25 May 2011;business-standard.com:New Delhi: In the first protest of its kind, transporters have decided to boycott Apollo Tyres from June 2 for increasing tyre prices. The All India Motor Transport Congress (AIMTC), the apex transporters network (it represents around 680 associations and seven million trucks) announced on Tuesday it would not carry raw material supply to the company’s three plants in Tamil Nadu, Kerala and Gujarat and would also block the supply of Apollo’s products in the market. The threat is to soon boycott other tyre makers, too. Transporters claimed tyre prices have shot up by 52 per cent in recent times. “We have decided to boycott the inbound and outbound transportation from all Apollo Tyres facilities from June 2. If the tyre prices are not reduced in 10 days, we will also boycott services at the facilities of other tyre companies also,” said G R Shanmugappa, president of AIMTC. The government has chosen to remain silent on our concerns over the cartelisation by tyre manufacturers, he added. Apollo Tyres said it would not comment, as it had yet to get any communication from AIMTC. “In the last 12 months, raw material prices have moved up by more than 40 per cent, and natural rubber, which constitutes 50 per cent of the raw material, increased by 70 per cent in FY11 as compared to FY10,” said an email reply from Apollo Tyres. The reply further said Apollo had tried and absorbed the cost push up to a certain level by increasing internal efficiencies. Beyond which, they had to go for price corrections. “The total price increase taken in this period was only 16 -17 per cent. This massive difference in the cost push and the price increases have resulted in our profits going down by more than 30 per cent,” added the reply. AIMTC also demanded that diesel prices not be raised; rather, that these be reduced by at least Rs 2 per litre. “If the diesel prices are increased, we will not be able to operate our trucks because the business will become further unviable,” said O P Agarwal, chairman, All India Transport Welfare Association and a member of AIMTC. He said diesel and tyre costs were 82 per cent of total operating cost. With any further rise, it would be impossible to operate. “The government should reduce diesel prices by Rs 2 per litre so that we do not go deep into red,” he added. AIMTC has also insisted the proposed clause in the new Carriage by Road Rules for suspending the registration of a trucker for a week in case of a complaint of non-delivery be removed. Else, it has threatened action.
JK Tyre Q4 net profit slips 50%; mulls acquiring rubber firms
Tuesday, 24 May 2011
25 May 2011;dailypioneer.com:New Delhi: JK Tyre & Industries on Tuesday reported 50 per cent fall in its net profit for the quarter ended March 31 at Rs 13 crore due to sever impact of high raw material prices. In order to mitigate the impact of rising natural rubber prices, the company is “seriously evaluating” options to acquire firms engaged in plantation of the commodity. It has also earmarked a capex of Rs 960 crore for this fiscal. JK posted a net profit of Rs 26 crore in January-March last year, JK Tyre & Industries President and Director Arun K Bajoria said. The net sales during the fourth quarter of last fiscal, however, increased by 28.53 per cent to Rs 1,347 crore from Rs 1,048 crore in the year-ago period. “It was a very tough year in terms of raw material prices, which increased by about 43 per cent in last fiscal. The impact of this rise in our margin was 25-27 per cent, but we raised the tyre rates by only 17-18 per cent in FY11. So this impacted our bottomline,” Bajoria said.
25 May 2011;timesofindia.indiatimes.com:NEW DELHI: Revenue secretary Sunil Mitra on Tuesday said the government may miss its tax collection target for the fiscal 2011-12 due to moderation in economic growth. He also argued against changes in the duty structure for crude and fuel. Mitra told a conference of top income tax officials that time is not conducive for duty cuts on petroleum products as that would gravely impact tax collections. At the same time, he pointed out that high inflation, oil prices and the increase in interest rates are expected to affect demand, impact corporate profitability and result in lower economic growth. These factors could also impact tax collections. "I would like to sound a note of caution in respect of target for direct tax that has been set for this year at Rs 5.32 lakh crore," Mitra said And, finance minister Pranab Mukherjee seemed to agree with his official's analysis. "He (Mitra) has raised the issue rightly... (The) situation is not conducive," the minister told the conference. Mitra's comments are the first official statement from the government on the fiscal situation coming under stress due to an expected moderation in economic growth. When the government had presented the Budget on February 28, several economists had questioned the expenditure numbers saying that Mukherjee had not budgeted for spending under crucial heads. Though the government had defended its calculations, which helped it project a fiscal deficit of 4.6% of GDP, events unfolding since then only go to show that Mukherjee will have to allocate more for subsidy, especially for cooking and auto fuel in the wake of a spike in global crude prices. With RBI estimating the economy to grow 8% compared to government's estimate of 8.5-9% at the start of the year, the possibility of tax targets being missed appears to be a reality, economists say. During 2011-12, gross tax collections are budgeted to rise 18% to Rs 9.32 lakh crore, compared to Rs 7.90 lakh crore realised last year. Within the finance ministry there are two views on duty cuts. The expenditure department is in favour of the move to help contain spending while saving the common man the burden of higher cooking gas and diesel prices. But, as reported by TOI, the revenue department of the finance ministry is opposing the proposal as it will adversely affect indirect tax collections.
24 May 2011;timesofindia.indiatimes.com:Pankaj Doval:NEW DELHI: Spurred by lower fuel price and higher mileage, the charm for diesel is set to get even stronger with nearly half of new car sales coming from the fuel in the next three-to-four years against the 30% share now, top officials from companies like Maruti and Volkswagen said. Sales of diesel cars have already been growing faster than petrol cars over the last few years and the widening price differential between the two fuels will only add to the trend. Demand for diesel has been very high, prompting companies to look at more and more variants on the fuel, which used to command 23% of overall sales in 2005-06, said Shashank Srivastava, chief GM (sales & marketing) at Maruti Suzuki India. "I expect diesel percentage to be significantly higher than the 30% now. It can be as high as 45-50% over the next three-to-four years," Srivastava said. Experts said the lower running cost on a diesel vehicle (less than half of petrol car), and the government's reluctance to make the price of the fuel uncomfortable, has given confidence to buyers as well as manufacturers to bet on the fuel. While petrol cars may be available off the shelf, their diesel variants enjoy huge waiting lists. Diesel variants of models like Swift, Dzire, Polo and Figo have been among those that command a waiting since launch. Srivastava said the popularity of diesel could be seen by the fact that whenever a model had both petrol and diesel options available, the sales have been higher for diesel. "In most of such models, diesel accounts for as high as 70% of volumes," he said. Neeraj Garg, director of sales at Volkswagen Passenger Cars, is even more bullish. "Diesel can be half of the total car market even before three-to-four years. The fuel is growing very strongly and has taken even us by surprise, forcing us to produce more of diesel." The company's two mainline models-Polo hatchback and Vento sedan-already have 50% of their sales on diesel. "While the price differential is forcing people to look at diesel, the engine refinement and advancement is also something that makes them go for the fuel," Garg said. Going by the trend, companies are already padding up for the big push in diesel. Hyundai is setting up a diesel engine plant, while companies like Maruti, GM and Ford are boosting the capacity of diesel engines. "The trend is certainly strong, but we at Hyundai believe it will grow by another 5-7% in the next three-to-four years. Even this increase should not be seen as small as it comes in a large growing market," said Arvind Saxena, director (sales and marketing) at Hyundai India Experts added that a variety of new launches on diesel-especially in the small car segment-are likely to result in faster, widespread adoption of the fuel. GM will get a diesel version of the Beat hatchback while Tata is also working on a diesel Nano. Both Hyundai and Maruti are also expected to get diesel in their large-volume models. Even Toyota will launch a diesel version of its soon-to-be-launched small car Liva. "When diesel becomes widespread in the small car segment, which commands for the lion's share in the car market, then it will be big. This will happen soon," Srivastava said. The only irritant to growth could be higher excise duty on diesel cars, as suggested by a government committee.
23 May 2011;business-standard.com:New Delhi: French carmaker Renault today launched its luxury sedan 'Fluence' in India with both petrol and diesel options, priced between Rs 12.99 lakh and Rs 14.40 lakh (ex showroom Delhi). "The Renault Fluence was designed for the Asian market and hence we are confident that it will not only shake up the segment, but also give the Indian customer their first taste of what Renault is capable of bringing to the Indian market," Renault India Managing Director Marc Nassif told reporters here. This is the first Renault branded car to be assembled in India at its Chennai facility, he added. Petrol variant of the Fluence will come with a 2 litre engine while the diesel option will be powered by a 1.5 litre engine. Renault along with its global alliance Nissan has committed an investment of Rs 4,500 crore by 2015 at Chennai facility, which will have a total production capacity of 4 lakh units per annum. The French company is currently considering setting up an engine plant at the facility. After Fluence, Renault will introduce a sports utility vehicle 'Koleos' this year, followed by three more car in 2012.
23 May 2011;business-standard.com:Chennai: State-owned Indian Oil Corporation (IOC) has embarked upon the process of "automation" of its retail stations in the country to improve services, a top company official said today. The company, which has earmarked about Rs 14,000 crore for capital expenditure this fiscal, owns about 19,000 fuel stations across the country. "We have taken up a programme on automation of all the retail petrol stations. Initially we will cover 4,500 petrol stations which retail about 200 kl of fuels every month," Indian Oil Chairman and Managing Director RS Butola told reporters here. In the first phase, about 1,600 petrol stations have been identified and are in the process of automation, he said, adding that after completing the 4,500 petrol stations, they would move to petrol pumps that retail about 100 kl every month. "This move would help the customer to identify whether he has purchased the correct quantum of fuel for his money or was the fuel is a mixture of correct quantity. These things he will be able to identify. The beauty of automation is you cannot tamper with," Butola said. Indian Oil owns about 19,000 fuel stations across the country, he added. Indian Oil Marketing Head Executive Director DSL Prasad said that for the process of automation "on an average Rs 16 lakh will be required". On their future plans, Butola said about Rs 14,000 crore has been fixed for this financial year as the capital expenditure. "These are all our normal plans... We have earmarked Rs 14,000 crore for capex in 2011-12," he said. Asked whether they were able to benefit from the recent fuel hike, he replied in negative saying only a "full compensation with cash support" would yield suitable results. "We are obviously every day in touch with the Government. In our case, we should be fully compensated. Whatever decision the government takes either it passes the burden to customers or if the government for its various objectives cannot pass, then we should be fully compensated by way of cash support," he said. Butola and senior officials were here to inaugurate their Lube Oil Base Stock facility set up at a cost of Rs 23.36 crore. It would handle a variety of Lube base oil grades like SN-70, Sn-150, SN-500, Sn-850 and BS-150. Initially, the plant would commence operations with an output of 4,000 tonne per month which can be gradually raised to 8,000 tonne per month.
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