Maruti Suzuki to launch more diesel models, says customer preference shifting
Friday, 03 February 2012
03 Feb 2012;economictimes.indiatimes.com:MUMBAI: The country's largest car-maker Maruti Suzuki will launch more diesel models to maintain its market share, which has been under pressure for months now, a top company executive has said. "Our market share has slipped to 40 per cent in 2011. This was due to slowdown in the industry and lower sales of petrol models compared to diesel car production," Maruti Suzuki Managing Director and Chief Executive Shinzo Nakanishi said here. The company will now focus on producing more diesel models. The company will be able to produce 300,000 diesel engines a year through Suzuki Powertrain, a joint venture between Maruti and Suzuki Motor's Gurgaon unit. Maruti will also buy up to 100,000 diesel engines annually for three years from Fiat India under a pact between the Italian car-maker and Maruti's parent Suzuki Motor Corp. This is expected to help the company produce more diesel cars, Nakanishi said. Customer preference here is fast shifting to diesel cars as the fuel is cheaper than petrol. The shift has prompted auto-makers to introduce new diesel variants and increase production of existing variants. Players like Ford have also announced plans to invest on diesel engines. Maruti's Swift, Ritz, Swift DZire and SX4 models are sold with 1.3-litre diesel engines. Meanwhile, Maruti has witnessed a turnaround in monthly sales after seven consecutive months of decline with a 5.18 per cent spike in sales to 1,15,433 units in January. It sold 1,09,743 units in the same month last year. Last December, its sales had declined by 7.1 per cent to 92,161 units. "Following the turnaround in the auto industry, our first target will be to quickly cover growth of 10-11 per cent as we have had a negative growth of 17 per cent during the April-December, 2011, period," Nakanishi said. Commenting on the Gujarat plant, Nakanishi said, "We have entered into an agreement for land at Mehsana, in Gujarat. The Gujarat plant will commence production only after we reach full capacity at our Manesar plant (1.8 million).
Oil firms resume fuel supply to Air India after four hours
Friday, 03 February 2012
03 Feb 2012;business-standard.com:New Delhi: After stopping supplies to Air India for four hours, the public sector oil marketing companies (OMCs) resumed supply after the airline assured it would make payments on Friday. The non-supply led to a delay of 25 flights across six airports. “Our oil supplies were cut for over four hours (from 4pm to 8.30pm) and resumed after assurance of a payment by tomorrow. None of our flights were cancelled but 25 flights were delayed at the six airports,” said an Air India official, who did not want to be identified. Oil supplies were stopped at Delhi, Mumbai, Chennai, Kolkata, Trivandrum and Kochi airports. The OMCs confirmed the supplies had been resumed and said if the payment is not made tomorrow, the airline will be put on cash-and-carry. “If Air India does not pay us by tomorrow evening, we will put it back on cash-and-carry,” said an oil company official, who did not want to be identified. A Group of Ministers (GoM), formed to monitor the revival of AI, had given a three-month credit period to AI, a shift from the normal credit period of 15 days. This is not the first time OMCs have stopped aviation turbine fuel (ATF) supply to airlines. On two occasions earlier, the OMCs had stopped supplies to AI and Kingfisher Airlines, on account of non-payment of dues. Today, the companies — Indian Oil Corporation (IOC), Hindustan Petroleum Corporations (HPCL) and Bharat Petroleum Corporation Ltd (BPCL) — stopped supplies after the government carrier did not clear dues for the second fortnight of October, in the range of Rs 268 crore and due on January 22, 2012. As of November 30, total dues on account of ATF supplied to Air India by OMCs was Rs 4,200 crore. Of this, Rs 3,588 crore is the principal and Rs 582.33 crore is the interest. Air India, with losses of Rs 20,000 crore and debt of over Rs 43,000 crore, owes Rs 2,380.88 crore in principal amount to IOC, Rs 635.08 crore to BPCL and Rs 573.01 crore to HPCL. Besides, it owes an interest of Rs 423.43 crore to IOC, Rs 92.73 crore to BPCL and Rs 66.17 crore to HPCL. A GoM working on the revival of AI has also recommended an infusion of Rs 23,000 crore in the airline till 2020-21.
02 Feb 2012;business-standard.com:The domestic alcohol industry has raised concern over the fixed price of ethanol and demanded inclusion in the process of determining prices. So far, only the chemical industry, the second-biggest consumer, had been opposing the mandatory blending of ethanol with petrol, at a fixed price. The Confederation of Indian Alcoholic Beverage Companies (CIABC), which includes leading liquor players like United Sprits and Radico Khaitan, has made a case for the industry’s inclusion in the price determination of ethanol. Earlier this month, CIABC director-general Pramod Krishna met cabinet secretary Ajit Kumar Seth to highlight the body’s apprehensions. The alcohol industry, the biggest consumer of molasses, the primary raw material for ethanol, is seeing a 14 per cent rise in annual demand. The concern of the potable alcohol industry on the adverse effect of the ethanol blending programme (at five per cent with petrol) on ethanol availability at market-driven prices for raw material needs to the industry had not been considered, despite repeated representations to the Planning Commission and other government departments, Krishna had said. Any process of price fixation of ethanol which does not have representation of major consumers of ethanol or does not take their concern into consideration was arbitrary, he had said. The implementation of ethanol blending and non-supply of the entire contracted quantity of ethanol by the sugar industry to oil companies had led to artificial scarcity and had increased the prices of ethanol/ethyl alcohol. According to Krishna, prices of extra neutral alcohol have risen from Rs 26 a litre in September 2010 to the current Rs 36-37. The potable alcohol industry contributes Rs 48,000 crore annually to the state exchequer in form of taxes, duties and levies on products by the industry. Non-availability of the industry’s main raw material on account of a fixed price and supply contracts between ethanol producers and oil companies can affect alcohol production, and in turn, states’ revenues, Krishna said. According to CIABC, the reduced availability and sharp increase in ethanol prices would lead to a rise in production costs. The prices of Indian-made foreign liquor is regulated in states like Andhra Pradesh, Tamil Nadu, Kerala, Delhi, Haryana, Rajasthan and Orissa, which together account for 60 per cent of sales. Therefore, any increase in raw material price cannot be passed on to end consumers in these states. Even in markets that have free pricing, the increase in the prices of the final products would have a cascading effect on taxes, making the products uncompetitive. The blending of ethanol at a proportion of five per cent with petrol began in 2007, but came to a halt in 2009, owing to low supply due to a fall in sugarcane output and default in supplies. It was reintroduced in November 2010. However, ethanol producers had defaulted on supply contracts and supplied only half the contracted quantity last year. Currently, supplies are being made at an ad-hoc price of Rs 27 a litre, as decided by a group of ministers. This price is due for revision, according to a quarterly petrol price linked formula suggested by the Saumitra Chaudhuri committee.
TVS Motor logs five percent sales growth in January
Wednesday, 01 February 2012
01 Feb 2012;economictimes.indiatimes.com:CHENNAI: Two- and three-wheeler maker TVS Motor Company Ltd closed last month with a five percent sales growth compared to January 2011. Announcing the monthly sales figures Wednesday, the company said it had sold 173,514 untis (171,112 two-wheelers and 2,402 three-wheelers) last month, up from 165,152 units (two-wheelers 161,725 and three-wheelers 3,427) sold in January 2011. Within the two-wheeler segment, TVS Motor's sales of motorcycles last month was lower by 2,113 units as compared to 67,721 units sold in January 2011. However, the company's sales of scooters and mopeds saw growth. TVS Motor sold 41,469 scooters and 66,437 mopeds last month as against 40,736 scooters and 56,695 mopeds sold in January 2011. The company's total exports last month came down to 18,610 units (two-wheelers 18,008, three wheelers 602) against 21,224 units (two-wheelers 19,498, three-wheelers 1,726) in the same month of the previous year. The company's cumulative sales for the period April 2011 to January 2012 grew by 10 percent with sales of 1,843,554 units as against 1,678,048 units recorded in the previous comparable period.
01 Feb 2012;business-standard.com:New Delhi: Protests by coal consumers, led by the power industry, against the government move to switch to a new pricing methodology have forced state-owned miner Coal India Ltd (CIL) to roll back the price hike under the Gross Calorific Value (GCV)-based system effected on January 1. Terming the CIL decision to raise rates an “error”, coal minister Sriprakash Jaiswal made it clear the rollback had more to do with the fear of passing on the increase to power tariffs than bringing a more efficient grading system. Announcing the rollback, he said, “Our country is not in a position to increase power prices.” While the rollback has come as a breather for consumers, as it makes the switch to GCV revenue-neutral, it has eroded Coal India’s cushion against a Rs 6,500-crore impact of a wage hike for its 3,63,000 workers agreed on Tuesday. The new grading system that led to an average 12.5 per cent increase in prices would have given additional revenue of Rs 6,250 crore to the miner annually. “The additional revenue that could have come from the increase in prices will not be available now. But, this is not a cause for worry, as the new pricing system will be reviewed after three months and a clear picture would emerge then,” CIL Chairman N C Jha told Business Standard. Jha also told a media gathering that some CIL subsidiaries could suffer a revenue loss as a result of the rollback but the exercise would remain revenue-neutral for the company as a whole. CIL was asked to review the new system by January 31 after a meeting of the standing committee on coal and steel on January 20. "When we made a switch to the GCV system, there was perhaps an error by Coal India and coal prices went up," the minister said on Tuesday. CIL’s share price on the Bombay Stock Exchange closed at Rs 325.6, down 2.9 per cent from the previous close. The miner had decided to do away with the earlier system of pricing based on Useful Heat Value (UHV) a month back in an attempt to align pricing with global practices. Power generator NTPC Ltd had recently said the GCV system had pushed up input costs 40 per cent. The coal ministry rejected the claim, arguing the switch was not a cover-up for profiteering. The move was a response to complaints of inferior quality supply from consumers, according to the ministry. The power industry had raised the price hike issue in meetings with the Prime Minister and the coal minister on January 18. Jaiswal had assured there would be no “irrational increase in prices”. Jha said a final call on price revision, if required in view of the wage hike, would be taken after studying in March the impact of the GCV review on CIL.
01 Feb 2012;business-standard.com:Mumbai: Maruti Suzuki is trading higher by 3% at Rs 1,225 after the company reported 5.2% year-on-year (y-o-y) growth in vehicle sales at 115,433 units for the month of January after consecutive decline in the previous seven months. The company had sold 109,743 units in the same month in the previous year, the India’s largest car maker said in a statement. The company recorded sales of 101,047 units in the domestic market last month, up 0.6% from 100,422 units in January, 2010. The exports, however, jumped by 54% in January, 2011, to 14,386 units from 9,321 units in the year-ago period, the company added. A combined 339,277 shares have changed hands on the counter so far on both the exchanges.
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