20 Dec 2010;business-standard.com:New Delhi: The country's largest car maker Maruti Suzuki India's 'completely made in India car' will hit the roads by 2012 and the company is likely to finalise the design within the next six months. According to people in the know of the project for the car, the company will finalise the design, engine size and how to position it in the market within the next six months. "It is likely that the made in India car will be positioned along with MSI's its best selling model Alto," a source said. Internally MSI has set 2012 as the launch target, the source added. At present MSI still depends on parent Suzuki for its future model design and development programme. It is, however, spending around Rs 1,500 crore over the next 3-4 years at its R&D centre at Rohtak -- Suzuki�s only such significant centre outside Japan -- to scale up its vehicle development programme and become self reliant. When contacted an MSI spokesperson said,"For customers' benefit, product development and technological innovation are continuous processes at MSI. We do not comment on future models and plans." The 'Made in India' car has been developed keeping in mind rival Hyundai Motors India's small car that is also likely to be unveiled in early 2012. Hyundai is also designing and developing the car keeping in mind the Indian market. Hyundai's small car is expected to be positioned below the company's existing flagship model, Santro, and operate in the segment that the Alto from Maruti Suzuki is in. Alto is currently the highest selling car model in India, with average sales of over 20,000 units per month, and is priced between Rs 2.29 lakh and Rs 3.26 lakh (ex-showroom, Delhi).
21 Dec 2010;hindustantimes.com:Mahesh Langa & Sumant Banerji:Sanand/New Delhi: With demand slumping, production taking a nosedive and unsold cars piling up, the world's cheapest car, the Nano, now poses a daunting challenge for Tata Motors. As many as 7,000 cars are parked in the open at the company's Sanand factory in Gujarat amid record low sales figures of just 509 cars in November, according to the Society of Indian Automobile Manufacturers (SIAM). The rise in inventory has forced the firm to slow down production and only a few dozen cars are being produced every day, sources at the factory told Hindustan Times, though the company said the situation was in line with its plans. "The slow rate at which cars are being picked up from the factory, it will take more than six months to clear the stock lying in the ground," an insider at the plant said. Originally billed as the Rs 1 lakh car, the Nano, now has a showroom price range of Rs 1.37 lakh to Rs 1.88 lakh in Delhi, depending on the features a particular model includes. Vendors who supply parts to Tata Motors said orders have been reduced and it was unlikely sales would match the projections of 20,000-25,000 units every month by March 2011 that the firm had made when it inaugurated the Sanand factory in June this year. "We are concerned about the slow production because we have seen cuts in orders for components that we supply to the company for the car," a leading vendor told HT. "Earlier, we were given a very higher projection of production, but the demand has not been as per the expectation, which apparently forced a fall in production." Tata Motors said the situation wasn't abnormal and in keeping with its plan "to keep inventory which is just appropriate during the end of the year". "Tata Motors has clear visibility and an action plan on the marketing, financing, sales and manufacturing of the Nano," the company said in an email response to HT. "Existing customers are happy with the car and as open sales are expanded the numbers will also increase." The firm has allocated plots to 41 vendors at the vendor park adjacent to the car plant spread over 375 acres. Of these, 25 have started construction and six plants are on the verge of commencing production. Its suppliers are hopeful the company's optimism is not misplaced. "Our plant is almost ready and we should start production next month," said Arvind Kapur, CEO and managing director, Rico Auto Industries. "I think the inventories have gone down and by March when sales open up around the country, Nano sales should go up. At present the company has placed orders for only as much as they need."
21 Dec 2010;hindustantimes.com: Police patrolled the streets of Tehran and other cities as Iran on Sunday started a politically sensitive overhaul of the way state subsidies are handed out. Gasoline prices were increased overnight by nearly 60 per cent, but most Iranians were allocated a small amount of fuel at severely reduced prices for the coming month in order to soften the price shock. New, increased prices for products such as bread, heating oil, water and other utilities were expected to be announced Sunday, officials told state media. The overhaul is highly sensitive because it will raise the prices of nearly all daily commodities and is expected to increase inflation. More than 60 million Iranians have been given the equivalent of $80 as compensation. Many Iranians believe that cheap fuel is a birthright. When Iran introduced a gasoline rationing system in 2007, dozens of gas stations were burned down in the capital, but generally people adopted quickly to the change. No incidents were reported Sunday, but riot police were seen on standby near key squares and gas stations.
20 Dec 2010;economictimes.indiatimes.com:Sagar Malviya:MUMBAI: Tata Motors has launched its first television commercial for Nano to revive the sales of the world’s cheapest car that fell to a record low of 509 units last month. The commercial, created by Rediffusion Y&R, portrays Nano as a spacious and sturdy car and shows two-wheeler owners envying its performance. “We are aiming for the masses and twowheeler customers also fall under that,” Tata Motors spokesman Debasis Ray said. “We want to highlight the proposition of the car, its reliability and durability and to position it as a family car,” he added. The commercial signals a u-turn in the marketing strategy for Nano, which had a next-tonothing marketing budget earlier. Tatas have launched a multi-crore media campaign to rebuild Nano’s brand image that took a beating after some instances of the car catching fire. Tata Motors’ Sanand plant in Gujarat has a capacity to make one Nano every minute, or about 20,000 cars in a month, but it sells less than 4,000 units. Therefore, analysts say, aggressive marketing will be the norm rather than an exception. “Nano’s off take is not as much as they would have expected,” IDBI Capital research head Sonam Udasi said. The company has excluded Nano from a 1-1.5% increase in passenger car prices from January 1 to retain its appeal. Two-wheeler makers are, however, not worried about Nano’s threat. “The buying and operating cost of a two wheeler is just a fourth of a car,” TVS Motors marketing president HS Goindi said. “And our volumes are so huge that it cannot be matched ever,” he added. The price difference between the base versions of Nano and a two-wheeler ranges between Rs 50,000 to Rs 80,000. It is too big an amount to lure an entry-level bike buyer, say experts. So, while there may be some shift, it will not be significant enough to make a big impact on two-wheeler market. Tata Motors is creating a countrywide network to sell Nano off the shelves by March that will include 1,000 odd special Nano kiosks. It aims to reach volumes of 12,000-15 ,000 units a month by March-April 2011. It needs to sell close to 10,000 Nanos per month to reach break-even within the next ten years, say experts. An advertising executive said the company is planning another television campaign early next year to attract families. Since its first delivery in July last, Tata Motors has dispatched more than 71,000 Nanos.
20 Dec 2010;economictimes.indiatimes.com:Rajeev Jayaswal:New Delhi . The oil ministry plans to raise cooking gas prices by Rs 50-100 per cylinder as the international price of liquefied petroleum gas has jumped by almost 66% since August. The rise in global prices is hurting state-run oil firms as India imports 3 million tonnes of LPG a year. The government will, however, take a decision on Wednesday only after weighing the political implications of a hike against the need to shore up the finances of companies such as Indian Oil Corp , which plans to raise Rs 20,000 crore from a public issue in 2011. International price of LPG has soared due to winter demand, and consequently the subsidy on every cylinder is set to jump to Rs 367 per refill from January 1, which is more than the retail price of Rs 345.35 in the Capital, two officials with direct knowledge of the matter said. The oil ministry will seek the approval of the empowered group of ministers (EGoM), which is also expected to consider higher diesel rates, when it meets on Wednesday, officials said. “We can’t tell the quantum of price hikes (of cooking gas and diesel) as the EGoM is the deciding authority. We will merely place facts before it,” an oil ministry official said. The decisions of the EGoM are final and do not require the cabinet’s nod. India, the largest consumer of LPG in Southeast Asia, meets its domestic demand by importing about 3 million tonnes of cooking gas. The Petroleum Planning & Analysis Cell , an arm of the oil ministry, estimates domestic LPG demand at 14 million tonnes in 2010-11. The country’s dependence on LPG imports is increasing due to a 5-8% annual growth in consumption. State-run oil companies are selling cooking gas at Rs 345.35 per cylinder in New Delhi. Their losses on its sale, compared with international rates, will jump to about Rs 367 per cylinder from January 1 as the import price of LPG for the next month has soared, officials said. State-run oil companies declined to provide rates at which they are importing LPG cargoes next month, terming it a commercial secret. Global LPG price, which was less than $600 a tonne in August, has touched around $1,000 a tonne and is still rising, an expert at a state-owned oil firm said, requesting anonymity. Oilcos losing Rs 5/litre on diesel LPG is a mixture of propane and butane. The mixture is predominantly propane in winter and butane in summer. As per reports, Algerian firm Sonatrach’s December selling price for propane was $925 per tonne, while it was selling butane for $985 per tonne. Sonatrach is the world’s third-largest LPG exporter. Oil firms raised petrol prices by about Rs 3 per litre last week, but they do not have the freedom to raise prices of diesel, cooking gas and kerosene. State-run firms IOC, BPCL and HPCL are losing about Rs 5 on every litre of diesel.
20 Dec 2010;business-standard.com:Swaraj Baggonkar:Mumbai: The pollution rules set to be enforced from 2015 require heavy investment in R&D, new tech. More stringent emission norms, set to kick in by 2015 for two-wheeler makers, seem to be one of the reasons why Honda opted to end its 26-year-old alliance with the Hero Group. The new Bharat Stage IV norms, to be imposed across India for two-wheelers by then, would be very different from the Bharat-III ones enforced today. Manufacturers are supposed to make technical changes to their vehicles accordingly. While the norm for two-wheelers was upgraded to Bharat Stage (BS)-III from BS-II, it was upgraded to BS-IV in select cities for cars and SUVs, earlier this year. Industry sources say Honda and other global two-wheeler makers are investing heavily on upgrading technology to comply with new emission norms in different parts of the world. While the Indian two-wheeler market will move to BS-IV (corresponding to Euro-IV) in 2015 ,the European region will be upgraded to Euro-V in the same period. The step is aimed at reducing pollutants significantly, as over 15 million two-wheelers are expected to be sold yearly from 2015 onwards in India. V G Ramakrishnan, senior director, Frost & Sullivan, said, “Honda knows better fuel injection systems are required to meet the next level of emission standards in India. The company has invested heavily in making its products more fuel-efficient. This technology could not have been shared with Hero Honda.” Already, concern was being raised by many shareholders, including institutional investors of Hero Honda, regarding higher royalty payments to Honda Motor Company. Increased sharing of technology over newer emission norms would have meant greater royalty payouts. “Royalty was a key issue with Hero Honda because this impacted profitability of the company. Hero Honda's strength in maintaining margins could definitely have been challenged if Honda continued with its high royalty charges,” stated an analyst from a Mumbai-based brokerage firm. An email to Honda Motor Company, seeking clarity on the deal and the proposed effect of enforcement of new emission norms, was not answered at the time of going to press. The new norms will pose a challenge to the Hero Group, which is now looking to develop its own research and development wing. Hero Honda is India’s largest maker of two-wheelers. It was unable to upgrade its range to BS-II from BS-II in time for meeting this year’s March 31 deadline, forcing the government to extend the time-limit for implementing cleaner emission norms for two-wheelers across the country. The company's largest selling brand, Splendor, was running on a BS-II engine until April 1. The company upgraded it to BS-III only in June, after road transport offices refused to register the motorcycle. “Honda’s ability to develop products suiting Indian conditions remains very high. Post the JV split, Honda can now get more aggressive in the entry and executive segments. This would result in increased competition for all players in the Indian market. The domestic two-wheeler market is expected to maintain its growth momentum over the medium term and pricing pressures may not be high, despite increased competition,” said, Manish Kedia, analyst from Icra.
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