26 August 2010;economictimes.indiatimes.com:NEW DELHI: The country's largest carmaker Maruti Suzuki is understood to have considering setting up a third plant at its Manesar unit that can entail an investment of about Rs 1,700 crore. According to industry sources, the company is mulling an additional plant that will have an annual capacity of rolling out 2.5 lakh units per year. At present, the company is investing a similar amount of Rs 1,700 crore to increase the capacity at its Manesar plant by 2.5 lakh units that will be operational by 2012. "The third plant at Manesar is likely to have almost the same investment and capacity like the second one," a source said at the Society of Indian Automobile Manufacturers (SIAM) summit here today. When contacted a Maruti official declined to comment saying that the company is currently focusing on the second plant. Maruti Suzuki India's Manesar plant has annual production capacity of three lakh units, while the Gurgaon plant produces seven lakh units per annum. Recently the company's Managing Director and CEO Shinzo Nakanishi had stated that the Indian car market is likely to double to five million units by 2015 and the company needs to be prepared to meet the growing demand in order to maintain its leadership position. According to SIAM, the market leader sold 2,82,488 cars during the April-July period this, representing a 47.68 per cent share in the overall 5,92,405 units market. In the comparable year-ago period, MSI had a 53.13 per cent share in the 4,40,069 units car market, with sales of 2,33,811 units. However the company was hopeful to regain an over 50 per cent share of the domestic passenger car market by the end of this fiscal.
26 August 2010;dailypioneer.com:New Delhi: Contrary to reports, oil PSUs will not make a counter bid to Vedanta Resources’ $9.6 billion offer to buy Cairn India, with Oil Ministry now disinclined to a rival bid. “There is no counter bid,” a top oil ministry official said. “The price at which Vedanta is acquiring Cairn India already is too high.” The change in stance possibly came about after Vedanta Resources Chairman Anil Agarwal spoke to Oil Minister Murli Deora at least on a couple of occasions this week. There were also reports that Agarwal met Congress President Sonia Gandhi on Tuesday on issues relating to his India projects, but no confirmation could be obtained. Also, the Prime Minister’s Office is believed to have discussed the issue, sources said, adding that Cairn Energy is likely to respond to the ministry’s queries by Friday. The ministry, which till early this week was nudging state-owned Oil and Natural Gas Corp (ONGC) to cobble up an alliance with Oil India and gas utility GAIL for a rival bid, says that it is only awaiting clarifications from UK’s Cairn Energy Plc on it selling majority stake in Cairn India. This is what ONGC has been contending from August 16 when the deal was announced, but the ministry was pushing it to examine a counter bid. “We are awaiting response to certain clarifications sought from Cairn Energy and will decide (on giving approval to the deal) after that,” the official said. Meanwhile, the board of ONGC, which is a 30 per cent partner of Cairn India in the prolific Rajasthan oilfields that are at the centre of its parent Cairn Energy’s deal with Vedanta, is likely to be briefed about the possible scenarios. “The matter is being taken to the board as a non-agenda and a status (report) would be presented,” a source said. Cairn Energy chief executive Bill Gammell had on Tuesday stated that his firm would seek “Government of India’s endorsement and any necessary consent” for the Vedanta deal. Cairn Energy is selling up to 51 per cent out of its 62.37 per cent stake in Cairn India to Vedanta, the mining company controlled by NRI billionaire Anil Agarwal. The firm had last week written to the Oil Ministry detailing the Vedanta deal. The Ministry was not satisfied with the details and wrote to Cairn Energy seeking explanation on provisions of the production sharing contract (PSC) in case of stake transfer. The letter states that certain PSCs entered into by Cairn India for exploring for oil and gas, have parent company guarantees and some PSCs have explicit provision of prior government consent in case of change of ownership. Sources said the ministry feels government approval is pre-requisite for conclusion of Cairn-Vedanta deal. On the other hand, Cairn Energy fells the Vedanta deal is a corporate transfer and not sale of stake in an oil field that would have triggered need for regulatory approvals. Had Cairn Energy sold its shareholding in the stock market, Government could not have done anything, they said, adding that Cairn India as a company continues to exist and only its shareholding is changing. Cairn India holds 70 per cent operator interest in the 6.5 billion barrels Rajasthan block. The PSC for the Rajasthan block provides for explicit government approval only in case of a party selling its interest in the block, but does not make the nod mandatory in case of change of ownership at corporate level like in the Cairn-Vedanta deal. State-owned Oil and Natural Gas Corp (ONGC), which has 30 per cent interest in the Rajasthan block, believes it has the pre-emption or right of first refusal to buy Cairn India in case the company’s ownership changed. But, the Joint Operating Agreement, between Cairn India and ONGC, gives partners pre-emption rights in case of sale of interest by either parties in the block but not in case of corporate ownership change, they added.
Fiat to export cars to neighbour countries by year-end
Wednesday, 25 August 2010
26 August 2010;hindustantimes.com:Fiat India on Thursday said it will start exporting cars to neighbouring markets -- Bhutan, Sri Lanka and Nepal -- by the end of 2010. The company, which has already started exporting its models Linea, Punto and Palio to South Africa, will look to enter the Bangladesh market by next year, an official of Fiat India Automobiles Ltd said on the sidelines of the SIAM summit in New Delhi. "We see opportunities in the neighbouring markets for our products, specially Sri Lanka, where the government has thrashed the import duty on new cars," the official said. Recently, the Sri Lanka government had brought down the import duty to 117 per cent from over 200 per cent earlier, the official said. Fiat has a joint venture with Tata Motors through which they share production facility at Ranjangaon in Maharashtra and distribution network as well.
Honda Cars undecided about vehicle assembly in Rajasthan
Wednesday, 25 August 2010
26 August 2010;timesofindia.indiatimes.com:NEW DELHI: Premium carmaker Honda Siel Cars India (HSCI) on Thursday said it is yet to decide on starting vehicle assembly in its second plant in Rajasthan, which has been put on hold indefinitely since last year. "We have not yet decided on the vehicle assembly...it will depend on the full capacity utilisation of our first plant in Greater Noida," HSCI Vice-President Jnaneshwar Sen told reporters at the Society of Indian Automobile Manufacturers (SIAM) summit here. The company had announced an investment of Rs 1,000 crore in the Tapukara plant having an installed capacity of 60,000 units per annum. It has recently increased the investment by Rs 250 crore. "We will launch our new small car in the next year from the Greater Noida plant. Once the capacity is fully utilised, we will move to Rajasthan," Sen said. Greater Noida has a capacity to produce 1 lakh vehicles a year. Currently, it is utilising about 60 per cent of its full capacity. In April-July period, the company sales had declined to 16,925 units from 17,749 units in the year-ago period.
M&M-Ssangyong to source $4-5 bn worth of components
Tuesday, 24 August 2010
25 August 2010;business-standard.com:Swaraj Baggonkar/Mumbai: Though domestic utility vehicle market leader Mahindra & Mahindra hasn’t yet formally bought cash-strapped SUV maker Ssangyong Motor Company, it has already started to lay down a road map for the South Korean auto maker. M&M plans to source automotive components worth $4-5 billion (Rs 19,000-23,000 crore) over several years from global markets for Ssangyong and itself. A substantial portion on this would come from India, where M&M has built a network of about 200-odd component vendors. The sourcing will largely aid the joint product development plan which M&M is contemplating with Ssangyong in the areas of premium sports utility vehicles and crossovers. Besides new products, M&M also has plans of tapping into the engine options of Ssangyong, while developing new engines with Ssangyong’s strong R&D setup. “Ssangyong may not have a product line-up which is as grand as some of the global car makers but we are very optimistic about the ones which are in the pipeline. Our strength of low-cost manufacturing and component sourcing plans will change Ssangyong,” said a source from the company. M&M, which expects to complete the detailed due diligence process by September and wrap the deal by November, has made it clear that it will have to set up an assembly line for at least two of Ssangyong’s products — Korando C and Rexton — in India. Ssangyong is mainly into the SUV segment and had showcased the Korando C, a compact SUV which is also its newest offering, at the Frankfurt Motor Show. In addition, the Super Rexton, which will replace the ailing Rexton II, is the premium product in the company’s line-up. Sources say the luxury sedan, Chairman W, which is also the new version of the premium model, will be tested for the export market by M&M, something held back earlier by the previous owner. The Chairman W is powered by a 5-litre, V8 engine (Chairman W 5.0 version) that develops 306 bhp of peak power. It competes against other premium models such as Mercedes S-class, BMW 7-series and Audi A8. The multi-crore buy-out will allow M&M to get access to the advanced research and development (R&D) centre of Ssangyong, which according to industry experts is one of the finest in South Korea. “There are about 600-odd people working at the Ssangyong R&D facility. They have a very high quality centre, which is fully capable to carry out design and engineering aspects of product development, besides testing,” said an M&M source. Since the start of the year, Ssangyong vehicles have seen a substantial growth in demand. In the January-June period, sales grew nearly three-fold to 36,512 units, as compared to 13,020 units sold in the same period last year.
Carmakers focus on design, lifestyle features & marketing
Tuesday, 24 August 2010
25 August 2010;economictimes.indiatimes.com:NEW DELHI: Atul Madanpotra bought his first car last month: a red Maruti Swift. “I liked the styling and the overall value that the car offers; it is well powered, spacious and easy to drive,” says the 24-year-old IT executive in Delhi. The youth is clearly in the driver’s seat at India’s cruising car market, dictating terms and forcing carmakers change the way they build and sell vehicles. Carmakers say the average age of car buyers in the country has come down to 32 from 39 over the last decade with earning members in the age group of 25-30 becoming big buyers in the market. This has completely changed colour and flavour on Indian roads where trendy hatchbacks and high-performance sports utility vehicles are gaining ground. “We are now dealing with younger customers who are not just hugely demanding but also frequently changing cars,” says Mayank Pareek, executive director (marketing & sales) at Maruti Suzuki. “This post-liberalisation generation is willing to spend on new products and willing to experiment a lot,” he adds. Maruti has seen sales of its models such as Swift and A-Star speeding on the back of sporty design and powerful performance. Powered mostly by this new generation of car buyers, the Indian auto market has been growing in high double-digit rates for several months. The market grew 37% year-on-year to 2.22 lakh units in July. Design has played an integral part in the success of cars such as Maruti Swift, Hyundai i20 and Honda City, says Dilip Chhabria, car designer and founder of DC Design that offers customization and makeover service for different car models. “New cars in India portray aggression. Just look at the Maruti A-Star or the Hyundai i20, which have aggressive frown (the front space between headlights and bumper) that changes the stance of the car,” he says. Many marketers now directly address the young and the upwardly mobile. Advertisement of General Motors’ Beat compact, for example, says, “Perfect for the next-gen driver. You.”
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