05 April 2011;hindustantimes.com:Manu P Toms:The motorbike, the preferred rugged ride of young men, has competition and if latest figures are anything to go by, the scooter has zoomed past it, powered by women. The demand for the unisex scooter — the one without gears and clutch — has outstripped demand. Scooters sold faster than motorcycles i n 2010-11, clocking 40% against the bikes’ 27%, industry executives said. As many as 1.9 million scooters were sold last fiscal, apparently with an extra push from women. Honda’s Activa, which tops the sales, has a waiting period of a year, said dealers in Mumbai. “This supply shortage is across India. The new plant, which will come up in August, will help us meet demand,” said NK Rattan, head of marketing, Honda Motorcycles and Scooters India (HMSI), which has a 45% market share. Despite making close to 650,000 Activas, HMSI is facing a backlog of 200,000. The 40% growth rate would be sustained for some time, said HS Goindi, president, marketing, TVS Motors, whose three models sold 425,000 units last year. “With demand growing, we, too, are facing some manufacturing constraints.” Hero Honda’s Pleasure clocked an unprecedented 360,000, while new entrant Mahindra & Mahindra saw its sales more than double to 158,733 in the last fiscal.
US forces Germany to stop Indian oil payments to Iran
Monday, 04 April 2011
05 April 2011;timesofindia.indiatimes.com:NEW DELHI: India is exploring paying for crude oil it buys from Iran in rupee after the US forced Germany to stop routing payments through a Hamburg-based bank. India in February had begun clearing past dues to Iran by making euro payments through German-based Europisch-Iranische Handelsbank AG ( EIH Bank). But EIH, which is owned by Iran, is a banned entity in the US and Washington used its influence on Germany to stop payments. "We are working with Iran to evolve an alternative payment mechanism. We hope to firm up plans very soon," a top finance ministry official said. The problem arose after Reserve Bank of India (RBI) in December last year scrapped a long-standing payment mechanism used to pay for Iranian crude imports. Early in March, oil minister S Jaipal Reddy had told Parliament that "pending dues of National Iranian Oil Company ( NIOC) are now being cleared and as of March 1, 2011, payment of euro 1.5 billion has been made to the Central Bank of Iran." But that was the last payment made to Iran, as soon after the news broke out, the US clamped down. Oil supplies from Iran have, however, not been affected and the Persian Gulf nation continues to sell oil on credit backed by corporate guarantee. "We are considering various alternatives ... making payments in rupee is one of them," the finance ministry official said. Reddy on March 3 stated in the Lok Sabha that "consequent to the withdrawal of the Asian Clearing Union (ACU) mechanism by the RBI with effect from December 23, 2010, all payments to Iran for import of crude oil have to be settled in any permitted currency outside the ACU mechanism." India imports 12 million barrels of crude oil every month from Iran, which is the nation's second-largest supplier after Saudi Arabia. After the scrapping of the ACU, Iran, which makes up for over 12% of India's oil needs, had continued to supply oil on credit despite the outstanding amount crossing a staggering $3 billion. Reddy then stated 21.2 million tons of crude oil was imported from Iran in 2009-10 fiscal. Mangalore Refinery imported 6.9 million tonnes, Essar Oil 5.3 million tonnes, Reliance 3.3 million tonnes, Hindustan Petroleum 3.2 million tons and Indian Oil 2.5 million tonnes. This fiscal, Reliance has completely stopped using Iranian oil and in first six months 8.9 million tonnes of oil was imported from Iran, Reddy said. Sources said as per the requirement of the German central bank, Deutsche Bundesbank (DBB) – which had permitted payment in euros through EIH – each drop of oil bought from US-sanctioned Iran was certified.
Volkswagen, Mercedes taking distributors of Maruti, Mahindra & Mahindra
Monday, 04 April 2011
04 April 2011;economictimes.indiatimes.com:Chanchal Pal Chauhan & Lijee Philip:NEW DELHI | MUMBAI: Global carmakers such as Volkswagen, Mercedes-Benz, Audi, Nissan and BMW are snatching away distributors from domestic rivals, including Maruti Suzuki and Mahindra & Mahindra, by offering better margins as they strive to secure prime locations and boost sales in the world's fast-growing market after China. New Delhi-based Bhasin Motors , which sold cars of Mahindra & Mahindra from its swanky showroom in the south extension market for eight years, has recently taken Volkswagen to its fold. The distributor's four-storey building, which showcased only M&M brands, has been bifurcated into two separate showrooms to accommodate German carmaker's products. Mumbai, India's second largest automobile market after Delhi, is also witnessing a change as dealers are shunning their long-standing loyalties to traditional brands. The trend started when Shaman Auto disengaged itself from Tata Motors to tie up with Volkswagen and Honda. Others like Thanebased Balaji Motors joined the bandwagon by becoming distributors of Volkswagen and Ford , replacing traditional automobile companies. Ratan Motors, which used to sell Maruti cars in the Central Mumbai suburb of Chembur, shifted to General Motors. In Mumbai, multinational companies own 20% of the total dealership network , according to data provided by the Federation of Automobile Dealers Association (FADA). Chandigarh, a city inundated with car dealers, is also on the cusp of change. Joshi Autozone, the largest dealer for Maruti for several years, has switched sides to sell vehicles of Hyundai , and Mercedes-Benz. Car companies such as VW, Audi, Mercedes-Benz, Renault and Nissan control 50% of the distribution channel in Chandigarh. Car dealers across different states declined to comment for the story. Winds of change are also sweeping across non-metro cities which are fast emerging as growing markets for automobiles. "These markets are risky with low margins. Hence, auto manufacturers like to take on dealerships with network in these markets," said a Mumbai-based car dealer. Multinational companies are breaking the long supremacy of traditional firms over the network of 2,000 car dealers in India. While Maruti Suzuki, Tata Motors and M&M dominated the distribution network with control of over 90% dealerships, the proportion has come down to 80% over the past two years. MNC companies own 20% of the distribution network across India at a time when the Indian automobile producers ended the fiscal 2010-11 on a high, with most car and twowheeler majors posting record sales. "The huge branding and lucrative margins are making the dealers shift towards MNC carmakers that promise better return on investments. The new cars launched by these fresh entrants attract customer eyeballs, leading to faster sales that lower inventory cost. With the entry of new companies such as Peugeot-Citroen , global car companies having huge distribution budgets will garner a third of the car distribution network India," said Rakesh Jain, former president of Federation of Automobile Dealers' Association. New-entrants like Volkswagen, which is rapidly ramping up its operations, are driving the transformation. The German carmaker is offering margins of up to 5-6 % on sales of new cars as against 3-3 .5% offered by traditional players such as Maruti and Tata Motors. Other players like BMW, Nissan, Audi and Mercedes are also providing better incentives than domestic carmakers. Volkswagen has also started pre-fabricated (manufactured in standard sizes to be assembled elsewhere) outlets which can transform into a full-fledged outlet in a fortnight. "We are late entrant into the Indian market. Hence, we are innovating to leapfrog into a major volume player. The pre-fabricated dealerships have come up at three places which help to kick-start sales within a month," said Neeraj Garg, director (marketing & sales), Volkswagen. Distribution channels are keeping pace with the fast-growing demand for cars sparked by rising disposable incomes and lifestyle changes. Damp showrooms that once sold a particular brand in dusty environments are transforming into 'brand centres' , requiring astronomical investments, said automobile industry experts. "The cost of infrastructure has shot up significantly. Incentives like money to use as initial investments and easy long-term credit is sufficient for dealers to switch to a new setup," said Vikram Sanghi, president Federation of Automobile Dealers' Association, the industry lobby group. While most car companies swear by the new market dynamics, India's largest car-maker Maruti Suzuki takes a different route. The New Delhibased company has disassociated itself from dealers that opted to sell other brands. But others seem to be flowing with the trend. "The market has changed and dealers are selling other brands too. It's a dynamic market and we do not stop our dealers to take other franchisees," said Jnaneshwar Sen, vice-president marketing, Honda. Many dealers are going out of the business due to discount wars and concentration of dealers in a particular area. The economic downturn took a heavy toll on their prospects, forcing many of them to lease out space to retail outlets and banks. Absence of quality people to man the business is proving to be another bottleneck . "While car sales are growing at the rate of 25%, there is scarcity of good quality manpower to support dealerships," said Sandeep Bafna, state chairman and president of the Federation of All Dealers Association of Maharashtra.
04 April 2011;business-standard.com:Singapore: US crude prices extended gains on Monday to hit their highest in more than 2-1/2 years above $108, while Brent also edged up, supported by positive jobs data from top oil consumer the United States and supply worries triggered by the unyielding turmoil in the oil rich West Asia. Comments from Iran's oil minister that there was no need for OPEC to hold an extraordinary meeting to address high oil prices also supported sentiment. Iran is OPEC's leading oil price hawk and holder of the organisation's rotating presidency in 2011. US crude was up 40 cents at $108.34 a barrel at 0430 GMT (1000 IST), after touching $108.74 earlier in the session -- highest since September 2008. ICE Brent added 22 cents to trade at $118.92 a barrel. "We have supply concerns which we haven't had for the last few years and this is mostly related to Libya now," said John Vautrain of energy consulting firm Purvin and Gertz. "The tension has disrupted crude supplies, and that is affecting Europe." The government of Libya -- the world's 17th-largest oil producer and Africa's third-largest -- sent an envoy to Greece on Sunday to discuss an end to fighting, but gave no signs of any major climbdown in a war that has ground to a stalemate between rebels and forces loyal to Muammar Gaddafi. Underlining the plight of civilians in western Libya, a Turkish ship that sailed into the besieged city of Misrata to rescue some 250 wounded had to leave in a hurry after crowds pressed forward on the dockside hoping to escape. In Yemen, two protesters died and hundreds were hurt on Sunday when police used live rounds, tear gas and batons to try to break up protests against President Ali Abdullah Saleh, who called for an end to weeks of unrest, signalling he has no intention of resigning soon. Unrest also reigned in other parts of West Asia, with the Gulf Arab states voicing deep concern over what they called Iranian interference in their affairs after Iran objected to the despatch of Saudi troops to Bahrain and a spying row raised tensions. Bahrain has seen the worst unrest since the 1990s after mostly Shiite protesters took to the streets in February, inspired by uprisings that toppled leaders in Egypt and Tunisia, to demand a bigger say in the Sunni-ruled country. STRONG DEMAND GROWTH Oil prices also got a boost from Friday's strong US payrolls data. US employment grew firmly for a second straight month in March and the jobless rate hit a two-year low of 8.8%, confirming the labor market was strengthening and fueling optimism about oil demand. "We have a bigger story on demand side. There is strong demand growth this year, and that is a reflection of the economic prospects of the world," added Vautrain. "On top of that, we have the unusual circumstances of the Japanese power outage which had taken out all the nuclear plants. That will tend to put more load on oil fired generators going forward." Japan's government on Monday told the operator of the crippled Fukushima nuclear plant to move quickly to stop radiation seeping into the ocean as desperate engineers resorted to bath salts to help trace a leak from one reactor. Vautrain noted that while the oil-fired generators in Japan were out too after the March 11 earthquake and tsunami, there were prospects of more being restored over time. "That would probably put up the (crude) price more later."
Volkswagen NBFC to finance pre-owned cars from Jan 2012
Sunday, 03 April 2011
03 April 2011;hindustantimes.com:Mumbai: German carmaker Volkswagen, which received a licence recently from the Reserve Bank of India to start its non-banking finance company (NBFC), plans to finance pre-owned cars from early next year. "We have received the licence from RBI to start our NBFC. We will start financing pre-owned cars from Ja nuary 2012," Volkswagen Finance India Board's Chairman Joern Achim Kurzrock said in Mumbai. "India being one of the fastest-growing economies, Volkswagen Finance wants to position itself in the market as a mobility provider with products which fully respect the needs of VW, Skoda and Audi customers. Our focus is to support the sales of our branded vehicles to customers," he said. The company is eyeing a huge opportunity in the pre-owned car segment and wants to cash in on it. "We feel demand for pre-owned cars is good in the Indian market and we want to bank on the opportunity," Kurzrock said. Volkswagen Finance India is a subsidiary of Volkswagen Financial Services AG, a wholly-owned subsidiary of Volkswagen AG and is headquartered in Braunschweig, Germany. Volkswagen Financial Services (VWF) provides captive financial services for its brand cars and supports vehicle sales in 38 countries. The auto major received the RBI licence March-end to start its NBFC. Volkswagen Finance plans to invest over Rs 120 crore in India and aims to cover the entire country in the next three-four weeks. "Our brands have witnessed a great demand in the Indian market in the last six months," he said. Volkswagen sold 8,095 units in March on the back of its two recent offerings - the hatchback Polo and its sedan Vento.
02 April 2011;timesofindia.indiatimes.com:NEW DELHI: Indraprastha Gas Ltd on Saturday hiked price of CNG it sells to automobiles in national capital by Rs 0.30 per kg to Rs 29.30 per kg. IGL, the sole supplier of CNG to automobiles and piped cooking gas to households, raised compressed natural gas (CNG) price in Delhi, Noida, Greater Noida and Ghaziabad with effect from midnight tonight, the company said in a press statement here. "The correction in prices would result in an increase of 30 paise per kg in the consumer price of CNG in Delhi and 35 paise per kg in the consumer price of CNG in Noida, Greater Noida and Ghaziabad," it said. The new consumer price of Rs 29.30 per kg in Delhi and Rs 32.85 per kg in Noida, Greater Noida and Ghaziabad would be effective from midnight tonight. Explaining the reason leading to the revision in the price of CNG, IGL managing director Rajesh Vedvyas said that the minor adjustment in rates was done because of increase in operating expenses as a result of revision of minimum wages by the government. "Despite the aforesaid prices increase, CNG would still offer nearly 64 per cent savings towards the running cost when compared to petrol driven vehicles at the current level of prices. When compared to diesel, driven vehicles the economics in favour of CNG at revised price would be over 22 per cent," he added.
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