with Ssangyong's Rexton and Korando. The two products will mark the company's entry into the luxury SUV space and Mahindra would like to see whether the market is as eager to lap up products from Ssangyong as it has done with its XUV500 and Scorpio SUVs.
Tata Motors to replace starter motor in 1.40 lakh Nano cars
26 Dec 2011;timesofindia.indiatimes.com:NEW DELHI: In the biggest-ever replacement exercise in Indian automobile history, Tata Motors has asked an estimated 1.40 lakh Nano owners to bring back their cars for change of the starter motor free-of-cost. Vehemently denying this is a recall, the company said it is changing the old starter motor with a new and 'better' one, an exercise that will reportedly to cost the firm around Rs 110 crore. "We have devised a better starter motor and so we are upgrading it in our old Nanos for improved performance. We have not received any complaint for this and this is not a recall," a Tata Motors spokesperson said. The company started the exercise in October and has already replaced the starter motor in about 50,000 Nano units, he added. When asked about the total number of cars that will be covered under this replacement activity, the spokesperson said: "We will change the part in all the old Nanos that were sold before launching the Nano 2012 in November." According to Society of Indian Automobile Manufacturers data, Tata Motors has sold a total of 1,40,428 Nano units till November, 2011, since the car's launch in 2009. On November 21 this year, Tata Motors introduced an upgraded Nano with a facelift, a more powerful engine, better fuel efficiency and new features, while keeping the price the same, in a bid to boost sales. Asked about the cost of replacing the starter motors, the spokesperson declined to comment. However, as per reports, the company is likely to incur a total outgo of Rs 110 crore for replacing the key component, which is responsible for starting the engine.
Energy deficit may rise up to 15% as weak rupee hurts coal imports
26 Dec 2011;economictimes.indiatimes.com:Devika Banerji & Sarita C Singh: NEW DELHI: Electricity generation by plants running on imported coal is likely to drop in the coming months following a sharp depreciation in the value of the rupee, tripping one of the few drivers of India's flagging industrial production. The near-20% rupee depreciation in the last six months has substantially increased generation costs of many power utilities that were forced to use imported coal because of stagnant domestic production, forcing them to cut generation. "Rupee depreciation has made purchase of imported coal unviable for most companies. We currently have an energy deficit of around 10%. It can leap to 12-15% if domestic coal is not made available to them in the short term," said a Planning Commission official. This, in turn, is likely to have adverse ripple effects on India's macroeconomic indicators. Electricity generation grew 8.6% during April and October compared to 4.8% in the year-ago period, despite a 5.5% decline in coal production during the same period. This growth was because of addition of imported coal-based 4630 MW of capacity in 2011 and boilers increasing blending of local coal with imported coal to 20-30%, up from traditional levels of 10-15%. As a result, according to the Central Electricity Authority, India's overseas coal purchases rose to 20.9 million tonnes between April and September from 12.3 mt during the same period last year. In addition to the weakening rupee, imported coal too has become dearer by 30-35%. "Prices are so high that coal is piling in the ports and companies are reluctant to buy even at spot prices," said Debashish Mishra, a senior director with Deloitte India. "Power cuts have already become a norm in many places and it's likely to be worse going ahead." In November, more than 11mt of imported coal, enough to light up five cities as big as Delhi, was lying at ports for over four months as producers refused to buy the costly coal despite acute fuel shortage. "This has significant implications for our near-term growth. Shortage of power will considerably weaken the impact of any monetary easing," said Jyotinder Kaur, economist, HDFC Bank. Power generation directly impacts around 2% of India's gross domestic product and can stall growth in sectors like services and agriculture. "It can pull GDP down to 6.5% and in the long term might make achieving a growth of 8-9% unsustainable," Kaur added. Global investment bank Goldman Sachs recently cut the target prices of Indian generators across the board by up to 61%, citing earnings hit for the segment from a weak rupee, high fuel costs and delays in capacity addition. Ratings agency Fitch has raised similar concerns over the increased dependence of Indian plants on imported coal and their inability to pass on the costs that is likely to lead to default on debt obligations. Ashok Kumar Khurana, director general of the Association of Power Producers (APP), said unavailability of domestic coal coupled with non-viability of imported coal is hitting the power sector hard. "Today the Indian power sector is in a critical state. We have a scenario of projects of around 20,000 mw operating at sub-optimal capacity. Coal India is in position to supply coal as committed and there is a limit to which boilers can use imported coal," Khurana said.
OilMin says no provision for penalty in RIL's KG-D6 contract
26 Dec 2011;business-standard.com:New Delhi: As it gets ready to take action against Reliance Industries for dip in output at KG-D6 fields, the petroleum and natural gas ministry has told a Parliamentary Committee that the production sharing contract for the block does not provide for penalty in case of shortfall in production targets. "There are no specific penalty stipulations in PSC in case of shortfall in achieving production targets envisaged in either the approved Field Development Plan or Annual Work Programme and Budget, except termination of the contract," the ministry told the Standing Committee on Petroleum and Natural Gas, whose report was tabled in Parliament last week. submission made to the committee, the ministry wants to limit the amount of expenditure RIL can recoup in proportion to the gas production from KG-D6, as it feels the 40 per cent drop in output was because the company did not drill the committed number of wells. Fearing of such a move, RIL had on November 24 slapped an arbitration notice seeking to address the issue legally. The Ministry last week sought time till January 31 to reply to the notice. The panel in its report expressed surprise at the lack of specific penalty stipulations in PSC and asked the government and its upstream technical arm, DGH "to review PSC contracts entered with various operators and incorporate stringent provisions therein for any breach in approved plan." The PSC allow operators to recover 100 per cent of their exploration and production costs and do not link cost-recovery to output. The Ministry told the panel that annual production targets are first approved by the operator (RIL)-led operating committee (OC). These are reviewed technically by DGH and "subsequently deliberated, reviewed and approved in the Management Committee" which comprises representatives of not just the operator but also the ministry and DGH. Gas output from Dhirubhai-1 and 3 gas fields in the KG-D6 block has fallen from 54 million cubic meters per day achieved in March 2010 to 32.94 mmcmd this month instead of rising to planned 61.88 mmcmd. RIL has so far drilled 22 well on the fields instead of 31 committed by April 2012. DGH, the ministry told the panel, is asking "the operator (RIL) to expeditiously drill wells in line with approved field development plan (FDP) during the year 2011-12, which may help to revive the falling gas production from these fields." The company had to shut down four wells due to water ingress/other problems, it told the panel adding the DGH was carrying out well-wise performance analysis to ascertain the reasons of decline in gas production from existing wells.
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