Our Office will remain closed on October 2nd,Friday. The Next update on Oct 3rd, Saturday
will feature media articles published on Friday.
MUTHURAMAN APPOINTED TATA STEEL VICE-CHAIRMAN, NERURKAR MD
The Economic Times (Web & Print Edition)
Mumbai: After an eight-year term at the helm of Tata Steel, B Muthuraman, late on Wednesday,
formally handed over the charge to HM Nerurkar, at a time when the countrys largest private
sector steel company gears up to meet slow global steel demand.
In a marathon board meeting that continued for more than five hours, Tata Steel agreed to
appoint Mr Muthuraman as non-executive vice-chairman. Mr Nerurkar was appointed as
managing director of Tata Steel, and Kirby Adams was appointed as MD and CEO of Tata Steel
Europe. Both Mr Nerurkar and Mr Adams will report to the board of Tata Steel.
The appointment of Mr Muthuraman as non-executive vice-chairman is in line with what was
recently implemented in two other group companies Tata Motors and TCS.
Ravi Kant, the former MD of Tata Motors, was also elevated as non-executive vice-chairman of
the commercial vehicle maker, while S Ramadorai of TCS was also given a similar role.
Mr Muthuramans tenure as MD saw the Jamshedpur-based steelmaker acquire Anglo-Dutch
steel company Corus for $13 billion, catapulting the Indian company as the worlds fifth-largest
steelmaker by capacity. While the acquisition is gradually giving synergistic benefits, the high cost
of acquisition and the recent slowdown in Europe has prompted Tata Steel to reset banking
covenants on loans taken to acquire Corus and also recently close down some overseas units to
Apart from tackling these issues, the new management will also have to address reported
displeasure among Corus employees on Tata Steels decision to provide bonus to Jamshedpur
employees, while ignoring to pay Corus staff.
The appointment of Mr Nerurkar was already indicated in March. Tata Steel had in a statement to
BSE said that the board had approved the appointment of Mr Nerurkar as executive director
(India and South East Asia) with effect from April 9, 2009. The statement also said that Mr Adams
was also appointed as additional director of the company.
Before being appointed as executive director, Mr Nerurkar was in charge of flat products division.
He has also been in charge of most of Tata Steels vital projects with robust exposure in
A B. Tech in metallurgical engineering from the College of Engineering, Pune University, Mr
Nerurkar has attended several management courses in India and overseas, including CEDEP in
France. He is associated with several professional organisations, such as Indian Institute of
Metals, INSDAG, AIMA Governing Council among others. He is also a member of the board of
directors of TM International Logistics.
STONE INDIA FORMS SUBSIDIARY TO MANUFACTURE FREIGHT CARS
Aniek Paul -Mint (Web & Print Edition)
Kolkata: An engineering company that manufactures components for the railways, the G.P.
Goenka-controlled Stone India Ltd, on Wednesday announced it was entering the logistics
business through a technical collaboration with US-based RailRunner NA Inc.
Stone India has formed a subsidiary called Stone Intermodal Ltd, which will start manufacturing
freight cars capable of running both on roads and on railway tracks. It will be spending Rs150
crore in two phases to build the new manufacturing facility. The firm will not only manufacture
these freight cars, but will also eventually lease them out to shippers.
This will revolutionize freight movement in India, said Goenka. But I dont expect miracles within a
year. The launch of these freight cars would substantially reduce shipment time and costs, he
Under an exclusive 10-year pact with RailRunner, Stone India will use its patented technology to
manufacture freight cars in India. Designs of the new freight cars have been submitted to the
Union rail ministry for approval. Stone India expects to start manufacturing the new freight cars
within a year.
Whereas a train can carry up to 45 conventional container carriers at a time, RailRunners
technology makes it possible for a train to carry up to 50 containers, said Amitava Mondal, Stone
Indias managing director and chief executive officer. Also, because the weight of these freight
cars is only 11 tonnes as opposed to 18-20 tonnes of conventional container carriers, running
these is going to be far more fuel-efficient.
Stone India and RailRunner started discussing a tie-up in January last year. Initially, the latter
was keen on taking an equity interest in the venture, but Goenka said he persuaded RailRunner
to agree in the end to a fee-based technical collaboration.
FOR TOYOTA, SMALL CAR WILL BE THE LITMUS TEST
Murali Gopalan -The Hindu Business Line (Web & Print Edition)
Mumbai: The heady response to the Fortuner sport-utility vehicle in India has been welcome
news to Toyota but the company believes the bigger test lies ahead with the small car scheduled
to debut during 2010-11.
It is this product that will eventually be part of the numbers game and, therefore, critical to
building market share, officials say.
There is no question that we are delighted with the order book for the Fortuner. It is a clear
acknowledgement of what brand Toyota stands for and the challenge now is to meet delivery
schedules with demand growing by the day. However, this does not take away
the fact that the small car is priority for 2010, they added.
A section of the market believes Toyota is already a bit too late in this segment where Maruti
Suzuki is the undisputed leader with Hyundai and Tata Motors in the second and third spots
each. The Japanese automaker was working on a model with subsidiary, Daihatsu some years
ago but this was shelved because the economics of production did not quite work out.
Toyota then went back to the drawing board and is now gearing up to launch the small car,
codenamed 800 L, towards end-2010. It is expected to be up to four metres long which will qualify
it for the lower eight per cent excise duty (against 20 per cent for other cars) and will be available
in both petrol and diesel versions.
The company has not made public any outlook on numbers but it is clear that the 800 L will be a
key growth driver since it is in a segment that accounts for nearly 80 per cent of car sales in India.
It would also be logical to assume that it will be targeted for other parts of the world, notably
Brazil, Russia and China.
Given the rapidly changing face of the global automobile industry where fuel efficiency has
become the norm, Toyota could also target Europe, experts say. To that extent, India may end up
being a production hub for the rest of the world, a business model started by Hyundai years ago
and now the norm for every other carmaker right from Ford and General Motors to Fiat and
At one level, Toyota has reason to be pleased with its India innings which has been on schedule
barring the fact that the initially targeted 10 per cent market share by 2010 has now been pushed
back to 2015. It is here that the 800 L will play a critical part because the IMV platform, which rolls
out the Innova and the Fortuner, cannot replicate a small car in terms of numbers, at least in the
Yet, these vehicles have played a big role in building the Toyota base in the country beginning
with the Qualis multi-utility vehicle years ago. The Corolla and Camry have also been part of this
brand-building strategy which is intended to pave the way smoothly for the 800 L.
We expect to close 2009 with a little over 40,000 Innovas and close to 10,000 units of the Corolla
Altis. The Fortuner has an order book of nearly 7,000 already and we will have to see if monthly
production will need to be increased in 2010, company officials said.
WORK AT NISSANS CHENNAI PLANT CRUISING AHEAD
The Hindu Business Line (Web & Print Edition)
Chennai: An hours drive from Chennai takes one to the emerging industrial hub of Oragadam,
where work on the car plant of Renault Nissan Automotive India Pvt Ltd is apace.
Global economic meltdown had forced the French partner in the joint venture to put its India plans
on the backburner, but Nissan is surging ahead on its schedule. In less than a year, it expects to
have a new factory that will churn out 200,000 cars a year, most of them meant for exports.
But right now, about 2,500 labourers, working for as many as 15 contractors, are engaged in the
construction of the plant that will sit on an area of 300,000 sq metres.
Mr Akira Sakurai, CEO and Managing Director, Renault Nissan Automotive India Pvt Ltd, told
visiting journalists that the first engine was assembled on September 14, a significant milestone in
the plants progress. Trial production of some parts started in August.
By the time Nissan rolls out its first model in May 2010, regular employees at the plant will more
than double to 1,500 from 700 now. At full production, in 2012, it will have nearly 3,000
employees. Training for the core staff has started at Nissans plants in the UK and Japan. Most
assembly line workers are from nearby areas, with engineering diplomas.
The suppliers park will house about 20 vendors, including Unipress, Tenneco Exhaust India,
Rieter Nittoku Automotive and Tacle India. Some of the suppliers have started constructing their
Equipment at the press shop where the manufacture of a car begins with the sheets of steel
being cut and pressed into desired shapes is in place. The shop features a 1,000-tonne press
from Renaults plant in Sandouville, France, and a 2,700-tonne press supplied by Rotem of Korea.
The paint shop equipment has come from Geico of Italy and Taikesha of Japan.
The trim and chassis line, which is nearly half-a-km long and a quarter km wide, is where the
painted shell gets fitted with components and becomes a vehicle.
The uniqueness of the assembly system is that it is built in such a way that several types and
models of cars could be put together on the same line.
REVA TO ROLL OUT TWO NEW ELECTRIC CARS SOON
IANS-See this story in:The Economic Times (Web Edition)
Bangalore: The maker of India's sole battery-run car, Reva Electric Car Co., is setting up a
second plant in the country's tech hub to roll out two new models next year for domestic and
export markets, a top company official has said.
"We are investing Rs 300 million (Rs 30 crore) in the second plant that will eventually have an
installed capacity of 30,000 units per annum," Reva co-founder and deputy chairman Chetan
Kumar Maini told IANS.
The 14-year-old firm has raised $20 million (Rs 960 million) from global investors Draper Fisher
Jurvetson and Global Environment Fund for this.
The company displayed prototypes of the two models at the 63rd Frankfurt International Motor
Show (IAA) Sep 15-27.
The first model - Reva NXR (next revolution) -- is a four-seat, two-door hatchback family car.
The second model -- Reva NXG (next generation) -- is a sporty two-seater with a targa roof,
designed by renowned automotive designer Dilip Chhabria.
"We plan to roll out NXR by mid-2010 and NXG a year later (mid-2011)," Maini said on the
sidelines of a conference.
"Export version of NXR will run on a Lithium Ion battery, with a top speed of 104 km per hour and
a range of 160 km on a full charge. The lead acid battery variant, with 80 kmph speed and 80 km
per charge, will be sold in the domestic market," he added.
The 14-year-old firm, a joint venture with AEV LLC of the US, has a greenfield plant in the
Bommasandra industrial area on the outskirts of the city, with an installed capacity of 6,000
electric vehicles (EV) per annum.
"We have exported about 1,500 cars to 24 countries across Europe, Asia and South America
over the last five years. Global auto dealers have shown keen interest in the new models at the
Frankfurt auto show," Maini asserted.
Though Reva has been pitching hard to sell its electric cars in the domestic market since 2003,
lack of awareness and absence of an official policy to encourage eco-friendly cars, as in Europe
and lately in the US and China, have proved to be obstacles.
As a result, sales of Reva cars in the domestic market have been stagnant unlike in the case of
petrol/diesel passenger cars, which have registered double-digit growth over the years, with a
range of models across segments.
"The new plant will have one of the lowest dust-to-dirt carbon footprints of any car in mass
production," Maini said.
Reva has formed a joint venture with global automaker General Motors India to roll out an electric
version of GM's Spark compact car platform next year for the domestic market. The tie-up will
also enable Reva to market its vehicles through GM's distribution network.
The joint venture will work with the central and state governments to build infrastructure for
electric vehicle charging and providing incentives to consumers.
"To fight global warming and reduce carbon emissions, electric vehicles cars are an alternative to
fossil fuel-driven cars. Though awareness of impact of climate change is growing, pro-active
policies and incentives by the government will encourage people to go for eco-friendly transport
system," GM India managing director Karl Slym said.
AFTER A LULL, BAJAJ AUTO TO UP CAPACITY AT TWO PLANTS
Suprotip Ghosh-Hindustan Times
Mumbai: Bajaj Auto Limited (BAL), the countrys second largest maker of two and three wheelers,
is planning to expand capacity in two of its factories.
The company, which has recently launched a revamped line of 100 cc motorcycles, sees
an improvement in demand even after the festival season is over. We are planning to expand our
capacities in the two factories, our ability to supply depends on the number of moulds we have
there, said Milind Bade, GM, marketing, two wheelers, BAL. Moulds are used to form parts of the
Bade, however, did not disclose the quantum of investment. Bajaj Auto reported a 6 per cent rise
in total vehicle sales to 2.13 lakh units in August 2009 over August 2008.
The company will increase capacity in its Pantnagar and Waluj plants, which are close to full
capacity of 75,000 units per month. The decision to increase capacity is significant, since BAL
has been cutting down production since 2008, when its market share began shrinking.
The expansion in capacity will be used to cater to demand for the 100 cc motorcycles that the
company has relaunched earlier this year. It is also planning variants of the 100 cc motorcycles,
but is keeping its cards close to its chest, Bade added.
US, IND TO DISCUSS LOWERING HARLEY'S IMPORT DUTIES AT TRADE MEET
Amiti Sen -The Economic Times
New Delhi: A fleet of Harley-Davidsons led his inauguration parade in Washington DC this
January. So its only natural that US President Barack Obama wants to do his bit for the iconic
American bike thats going through a rough patch. As Harley prepares for its India debut in 2010,
the Obama administration is set to take up the issue of lowering import duties again with the
Harley-Davidson got access to India two years ago, thanks to lobbying by the Bush
administration, which allowed Indian mangoes into the US as a quid pro quo. Now the US has
informed India that the issue of duties will be on top of its agenda during the trade forum meeting
next month. The country will be led by its trade representative Ron Kirk.
The US department of commerce has already discussed the issue informally with us and US
officials will discuss it extensively at the trade policy forum meeting in October, a commerce
department official, who did not wish to be named, told ET.
Harley-Davidson motorcycles are to be sold in India through a wholly-owned subsidiary of the
company. According to the official, the US government wants to ensure they are priced as
competitively as possible by urging India to bring down Customs duties. Import duties on
completely-built units (CBUs) is 60%, in addition to 30% local taxes. With the existing duties, the
market price of Harley-Davidson bikes is expected to range between Rs 6 lakh and Rs 14 lakh.
When agreeing to allow Harley-Davidsons into the country in 2007, India had said a categorical
no to lowering duties. Things are, however, a little different now. Indias position on the issue
would also depend on what else is on the table. Things would unfold once the trade policy forum
discussions take place, the official says.
The Milwaukee-based company, which announced in September that in addition to 1,000 job
cuts, there will be layoffs in southeastern Wisconsin and a two-month holiday shutdown at its
Buell motorbike plant in East Troy, is banking a lot on India. It hopes the country will overtake
Japanwhere it sold 14,654 bikes last yearand emerge as its biggest market in Asia in the next
KAWASAKI NINJA 250R
Varad More -The Economic Times (Zigwheels)
We have confirmed news that mid next week, Bajaj Auto will unveil the Kawasaki Ninja 250R in
the country. Definitely the most eagerly awaited bike and also India's first true-blue quarter-litre
motorcycle, the Ninja has a lot riding on it in order to propel the Indian two-wheeler industry
towards large capacity performance-oriented motorcycles. Equipped with cycleparts usually seen
on large capacity superbikes, the Ninja 250R will offer Indian bikers a taste of superbike
performance. This bike was shown by Bajaj Auto at the 2007 Auto Expo in New Delhi and back
then it created quite a lot of stir in the Indian market.
After almost two years of wait, finally the Ninja 250R is all set to make its debut at Bajaj Auto's
Akurdi plant next week. There are no technical changes made to the Ninja 250R and it will be
imported from Thailand as Completely Knocked Kits (CKD). The bikes will be assembled at the
Bajaj Auto's Chakan plant and they will be sold through the elite ProBiking showrooms across
major cities. The only visible changes on the bike include a matte-black exhaust pipe and the
black-coloured rear tail unit with a green pillion seat, unlike the black tail unit seen on the
Bajaj Auto has been highly secretive about the bike's pricing and it is very difficult right now to
quote the correct pricing. However, since it is a CKD import, the duties slapped on the Kawasaki
will be lesser in comparison to duties levied on direct a CBU import - which means that the Ninja
won't be exorbitantly priced for India.
BAJAJ LAUNCHES RE 600 CARGO VEHICLE
Priyadarshan Bawikar -The Economic Times (Zigwheels)
Bajaj Auto, the largest manufacturer of 3-wheelers in the world launched their latest entrant in the
diesel powered 3-wheeler goods carrier market, the RE 600, on the 23rd of September. Powered
by a 4-stroke, air-cooled 416.6cc diesel engine producing 6.85PS of power and 18.17Nm of
torque, Bajaj announced that this new mini cargo carrier delivers the highest mileage, at least
5kmpl of diesel more than other vehicles, and lowest operating costs in the commercial 3-wheeler
category. Designed to carry a maximum load capacity of 600kg, the RE 600 is priced at Rs.
1,03,686 exshowroom Pune.
The RE has its roots in Bajaj's lineup of 3-wheeled passenger carriers which amount to 95-
percent of the company's commercial vehicle sales. R C Maheshwari, CEO of Bajaj Auto's
Commercial Vehicles was on hand at the time of launch and commented, "With the launch of this
vehicle, we are meeting the needs of those customers with payloads up to 600 kilograms and are
not willing to pay high operating and fixed costs. RE 600 would not only match but exceed the
needs of those customers who rely on incity transportation as a major need for their last leg
distribution to retailers and end-users." Bajaj also said that the RE600 has been designed with
the lowest turning radius for this very reason.
Rajiv Bajaj, MD of Bajaj Auto, who was also present for the launch, said that after a slump in 3-
wheeler sales last year, things were beginning to look good, with 24% growth in domestic sales in
the first 5 months of this financial year.
Interviews / Features
BEST TIME FOR INDIAN AUTO COS TO ENTER US MARKET: E&Y
Manu P. Toms -The Hindu Business Line (Web & Print Edition)
Mumbai: This is the best time for the Indian automobile companies to enter the US market,
according to Mr Mike Hanley, Global Automotive Leader at Ernst & Young.
With American auto-makers selling some of their brands and a shift in the US consumer interest
towards smaller and fuel-efficient cars, there are unique opportunities for the manufacturers in
countries such as India and China, he says.
This observation holds significance in the context of the possible US entry of Mahindra &
Mahindra, with its diesel engine Scorpio pickup in 2010. The Tatas established a presence in the
US through their newly-acquired marquee brands Jaguar and Land Rover (JLR). The latters new
strategy to come out with light weight and fuel efficient models may help them improve sales in
the US market, the second largest market for the marquee brands.
Mr Hanley, who heads Ernst & Youngs Global Automotive Centre, was in India recently to visit
automotive clients of the firms India team. He spoke to Business Line on the prospects and
challenges for Indian automobile manufacturers, particularly in the background of their ambitions
to explore the US which still remains the worlds largest automotive market.
What are the prospects of Indian companies making inroads into the US market?
We at Ernst & Young believe that there is no better time than now for Indian and Chinese
companies to enter the North American automotive market. There are currently a number of
brands being divested by the American auto-makers. Further, we are also seeing a segment shift
to smaller and fuel-efficient vehicles as there is now a need for such vehicles. The time is
therefore right in both cases to be looking at this market.
Do you see any prospect of Indian companies setting up their manufacturing base in Detroit?
In the near term, this will not be the route which Indian companies may adopt. If you look at the
successful Japanese and Korean auto-makers, their strategy for global expansion has been to
find the markets first, import, build a customer base and then progress to manufacturing. This has
been the proven model and I would expect Indian companies to follow the same as well. In the
current scenario, this would apply at all times except when the North American market is being
tapped into by way of an acquisition. The right strategy would therefore depend on whether a
company is expanding into North America organically or by way of an acquisition.
What are the challenges being faced by Indian companies seeking to enter these markets?
Both Chinese and Indian companies are facing the same type of challenges. Primarily, North
America is a very developed market when it comes to consumer preferences such as safety
standards, emission norms. For Indian companies, this would be a big challenge in terms of how
soon they can gear up on providing vehicle safety, added features. In fact, this could be a reason
why some of these companies may be looking at acquisitions, as many of the existing brands
may be established in terms of these qualities.
Do you think that the US market is ready for small cars?
What we do know is that at some price-point of gasoline, the US consumers will shift from SUVs
to small cars and experience shows that this is about $4 per gallon. What we need to determine
is that what consumers will do if gasoline prices start to come down, though the mindset is
moving towards smaller and fuel-efficient vehicles. The companies in North America are trying to
build cars in this category and we are seeing some cars in the market. Our long-term view is that
there will be a segment shift to small cars. That said, there is still a base market demand for
trucks and SUVs, particularly from farming and agri-communities as also from large families.
What is your view on India emerging as a global automotive hub?
There is no question about India emerging as an auto hub. While growth levelled off in 2008, but
it is expected to return to 8-10 per cent annual increases over next few years. We project light
vehicle sales to touch two million in FY2010. India clearly has the opportunity to grow into a large
market, particularly if you look at the very low density numbers here, which are currently 9 cars
per 1,000 people. It is the low auto penetration which marketers look at when evaluating the
opportunity. We believe that the density number can generate significant opportunities for growth
in the future.
Do you believe that the Indian market is ready for such growth rates in auto?
Agreeably, India too faces infrastructural and environment issues like China. We must take a
holistic view of the transportation industry, with automotive just being a part. In this environment,
the advanced power-trains concept cannot be ignored. If you dont, you put yourself at risk of
being outdated 15 years down the line.
What is your view on component sourcing from India?
Sometimes we overstate the real cost value of producing in India and exporting. In reality, most of
the components being produced are for the local markets and the export percentage is relatively
low. Particularly in an environment where the cost structure in the US is getting reduced. Longer
term, more and more products get produced where they are consumed. Exports can be looked at
in the aftermarket space within the region, but not necessarily to the US.
Where do you think Indian companies stand when it comes to fuel efficiency and R&D?
There is limited technology which is developed in India and the local car companies are mostly
dependent on countries such as the US, Germany and Japan. However, in small car technology,
India is creating tremendous value.
According to you, where is the US auto market headed and are programmes like cash-for-
We do expect some growth in 2010, but it could be 3-5 years before we get back to the 16 million
units levels, which we had in the early years of this decade. This year, we are expecting 10
million units, which is the lowest US auto sales volume since mid-1960s, new sales are at lowest
per capita level since World War II. The cash-for-clunkers programme was good to get this
moving in the industry. Yet, the pent-up demand is now behind us as people have traded their old
cars for new ones.
Why are the US automotive companies lagging behind in the global as well as Indian markets?
The reasons why these companies are lagging behind is why North America was going through
the crisis. These are very large companies which had traditionally very high market shares and
their cost structures and capacities were there to support these market shares. When the
competition came in, the only way to survive was to prop-up the market by providing incentives,
which pushed up sales, but were not good for the overall health of the industry. It is only now that
the car-makers are introducing the real changes which are needed such as cost reductions and
cutting brands this is what will make the real difference and make them competitive. They are
now getting costs aligned with market share and this is the real difference that we see.
FIGO- RATIVELY COOL!
Adil Jal Darukhanawala -The Economic Times (Zigwheels)
If ever there was a single noteworthy indicator to suggest that the Ford Motor Company was not
just determined and willing but also wanting to use finesse, cutting edge design and technology
while having the gumption to burst in on the cut throat small car class of what is actually turning
out to be the world's largest small car market it had to be Ford CEO Alan Mulally jetting in to India
to reveal his company's first ever modern Bsegment offering in the world.
Well for India and for Asia-Pacific, Ford hasn't had a small car, preferring to use badge-
engineered Mazdas for the purpose. However the grim economic reality in the developed world
has forced Ford, like many other brands, to focus more closely and actively on Asia.
"We have to be here because it is all happening in India as far as small cars are concerned," said
Mulally speaking exclusively to ZigWheels.com. "The global small car projections speak for
themselves, and we don't want to miss out on a segment which could be as large as 70 to 80 per
cent of the world's car production."
The new Ford B-segment offering is an all new car (badged Figo, literally Italian colloquial for
cool) on a completely new platform which has been engineered by Ford using a global team (thus
the "One Ford, One Vision" tag line adopted by the firm) but with its Indian arm spearheading
much of the execution. This new car to be built as hatchback, notchback, even a small MAV
(multi activity vehicle) and any other configuration which could slip into finer niches, is to be built
at various Ford manufacturing facilities in Asia-Pacific and also in Europe but the Figo
programme gets underway first in India. This is by far the most significant detail which illustrates
that Ford is now turning its attention even more fiercely with a determination which it hadn't
displayed in its over 15 year journey in India.
The Figo will be powered by either an 1.2-litre petrol or a 1.5-litre diesel engine, the right
displacement sizes to make full use of the excise tax benefits earmarked by the Indian
government for cars of its type and length. A 5-speed manual gearbox would be the obvious
transmission to begin with though an automatic cannot be ruled out for introduction at a later
date. Ford's latest plant upgrades and capacity enhancements at its Chennai plant includes an
all-new engine shop which is well placed to deliver the new small petrol engine for the Figo.
Additionally, the plant capacity is now hiked to 200,000 units per annum and this is critical
because Ford India would also be exporting the Figo to markets in the region.
Speaking about interiors, the two cars drove up on stage and their drivers locked the doors close
after stepping out. Having blackened windows so as not to reveal many interior details, it could
have been that the definitive interior dcor hadn't manifested itself as the car is yet months away
from series production but the artists' rendering which Ford provided does indicate a sportier and
more rounded soft touch dashboard with typical Ford interior accents. The car seems to have the
one commodity that the successful B-segment premium hatchbacks need to have in abundance -
cabin space. Our staffers deduced this purely from the Figo's external architecture and the large
wheelbase with wide tracks make for a hatchback with near impressive cabin space as the firm's
What remains to be seen though is the route Ford will take as to its price positioning within the
segment. If it has to truly slug it out with established players in class and also lend credence to
making its enhanced capacity count, the Figo would have to be Maruti-Suzuki price competitive.
If, and can, this happen are two different things but Ford would need to strike the perfect stance
between these two to make for a convincing challenger in the most competitive car class in the
THE FREELANDER 2 HAS LANDED
The Economic Times (Zigwheels)
Land Rover's internationally bestselling model, the Freelander 2, has finally made its way to
Indian shores. This compact, but highly up market, SUV is the British offroad car maker's fourth
model in the country and joins its existing range consisting of the Discovery 4, the Range Rover
Sport and the Range Rover which were launched in June earlier this year. Rohit Suri, Head of the
Premier Car Division of Tata Motors who presided over the launch ceremony commented that
Tata Motors 'will continuously enhance the Land Rover product portfolio' over the coming years.
The Freelander breaks away from traditional SUV design with a monocoque chassis that delivers
outstanding on-road performance, smart and spacious interiors, along with a healthy dose of
luxury and advanced technologies that the Land Rover brand is famous for. On the engine front,
the Freelander 2 comes with a 4-cylidner 2.2-litre common-rail turbo diesel engine under the hood
capable of a peak power output of 160 horsepower and 400Nm of torque. Gearbox choices
include an option between either a 6-speed manual transmission or a 6- speed automatic
gearbox with CommanShift.
The Freelander 2 features a full-time four-wheel drive system along with Land Rover's proprietary
Terrain Response technology which comes with settings for optimum drive ability across a variety
of terrain conditions. Even on the safety front, the Freelander 2 scores high marks with seven
airbags and systems like ABS, Electronic Traction Control, Dynamic Stability Control and Roll
Stability Control, and in fact is the first car in its class to get a full 5-Star EuroNCAP safety rating.
The Freelander 2 is available in 3 trim levels in India - S, SE and HSE and pricing starts Rs.33.79
lakhs ex-showroom Mumbai.
GM'S SPARK TO GET REVA POWER!
Vikram Gour -The Economic Times (Zigwheels)
Just a few weeks back we had breaking exclusive story on Indias pride at the Frankfurt Motor
Show - the new breed of REVA electric cars. And guess what, the nifty little zero-emission car is
already on its way to becoming famous on Indian streets thanks to the new alliance struck
between itself and General Motors India. ZigSpy has confirmed that GM India is already testing
the product and the results mean that market viability for an electric Spark could be as early as
next year. The tie-up with REVA goes further than the Spark for GM India is not ruling out an
electric option on their upcoming Chevy Beat small car.
Even though few have even contemplated the thought of introducing an all-electric car backed by
strong manufacturer muscle in India yet, it seems that GM along with REVA is looking to gain the
first mover advantage in the segment.
The technogical agreement is one that could be seen as beneficiary to both parties. REVA will
provide the electric drive trains which will be fitted into the Spark either at the Talegaon plant or
Halol plant, as the Spark rolls out of both locations. The vehicles will carry only the Chevrolet
Chetan Maini, Deputy Chairman and CTO, REVA Electric Car Company adds, "This collaboration
is about utilizing each other's strengths in order to create a product that is environmentally
friendly. It is our ambition to reduce carbon emissions and we are happy to partner with GM India
who share our ambitions."
The plan to make the Spark and possibly the Beat electric fit in with the new GM's global mantra
on reduced fossil fuel dependence and a newfound love for all things green. Even though the
longrange Volt has been the buzzword internationally as far as GMs green intentions are
concerned, small car dominated markets like India may need a different strategy, which is where
the electric Spark and Beat duo come in - thanks to their aggressive and affordable price points
despite an electric option.
The final products are still some time away and further work is being done to make them suitable
for in-city use. Details as to the range, battery type and price have not been divulged however it is
our best estimate that the electric Chevy small cars will come with a range of 150 km on a single
charge using lead acid batteries as lithium ion batteries would seriously increase costs and the
vehicles would feature a quick charge mechanism in order to make them more user friendly.
It remains a step in the right direction, for going green is the future of the automobile industry. A
user friendly approach such as what GM India and REVA have taken deserves to be applauded.
Auto Component Industry Related News
NK MINDA FORMS JV WITH ITALY-BASED EMER
PTI-See this story in: The Hindu Business Line
New Delhi: Auto component maker NK Minda Group on Wednesday said it has entered into a
joint venture with Italy-based Emer to manufacture and sell alternate fuel systems and has
earmarked an investment of Rs 40 crore in the next three years for this purpose.
The new joint venture company -- Minda Emer -- will exploit the global design, production and
distribution strengths of parent companies to deliver gas fuel systems to the global market, NK
Minda said in a statement.
While, Emer will supply technology, design and testing, Minda will provide production
competencies and market development services,'' it said. Products from the joint venture will hit
the Indian market by March, 2010. It will be manufactured at a facility located at Manesar, which
has an installed capacity of 50 lakh units, including 12 lakh systems and kits per year by 2012.
Our new partnership with Minda will create a unique company with a strong production local base
to provide market-leading high performance alternate fuel systems to customers in India and
around the world,'' Emer's President of the Board Sergio Ravagli said.
The joint venture, besides producing and supplying kits to the original equipment manufacturers,
will also manufacture kits for the retail market for retrofitting. The Minda-Emer kits will incorporate
the latest technological advancements available glob ally to provide cost effective and innovative
solutions for LPG, CNG and HCNG systems, the release added.
AMTEK AUTO ISSUES FCCBS FOR $75 M
PTI-See this story in: The Hindu Business Line
Mumbai: Auto components maker Amtek Auto on Wednesday said it has raised an additional $75
million (nearly Rs 357.75 crore) by issuing 5.625 per cent Foreign Currency Convertible Bonds
(FCCBs). In a filing to Bombay Stock Exchange, Amtek Auto said in that along with the previously
issued FCCBs, the offer size now stands at $140 million. The company still has an option to
further increase the issue size by $35 million, that is, up to $175 million, it said. Shares of Amtek
Auto closed at Rs 220.85 on the BSE on Wednesday.
Oil Lubricants and Alternative Fuels
OIL REBOUNDS TO USD 66.97 A BARREL
Agencies-See this story in: The Indian Express
Singapore: Oil rebounded in Asian trade on Wednesday after overnight falls in reaction to weaker
US consumer confidence, analysts said.
New York's main contract, light sweet crude for November delivery, rose 26 cents to USD 66.97 a
barrel. Brent North Sea crude for November delivery gained 29 cents to USD 65.78 a barrel.
Crude prices tumbled on Tuesday after a widely watched US consumer confidence index fell to
53.1 in September from 54.5 in August, overshadowing some positive data on the housing front,
The figure was weaker than the 57.0 expected on Wall Street, and suggested consumers may be
cautious in resuming spending, which is key to economic recovery.
"Lack of conclusive data led to a situation where on one hand commodities and equities mostly
inched down, but on the other corporate credit was mixed and emerging market assets gained,"
said Dariusz Kowalczyk, chief investment strategist with SJS Markets financial firm. "Clearly,
while US and global recovery is continuing, it is being built on a shaky ground. We bet that it will
continue, but inconsistent macroeconomic indicators will keep investors on edge."
Investors are awaiting other key data to be released this week for a better gauge on the pace of
recovery in the US, the world's biggest energy user.
TOYOTA, FORD TO OUTSELL GM IN US BY 2015: REPORT
Reuters-See this story in: The Economic Times
Dearborn, Michigan: Toyota Motor Corp and Ford Motor Co are likely to outsell General Motors
Co in the US market by 2015 -- when industry sales will finally return to levels last seen in 2000,
according to an industry forecasting firm.
Faltering Chrysler Group LLC is also expected to lose market share in a recovering market and
by 2015 its US sales will be on par with those of surging Hyundai Motor Co, IHS Global Insight
said at a presentation on Wednesday. "The shift in volume from GM and Chrysler to Toyota
, Ford, and other manufacturers will be massive," said George Magliano, an IHS Global Insight
Toyota already overtook GM in global sales last year. GM emerged from bankruptcy on July 10
by selling most of its assets to a group led by the US Treasury, and Chrysler emerged from
bankruptcy in June by completing a similar sale process to a group led by Italy's Fiat.
Ford, the only US automaker that has not sought emergency government loans to run operations,
has gained market share in recent months at the expense of GM and Chrysler. It currently ranks
third in US sales behind GM and Toyota. Ford will overtake GM as the leading US automaker in
its domestic market in the next several years, Magliano said.
Magliano forecasts US industry auto sales are likely to climb back to top 17.3 million units by
2015 -- comparable to 2000. The forecasting firm sees 2009 auto sales above 10 million units
and 2010 sales between 11 million and 11.5 million units.
He expects Toyota, currently No.1 in US sales, to sell about 3 million vehicles in 2015 for a
market share of nearly 17 percent, followed by Ford and GM in the 2.5 million to 3 million unit
range. Chrysler's US sales are forecast at about 1.25 million units in 2015 for a market share of
7.2 percent -- down from 11 percent in 2008, IHS Global Insight said. That would put Chrysler on
par with Hyundai in US sales -- the best-performing major automaker in the United States this
year, the company forecast. Hyundai in 2009 is the only major automaker to increase US sales.
TOYOTA TO RECALL 3.8M VEHICLES OVER FLOOR MATS
AP -See this story in: Deccan Chronicle
Toyota Motor Corp. said on Tuesday it will recall 3.8 million vehicles in the United States, the
company's largest-ever US recall, to address problems with a removable floor mat that could
cause accelerators to get stuck and lead to a crash.
The recall will involve popular models such as the Toyota Camry, the top-selling passenger car in
America, and the Toyota Prius, the best-selling gas-electric hybrid.
Toyota said it was still working with officials with the National Highway Traffic Safety
Administration to find a remedy to fix the problem and said owners could be notified about the
recall as early as next week. Toyota spokesman Irv Miller said until the company finds a fix,
owners should take out the removable floor mat on the driver's side and not replace it.
"A stuck open accelerator pedal may result in very high vehicle speeds and make it difficult to
stop a vehicle, which could cause a crash, serious injury or death," Miller said.
NHTSA said it had received reports of 102 incidents in which the accelerator may have become
stuck on the Toyota vehicles involved. It was unclear how many led to crashes but the inquiry
was prompted by a highspeed crash in August in California of a Lexus barreling out of control. As
the vehicle hit speeds exceeding 120 mph, family members made a frantic 911 call and said the
accelerator was stuck and they couldn't stop the vehicle.
"This is an urgent matter," Transportation Secretary Ray LaHood said in a statement. "For
everyone's sake, we strongly urge owners of these vehicles to remove mats or other obstacles
that could lead to unintended acceleration."
The recall will affect 2007-2010 model year Toyota Camry, 2005-2010 Toyota Avalon, 2004-2009
Toyota Prius, 2005-2010 Tacoma, 2007-2010 Toyota Tundra, 2007-2010 Lexus ES350 and
2006-2010 Lexus IS250 and IS350.
Toyota's previously largest U.S. recall was about 900,000 vehicles in 2005 to fix a steering issue.
The company declined to say how many complaints it had received about the accelerator issue.
The Japanese automaker warned owners that if they think their vehicle is accelerating out of
control, they should check to see whether their floor mat is under the pedal. If a driver can't
remove the floor mat, Toyota advises drivers to step on the brake pedal with both feet until the
vehicle slows and then try to put it into neutral and switch the ignition to accessory power.
For vehicles with engine start/stop buttons, Toyota said the engine can be shut off by holding the
button down for three seconds.
In the August incident near San Diego, the fiery crash of a 2009 Lexus ES 350 killed California
Highway Patrol Officer Mark Saylor, 45, and three members of his family on State Route 125 in
Santee. The runaway car was traveling at more than 120 mph when it hit a sport utility vehicle,
launched off an embankment, rolled several times and burst into flames. One of the family
members called police about a minute before the crash to report the vehicle had no brakes and
the accelerator was stuck. The call ended with someone telling people in the car to hold on and
pray, followed by a woman's scream.
NHTSA investigators determined that a rubber all-weather floor mat found in the wreckage was
slightly longer than the mat that belonged in the vehicle, something that could have snared or
covered the accelerator pedal.
Toyota spokesman John Hanson said the final report had not yet been submitted in the California
"We don't know what the actual cause was of that accident other than preliminary reports that
have been published so it's impossible for us to comment on that particular incident," Hanson
In mid-September, Toyota ordered 1,400 Toyota and Lexus dealers nationwide to ensure that
each new, used and loaner vehicles had the proper floor mats and that the mats were properly
In September 2007, Toyota recalled an accessory all-weather floor mat sold for use in some 2007
and 2008 model year Lexus ES 350 and Toyota Camry vehicles because of similar problems.
TOYOTA TO HIRE 1,600 CONTRACT EMPLOYEES
PTI-See this story in: The Financial Express
Tokyo, New Delhi: Japanese auto maker Toyota Motor Corporation will be hiring 1,600 contract
employees in the coming months, indicating that the auto sector is slowly recovering. The car
maker, which has been severely hit by the global financial turmoil, on Wednesday said the hiring
of 1,600 fixed-term employees would begin next month.
The decision to increase the number of contract employees reflects future production plans,
against a backdrop of gradually recovering automobile sales worldwide encouraged by tax-
incentive and subsidy programs implemented in various countries, the car maker said in a
Auto makers have seen a steep decline in sales as consumers cut down on spending in the wake
of the financial turmoil. Many entities also resorted to job cuts to bring down costs.
MERC CREATES 800 NEW JOBS
AP-See this story in: Hindustan Times
Mercedes-Benz plans to take on 800 new employees at a bus and truck plant in Brazil due to
improved business in the country, parent company Daimler AG said Wednesday. In addition to
the new employees at the Sao Bernardo do Campo plant, near Sao Paulo, Daimler said.
Other Related News
M&M TO BRING ENGINE UNITS UNDER ONE CO
Lijee Philip & Deeptha Rajkumar-The Economic Times
Mumbai: Mahindra & Mahindra (M&M), the nations largest tractor-maker, may combine its two
engine-making units, unlisted subsidiary Powerol and the listed Swaraj Engines, under one
company in a bid to boost revenues from the business, said two officials familiar with the
The combined entity, which may be headed by Bishwambhar Mishra, MD of Swaraj Tractors, will
have a revenue of more than Rs 1,000 crore a year. Mahindra, which owns 33% in Swaraj
Engines, said it does not comment on market speculation.
The Mahindra Group, which has been segmenting businesses under different companies instead
of a single company with diversified businesses, may benefit from the merger of engines divisions
too as it aims to become a top global tractor maker surpassing John Deere of the US. While
Powerol supplies engines to Mahindra tractors, Swaraj supplies for its namesake tractor company
which Mahindra bought in 2008. The group has separate companies for various businesses such
as real estate, finance, leisure and software.
Mahindra is contemplating two options, people close to the development said. The tractor maker
may merge its subsidiary Powerol with Swaraj, leading to higher stake for Mahindra in Swaraj
Engines. Alternatively, Swaraj Engines may sell its business to Mahindra and payout the
proceeds to minority shareholders and Kirloskar Oil Engines, which owns 17% of Swaraj, leaving
it a shell company.
A final decision will depend on which structure will be beneficial from a sales tax point, legal
Atul Kirloskar, MD of Kirloskar Oil Engines, refused to comment on a possible stake sale,
although analysts believe the it made sense for the Kirloskars.
Swaraj Engines had a sales of Rs 208 crore for the year ended March 2009 and the net profit
was Rs 21.2 crore.
As a consolidated entity the engines and genset business will have a larger foundation to stand
on and build a much larger business, said Mahantesh Sabarad of Centrum Broking.Share of
Swaraj Engines have risen more than 12% in the past week and almost 18% the past month. The
stock rose 6% to closed at Rs 351.10 on Wednesday on the Bombay Stock Exchange.
AT RS 3,400 CR, RECORD AUTO LOAN DISBURSAL IN SEPT
Chanchal Pal Chauhan -The Economic Times
New Delhi: With auto sales zooming, auto financiers too are back with a bang. The top eight auto
financiers disbursed loans worth Rs 3,400 crore in September the highest for a month in the past
two years led by impressive auto sales, new launches and return of confidence among potential
The disbursement in September is 25% higher than the monthly average of Rs 2,700 crore seen
in the past four months. Auto finance leader HDFC Bank has registered over 40% growth in loan
disbursement in September from a year ago, while other leading players such as Kotak Mahindra
Bank, SBI, Canara Bank, PNB and Bank of Baroda have also seen a growth of 25-35 %. This
September is expected to mark a historic high in sales for the car industry.
We had a terrific month after a long gap as sales went much beyond our anticipated targets. We
disbursed loans of over Rs 1,000 crore in September. The growth momentum is expected to spill
over to October, HDFC auto loan head Ashok Khanna said.
Other bankers are equally upbeat. Kotak Mahindra Bank CEO Sumit Bali said, It seems the
market is on fire. Sales have virtually zoomed to the highest level in past few days with almost
zero inventories at many car dealerships. Our loan disbursal for the month has increased 50% to
Rs 325 crore.
Consumer sentiment had turned weak and auto financiers became conservative on lending last
September following the collapse of US investment bank Lehman Brothers in the US. This
coupled with early arrival of festive season, which is governed by Hindi calendar, has led to
massive year on-year growth for auto loans.
A low-interest rate regime has also helped financier attract customers. The entry of PSU banks
with aggressive single-digit rate against the 10-12 % rate offered by private banks has expanded
the market, especially in smaller towns and rural areas.
The demand for new cars from our branches in tier II & III towns has been very steady. There is a
major jump in our total loan allocations in September over August and much of that has come
from these smaller markets, said a senior SBI executive preferring not to be named.
Carmakers are also benefiting from the easier availability of finance, registering a high double-
digit growth. Customers are actually benefiting from the extremely low interest rates offered by
few PSU banks. We have noticed that the bulk of customers who had postponed their purchases
are again flocking to our dealers to buy new cars, said Marutis chief general manager (marketing)
A spate of new launches by car companies has also brought into the market more buyers and led
to higher loan disbursal. Over a dozen new cars were launched in September alone. The next few
weeks will see many new launches including Marutis new SX4 and multi activity van-O 2, General
Motors Cruze sedan, Porsche Panamera, Volkswagen Beetle and Polo, Ford Figo, Hyundai
Santa Fee, BMW Z4.
PSU INSURERS WANT MOTOR THIRD PARTY POOL TO CONTINUE
C. Shivkumar -The Hindu Business Line
Bangalore: Public and private sector insurers have locked horns over the status of the India Motor
Third Party Insurance Pool (IMTPIP).
Highly placed PSU officials said that they were completely opposed to the dismantling of the
IMTPIP as demanded by the private general insurers. The officials said, Dismantling IMTPIP
would mean a return to the status quo ante. This means that PSU insurers would have to resume
underwriting the loss-making commercial vehicle third party liabilities.
The IMTPIP started operations in April 2007. The pool, comprising 17 public and private sector
non-life insurers, takes over all commercial vehicle third party motor risks. The share of each
insurer in the pool was on the basis of gross direct insurance premium collected. The pool was
administered by the national reinsurer, General Insurance Corporation.
The pool was intended to provide a mechanism for containing the high claims ratio. Till 2007, the
losses from commercial vehicle third party liabilities were entirely borne by the public sector. The
high losses, in turn, resulted in the underwriting business being in the red. The pool mechanism
had cut the losses to some extent as the risk was shared among all the 17 companies.
However, the pool is now faced with mounting opposition from the private sector insurers. The
private players want to return to the old system. Such a system, PSU officials said, would result in
the private sector underwriting risks on only private motor vehicles, where the third party losses
were below 100 per cent. The losses in the commercial vehicles segment were high, with the
claims being upwards of 150 per cent.
The officials said although the IMTPIP remained functional for almost three years, it was yet to
put data in place for claims and losses. The Insurance Regulatory and Development Authority
had sought this data as a precondition for motor vehicle liability premium revisions. The pool
functions as an exclusive reinsurance agency for third party motor insurance losses.
With the number of risk covers rising, losses have also mounted, bleeding capital from the private
sector, the officials said. Besides, the demand for dismantling the pool coincided with the
downturn in investment earnings and sharp drop in premium income after the deregulation of fire
and engineering business in 2007. Investment income in the past had buffered the underwriting
losses for the public sector.
Officials said that that in the event of the pool being dismantled, PSUs favour minimum quotas for
the private sector in third party commercial vehicle risks. The pool itself, they said, could be
restricted to the four public sector general insurers.
To face resistance
However, even the proposal for minimum quota on commercial vehicle third party risks is
expected to face resistance from the private players. This was in view of the continuing high
losses in the sector and the absence of a free pricing regime for third party liabilities. Pricing of
third party liability is currently administered. Despite demands for deregulation, the insurance
regulator is yet to take a decision on the subject.