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India Automobile Industry Updates

In this issue:
Regulatory Update Auto industry cheers continuation of CENVAT cut Automobile disappointed Effects of Recession Mahindra Renault venture posts Rs 490-cr loss M&M sees dip in automotive biz Worst is behind Leyland MD us, says sector

Automobile Industry Updates


Issue No 5 July 2009

Regulatory Update
Auto industry cheers continuation of CENVAT cut The Indian auto industry, which has been struggling hard to emerge from the sluggish market conditions, on Monday said that continuation of CENVAT cuts in the General Budget 2009-10 is a good step, but added that there could have been some incentives for exports. More Automobile sector disappointed The Union Budget 2009-10 on Monday failed to enthuse the slowdown-hit auto industry. Though some reduction in excise duty on large cars and utility vehicles has been announced, the industry leaders said a complete package was the need of the hour for the revival of the industry, particularly for passenger car and commercial vehicle segments. The industry has, however, welcomed continuation of CENVAT cuts that were announced in December last More

Michelin Posts Loss on Sales Slump, Restructuring Costs US auto bankruptcies hit Indian auto suppliers: Fitch Ratan Tata calls for cost cuts at Jaguar Land Rover Press Release Tata Motors net up 58% on low input cost Mahindra Tractors sales rise 51.92 pc in June M&M plans to roll out diesel trucks in US Commercial vehicle market in India to rise Bank of Rajasthan ties up with Mahindra & Mahindra Ashok Leyland, John Deere float equal stake venture Auto cos ride the green wave in Europe P K Ruia may step down from boards of all group cos MRF blames militant group for unrest at Arakkonam plant ATMA expects Rs. 6,000 crore worth investments in Indian tyre making industry

Effects of Recession
Mahindra Renault venture posts Rs 490-cr loss Following a 48 per cent fall in sales, Mahindra Renault Pvt Ltd has posted a loss of Rs 490.21 crore on a gross turnover of Rs 741.17 crore during 2008-09. The company, a 51:49 joint venture between Mahindra & Mahindra (M&M) and Renault, of France, makes the Logan entry-level sedan at M&Ms Nashik plant. More M&M sees dip in automotive biz Mahindra & Mahindra (M&M) sees a sharp decline in automotive and tractor business and expects pressure on margins to continue in the current fiscal year. The Mumbaibased tractor maker, which made large-scale acquisitions in the automotive space in the recent past, saw revenues from the automotive business plunge to Rs 100.85 crore in FY09, from Rs 741.25 crore last year. More

Tyres made from trees cheaper, more fuel efficient: Research Bridgestone to production capacity expand

Worst is behind us, says Leyland MD Ashok Leyland (ALL) reported a net profit of Rs 190 crore for the year ended March 2009 compared with Rs 469 crore last year. Its headcount is 11,938 (13,304). The company declared 100% dividend and its sale revenue from vehicles, engines and

Volvo cuts prices of sports vehicle XC90 by Rs 4 lakh Car sales rise 5th month, new models help

spare parts during 2008-09 stood at Rs 6,666 crore (Rs 8,947 crore). More Michelin Posts Loss on Sales Slump, Restructuring Costs

Fiat India to raise $510 mn loan Porsche plans to sell 50 units of Panamera this year Tata Motors to deliver first Nano on Friday Rural markets drive up car sales in June quarter New Product M&M rolls out micro-hybrid Bolero Maxitruck in Pune Mahindra looking for new launches for growth: Keshub Mahindra Ashok Leyland launches new multiaxle vehicle BMW likely to launch Mini Hatchback in India by Dec 09 Used Vehicles Shriram Transport Co to enter debt market Industry Competition

Michelin & Cie., the worlds second- largest tiremaker, reported a loss in the first half on a slump in sales to vehicle manufacturers and trucking companies hit by the global recession. More US auto bankruptcies hit Indian auto suppliers: Fitch The bankruptcies of leading American car makers Chrysler and General Motors coupled with depreciation of the rupee could adversely impact the prospects of the Indian auto suppliers, says a report. More Ratan Tata calls for cost cuts at Jaguar Land Rover Jaguar Land Rover (JLR), the marque brands acquired by Tata Motors from the Ford Motor Company in June 2008 needs cost reduction and reduction of development and productionising time as the global recessionary trends have seen a sharp fall in luxury vehicle sales. More

Press Release
Tata Motors net up 58% on low input cost

LCV segment bucks trend, sells 48,374 units during AprilJune'09 Proton looks to drive on to Indian auto track Auto makers continue uphill drive in July Fiat, Tata eye market Ferraris in India: Report for

Tata Motors posted better-than-expected quarterly earnings driven mainly by fall in raw material prices and the new accounting rules on forex differences. The company, India's largest vehicle manufacturer, said it saw signs of recovery for the business both within and outside India. In addition, the government's renewed thrust on infrastructure and tax cuts would aid growth in coming quarters. The Tata group flagship reported a 58% growth in net profit to Rs 514 crore in the first quarter ended June 30 as against Rs 326 crore in the previous corresponding quarter. More Mahindra Tractors sales rise 51.92 pc in June

Ashok Leyland Nissan JV to rework manufacturing plans Pawan Ruia interested to buy out Tyre Corporation Vredestein: Marriage to Apollo Will Stand the Test of Time Apollo Tyres target group connects with

Farm equipment maker Mahindra Tractors today reported a 51.92 per cent rise in its total tractor sales in June at 18,242 units compared with 12,008 units in the same month last year. The domestic sales in last month grew by 61.13 per cent at 17,811 units against 11,054 units in the year-ago period, the company said in a statement. More

Apollo Tyres gets a refreshed website DuPont and Goodyear create high-tech tyres that Rock 'n Roll JK Tyre June quarter doubles at Rs 41 crore net

M&M plans to roll out diesel trucks in US Utility and tractor major Mahindra & Mahindra is stepping up plans to launch dieselpowered pick-up trucks in the US, even as global carmakers such as Honda, Toyota, Nissan and Ford have put similar pick-up launches in the US, on hold. More Commercial vehicle market in India to rise The commercial vehicles market in India is set to experience significant changes with the hub-and-spoke model of transportation, according to a recent report from Frost & Sullivan. The rising demand for specialized vehicles, due to the creation of the huband-spoke model is driving the commercial vehicles market in India, said Frost & Sullivan Industry analyst Sanjay Vasudevan. More Bank of Rajasthan ties up with Mahindra & Mahindra Bank of Rajasthan, one of the fastest growing, technology driven and customer

Apollo Tyres mulls Rs 1,000 cr investment for IT park in Kerala Apollo Tyres sees 11 pc FY10 sales growth Apollo Tyres targets 2-b output by 2011 Rolls Royce sees India emerging as most important Mkt Escorts arm to market Chinese firm's truck cranes Ford Honda cut car prices by up to Rs 6000 International Updates Mahindra to enter US market with fuel-efficient pickup truck news Electric cars poised to give auto industry a jolt Bridgestone recalls 127,000 tyres Bridgestone to Retreaded Tire Thailand another

friendly private sector bank, has announced tie-up by signing memorandum of understanding (MOU) with Mahindra & Mahindra one of the leading automobile & tractor manufacturer in India. This pact will help farmers in Rajasthan to obtain loan for tractors & farm equipments at a lower interest rate. More Ashok Leyland, John Deere float equal stake venture The countrys second largest truck maker Ashok Leyland and the US-headquartered John Deere Construction and Forestry Company Monday announced floating of a

Build Plant

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50:50 equal stake joint venture company to manufacture and market earthmoving equipments. More

GM sales rise 38% in China China Car Sales Jump 48% on Economic Stimulus, Most Since 2006

Auto cos ride the green wave in Europe Indian carmakers are reaping the benefits of the incentives offered by the governments of Germany, France and the UK to people exchanging their old cars for new fuel-efficient ones. More P K Ruia may step down from boards of all group cos Ruia group Chairman P K Ruia may step down from the board and allow the group companies to be managed by professionals, while he would remain group chairman. More MRF blames militant group for unrest at Arakkonam plant Indian tyre major, MRFs Arakkonam plant, re-opened on May 27, 2009 after a lock out, is still caught in the grip of labour unrest mainly due to the agitation by a section of workmen led by a splinter group. More

ATMA expects Rs. 6,000 crore worth investments in Indian tyre making industry Discerning the surging demand for truck and bus radial tyres, the Indian tyre making industry (which is into manufacturing radial tyres) could see investments worth Rs. 6,000 crore in the next few years, thereby generating an extra capacity of 3.77 million units truck and bus radials, as predicted by Automotive Tyre Manufacturers Association. More Tyres made from trees cheaper, more fuel efficient: Research Automobile owners around the world in the near future might drive on tyres that are partly made out of trees - which could cost less perform better and save on fuel and energy. More Bridgestone to expand production capacity Bridgestone, the world's no. one tyre and rubber manufacturer, announced a production capacity expansion at its unit in Pithampur at Indore (Madhya Pradesh). The additional capacity facility will ramp up the production of tyres by 4,500 (units) per day. More Volvo cuts prices of sports vehicle XC90 by Rs 4 lakh Luxury car maker Volvo Car India on Thursday said it has cut the prices of its flagship sports utility vehicle XC90 by Rs 4 lakh to boost sales amidst the current economic downturn. The XC90 D5 will now come at Rs 42.5 lakh, while the XC90 32 and XC90 V8 would be available for Rs 43.5 lakh and Rs 49.5 lakh, respectively. More Car sales rise 5th month, new models help Car Sales rose an annual 7.8 per cent in June, climbing for a fifth straight month and reinforcing the country was one of the few markets where demand has been picking up. A spate of new models and falling borrowing costs are luring new buyers back after a downturn in the middle of last year when high interest rates, lack of vehicle finance and a slowing economy squeezed demand. More Fiat India to raise $510 mn loan Fiat India Automobiles, a joint venture between Tata Motors and Fiat, is close to finalising a loan of $510 million about Rs 2,458 crore at current exchange rates for its capex and working capital programmes. The loans include a rupee term loan, a working capital loan and an export credit agency (ECA)-backed overseas loan, according to people close to the development. More

Porsche plans to sell 50 units of Panamera this year Despite the global economic meltdown, German car maker Porsche plans to sell 50 units of its premium luxury sedan Panamera, which is to be launched by October, in India this year. More Tata Motors to deliver first Nano on Friday Tata Motors Ltd, India's largest vehicles maker, said on Thursday it would deliver the Nano, the world's cheapest car, to its first customer on Friday. Chairman Ratan Tata had showcased the Nano at an auto show in New Delhi in January last year, but consumer bookings began only in April this year after the project was delayed due to land disputes at its planned site in West Bengal. More Rural markets drive up car sales in June quarter Car sales grew 8.3% in June, aided by rising demand in semi-urban and rural markets, lower interest rates on auto loans and huge monsoon discounts offered by manufacturers. However, sale of commercial vehicles continued to decline, affected by a demand slump triggered by the economic downturn. More

New Product
M&M rolls out micro-hybrid Bolero Maxitruck in Pune Mahindra & Mahindra Ltd. (M&M), on 14th July09, has launched the Bolero Maxitruck with the micro hybrid technology, priced at Rs. 3.52 lakh (ex-showroom Pune). Mahindra has pioneered this eco-friendly and innovative technology in India and successfully implemented the same for use in vehicles such as the Bolero and the Scorpio. More Mahindra looking for new launches for growth: Keshub Mahindra Automobile major Mahindra & Mahindra is looking for new launches for growth, chairman of the company Keshub Mahindra said here on Thursday. More Ashok Leyland launches new multiaxle vehicle Hinduja Group flagship and leading commercial vehicle manufacturer Ashok Leyland today launched the 3116 multiaxle vehicle (MAV) developed for high fuel efficiency.

Speaking to media persons after the launch here, Vinod K Dasari, Director and Chief Operating Officer, Ashok Leyland, explained that the 3116 is being launched to complement the company's successful 3121 8x2 MAV. More

BMW likely to launch Mini Hatchback in India by Dec 09 German auto major BMW may once again look at the possibility of launching its Mini Hatchback in India by December 2009. The company recently raised the annual capacity of its Indian plant to 3,000 units from 1,700 on a single-shift basis at a cost of $750,000. More

Used Vehicles
Shriram Transport Co to enter debt market Shriram Transport Company (STFC), a non banking finance company (NBFC) plans to hit the debt capital market with issue of non convertible debenture(NCD) aggregating to Rs 1000 crore. More

Industry Competition
LCV segment bucks trend, sells 48,374 units during April-June'09 There is good news for the light commercial vehicles of late. The industry has bucked the slowdown trend in the Indian commercial vehicle industry by posting a 17 per cent growth at 48,374 units during April-June09 period. Buoyed by this trend many tractor and CV makers like ICML, Bajaj Auto, Mahindra, Ashok Leyland, etc are chalking out robust strategies to either enter this segment or enhance its existing LCV portfolio. More Proton looks to drive on to Indian auto track Malaysian car maker Proton is keenly looking to enter the growing Indian automobile market to expand its overseas operations amid global demand slump. Proton has been trying to enter the lucrative Indian auto market for some years and the company was reportedly in talks with home-grown auto major Mahindra & Mahindra as well as contract manufacturer Argentum Motors. More Auto makers continue uphill drive in July Defying fears of a deficient monsoon affecting sales, major auto makers in the country registered a healthy growth rate in domestic sales in July, thereby continuing with the positive trend that began this year. More Fiat, Tata eye market for Ferraris in India: Report Italian auto giant Fiat and Indian car maker Tata are in talks about a joint marketing project to sell Ferraris and Mazeratis in India, news reports said on Thursday. More

Ashok Leyland Nissan JV to rework manufacturing plans In view of the current economic downturn and the reduction in demand for M&HCVs, the Hinduja Group-controlled Ashok Leyland has redrawn its capacity enhancement programmes to be in line with market outlook. More Pawan Ruia interested to buy out Tyre Corporation According to reports in the media, the Calcutta-based Ruia Group, owners of Dunlop India and Falcon Tyres, is negotiating for acquisition of the ailing Union Government undertaking, Tyre Corporation of India Limited (TCIL), which has a tyre manufacturing facility at Kankinada in West Bengal. More Vredestein: Marriage to Apollo Will Stand the Test of Time On May 15, Apollo Tyres purchase of Vredestein Banden was completed with the signing of contracts ratifying a deal estimated to be worth between 175 million and 229 million euros. More Apollo Tyres connects with target group Apollo Tyres has launched a novel display in malls to connect with its target group. Apollo's new corporate identity was unveiled early this year. The idea was to remain in tune with the times and to reflect the company's young, vibrant and dynamic nature. More Apollo Tyres gets a refreshed website After rolling out its new corporate identity across operations in the first quarter of 2009, Apollo tyres has now launched a refreshed website. More DuPont and Goodyear create high-tech tyres that Rock 'n Roll Goodyear and DuPont, among the world leaders in tyres and chemicals respectively, have come together to produce high-tech, ultra-tough tyres with Kevlar that might just be the next big leap forward in tyre technology. More JK Tyre June quarter net doubles at Rs 41 crore JK Tyre, on Thursday, reported double net profit at Rs 40.75 crore for the first quarter of the financial year as opposed to Rs 20.24 crore in the corresponding period a year ago, for the quarter ended June 30. Net sales for the April-June period increased by 5.73 per cent Rs 897.67 crore against Rs 849.06 crore in the corresponding period a year ago. More

Apollo Tyres mulls Rs 1,000 cr investment for IT park in Kerala Apollo Tyres was planning to invest about Rs 1,000 crore for setting up an IT park and a hotel complex in Kerala, Apollo Group Chairman Onkar S Kanwar today said. More Apollo Tyres sees 11 pc FY10 sales growth Apollo Tyres expects an 11 per cent growth in domestic sales in 2009/10, helped by reviving demand from increased economic activity, and sees margins maintained at current levels, its finance chief said. More Apollo Tyres targets 2-b output by 2011 With the commissioning of the tyre manufacturing unit of Apollo Tyres Ltd (ATL) at Chennai by December this year, the production of truck and passenger tyres of the company will be increased to 2 billion-mark by 2011. More Rolls Royce sees India emerging as most important Mkt Rolls Royce Motor Cars, the UK-based manufacturer of luxury automobiles, sees India emerging as its most important market in the next five to 10 years, and is looking at using parent BMWs supplier network in India to source components. More Escorts arm to market Chinese firm's truck cranes Escorts Construction Equipment Limited (ECEL), part of the Escorts Group, has signed an agreement with the Chinese Hunan Zoomlion International Trade Co Ltd for marketing the latter's truck cranes in India. More Ford Honda cut car prices by up to Rs 6000 Car makers Ford India and Honda Siel Cars India on Tuesday cut the prices of some of their models by up to Rs 6,000 a piece to pass on the benefit of excise duty cut on large cars announced in the Budget. GM India, Toyota Kirloskar Motor and BMW had also said they would pass on the benefit of excise cuts to consumers. More

International updates
Mahindra to enter US market with fuel-efficient pickup truck news Mahindra & Mahindra is doing exactly what major Western automakers have failed to do - making fuel-efficient trucks. The Indian utility vehicles major seems to have taken over from Chrysler, Ford, GM and Toyota as the auto giants put off their small diesels in the wake of the second oil spike. More

Electric cars poised to give auto industry a jolt Within five years, the market for electric cars could reach between 270,000 and 335,000 units per year in the U.S., predicts Art Spinella, president of CNW Research, a market research firm in Bandon, Ore. That would certainly confirm the arrival of the electric car as a real product in a way that has never happened before, though it would still represent only about 2 percent of total sales, Spinella points out. More Bridgestone recalls another 127,000 tyres Bridgestone Corp., the world's largest tire maker by sales, disclosed Tuesday it is recalling 127,183 Firestone-brand tires sold in the U.S. because a faulty tread could separate and cause an accident. More Bridgestone to Build a Retreaded Tire Plant in Thailand Bridgestone Corporation has announced plans to build a new plant for the production of procure tread for retread tires. This production base will help Bridgestone increase sales of its retread products as well as develop its solutions business in Japan, Asia, and China. More GM sales rise 38% in China GENERAL Motors (GM) China said vehicle sales in the world's most populous nation were up 38 per cent year-on-year as the market continued to outpace expectations for growth. The struggling US automaker and its joint ventures sold more than 800,000 vehicles in China in the first half of 2009. More China Car Sales Jump 48% on Economic Stimulus, Most Since 2006 Chinas passenger-vehicle sales rose 48 percent in June, the biggest jump since February 2006, as government stimulus spending spurred a revival in the worlds third-largest economy. Chinese motorists bought 872,900 cars, sport-utility vehicles and other passenger vehicles last month, the China Association of Automobile Manufacturers said More Back to Top

Regulatory Updates
Auto industry cheers continuation of CENVAT cut 6 July 2009 Press Trust of India The Indian auto industry, which has been struggling hard to emerge from the sluggish market conditions, on Monday said that continuation of CENVAT cuts in the General Budget 2009-10 is a good step, but added that there could have been some incentives for exports. "I am happy on behalf of the whole industry as the Fringe Benefit Tax (FBT) has been abolished, but also little bit unhappy as MAT has been increased. It is a good step that the benefits of the stimulus packages have been continued," Bajaj Auto Ltd Chairman Rahul Bajaj told PTI. Expressing similar sentiments, Society of Indian Automobile Manufacturers (SIAM) Director General Dilip Chenoy said the Budget has maintained stability in the prices of vehicles "infact it has reduced the prices in case of some vehicles by Rs 5,000". The government announced a four per cent cut in CENVAT in December as part of its stimulus package, which helped in riving the auto sales up to a certain extent. Chenoy said that abolition of surcharge on income tax, increase in the tax exemption limit, and abolition of Fringe Benefit Tax (FBT) would help increase consumer savings, boosting the purchasing power. The Budget on Monday proposed to reduce the additional excise duty on big cars with engine capacities of 2,000 cc and above by Rs 5,000 per unit. It also cut the duty of petrol-driven trucks to eight per cent from 20 per cent at present. The country's largest carmaker, Maruti Suzuki India, Chairman R C Bhargava said: "There are lot of positives in the Budget. The biggest positive of any Budget is continuing with a stable environment. Stability is very important for the industry, which is what he (the Finance Minister) has done." However, country's largest exporter Hyundai Motor India Managing Director H S Lheem expressed unhappiness with the Budget for not providing any incentives in promoting exports. "I am very disappointed as no attention was given to the exports of the auto industry. We expected some incentives for exports. It is the time to promote exports not only for the vehicle industry, but also for the auto component sector," he added. "We were expecting some rationalisation of taxes. But these have not happened. The automotive industry is one of the growth drivers of the economy and as such some tax relief would have helped the industry to generate some volumes," he added. On the commercial vehicle front, which has been the hardest hit due to slowdown, Chenoy said nothing specific was done. Back to Top

Automobile sector disappointed

8 July 2009 The Hindu The Union Budget 2009-10 on Monday failed to enthuse the slowdown-hit auto industry. Though some reduction in excise duty on large cars and utility vehicles has been announced, the industry leaders said a complete package was the need of the hour for the revival of the industry, particularly for passenger car and commercial vehicle segments. The industry has, however, welcomed continuation of CENVAT cuts that were announced in December last. In his budget speech, Mr. Mukherjee announced the reduction of excise duty applicable to large cars and utility vehicles of engine capacity of 2000 cc and above to Rs. 15,000 from Rs. 20,000 per vehicle. Similarly, the excise duty on petrol driven trucks and lorries has been reduced from 20 per cent to 8 per cent; while on chassis of such trucks and lorries, the reduction is from 20 per cent to 8 per cent. Commenting on the budget, Society of Automobile Manufacturers President, Ravi Kant, who is also Managing Director of Tata Motors welcomed the reduction of the additional levy on large cars and utility vehicles and hoped that further rationalisation of tax rate would take place and the excise duty on utility vehicles and cars, other than small cars, would go down. While these proposals will have a positive impact on the automobile industry, these will be visible in the medium term and long term rather than having any immediate impact, more so for the commercial vehicle segment, which is going through severe downturn. Hyundai Motor India Managing Director H. S. Lheem said their demand for incentives for promoting exports has been ignored. I am very disappointed as no attention was given to the exports of the auto industry. We expected some incentives for exports. It is the time to promote exports not only for the vehicle industry, but also for the auto component sector, he added. Similarly, General Motors India President and Managing Director Karl Slym said the budget failed to meet the expectations of the auto industry. We were expecting some rationalisation of taxes. But these have not happened, he said. The automotive industry is one of the growth drivers of the economy and as such some tax relief would have helped the industry to generate some volumes, he said. Expressing his disappointment, Ford India Managing Director Michael Boneham said: The majority of demands of the automobile industry have not been addressed. The opportunity to rationalise excise duties on the passenger car segment has not been considered. Automotive Component Manufacturers Association of India President J. S. Chopra said overall, the Budget was neutral for the auto-component industry as it did not contain anything new for the industry. The small reduction in the excise duty on large cars and petrol driven trucks would have a very marginal positive impact on vehicle sales. Back to Top

Effects of Recession

Mahindra Renault venture posts Rs 490-cr loss The Hindu Business Line 12 July 2009 Following a 48 per cent fall in sales, Mahindra Renault Pvt Ltd has posted a loss of Rs 490.21 crore on a gross turnover of Rs 741.17 crore during 2008-09. The company, a 51:49 joint venture between Mahindra & Mahindra (M&M) and Renault, of France, makes the Logan entry-level sedan at M&Ms Nashik plant. Drop in sales According to M&Ms 2008-09 annual report, the joint venture sold 13,423 cars during the year under review. In the previous year, the company sold 25,891 cars. In the first three months of this financial year, sales of the Logan have fallen nearly 68 per cent to 1,478 units from 4,595 units in the corresponding period last year. The annual report attributed the decline in Logans sales to increased competitive activity in its market segment. Industry sales in the C-segment, where Logan competes, increased 12 per cent in financial year 2009, the annual report said. The C-segment itself grew 12 per cent last financial year, totalling 2.46 lakh units. M&Ms share in this segment dropped from 11.8 per cent in 2007-08 to 5.5 per cent last year. Light Commercial Vehicles M&M manufactures light commercial vehicles for another joint venture Mahindra Navistar Automotives Ltd and the Logan for the joint venture with Renault, on a contract basis. It also distributes these LCVs and cars for the two joint venture companies respectively under a distribution contract for a fee. Automobile industry experts say that Mahindra Renault Pvt Ltd will have to take a decision quickly on how long it is going to continue making the Logan. M&M has a capacity to make 50,000 units of the Logan a year, but with falling sales that capacity will be largely unutilised, they say. Automotive vehicles According to the annual report, the company maintained its automotive vehicles sales. It sold a total of 220,213 vehicles 44,533 three-wheelers, 8,603 LCVs and 13,423 cars recording a growth of 0.6 per cent over the previous year. The company posted a consolidated profit after tax of Rs 1,405.41 crore down 10.5 per cent over the previous year. Its net revenue was up 10 per cent at Rs 26,919.8 crore. M&M has been aggressive in overseas acquisitions in the last two-three years, particularly with regard to the auto

component business. Information provided in its latest annual report shows that a number of these overseas subsidiaries, particularly in Europe in the forgings business, have reported losses. The acquisitions completed last financial year include Engines Engineering, Italy a two-wheeler design company; Metalcastello S.p.A., a gear manufacturing company in Italy; and, a second tractor joint venture in China. M&M formed a Systech sector, under which its overseas auto component acquisitions fall into. Farm-equipment In 2008-09, Mahindra & Mahindras Farm Equipment Sector formed a joint venture Mahindra Yueda (Yancheng) Tractor Company Ltd in China with Jiangsu Yueda Yancheng Tractor Manufacturing Company Ltd. M&M holds a 51 per cent stake in this joint venture. This company and an earlier tractor joint venture in China, Mahindra (China) Tractor Company Ltd, posted losses. According to the annual report, Mahindra (China) Tractor Company was able to grow by 21 per cent over the previous year despite the stagnant industry situation. This was made possible through the launch of Mahindra branded red tractors and expansion of the product range up to 40 HP segment on the current platform. In the last financial year, the company made the change over to selling tractors under the Mahindra Feng Shou brand. Back to Top M&M sees dip in automotive biz 28 July 2009 The Economic Times Mahindra & Mahindra (M&M) sees a sharp decline in automotive and tractor business and expects pressure on margins to continue in the current fiscal year. The Mumbai-based tractor maker, which made large-scale acquisitions in the automotive space in the recent past, saw revenues from the automotive business plunge to Rs 100.85 crore in FY09, from Rs 741.25 crore last year. A major threat to both the sectors lies in the escalation of raw material prices such as iron, steel and rubber, which are likely to put pressure on prices and affect margins or demand, the company has said in its latest annual report that has not yet been formally released. Although commodity prices have recently declined after peaking in the first half of 2009, the near-to-medium term remains unclear given the uncertainties in the global macro-economic environment. While high input costs can put pressure on automotive pricing, M&M says that its automotive sector continues to be amongst the most aggressive in passing on these costs to consumers, but may not be able to always do so in the future. Prices of steel a major input for M&M and one which is bought through long-term contracts had risen by about 80% till 2007 end. Although steel prices are seeing some correction, availability of finances may also affect company sales. Growing integration of the Indian economy with the global economy, events around the world have a direct or indirect impact on the Indian automobile industry, the company cautioned in the report. Indian financial markets are highly integrated to global financial markets. As a result, liquidity and availability of credit... will be impacted by conditions in the global markets, it added.

Auto companies have been absorbing input costs pressures in the recent past owing to falling sales. Any increase in price can affect demand, so most companies are holding to price increases, said a senior car company official. M&M is countering the threat of new players in the auto segment through a stronger focus on cost reduction and increased operational efficiency. M&M is also banking upon new products like the Xylo and the refreshed Scorpio to maintain its sales momentum. The company will continue its focus on achieving cost leadership through focused cost optimisation, value engineering, and improved efficiency measures like supply chain management, countrywide connectivity of all its suppliers and dealers, and exploiting synergies between its sectors, it said in the annual report. With the opening up of the defence sector for private sector participation, M&M has formed a separate division, MDS, that is likely to explore opportunities in high-end defence technologies space. Recently, engineering major Larsen & Toubro (L&T) and Europes EADS Defence and Security formed a joint venture (JV) company to make defence electronics products in the country. The JV will develop, design, and manufacture electronic warfare, radars, military avionics and mobile systems for Indian customers as well as for the global market. People close to the development said that M&M may look at similar opportunities. While evaluating possibilities for forming separate JVs/alliances with strategic partners for Land Systems and Naval Systems businesses, M&M is understood to be transferring the two businesses to two separate subsidiaries of the company. Back to Top Worst is behind us, says Leyland MD 29 July 2009 The Economic Times For commercial vehicle major Ashok Leyland, 2008-09 was one of the worst years in its 60-years history. But, the worst is behind us and first green shoots of growth is visible, noted the Hinduja Group flagship company MD R Seshasayee. Ashok Leyland (ALL) reported a net profit of Rs 190 crore for the year ended March 2009 compared with Rs 469 crore last year. Its headcount is 11,938 (13,304). The company declared 100% dividend and its sale revenue from vehicles, engines and spare parts during 2008-09 stood at Rs 6,666 crore (Rs 8,947 crore). In his presentation made at the AGM here on Tuesday, Mr Seshasayee said market demand is picking up and the economy is on an uptick but the growth momentum needs to be sustained. He said the global meltdown had impacted the Indian economy, which is in a deceleration state. The commercial vehicle industry, particularly medium and heavy duty segments, had fallen by 33%. The bus segment dipped by 10% while the trucks fell by 37%. ALL sales dropped by 34.7% to touch 54,431 units in 2008-09 from a peak of 83,307 vehicles in the previous year. Being a cyclical industry, the fall was anticipated but lack of cash, capital and confidence has hit the company hard. The second half of the year had seen a precipitous fall as Ashok Leyland lost 1.8% market share. Regional imbalances too adversely affected its performance which reflected in its traditional stronghold south witnessing a steep drop.

Lack of significant presence in the east where the market held its own also impacted ALL. However, demand for semiforward cab vehicles had surged, Mr Seshasayee said. Despite all this, the company had not lost in the bus market segment, where it maintained its leadership position with 46% market share. Export markets posed severe challenges with the market collapsing following civil war in Sri Lanka. In the Middle East, especially Dubai, ALL faced extreme challenges as the number of vehicles sold declined from 300 to 30 in the second half of the fiscal. Seeing significant growth in the engine business, Mr Seshasayee said ALL had managed to maintain its unbroken track record of profitability. Prudent in borrowings reflected in its stability. To combat downturn, ALL has initiated a slew of steps including focusing on non-cyclical business, cash conservation, internal cost-cutting measures and improvement in competitiveness. Noting that it is the fourth cycle of business that he has been associated with, Mr Seshasayee said the non-cyclical business contribution had shot up from 34% to 50%. This was also due to some large government contracts bagged by ALL. There has been a spurt of purchases from the defence sector and in the coming years, results would start showing. To overcome vulnerability in some markets, ALL is consciously targeting new export markets. A capex reduction from Rs 3,000 crore to Rs 2,000 crore over the next 3 years too is one way of conserving cash resource, he said, adding to move from an accelerated to a braking mode is painful. Since January, applying the brakes has been a hurtful process. Seeing airport as a growing segment, he said ALL has the distinction of producing Indias first H-CNG engine. The company has also expanded its dealership network to 170, authorised service centre to 146 and workshops to 2,300. Back to Top Michelin Posts Loss on Sales Slump, Restructuring Costs 31 July 2009 www.bloomberg.com Michelin & Cie., the worlds second- largest tiremaker, reported a loss in the first half on a slump in sales to vehicle manufacturers and trucking companies hit by the global recession. The net loss was 119 million euros ($168.1 million) compared with net income of 430 million euros a year earlier, the Clermont-Ferrand, France-based company said in a statement today. Sales fell 13 percent to 7.13 billion euros. Analysts had expected a 320 million-euro loss on sales of 7.09 billion euros, according to the median of estimates compiled by Bloomberg. Inventories have now returned to more normal levels, but not to the extent that we can talk about a real upturn, Chief Executive Officer Michel Rollier said in the statement. Declining raw-material prices should support second-half margins. Tiremakers are being squeezed by a slowdown in vehicle production and weakening sales of replacement truck tires, as the recession hits freight carriers and construction companies. While government-backed sales incentives halted Europes auto- market slump last month, demand was 11 percent lower for the first half overall. Michelin rose 2.01 euros, or 4.4 percent, in Paris yesterday, extending the stocks gain this year to 26 percent and valuing the company at 7 billion euros.

The company gave no earnings forecast for the full year. Rollier said in February the 10 percent operating margin originally targeted for 2010 may be achieved a little later as the sales slide forces the postponement of some investments. Earnings Details Michelin recorded a first-half operating profit of 282 million euros, excluding one-time gains and losses, for an operating margin of 4 percent. That compared with a 708 million- euro profit a year earlier, or 8.6 percent of sales. Raw-material costs wiped 117 million euros off first-half profit, Michelin said. Rollier had cautioned in February that the decline in rubber and oil prices since last year would not trickle through to Michelins earnings until the second half. The price of natural rubber fell by more than half in the 12 months following its June 30, 2008, peak of 356.9 yen ($3.94) per kilogram, mirrored by the drop in crude oil in the period. Michelin said its truck-tire operations recorded a 163 millioneuro operating loss, after a profit of 139 million euros a year earlier, as sales plunged 23 percent to 2.07 billion euros. The operating margin on car tires fell to 6.3 percent from 7.6 percent a year earlier on a 9.4 percent decline in sales, the company said. The profitability of specialty tires for airplanes and construction equipment fell 2 points to 18 percent, as sales fell 6.1 percent to 1.11 billion euros. Michelin pledged in April to cut investment by 45 percent this year, predicting that sales would begin to recover after declining throughout the first half. The company announced the closure of a B.F. Goodrich plant in Alabama the same month, with the loss of about 1,000 jobs. Globally, it plans to continue reducing the workforce at a rate of 3-4 percent per year. Back to Top US auto bankruptcies hit Indian auto suppliers: Fitch 9 July 2009 PTI The bankruptcies of leading American car makers Chrysler and General Motors coupled with depreciation of the rupee could adversely impact the prospects of the Indian auto suppliers, says a report. "The high degree of consolidation in the US auto market, which has become the second-largest export destination for the Indian auto component sector, may clearly hinder the prospects of early revival," global credit ratings agency Fitch Ratings today said. According to the report, the export-oriented suppliers have suffered an even sharper decline in sales and profitability, due to the slump in the global markets and the bankruptcy filing by major US auto makers (Chrysler and GM)." While Chrysler has exited bankruptcy, GM is expected to come out of bankruptcy in the coming weeks. Fitch Ratings asserted that reduction in export revenues and depreciation of the rupee against the dollar has forced some auto suppliers to restructure their borrowings into longer maturities, in order to reduce the imminent pressure on cash flows. In its report on the Indian auto suppliers, Fitch Ratings pointed out that such a situation could prolong the payment period

for outstanding dues from these automakers Back to Top Ratan Tata calls for cost cuts at Jaguar Land Rover 30 July 2009 The Economic Times Jaguar Land Rover (JLR), the marque brands acquired by Tata Motors from the Ford Motor Company in June 2008 needs cost reduction and reduction of development and productionising time as the global recessionary trends have seen a sharp fall in luxury vehicle sales. The challenge for Jaguar Land Rover will be to sustain operations through this difficult period, the chairman, Ratan Tata said in the companys latest annual report. This will, however, call for a change from some of the traditional practices and a commitment to encourage change. As part of a new strategic initiative, JLR is planning to have all its future cars constructed with light-weight aluminium bodies to reduce weight and cut CO2 emissions. JLR is also identifying sources of components from India, recognising engineering and computer-aided design capabilities within Tata Motors. It is also developing a hybrid powertrain which will be introduced in future models of Jaguar and Land Rover. Several new models are under development and will be released in the market in the coming years. These will widen the project range and re-energise the range, Mr Tata said. Officials believe that the new products and more aggressive marketing will see it through this period. Tata Motors has also hired KPMG International and Roland Berger Strategy Consultants to reduce costs and increase cash flow. I feel strongly that in later years we can look back on the JLR acquisition and say to ourselves that this was a very worthwhile strategic acquisition and one which has brought us considerable technology and global presence, Mr Tata said in the report. While the US, Europe and Japan have seen new car sales decline by 16% in the second half of 2008, China and India have been exceptions. China has witnessed a significant reduction in its automotive-related exports and supplies to automobile companies and the Chinese domestic car market has grown by 7%. In India, the passenger car market has remained more or less flat compared to the previous year. However, the economic downturn in India which has affected spending in infrastructure, construction and general road transport, has, in turn, seriously affected the commercial vehicle sector where sales declined by 33%, said Mr Tata in the annual report. The deferment of infrastructure projects and the slowdown in the mining sector have resulted in a tremendous drop in demand for medium and heavy vehicles. However the CV sector is showing signs of revival since the first quarter of 2009-10, but it will still be a long and arduous road to recovery. Back to Top

Press Release

Tata Motors net up 58% on low input cost 28 July 2009 The Times of India Tata Motors posted better-than-expected quarterly earnings driven mainly by fall in raw material prices and the new accounting rules on forex differences. The company, India's largest vehicle manufacturer, said it saw signs of recovery for the business both within and outside India. In addition, the government's renewed thrust on infrastructure and tax cuts would aid growth in coming quarters. The Tata group flagship reported a 58% growth in net profit to Rs 514 crore in the first quarter ended June 30 as against Rs 326 crore in the previous corresponding quarter. The earnings far exceeded market forecast of low profits, lifting the stock up by up to 3.9% during the last minutes of trade. The scrip finally ended 0.4% up at Rs 375 in a flat stock market. During the quarter, net revenue fell 7.6% to Rs 6,405 crore. The earnings represent Tata Motors's standalone performance and don't include that of the JLR and Daewoo operations. The company management said it has repaid $150 million of the $1-billion JLR bridge loan. The company had raised the money last month by selling 1.5% stake in Tata Steel. It has roped in two international consultancy firms KPMG and Roland Berger to advise the company on cutting costs and reducing complexities at its loss making Jaguar and Land Rover units. The consultants have been working on this for over two months, said Tata Motors vice-chairman Ravi Kant. The company posted a notional forex loss of Rs 6 crore as against Rs 162 crore in the previous corresponding period. In a statement it said profit before tax in the year-ago quarter would have been higher by Rs 176 crore under the revised accounting policy effective March, 2009. Sales declined as falling earnings forced customers to defer purchases of cars and trucks. Within the passenger cars portfolio, it gained market share in the sedan segment but lost in SUVs. The star performer, however, was the Indica Vista. In commercial vehicles, while light commercial vehicles saw an improvement, demand is yet to pick up in heavy commercial vehicles. Exports fell 43%, particularly in its key market South Africa. Softening commodity and crude prices had a positive impact on earnings. Raw material consumption declined 24% during the period under review. Operating margins improved by 400 basis points. Credit Analysis & Research head Reveti Kasture said, After turbulence during Q2 FY09, the automobile industry has shown signs of revival, boosted by three stimulus packages. The recuperating consumer sentiment, picking up of the job market, relatively cheaper auto finance and improving liquidity scenario would augment the growth of passenger vehicle sales by 6-7% in FY10. The pick up in industrial production and economic activities is expected to expand the commercial vehicle market.'' Back to Top Mahindra Tractors sales rise 51.92 pc in June 1 July 2009 Indopia

Farm equipment maker Mahindra Tractors today reported a 51.92 per cent rise in its total tractor sales in June at 18,242 units compared with 12,008 units in the same month last year. The domestic sales in last month grew by 61.13 per cent at 17,811 units against 11,054 units in the year-ago period, the company said in a statement. "The sentiment in the market is very positive because the MSP (minimum support price) paid for last year & aposs crop was very high and we had a very good monsoon. Availability of finance and lowering of interest rates by the banks have helped in boosting the sales, Mahindra& Mahindra President (Farm Equipment Sector) Anjanikumar Choudhari told PTI. Exports, however, fell by 54.82 per cent to 431 units from 954 units in the corresponding period last year. Asked about the fall in exports, Choudhari said:" Exports to Africa and the SAARC countries was normal, but the export market in the US was severely affected due to the economic meltdown there." The company said that as a consequence its merger with Punjab Tractors Ltd (PTL), effective from August 1, 2008, the total sales also includes 4,676 units of the merged entity. Back to Top M&M plans to roll out diesel trucks in US 9 July 2009 The Economic Times Utility and tractor major Mahindra & Mahindra is stepping up plans to launch diesel-powered pick-up trucks in the US, even as global carmakers such as Honda, Toyota, Nissan and Ford have put similar pick-up launches in the US, on hold. People connected with the development said the Mumbai-based company wants to cash in on the opportunity created by the disinterest of global majors, by competitively pricing its products in the American market, which is slowly limping back after getting mauled in the slowdown. Global carmakers had put off showcasing their diesel products, after the credit squeeze seen post the Lehman Brothers collapse, and also because of the shift in focus with the launch of alternate-powered vehicles such as hybrid cars. By December 2009, M&M plans to launch the diesel-powered two-door and four-door pick-up trucks. While there are no concrete plans to launch the hybrids, the Scorpio will be launched a year later. M&M is yet to decide on the pricing, production targets and advertising spends for the US market. Stringent emission norms is forcing M&M to reconfigure the vehicles it proposes to launch in the highly-competitive US market, said those connected with the project. The auto major will initially start pick-up operations and those of SUVs through the completely-built-unit route followed by the completely-knocked-down route. The SUV will be based on the Scorpio platform, but will be completely redesigned for the US market and badged differently, said sources. The company intends to start local assembly operations when

volumes start picking up. However, it isnt yet clear how M&M intends to market its products. As the companys diesel-powered pick-ups had slow sales in South Africa, where they were launched in 2006. Compared to that, US are a mature market and consumer behaviour will tend to be markedly different, said one analyst who tracks M&M. The company has tied up with US biggest vehicle distributor Global Vehicles to sell the brand, which in turn, has appointed around 263 dealers. As the US is a brand-conscious market and M&M is little-known there, the company will initially target the vehicles at the green consumers, tractor customers and the Indian expatriates in the US. M&M has CKD plants in Brazil and Egypt. It has a presence through the CBU route in Australia, South and Central America. Back to Top Commercial vehicle market in India to rise 7 July 2009 Indus News Wire The commercial vehicles market in India is set to experience significant changes with the hub-and-spoke model of transportation, according to a recent report from Frost & Sullivan. With the burgeoning road infrastructure development, commercial vehicle sales will be driven by a focus on applicationspecific commercial vehicles such as medium and heavy commercial vehicles for long distance transportation and light commercial vehicles, typically the sub-3.5-ton vehicles, for local transportation. The sub-3.5-ton light commercial vehicle segment is poised to capture a significant share of the overall commercial vehicles market and is expected to witness intensifying competition with the entry of more participants, according to Frost & Sullivan. Data from Frost & Sullivan finds that the production of commercial vehicles in India stood at 417,126 units in 2008 with sales of 384,122 units in the same year. Production, domestic sales and exports dropped in 2008 due to economic slowdown. The rising demand for specialized vehicles, due to the creation of the hub-and-spoke model is driving the commercial vehicles market in India, said Frost & Sullivan Industry analyst Sanjay Vasudevan. Growth in segments such as retail and intra-city goods transportation needs has contributed to the increase in demand for sub 3.5 ton light commercial vehicles. The National Highways Development Program for improving road infrastructure and national highways will also impel the demand for commercial vehicles with a significant rise in goods and passenger transport by road, due to enhanced connectivity. Consolidation and increasing maturity of the transportation sector in India, because of improved infrastructure, has resulted in a shift in the segment sales of commercial vehicles. Truck sales are on an upswing because of fleet replacement and the establishment of a new segment of sub-1 ton vehicles. The contribution of light commercial vehicle to the total demand for commercial vehicles has been increasing due to the rapidly expanding usage of smaller vehicles,

intra-city transportation, and the creation of a new segment of small commercial vehicles, following the introduction of the highly successful Tata Ace, according to Frost & Sullivan. New product introduction, coupled with significant technology changes and features, will be observed in the light commercial vehicle market. Light commercial vehicle products for executive mass transport will occupy a niche and set to experience a significant growth in demand. Accordingly, the commercial vehicles market is reorganizing its product portfolio, in synch with the changing demand pattern. However, growth in the next three years is likely to be moderate compared to the blistering growth witnessed in the last two to three years, Frost & Sullivan said. Domestic companies, with a significant three wheeled goods carrier portfolio, are anticipated to rush into the sub 3.5 ton four wheeled commercial vehicles, to keep abreast with the market trend, said Vasudevan. Growth will be largely driven by the sub 1 ton category for last mile transport requirements. Exports of medium and heavy commercial vehicles are also in full swing as local medium and heavy commercial vehicles manufacturers eye the overseas market to enhance their business. Back to Top Bank of Rajasthan ties up with Mahindra & Mahindra India PRwire 14 July 2009 Bank of Rajasthan, one of the fastest growing, technology driven and customer friendly private sector bank, has announced tie-up by signing memorandum of understanding (MOU) with Mahindra & Mahindra one of the leading automobile & tractor manufacturer in India. This pact will help farmers in Rajasthan to obtain loan for tractors & farm equipments at a lower interest rate. This MOU will help farmers in Rajasthan to get benefit of tractor loan up to Rs. 10 lakhs at interest rate of 11.00 % p.a and for loan above Rs. 10 lakhs at a rate of 11.50 % p.a. Repayment of loan can be made in the period 7-9 years. One of the features of this tie up is quick disposal of proposals within a period of 7-15 days. The Bank has also waived processing charges on the said loan. Besides, a special discount of Rs. 5000/- would be provided by the dealer to the farmer. The foremost advantage of this scheme is that it offers credit not only to bigger farmers but also to small and marginal farmers with a land holding of four acres as well. Back to Top Ashok Leyland, John Deere float equal stake venture 13 July 2009 IANS The countrys second largest truck maker Ashok Leyland and the US-headquartered John Deere Construction and Forestry Company Monday announced floating of a 50:50 equal stake joint venture company to manufacture and market earthmoving equipments. The company Ashok Leyland John Deere Construction Equipment Private Limited will initially make backhoe and wheel

loaders and will set up a plant near here, a company release said. The pilot production is expected to start from Oct 2010 and full fledged production by Jan 2011. The statement does not specify the new companys financial and production capabilities. The new company combines Ashok Leylands expertise and broad pan-India distribution network with John Deeres technical know-how and vast experience in the construction equipment business. John Deere is the worlds largest manufacturer of equipment for agriculture and forestry. The $2.5 billion Indian construction equipment industry has been on a growth trajectory and forecasts 20 percent year-onyear growth for next 5 years. Back to Top Auto cos ride the green wave in Europe 8 July 2009 The Economic Times Indian carmakers are reaping the benefits of the incentives offered by the governments of Germany, France and the UK to people exchanging their old cars for new fuel-efficient ones. The country's largest car exporter, Hyundai Motor India, recorded its highest export growth last month, while Maruti Suzuki is raising its export target, as the scrappage policy in Europe that gives e750-5,000 (Rs 50,000-350,000) to people buying fuel-efficient cars has led to an increase in demand for their small cars. The 11-year-old subsidiary of Korean carmaker Hyundai Motor recorded a 33% growth in exports in June to 24,241 cars over the same month last year. On a sequential basis, exports increased 21% in June from 20,125 cars in May. Maruti's exports rose 176% to 13,336 cars last month over 4,836 cars sold overseas in the same month last year. Month-onmonth exports increased 47% from 9,087 cars in May this year. Three small cars A-Star, i10 and i20 are the biggest grossers in Europe, as these fuel-efficient models emit low volumes of carbon dioxide per kilometer. Thanks to booming exports, Hyundai's production schedule for exports is already booked for the next two months and the company is now looking at bagging orders for September and beyond, helping the company post handsome profits. This is likely to help the company that recorded a loss of Rs 87 crore in the quarter ended March due to currency fluctuations. "Exports have jumped, as monetary incentives for fuel-efficient and eco-friendly cars, low on emission, have gone up in Europe. We fit the bill, as our new cars i10 and i20 adhere to such standards," Hyundai's senior vice-president (sales & marketing) Arvind Saxena said. Germany, better known for its luxury marques BMW, Audi and Mercedes, has set aside e5 billion to make the country eco-friendly by encouraging fuel-efficient cars. Those exchanging big cars for small fuel-efficient ones will get e2,500. Spain will barter two-lakh cars by giving e2,000 in cash to people exchanging fuel guzzlers. France offers an incentive of e1,000 with deferred tax benefit of up to e5,000 on each car with carbon dioxide emissions less than 160 gm/km. Italy is extending a e3,000 payout for all new cars emitting carbon dioxide below 130 gm/km.

"Our parent Suzuki Motor's distribution network in Europe is clogged with bookings," Maruti's executive officer (sales & marketing) Mayank Pareek said. Maruti aims to export two lakh cars in FY10 from the 70,000 cars it exported in FY09. The spurt in demand for 'made in India' cars is likely to be a major growth driver for other carmakers entering the small car space. Toyota, GM, and Ford are looking at a possible debut in compact cars by next year. Eyeing the potential in mind, Toyota Kirloskar Motor, the Indian unit of Japan's Toyota Motor Corp, has increased investment by an additional Rs 800 crore, taking it to Rs 4,000 crore till 2016 in its small car manufacturing facility near Bangalore. "The Indian subsidiary will play a larger role in global operations. Besides the domestic market, our small car, coming next year, will also cater to several overseas markets," said a TKM executive, requesting anonymity. Back to Top P K Ruia may step down from boards of all group cos 7 July 2009 Business Standard Ruia group Chairman P K Ruia may step down from the board and allow the group companies to be managed by professionals, while he would remain group chairman. Ruia, who had last year stepped down from the board of wagon manufacturer Jessop & Co, said today that the model of management in the group companies could be based on the one in Jessop. This model would be followed only in companies which were on the right track. When asked about Dunlop India, Ruia said it was not on the right track. He did not categorically say whether he would continue as executive chairman of the ailing tyre company. On commencement of operations at Dunlop, Ruia said funds were ready, but it hinged on a court case related to nonrestoration of power in the plant. Speaking about Jessop, Ruia said he was planning to list Jessop on the stock exchanges. "To get it listed our holding has to be brought down to 75 per cent from over 94.5 per cent currently. There are a few options like inducting strategic investors and disinvestment," Ruia said while speaking on the sidelines of Jessop & Co AGM. The Durgapur facility of Jessop may reopen this year. The company would install the machinery of Mukund Foundry. So far, Ruia has invested Rs 30 crore in the plant. Back to Top MRF blames militant group for unrest at Arakkonam plant 12 July 2009 Economic Times Indian tyre major, MRFs Arakkonam plant, re-opened on May 27, 2009 after a lock out, is still caught in the grip of labour unrest mainly due to the agitation by a section of workmen led by a splinter group. Recently, the State Labour Minister, T M Anbarasan informed the Assembly, following the efforts of labour department, 904 workmen had returned to work by accepting the bipartite settlement with MRF workers welfare union. However, 494 workmen belonging to MRF-ULF have not resumed work.

The plant has a total workforce of 3262 including contract labour and trainees. The Minister said a case is pending before Madras High court on the petition filed by MRF-ULF. It has been pressing for recognition as per ILO recommendations and insisting on signing a wage settlement with it. Stating the Government is keenly watching the development; the Minister told the house depending on the court order, Government will take further action. Meanwhile, MRF in a statement on Saturday said the Arakkonsm unit always had good industrial relations. It blamed a militant splinter group for carrying out a vilification and misinformation campaign against the industrial climate prevailing in Tamil Nadu and against MRF and Arakkonam factory. It said despite a popular wage settlement reached with recognised unions offering substantial benefits to the workmen, the splinter militant group, in the garb of trade union activities, had indulged in violence and tried to scuttle the accord. It had shown disrespect to the advice of Government and courts. The company said majority of the workmen, who saw the malafide intentions of the group, had resumed work. Thus, near normalcy has been restored in the production and supplies to OEs, dealers and other undertakings. The company said, The management of MRF sincerely believes the misled workmen, the general public and the Government agencies should not be influenced by vilification campaigns, being relentlessly carried by the splinter group and their leaders." Back to Top ATMA expects Rs. 6,000 crore worth investments in Indian tyremaking industry 20 July 2009 www.wheelsunplugged.com Discerning the surging demand for truck and bus radial tyres, the Indian tyremaking industry (which is into manufacturing radial tyres) could see investments worth Rs. 6,000 crore in the next few years, thereby generating an extra capacity of 3.77 million units truck and bus radials, as predicted by Automotive Tyre Manufacturers Association. Radial tyres typically offer better fuel efficiency and last longer than regular tyres. Currently, only about 8-12 per cent of trucks and buses in India run on radial tyres, which is expected to go up to atleast 20-25 per cent in the next few years. Especially, after the government banned imports on Chinese radial tyres, multinational tyre companies like Continental AG, Bridgestone, Michelin et al, who had already set up their distribution base in the country, are considering to pump in huge sums of money for setting up a greenfield facility. Other global giants like Pirelli, Kumho, Hankook, and Yokohama are also expected to follow the same route, although none of them has yet confirmed its plans. It may be recalled that the Foreign Investments Promotion Board (FIPB) has approved French tyremaker; Compagnie Financiere Michelin (CFM) proposed Rs. 11,000-crore foreign direct investment for establishing a wholly-owned subsidiary and which would entail building a state-of-the-art manufacturing facility in Tamil Nadu for rolling out radial and off-the-road tyres, tubes and ancillary tyre related products. The Indian arm of Clermont-Ferrand company is planning to invest Rs. 4,000 crore over a period of seven years and intends to make a further infusion of Rs. 7,000 crore over a period of three years, after the completion of the initial funding depending on the progress of the project and demand of the tyre market. This first phase operation is anticipated to create 1,500 jobs, and eventually half the factorys output will be exported, and the company may consider scaling up its output with after the first phase, creating 500 jobs additionally. Though it could not be officially confirmed, speculation is pretty rife that Michelin had been holding discussions with the Tamil Nadu state government to for setting to set up a greenfield facility on a 290-acre land at the SIPCOT Industrial Park in Oragadam, near 40 km from Chennai (in Tamil Nadu), where Daimler AG would also be establishing its commercial vehicle plant. Likewise, Apollo Tyres is all set to commence production at its greenfield facility at Oragadam near Chennai by

November09, where it will be rolling out truck, bus and light truck radial tyres, along with high and ultra-high performance passenger car radial tyres for the domestic and export markets. The plant will have a capacity to produce 8,000 tyres a day, according to the companys press release. The 135-acre facility is to come up at the Oragadam Industrial Park promoted by the State Industries Promotion Corporation of Tamil Nadu (SIPCOT) near Kanchipuram on the ChennaiBangalore route. Furthermore, JK Tyres Ltd would be infusing Rs. 700 crore at its truck and bus radial plant in Mysore to increase capacity to 12 lakh units from the current capacity of 368,000 units. It was reported earlier that Madras Rubber Factory (MRF) has entered into an agreement with the Tamil Nadu state government to set up a manufacturing unit with an initial production capacity of 3.5 lakh radial tyres (for both trucks and cars) a month in the first phase, which would be doubled by the end of 2009. The company has earmarked Rs. 600-800 crore for the project at a 290-acre site in Perambulur, near Tiruchi in Tamil Nadu. Nearly 2,500 jobs would be created when the production goes on-stream. Its competitor, Dunlop Tyres will also be entering this segment. Back to Top Tyres made from trees cheaper, more fuel efficient: Research 23 July 2009 Economic Times Automobile owners around the world in the near future might drive on tyres that are partly made out of trees - which could cost less, perform better and save on fuel and energy. Wood science researchers at Oregon State University in US found the potential of microcrystalline cellulose - a product that can be made easily from almost any type of plant fibers - to partially replace silica as reinforcing filler in the manufacture of rubber tyres. The study suggests that this approach might decrease the energy required to produce the tyre, reduce costs, and better resist heat buildup. Early tests indicate that such products would have comparable traction on cold or wet pavement, be just as strong, and provide even higher fuel efficiency than traditional tyres in hot weather. "We were surprised at how favourable the results were for the use of this material," said Kaichang Li, an associate professor of wood science and engineering in the OSU College of Forestry, who conducted this research with graduate student Wen Bai. "This could lead to a new generation of automotive tyre technology, one of the first fundamental changes to come around in a long time," Li said. Cellulose fiber has been used for some time as reinforcement in some types of rubber and automotive products, such as belts, hoses and insulation - but never in tyres, where the preferred fillers are carbon black and silica. Carbon black, however, is made from increasingly expensive oil, and the processing of silica is energyintensive. Both products are very dense and reduce the fuel efficiency of automobiles. In this study, OSU researchers replaced up to about 12 percent of the silica used in conventional tyre manufacture. This decreased the amount of energy needed to compound the rubber composite, improved the heat resistance of the product, and retained tensile strength. More research is needed to confirm the long-term durability of tyres made with partial replacement of silica, Li said. Further commercial development of this technology by a tire manufacturer could be undertaken at any time, he said. The newest findings were recently published in a journal, Composites Part A: Applied Science and Manufacturing. Back to Top

Bridgestone to expand production capacity 24 July www.central chronicle.com Bridgestone, the world's no. one tyre and rubber manufacturer, announced a production capacity expansion at its unit in Pithampur at Indore (Madhya Pradesh). The additional capacity facility will ramp up the production of tyres by 4,500 (units) per day. Mr Takashi Urano, Vice President and Senior Officer, International Tyre Business Operations of Bridgestone Corporation, Japan, in a release here said, ''India is growing rapidly, and its potential seems to be unlimited. Success in India is essential and inevitable for Bridgestone to reach the goal to become undisputed no. one tyre and rubber company in the world both in name and reality.'' ''We are going to put more focus on Indian market than ever, and are looking for newer possibilities to grow further'', Bridgestone India Managing Director H Tanigawa said. Bridgestone has invested Rs 259 crore for this additional capacity expansion project. The expansion will in turn increase the total production capacity by around 40 per cent of the current. This will also generate an additional employment for approximately 300 people, he said. Back to Top Volvo cuts prices of sports vehicle XC90 by Rs 4 lakh 9 July 2009 PTI Luxury car maker Volvo Car India on Thursday said it has cut the prices of its flagship sports utility vehicle XC90 by Rs 4 lakh to boost sales amidst the current economic downturn. The XC90 D5 will now come at Rs 42.5 lakh, while the XC90 32 and XC90 V8 would be available for Rs 43.5 lakh and Rs 49.5 lakh, respectively. "In lieu with current economic scenario and to provide luxury at right price, the prices for the flagship model Volvo XC90 SUV has been reduced by 7-8.5 per cent with effect from July 9," Volvo Car India said in a statement. The company also announced opening of new dealerships at Pune and Chennai, taking the total number of dealerships in the country to seven. "The expansion of our dealer network signals the importance of the Indian market to Volvo Cars. We believe that India holds tremendous potential for our brand and want to make sure that we fully capitalise on the opportunities available...," Volvo Car India MD Paul de Voids said. Recently, other car makers including Hindustan Motors, Ford India, Honda Siel Cars India and Hyundai Motor India had announced price cuts of Rs 6,000 on some of their models following additional duty excise reduction announced by Finance Minister Pranab Mukherjee during the Budget on July 6. Back to Top Car sales rise 5th month, new models help 8 Jul 2009 REUTERS

Car Sales rose an annual 7.8 per cent in June, climbing for a fifth straight month and reinforcing the country was one of the few markets where demand has been picking up. A spate of new models and falling borrowing costs are luring new buyers back after a downturn in the middle of last year when high interest rates, lack of vehicle finance and a slowing economy squeezed demand. "It is a kind of pent-up demand," said Dilip Chenoy, director general of Society of Indian Automobile Manufacturers (SIAM). "A lot of sales in the 2-wheeler and passenger car segment is led by new model sales." Companies sold 107,531 cars in June, compared with 99,741 a year earlier, while motorbike sales rose 16.2 per cent to 550,833 units, data from SIAM showed. Maruti Suzuki, the country's top car maker and 54.2 per cent owned by Japan's Suzuki Motor Corp, which last week reported a 22.6 per cent annual rise in June car sales, led the pack. However, sales of trucks and buses, a barometer of economic activity, fell 12.5 per cent from a year earlier to 36,193 units, the data showed. In comparison, US auto sales tumbled 28 per cent in June, which was the narrowest decline in nine months. In Japan, industry-wide auto sales fell 14.5 per cent in June, the ninth straight month of double-digit percentage fall, though the pace of decline has eased from previous months. SALES SEEN RISING India's annual budget on Monday is expected to help the auto sector, with its focus on the farm sector aiding tractor sales and higher spending urban schemes spurring demand for buses. It had also lowered factory gate tax on cars. "There is a little bit of recovery happening," said Surjit Arora, auto analyst Prabhudas Lilladher. "July numbers should be better than June... especially in the compact car segment because with no changes in the budget, customers who had postponed purchases in June will now be buying." The compact segment accounts for about 70 per cent of the car market. Chenoy said the fall in interest rates for car financing was led by State Bank of India, the country's largest lender, which cut its lending rates twice this year. However, he said in absolute terms the growth on month to month was small. "The flat trend is worrying." He said a 3-5 per cent car sales growth in 2009/10 forecast by SIAM earlier this year was based on two stimulus packages by the government. "Currently nothing has changed," he said. The auto sector stock index has risen nearly 49 per cent this year, in line with the main BSE index. Back to Top Fiat India to raise $510 mn loan 21 July 2009 The Economic Times

Fiat India Automobiles, a joint venture between Tata Motors and Fiat, is close to finalising a loan of $510 million about Rs 2,458 crore at current exchange rates for its capex and working capital programmes. The loans include a rupee term loan, a working capital loan and an export credit agency (ECA)-backed overseas loan, according to people close to the development. Fiat India Automobiles, a 50:50 joint venture formed in 2007, manufactures Fiat and Tata cars and also produces transmission sets and engines. The term loan of Rs 1,000 crore has a door-to-door maturity of six years while the ECA loan of euro 130 million (around Rs 900 crore) has a door-to-door maturity of eight years. The working capital loan of Rs 600 crore has a tenure of one year, said people familiar with the matter. Citi was the sole arranger for the loans. The rupee term loan and the working capital loan were given by State Bank of India, IDBI Bank, Punjab National Bank and Union Bank of India. When contacted, a Fiat India spokesperson said: The company is discussing and finalising financing proposals with bankers to fund the companys originally planned operations. There is no change in production capacity. The original funding plan of 1:1 between rupee loan and ECA was subsequently revised to 2:1 on the back of rupee liquidity, said sources. The benefit of an ECA-led loan is that because of the guarantee that typically comes in such a case, the interest cost on the loan comes down drastically and the borrower is able to get a longer tenure loan. However, the interest costs on these loans are not known. The Tata-Fiat JV plans to invest close to Rs 4,020 crore in its Ranjangaon facility near Pune. By 2012, the capacity of the Ranjangaon plant would be expanded to two lakh cars, three lakh diesel engines, and three lakh spare parts and accessories per annum. At present, the plant, which makes the Fiat Palio, the Grande Punto and the Linea in the B and C segments, has the capacity to produce one lakh cars and two lakh engines. The plant also has a production capacity of 1.3-litre multi-jet diesel engines, 1.2-litre and 1.4-litre fire gasoline engines and transmissions. Fiats 1.3-litre multi-jet diesel engines, 1.2-litre & 1.4-litre fire gasoline engines and C549 transmission machinery which powers the current range of cars. Apart from Fiat cars, the Pune facility rolls out Tata passenger next generation cars. The JV has an equal representation of five members from the two partners. While Tata MD Ravi Kant will be the JV chairman, the vice-chairman will be Alfredo Altavilla, the CEO of Fiat Powertrain Technologies and senior V-P (business development) of Fiat Group Automobiles. Rajeev Kapoor, brought in from Hero Honda, has been appointed the president and chief executive officer of the JV and is in-charge of the operations of the new entity and reports to the board of directors of the joint venture. The distribution and service of Fiat-branded cars in India will continue to be managed by Tata Motors, in line with the agreement signed in March 2006. Back to Top Porsche plans to sell 50 units of Panamera this year 27 July 2009 PTI Despite the global economic meltdown, German car maker Porsche plans to sell 50 units of its premium luxury sedan Panamera, which is to be launched by October, in India this year.

The Panamera range of luxury sedan cars in the range of Rs 1.4 crore to Rs two crore would be launched by October 3. However, bookings for 13 cars had been completed in India, Rod Wallace, Managing Director of Precision Cars India, official importer of the Porsche range of cars, told PTI here. The company, which sells the popular SUV Cayenne in the country, has sold around 650 cars since its entry into India three years ago. However, 65 per cent of the sales came from the 'Cayenne', he said. "In 2007, we sold around 168 units while in 2008 it was 150..however with the Panamera we are hoping to reach 225 over the next 12 month period", he said. He said the company had set up a new plant in Germany exclusively to manufacture about 20,000 units of the Panamera range of cars. Total production at its German plant has declined from 98,000 units (in 2008) to 80,000 units this year due to the recession, he said. Indian operations contribute only a meagre percentage of global sales while the US, Europe, China and the Middle East are the 'big' markets, he said. To a query, Wallace said Mumbai was the biggest market for the company, with 60 per cent of sales coming from there, followed by Delhi with 30 per cent, while the remaining 10 per cent came from the rest of the country. The company currently has two dealers each in New Delhi and Mumbai. It would be opening three more dealerships each in Chennai, Hyderabad and Cochin. The Hyderabad and Cochin dealerships would be set up on 14,000 square feet, while the Chennai one would be on 11,000 sq ft. Back to Top Tata Motors to deliver first Nano on Friday 16 July 2009 The Economic Times Tata Motors Ltd, India's largest vehicles maker, said on Thursday it would deliver the Nano, the world's cheapest car, to its first customer on Friday. Chairman Ratan Tata had showcased the Nano at an auto show in New Delhi in January last year, but consumer bookings began only in April this year after the project was delayed due to land disputes at its planned site in West Bengal. Tata has assured price protection for the first 100,000 customers, for whom the cars will be available for Rs 1,00,000 ($2,053), excluding taxes. The company, which is currently manufacturing the Nano from its interim facility at Pantnagar, has a capacity to manufacture 50,000 cars a year, which it plans to raise to 2.5 lakh units once its new plant at Sanand in Gujarat starts in December. The company sold a total of 6.10 lakh forms and garnered nearly Rs 2,500 crore on 2.03 lakh bookings. Although initial industry expectations were around five lakh bookings, company officials maintain that the company has garnered a good response at a time when the car market is struggling for volumes. Over 70% of the total 2.03 lakh bookings have come from non-metro markets. Tata Motors, which closed the bookings for the Nano on April 25, 2009, will complete the process of delivering one-lakh cars by the last quarter of 2010. A Tata Motors dealer based out of South Mumbai said, customers have been informed about the delivery schedule in their

allotment letters. Customers, who do not figure in the first one-lakh list, have been given the option of retaining the booking and will earn interest on their booking amount with effect from July 2009. According to Tata Motor spokesperson, as many as 55,021 customers have consciously agreed to accept the delivery of the cars after the first batch delivery. Back to Top Rural markets drive up car sales in June quarter 9 July 2009 The Economic Times Car sales grew 8.3% in June, aided by rising demand in semi-urban and rural markets, lower interest rates on auto loans and huge monsoon discounts offered by manufacturers. However, sale of commercial vehicles continued to decline, affected by a demand slump triggered by the economic downturn. According to monthly data released by Society of Indian Automobile Manufacturers (SIAM), 1,40,000 vehicles were sold in June. Two-wheeler sales posted a 17.44% growth to 7,06,000 units in June over the year-ago period. Truck and bus sales dropped 13% to 36,193 units in the same period. Sales momentum is expected to continue on the back of new car and bike launches. Hyundai has launched new variants of its i20 hatchback, Maruti launched the Ritz hatchback, Fiat has launched two new cars, the Punto hatchback and the Linea sedan, and Honda has launched the Jazz which made a debut few weeks ago. The new cars grew the market. With the i20s diesel variant, we expect to double monthly sales to 4,000 units per month, Hyundai senior vice-president (marketing & sales) Arvind Saxena said. During the first quarter of the current fiscal, vehicle production rose 9.5% to 30.69 lakh vehicles while domestic sales surged faster by 11.24% to 27.40 lakh vehicles. Auto analysts tracking the sector predict strong demand for cars and twowheelers. Crisils research head Sachin Mathur said sale of passenger vehicles (cars and two-wheelers) in the country could post high single-digit growth, adding strong demand for India-made cars in Europe and other markets could push sales growth to double digits. Truck sales may continue to plunge as no real demand is being generated from the industrial sector and the domestic freight market is still negative. We do not expect a revival in this segment and sales may continue to be sluggish in the next quarter, he said. Sale of commercial vehicles fell by 13% in the first quarter of the financial year to 96,835 vehicles, while the heavy trucks segment, a barometer of economic activity, fell at a steeper 36% to 31,381 units during the period. This segment continues to remain a challenge as sales are not picking up despite numerous stimulus packages from the government. With the new re-possession norms for financing new vehicles likely to be enforced and easier flow of credit to the segment, we expect some positive upswing in the next few months, SIAM director general Dilip Chenoy said. The government has initiated a series of steps to revive demand .especially for heavy trucks. It has set up a special

purpose vehicle to increase funding of new trucks, while the depreciation rate (net value of the product) calculated on new vehicles has been increased to 50% from the earlier 15% under a series of stimulus packages. These steps and a lower base of sales in the second half of FY08 are likely to bring commercial vehicle sales into positive territory. Back to Top

New Product
M&M rolls out micro-hybrid Bolero Maxitruck in Pune 15 July 2009 Wheel Unplugged Mahindra & Mahindra Ltd. (M&M), on 14th July09, has launched the Bolero Maxitruck with the micro hybrid technology, priced at Rs. 3.52 lakh (ex-showroom Pune). Mahindra has pioneered this eco-friendly and innovative technology in India and successfully implemented the same for use in vehicles such as the Bolero and the Scorpio. A one-tonne payload coupled with a top speed of 100 km/hr ensuring greater pulling power, allows heavier loads to be carried in a single trip. Owners can also make a greater number of trips per day, giving them the opportunity to expand the geographical scope of their business. A reduced turning circle radius of 6.6 m makes it easy to manoeuvre the vehicle in small spaces, allowing door-step delivery even in narrow alleys. The vehicle also incorporates Viscous Fan-drive technology which switches off the fan when the engine temperature falls below a pre-set temperature, and a new muffler design which drastically reduces back-pressure. This result in less fuel consumption by the engine and improved fuel efficiency. The Bolero Maxitruck with Micro Hybrid technology, thus, ensures substantial savings in fuel costs, making it a better economic proposition. It is to be mentioned that micro-hybrid technology is based on the simple principle of not burning fuel when it is not required. It automatically detects moments, during the journey, when the vehicle is idle and stops the engine. This conserves fuel, leading to reduced running costs and reduced emissions. This technology switches off the vehicles engine after it has come to a complete halt. For example, if the vehicle comes to a halt at a traffic signal and is in neutral, the engine will shut down automatically after 5 seconds. Once the signal turns green and the driver presses the clutch pedal, the engine starts immediately for continuing the journey. The new Bolero Maxitruck features the stylish front look of the Bolero; the distinctive front grille gives the vehicle a masculine yet aesthetic face, lending it a strong on-road presence and evoking a sense of pride for its owner. The Bolero Maxitruck is the first product in the Pick-Up category to offer the revolutionary Micro hybrid technology which has been pioneered by Mahindra in India. This path breaking system will help deliver considerable improvement in fuel efficiency, ensuring greater prosperity for our customers, said Vivek Nayer, senior vice-president, Marketing, Automotive Sector, Mahindra & Mahindra Ltd. The Bolero Maxitruck with micro hybrid technology has been designed keeping the customers needs in mind. Prime importance is given to convenience and utility. Plush fabric seats, greater cabin space and a ventilated cabin reduce driving fatigue and ensure greater comfort for both the driver and the passenger. A Bolero-like instrument panel sports easy-to-read dials, while an integrated dashboard and glove box provides greater utility and storage space. Back to Top

Mahindra looking for new launches for growth: Keshub Mahindra The Economic Times 30 July 2009 Automobile major Mahindra & Mahindra is looking for new launches for growth, chairman of the company Keshub Mahindra said here on Thursday. Addressing the 63rd annual general meeting of the company, Mahindra said last fiscal was very difficult. Many internationally big automobile companies suffered heavily. However, Mahindra managed to augment its growth by launching new models and would be banking upon new products to maintain the sales momentum. The recently launched Mahindra Xylo and refreshed Scorpio have received encouraging response in the market. The company has sold 15,000 Xylos since its launch, he said. While Mahindra did not indicate what type of new launches he has in mind, the company's annual report has said it would be launching new products to address previously unaddressed market segments. He informed shareholders that the company is developing new businesses through its subsidiaries. Referring to the acquisition of Satyam Computers by the company's subsidiary Tech Mahindra, he said he was enthused by the market response to the acquisition. When asked whether Satyam would be merged with Tech Mahindra, he said nothing is ruled out. He pointed out the company has factored in the interest expenses on acquisition of Satyam but has not considered profit or loss of Satyam as the restatement of Satyam's accounts is still on. He said the company has made looses in the venture with Renault. The company has a 51\49 per cent partnership with Renault and makes Logan cars. The company has also lost money in the tractor business in the US, he added. Back to Top Ashok Leyland launches new multiaxle vehicle 30 Jul 2009 PTI Hinduja Group flagship and leading commercial vehicle manufacturer Ashok Leyland today launched the 3116 multiaxle vehicle (MAV) developed for high fuel efficiency. Speaking to media persons after the launch here, Vinod K Dasari, Director and Chief Operating Officer, Ashok Leyland, explained that the 3116 is being launched to complement the company's successful 3121 8x2 MAV. The 3121 has earned market preference for arduous applications on flat terrains. Market feedback showed the need for a similar vehicle with lower operating costs, he said. "Customers are seeking to improve operational profits by plying higher capacity vehicles that maximise the load. Therefore, within the MAV segment, there is a perceptible shift in favour of the 31T GVW vehicles, constituting 14 per

cent of the MAV demand in the first quarter of the current fiscal," Dasari said. The newly launched vehicle would cost Rs 15.50 lakh ex-showroom depending on the booking choice, he said. The customer stands to benefit from 3116 MAV's inline fuel injection pump, which provides for low maintenance costs as well as excellent mileage, he said. Giving an insight into the segmental shifts, Dasari explained the MAV segment, pioneered by Ashok Leyland, has grown to become the largest segment, accounting for over 60 per cent of the medium and heavy duty goods volume. Andhra Pradesh, being one of the largest markets for MAVs, was the natural choice for the national launch of the new vehicle, he said. In the state, 8x2 vehicles already constitute 17 per cent of the MAV volume. The 3116 MAV is tailormade for cement and general goods movement that dominate the state's transportation sector, he added. Back to Top BMW likely to launch Mini Hatchback in India by Dec 09 10 July 2009 The Economic Times German auto major BMW may once again look at the possibility of launching its Mini Hatchback in India by December 2009. The Mini would be imported and would carry a price tag of around Rs 20 lakh for the base model. We had shelved plans of launching the mini hatchback last year when the market started turning bad since we saw that the risks involved in launching it were more than the rewards we would be able to reap afterwards. Towards the end of this year, we will once again weigh the pros and cons of launching the hatchback model in India, said BMW India president Peter Kronschnabl after launching BMW X6 in Kolkata. The Rs 20-lakh price tag would be Rs 9-10 lakh higher than the highest priced car in the segment. We need to assess if there is a market for such cars. We also need to convince our dealers that additional investment they make would fetch returns if we have to launch the car in India, he added. Nevertheless, the possibility of the vehicle being a success last year was bad, and the car market hasnt improved much during this time. Although we will look at the possibility of launching the car during December 2009, the possibility of a market survey yielding positive results does not seem a bright possibility, said a senior BMW official. The company sold 1,747 cars during the first half of 2009 calendar, about a quarter of total luxury car sales of 7,400 in India. BMW vehicle sales improved by about at 12% over the previous corresponding period which is 1.5% above the growth in the entire segment, Mr Kronschnabl said. This year, BMW is looking to sell 3,000 units of which 100 will be in Kolkata. In 2008, the company sold 75 cars in Calcutta. The company recently raised the annual capacity of its Indian plant to 3,000 units from 1,700 on a single-shift basis at a cost of $750,000. Back to Top

Used Vehicles
Shriram Transport Co to enter debt market 22 July 2009 Business Standard Shriram Transport Company (STFC), a non banking finance company (NBFC) plans to hit the debt capital market with issue of non convertible debenture(NCD) aggregating to Rs 1000 crore. Revealing this Rajeev Garg, general manager (marketing), Shriram Transport Company maintained that the company plans to enter the debt capital market on July 27 with public issue of NCDs aggregating to Rs 500 crore with option to retain over subscription up to Rs 500 crore for issuance of additional NCD. The company already has filed prospectus with the Registrar of Companies to this effect. The NCD issued with an interest offer in the range of 10.75 per cent to 11.25 per cent a year, closes on August 14. Shriram Transport Company is finance provider for commercial vehicle industry and dominates in financing pre owned commercial vehicles. The commercial vehicle finance company is looking to utilize the funds raised through NCD for meeting their lending requirements. Meanwhile, Rajeev Garg maintained that despite dipping sales of commercial vehicles last year, Shriram Transport Company has grown by 25 per cent. It is because the company main business (75 per cent) comes through financing of pre-owned commercial vehicles and only small percentage (25 per cent) comes through financing of new commercial vehicles. The market of pre-owned commercial vehicles has not seen any significant downslide. Commenting on the future products that company was looking to add to their portfolio, Garg maintained that company was looking to venture into equipment financing business with focus on retail borrowers. Back to Top

Industry Competition
LCV segment bucks trend, sells 48,374 units during April-June'09 25 July 2009 WheelsUnplugged There is good news for the light commercial vehicles of late. The industry has bucked the slowdown trend in the Indian commercial vehicle industry by posting a 17 per cent growth at 48,374 units during April-June09 period. Buoyed by this trend many tractor and CV makers like ICML, Bajaj Auto, Mahindra, Ashok Leyland, etc are chalking out robust strategies to either enter this segment or enhance its existing LCV portfolio. The light commercial vehicle segment has been witnessing growth after the launch of Tatas Ace in the sub three-tonne category. In the last few months, Ashok Leyland entered in to a joint venture with Nissan, Swedish automotive giant Volvo tied up with Eicher and Daimler with the Hero Group, each competing for a pie of the LCVs segment. Besides them, AMW has also said that it would shortly announce its LCV plans. With the Finance Minister, Pranab Mukherjee, bringing down excise duty on petrol-driven trucks, a number of commercial vehiclemakers may consider rolling out alternate fuel variants of its diesel-powered LCVs. It was reported a couple of days back that the newly-formed UPA government, in its Annual Budget 2009-10, has slashed excise duty on all petrol

trucks to 8 per cent from 20 per cent, in order to promote its presence in the Indian commercial vehicle industry. Hindustan Motors Limited (HML), which had earlier rolled out its brand-new 2.3 ton GVW mini- truck 'HM- Shifeng Winner' in Kolkata in West Bengal last year, is gearing up to launch the aforesaid vehicles BS-IV version in National Capital Region (NCR) shortly. It is to be mentioned that the vehicle is being produced in collaboration with Shandong Shifeng (Group) Co. of China from where the trucks is imported in knocked-down versions. Currently, the company manufactures 1,000 units of the one-tonne payload capacity mini-truck per month at its Uttarpara plant in West Bengal, and has firmed up plans to ramp up the capacity according to its demand in the future. Over the next six months the 'Winner' would be rolled out across the country. A CNG version of the vehicle is also planned for launch in the next few months. According to well-informed sources, Tata Motors may consider manufacturing the petrol version of its best-selling dieseldriven Ace LCV and is exploring the feasibility of making several variants of its aforesaid mini-truck platform, which includes a petrol one. Although it is expected that a petrol-powered Ace will be bigger than the current 0.5 tonner, company officials have refused to offer any comments on this. The Tata Ace succeeded in creating an entirely new segment that competitors are known to be working on different models to compete against the Tata Ace. In India, the one-tonner Ace costs around Rs.2.2 lakh. The 700cc 4-stroke, naturally aspirated, indirect injection diesel engine delivers a power of 16 hp (12 kW) at 3200 rpm and a torque of 3.8 mkg @ 2000 rpm. The countrys second largest bikemaker, Bajaj Auto Limited (BAL) will also be setting up a plant next to its facility in Chakan for its proposed LCV project and has earmarked an investment outlay of around Rs. 1,000 crore. . Furthermore, the plant is expected to have a capacity of half a million vehicles and will be set up on 250 acres. Another Rs. 1,000 crore will be put in by its vendors who will set up base in the same premises, though it could not be officially confirmed. A senior representative had earlier told reporters that though the vehicle comes closest to the Ace in terms of market segments, its design, utility and cost will be key differentiators. Chances are highly likely that Bajaj Auto will forge a 51:49 JV for manufacturing its LCVs and will hold a majority stake. Back to Top Proton looks to drive on to Indian auto track 26 July 2009 The Economic Times Malaysian car maker Proton is keenly looking to enter the growing Indian automobile market to expand its overseas operations amid global demand slump. Proton has been trying to enter the lucrative Indian auto market for some years and the company was reportedly in talks with home-grown auto major Mahindra & Mahindra as well as contract manufacturer Argentum Motors. Apart from its annual report of last fiscal, where the company had marked India as one of the major target markets, Proton's recent review states that it is studying the 12-lakh units strong Indian passenger car market. Proton Holdings Berhad Managing Director H S Z A B Syed Mohamed Tahir said the company would intensify its export programme to diversify into various market segments and reduce dependence on the domestic market. "On this note, we will be launching new programmes regionally, specifically in ASEAN, China, India and the Middle East... Proton will leave no stone unturned in our vision to strengthen our brand equity within the local and regional arena," Tahir

said in the latest review of the company's performance. He, however, did not specify as to when the company will enter India. Meanwhile, repeated e-mail queries to a Proton spokesperson remained unanswered. Back to Top Auto makers continue uphill drive in July 1 August 2009 PTI Defying fears of a deficient monsoon affecting sales, major auto makers in the country registered a healthy growth rate in domestic sales in July, thereby continuing with the positive trend that began this year. All the major carmakers such as Maruti Suzuki India, Mahindra & Mahindra and Honda Siel Cars saw their sales for July moving northwards. In the two-wheeler segment as well, all the major players, led by market leader Hero Honda, witnessed a rise in their sales. Domestic sales of the country's largest auto maker, Maruti Suzuki, grew 33.36 per cent to 78,074 units in July from 58,543 units in the same month last year. Mahindra & Mahindra's total sales were up at 22,463 units as against 17,302 units in the year-ago period, up by 26.90 per cent. Carmaker Honda Siel Cars India posted an 11.99 per cent rise in its sales at 4,857 units in July as against 4,337 units in the same period last year. In the two-wheeler segment, market leader Hero Honda's total sales jumped by 30.39 per cent at 3,66,808 units in July compared with 2,81,317 units in the same month last year. Chennai-based TVS Motor Company reported a 2.07 per cent increase in its total two-wheeler sales at 1,20,994 units as against 1,18,545 units in the same month last year. Back to Top Fiat, Tata eye market for Ferraris in India: Report 23 July 2009 AGENCIES Italian auto giant Fiat and Indian car maker Tata are in talks about a joint marketing project to sell Ferraris and Mazeratis in India, news reports said on Thursday. "We are talking. We have various projects (including) marketing Ferraris and Maseratis" in India, Tata boss Ratan Tata told the Italian daily La Stampa. Both brands are under Fiat's control.

Tata Motors is also present in the luxury car business, having acquired the British brands Jaguar and Land Rover for 2.3 billion dollars from US automaker Ford last year. At the other end of the scale, Fiat and Tata are considering marketing the Tata Nano, the world's cheapest car, in Latin America, where Fiat has a strong presence. The partners are also discussing "sharing new car platforms" and have plans for Iveco, Fiat's truck and bus subsidiary, Tata told La Stampa, which is owned by the Fiat group. The Nano, starting at some 1,640 euros (2,330 dollars) in India, hit the streets this month in India, and Tata has plans to export it to Europe, South America and Southeast Asia. It will arrive in Europe "at the end of 2011 as planned," said Tata, who is on Fiat's board of directors. He added that the Nano had just passed European safety tests. Fiat and Tata build cars, engines and gearboxes together in India, and Tata Motors is Fiat's distributor in India. Back to Top Ashok Leyland Nissan JV to rework manufacturing plans 19 Jul 2009 PTI In view of the current economic downturn and the reduction in demand for M&HCVs, the Hinduja Group-controlled Ashok Leyland has redrawn its capacity enhancement programmes to be in line with market outlook. The company will ensure that future expansion is well aligned to market demands, the company said in its annual report here. "In view of the global slowdown, Ashok Leyland and its joint venture partner, Nissan Motor Co of Japan, are reworking the manufacturing plans including the option of phased implementation of the project," Ashok Leyland's Chairman, R J Shahaney, said in the annual report. The company had signed an agreement with Nissan in 2008 to form three joint venture companies for the light commercial vehicles (LCV) business in India for technology development, vehicle manufacturing and powertrain manufacturing. Fiscal and other incentives from the Tamil Nadu Government for the project have been secured, although allotment of land for the project is awaited, Shahaney said. The Indian LCV market has witnessed a tremendous growth in the recent past. During the last financial year, LCVs contributed to more than half of total CV volumes. Back to Top Pawan Ruia interested to buy out Tyre Corporation 2 July 2009 www.wheelsunplugged.com

According to reports in the media, the Calcutta-based Ruia Group, owners of Dunlop India and Falcon Tyres, is negotiating for acquisition of the ailing Union Government undertaking, Tyre Corporation of India Limited (TCIL), which has a tyre manufacturing facility at Kankinada in West Bengal. Ruia ventured into the tyre industry in 2005 by buying Dunlop India from Manohar Rajaram Chhabria's family. Commercial production at the tyre major's Sahaganj factory had resumed Jan 14 last year, after a five-year closure. According to auto industry analyst, TCI, on the other hand, has limited tyre manufacturing capacity, which is not adequate for survival in today's competitive scenario. However, the combined strength of Dunlop and TCI would make it a significant player in the tyre market in the Eastern region. The Ruia Group, a fast emerging industrial conglomerate with interest in infrastructure & engineering, tyre & rubber products, sugar and electronics, has had a phenomenal growth since its inception in 1993. The able leadership of its chairman Pawan K Ruia has given the Ruia Group a formidable reputation in turning around ailing industrial giants through innovative management practices. The core capability of the Ruia Group lies in identifying the opportunities and reinventing the acquired companies. The Group has a workforce of around 10,000 skilled, committed and qualified professionals. Back to Top Vredestein: Marriage to Apollo Will Stand the Test of Time 2 July 2009 www.tirereview.com On May 15, Apollo Tyres purchase of Vredestein Banden was completed with the signing of contracts ratifying a deal estimated to be worth between 175 million and 229 million euros. The new combined company, Apollo Vredestein BV, will operate as a wholly owned subsidiary of the Indian tyre giant Apollo, with full responsibility for selling all of both companys tyre brands (Vredestein, Maloya and Apollo) in Europe. Having witnessed Amtel-Vredestein go to the wall earlier this year, observers agree that the company's previous alliance with the now defunct Russian tyre maker turned out with the benefit of hindsight to have been a mistake. Nevertheless, Vredestein's re-marriage to an ambitious manufacturer with its own designs on European market access puts the new combined company just outside the top 10 global tyre manufacturers, somewhere around 12 or 13; fulfils Vredesteins desire to find emerging market production capacity and a route into the related sales markets; and is being hailed as a new beginning for the Dutch tyre maker. Tyres & Accessories recently travelled to Apollo Vredestein BV's Enschede headquarters and asked the newly merged company's CEO, Rob Oudshoorn, why it will be second time lucky for the tyre manufacturer. Apart from the fact that Vredestein's two recent parent companies offer similar access to low cost production and emerging market sales opportunities, there are very few similarities between Amtel and Apollo when it comes to approach. This, according to Oudshoorn, is why there was a corporate sigh of relief at Vredestein when the company sealed the deal with Apollo just a couple of months ago; shoring up its own position and defending it from any less accommodating moves. What was not widely publicised till now was that Vredestein has effectively been up for auction since September.

According to Oudshoorn, interest in the company was strong and there were fewer parties who didn't express interest in the company than those that did. Specifically this means interest from many of the well-known western and Far Eastern tyre manufacturers. The reason for all the interest in Vredestein, in addition to the company's modern facilities and forward-looking approach, is that it is one of only two independent companies remaining in Europe (the other being Nokian). And for anyone looking to attain a foothold in Europe the fact this company comes with an R&D centre and an established sales and distribution network makes it a more attractive prospect. While there was no shortage of potential buyers from the external tyre world, there was also a strong bid for a management buyout from within the company. Tyres & Accessories understands that this option was very much in the running throughout the process and had the potential to be successful. Speaking exclusively to T&A, Rob Oudshoorn explained that early interest was shortlisted to three or four serious bids, before being further reduced to two options the MBO route or Apollos bid. In the end Vredestein's management decided the merger with Apollo was in Vredestein interests so this made the way clear for Vredestein to accept Apollos bid. So what did they pay? With all the reported interest in Vredestein, one might expect this to drive the price up. However, the reality of the situation is that the auction was taking place at the very bottom of the cycle in what can only be described as a buyers market, with the assessed value of all the leading automotive suppliers and tyre makers taking a particularly battering. Oudshoorn wouldnt comment on what the exact price tag was, but in the light of the estimations currently being thrown around by financial analysts, T&A understands that the real price tag was at the bottom end of the 175 to 220 million euro range roughly the same price that previous owner Amtel paid for Vredestein Banden in 2005. Whatever the exact amount Apollo paid for Vredestein (and this is likely to be confirmed in Apollos full year financial results), it is now clear that the purchase was made using the 220 million euros originally earmarked for the construction of a greenfield production site in Hungary. Apollos plans to build its European Manufacturing and High Technology Centre in the city of Gyngys faltered in mid-August 2008 when the company admitted production at the facility wouldnt begin before 2010. At the time reasons given were unexpected delays in administrative processes and a divisive referendum on the investment for the local community. Be that as it may, it is also likely to be more than a coincidence that Apollo pulled the plug on its Hungary plans at the same time as the Amtel-Vredestein board announced a $222 million dollar full-year 2007 loss and approved a reverse takeover of Sibur Russian Tyres. It appears that Apollo has decided to avoid the political and regulatory pitfalls (not to mention volume and distribution pressures) of building on a Greenfield site, in favour of buying an existing profitable operation which comes with already established brands, sales and marketing network and an R&D centre all for roughly the same price. (Tyres & Accessories/Staffordshire, U.K.) Back to Top Apollo Tyres connects with target group 7 July 2009 www.domain-b.com Apollo Tyres has launched a novel display in malls to connect with its target group. Apollo's new corporate identity was unveiled early this year. The idea was to remain in tune with the times and to reflect the company's young, vibrant and dynamic nature. Apollo Tyres undertook the visibility exercise for its new identity in malls in Delhi NCR, where tubeless passenger vehicle

tyres have been displayed in a stylish, cylindrical-shaped reflective unit, complete with Apollo's new branding. The tyres on display are the premium range of car and 4x4 namely, Acelere, Acelere Sportz, Aspire and Hawkz. The speed on these range from Acelere's H rated tyre or 210kmph to Aspire's W rated at 270kmph. These tyres are meant for the mid to premium range of cars. Hawkz is a 4x4 fitment, with a variety of usages such as on highways and in rough terrain. This activity was undertaken at MGF Metropolitan Mall in Gurgaon, MGF Rajouri Garden and Great India Place in Noida. People could check out the tyres on display, learn more about the product features and make enquiries. The entire activity was handled by Big Fish Communications. After Delhi NCR, the company plans to take the same display to various malls in other cities as well. Back to Top

Apollo Tyres gets a refreshed website 15 July 2009 www.wheelsunplugged.com After rolling out its new corporate identity across operations in the first quarter of 2009, Apollo tyres has now launched a refreshed website. Moving away from the earlier usage of black and red to the vibrancy of purple and orange, moderated by shades of grey. Colours and usage, which no other tyre company has, and only a few companies across the world dare to incorporate. The company claims that the colours have allowed Apollo to bring to the fore its internal reality of youthfulness and dynamism. The new website (www.apollotyres.com), attempts to live up to these virtues, introducing contests and 'fun' elements for the surfer in sections called Fun Wheeling and Contest Corner. A special section called Motor Marks (under the India country site), primarily for motoring buffs, captures properties Apollo Tyres has built with various automotive publications in India. The Contest Corner now has a photography contest for both amateurs and professionals focusing on the 'Joy of Motoring'. Entries are welcome from all till September 2009. Structurally, the website has five distinct blocks, namely, Corporate, India, South Africa, Europe and other Markets. The 'Corporate' section carries content related to Apollo Tyres Ltd as an organisation and includes information for key stakeholders like Media and Investors. Other Markets is tailored to the needs of Apollos customers beyond the three domestic markets. The 'Country Operation' sites are being developed as customer-focused sites, concentrating on specific activities in each geography. A key requirement that was kept in mind was ease of navigation to enable any information to be accessed with a maximum of three clicks and that most information should be easily downloadable, including company logos, biographies and photographs of management and financial trends. According to Alexa web ranking, among global tyre companies, www.apollotyres.com ranks as the 4th most frequented site in the world. Back to Top DuPont and Goodyear create high-tech tyres that Rock 'n Roll 16 July 2009

www.zigwheels.com Goodyear and DuPont, among the world leaders in tyres and chemicals respectively, have come together to produce high-tech, ultra-tough tyres with Kevlar that might just be the next big leap forward in tyre technology. Think Kevlar, and immediately bullet-proof vests come to mind. But this ultra-tough fibre developed by DuPont in the mid 60s has found a wide variety of applications over the years, ranging from automobile to aerospace. The concept of using Kevlar in the manufacture of automobile tyres is nothing new really. In fact, replacing steel with Kevlar in racing tyres has been among the first commercial applications for this magic fibre. Now however, the boffins at DuPont have worked closely with the Goodyear Tire & Rubber Company to develop tyres with Kevlar that are targeted for use in conditions ranging from tough, rocky terrain to everyday highway driving, and can help provide stability, toughness and comfort. Using DuPont's years of experience and knowledge of material properties, Kevlar yarns were designed and developed into cords to meet Goodyear's tyre performance needs for passenger cars and trucks. This long-standing relationship between the two companies has yielded many high-tech tyres in the recent past. The resultant tyres use the advantages of Kevlar to help deal with the challenges of the road, ride and comfort, handling, thermal and flame resistance, reduced tyre weight and road noise, among others. A few years ago, Goodyear introduced a couple of commercial tyres that featured a layer of Kevlar under the tread to deliver toughness, shock-absorption and sound insulation. Among the latest innovations is the new Goodyear Wrangler MT/R with Kevlar which is the first off-road tyre in the U.S. that is built with Kevlar for enhanced sidewall puncture resistance. Using Kevlar to reinforce the sidewalls means that the tyre is fairly impervious to cuts and punctures in the sidewalls - a common malaise that plagues tyres when driving on demanding off-road surfaces. It also helps reinforce the sidewall for when drivers return to the pavement for the drive home. Sidewalls reinforced with Kevlar in the new tyre help increase sidewall puncture resistance by approximately 35 percent, compared to the original Wrangler MT/R, a tyre already well-known for its toughness. Apart from this, Goodyear subsidiary Dunlop, working with designer Pininfarina, also unveiled a future concept tyre technology in Europe. This new ultra-lightweight concept tyre features the latest Kevlar technology to replace traditional steel components and weighs 20-percent less than its regular counterparts. This reduced weight, according to Dunlop, should provide better fuel economy, combined with excellent performance and increased driving pleasure. Another of Dunlop's latest creations is the SP Sport Maxx TT which features lower sidewalls reinforced with DuPont Kevlar. This new tyre is designed to help empower drivers by enhancing driver feedback and precision and features a motorsports-inspired tread and Dunlop's exclusive Touch Technology for better grip and steering response. The SP Sport Maxx TT is already available in North America in 35 initial sizes, ranging from 16-22 inch rim diameters, and will be launched in Europe later this year. Back to Top JK Tyre June quarter net doubles at Rs 41 crore 16 July 2009 www.mydigitalfc.com JK Tyre, on Thursday, reported double net profit at Rs 40.75 crore for the first quarter of the financial year as opposed to Rs 20.24 crore in the corresponding period a year ago, for the quarter ended June 30. Net sales for the April-June period increased by 5.73 per cent Rs 897.67 crore against Rs 849.06 crore in the corresponding period a year ago.

Even though the commercial truck tyres segment is weak, light commercial vehicle tyre segment and off the road (OTR) segment is showing positive demand, said Raghupati Singhania, vice chairman and managing director of JK Tyre. He credited double net profit figures to efficiency improvement and cost cutting measures. The tyre-maker has recorded sales of Rs 400 crore in the first six months of operations in Mexico from its recently wholly acquired Mexican tyre company Tornel. Tornel has a present combined capacity of 6.6 million tyres annual capacity with three manufacturing plants. Back to Top Apollo Tyres mulls Rs 1,000 cr investment for IT park in Kerala 22 July 2009 Economic Times Apollo Tyres was planning to invest about Rs 1,000 crore for setting up an IT park and a hotel complex in Kerala, Apollo Group Chairman Onkar S Kanwar today said. There were plans to set up a five star hotel and IT park at the 30 acres land at nearby Kalamassery where it has a tyre unit, Kanwar told reporters here. The company had decided to shift the unit to the Rubber Park at nearby Irapuram. But due to strong objection from the trade unions, it had been held up. Kanwar said the unions have more or less agreed for shifting the factory. Apollo Tyres is planning to double the capacity of the unit from 100 tonnes per day to 200 tonnes per day after it was shifted to the rubber park. On the company's revenues, Kanwar said from the India operations, the total business revenue was Rs 4,100 crore and it was expected to grow to Rs 6,000 core by 2011 fiscal. Apollo's 60 per cent turnover was from Indian operations and the target was to raise it to 70 per cent, he said. A Rs 2,000 crore new plant was coming up in Tamil Nadu and it was expected to be completed in another 11 months time where truck and bus radial tyres would be manufactured. The company was planning to put in Rs 100 crore investments in its Perambra unit. Thirty-five per cent of the total tyre production was from Kerala. The company had invested about Rs 300 crore in the last two years for production, he said. Back to Top Apollo Tyres sees 11 pc FY10 sales growth 23 July 2009 Economic Times Apollo Tyres expects an 11 per cent growth in domestic sales in 2009/10, helped by reviving demand from increased economic activity, and sees margins maintained at current levels, its finance chief said. "Demand growth remains reasonably strong, so we're quite upbeat on that front. Raw materials will put some pressure," Chief Finance Officer Sunam Sarkar said over the telephone. "We hope we'll continue with the efficiencies we've been able to squeeze out and continue with similar margins for the rest of the year." Apollo has an operating margin of 16.5 per cent and a net margin of 8 per cent. It reported a 95 per cent rise in India operations' June quarter profit to 946.7 million rupees. Sales rose to 11.80 billion rupees from 10.76 billion rupees. IIn the fiscal year to March 2009, it had reported India sales of 40.7 billion rupees.

Back to Top Apollo Tyres targets 2-b output by 2011 23 July 2009 www.expressbuzz.com With the commissioning of the tyre manufacturing unit of Apollo Tyres Ltd (ATL) at Chennai by December this year, the production of truck and passenger tyres of the company will be increased to 2 billion-mark by 2011. Onkar S Kanwar, chairman, ATL, told media persons here that the Rs 2,000-crore company at Chennai will manufacture high performance truck and car tyres. The company is focusing on the passenger segment in India as high-end cars are being introduced in the market, which need high quality tyres. Apollo, which has become an international company with starting operations from South Africa and Netherlands, plans to acquire a position of one of the 10 major tyre companies in the globe. The company acquired Vredestein Banden BV in the Netherlands, which has a high-end passenger car tyre manufacturing facility and extensive access to the European market and also acquired Dunlop Tyres International (since renamed Apollo Tyres South Africa Pty Ltd), comprising three tyre manufacturing units and a retreading plant in Southern Africa. With the launching of Tamil Nadu unit, 2.4 million truck tyres will be manufactured from there. 70 percent of the production will be truck tyres and the 30 percent will be passenger car tyres. The company has registered a growth of 8 percent last year with an operating profit of 11 to 12 percent. Of the total turnover, 60 percent is from India and 40 from other countries. Back to Top Rolls Royce sees India emerging as most important mkt 29 July 2009 ET Now Rolls Royce Motor Cars, the UK-based manufacturer of luxury automobiles, sees India emerging as its most important market in the next five to 10 years, and is looking at using parent BMWs supplier network in India to source components. The super-exclusive British marque, which sells cars on the basis of pre-determined quotas in low-volume markets, seems to have realised the potential of India, the second-fastest growing economy in the world. We believe India will be the single most important market for Rolls Royce in the next 5-10 years, said Tom Purves, the chief executive of the company. Mr Purves said the market for his cars is shifting from the West to the East with markets such as India and China contributing more to its growth. Rolls Royce cars are custom-made at its Goodwood factory in the UK, and the talk of sourcing components from a foreign country is a first for the carmaker. Were open-minded, and being within the BMW group network, we have access to all the purchasing power the group has and engineering opportunity that exists, Mr Purves said. In the long term, India represents a phenomenal business opportunity because we have seen a general movement of our business from the West to the East, to markets like India and China that have played a crucial part in the growth Rolls

Royce has enjoyed, Mr Purves said. India has improved its contribution to Rolls Royces overall business substantially. Thats good news because globally the company has seen a 25% dip. Once the brand new Ghost slides into the Indian market next year, the tally is expected to hit 50. The Ghost, to be priced Rs 2.7-3 crore, will be formally launched at the Frankfurt Auto Show this year, and bookings in India will kick off in autumn. Delivery of vehicles will begin in spring 2010, when the car will be formally rolled out in India. Rolls Royce, which was an intrinsic part of Indias princely past, made a re-entry into India in 2005, and was surprised when sales hit around a-car a-month beating expectations by miles. Although the company admits it benefited from its Indian heritage, its now clear it wants to target the new Maharajas the kings of business. Back to Top Escorts arm to market Chinese firm's truck cranes 13 July 2009 PTI Escorts Construction Equipment Limited (ECEL), part of the Escorts Group, has signed an agreement with the Chinese Hunan Zoomlion International Trade Co Ltd for marketing the latter's truck cranes in India. ECEL will market a range of truck cranes of Hunan Zoomlion, including the 'All-Terrain Truck Cranes', the company said in a statement. "Given the planned growth and focus on infrastructure projects like flyovers and bridges, this arrangement will provide a boost to ECEL's ongoing growth plans," ECEL Executive Director and CEO Kanwal Kishore Vij said. Currently ECEL has Pick-n-Carry cranes 5T-23T and Rough Terrain Slew Cranes 17T-40T under its product portfolio. Back to Top Ford Honda cut car prices by up to Rs 6000 7 Jul 2009 PTI Car makers Ford India and Honda Siel Cars India on Tuesday cut the prices of some of their models by up to Rs 6,000 a piece to pass on the benefit of excise duty cut on large cars announced in the Budget. While Ford India announced a price cut of Rs 6,000 for its sport utility vehicle (SUV) 'Endeavour', Honda Siel Cars India (HSCI) reduced the prices by Rs 5,000 for its luxury sedan 'Accord' and SUV 'CR-V'. "The price reduction of Rs 6,000 will be applicable to all three variants of the Endeavour," Ford India said in a statement. "The duty reduction has been a welcome step taken by the government though the reduction is limited only to large cars. We are pleased to pass the benefit of the reduction on the Endeavour to the consumer in its entirety." Ford India VicePresident (Sales) Tim Tucker said. Meanwhile, HSCI said following the price cuts, its Accord would be available between Rs 17.72 lakh and Rs 24.80 lakh.

Its CR-V would now come at Rs 22.92-Rs 23.62 lakh. Hindustan Motors had already reduced the prices of its partner Mitsubishi's Pajero, Outlander and Montero by Rs6,000. GM India, Toyota Kirloskar Motor and BMW had also said they would pass on the benefit of excise cuts to consumers. The government had proposed to reduce the additional excise duty on big cars with engine capacities of 2,000 cc and above by Rs 5,000 per unit in the Budget for 2009-10. It also announced a duty cut on petrol-driven trucks to eight per cent from 20 per cent at present. Back to Top

International Updates
Mahindra to enter US market with fuel-efficient pickup truck news 15 July 2009 Domain-b Mahindra & Mahindra is doing exactly what major Western automakers have failed to do - making fuel-efficient trucks. The Indian utility vehicles major seems to have taken over from Chrysler, Ford, GM and Toyota as the auto giants put off their small diesels in the wake of the second oil spike. While high diesel fuel prices and bankruptcy woes hit Chrysler and GM, underdog Mahindra has steadily been pushing plans to sell its first trucks in America by the end of 2009. The truck, tentatively called TR20 or TR40, was originally planned to be named Appalachian, with expected sales starting in the first quarter of 2009. Mahindra has put plans for a diesel hybrid version on the backburner and instead is coming out with a high-torque, 2.2liter four-cylinder engine and six-speed automatic transmission that's expected to be rated at least 30 mpg. Mahindra's US distributor, Global Vehicles USA Inc, said the pick-up is capable of hauling up to 2,700 pounds and tow up to 5,000 pounds. It hopes to sell the yet-to-be-named Mahindra pick-up in the mid- to low-$20,000s. By comparison, the two-wheel-drive, two-door Toyota Tacoma (the best-selling midsize pick-up) with a 2.7-litre fourcylinder gas engine and four-speed transmission is priced at over $16,000. The vehicle can carry only up to 1,380 pounds in its cargo box and pull a 3,500-pound trailer. The Tacoma is rated at 19/25 mpg city/highway. The difference in price between a small-end gas truck and the Mahindra diesel could be around $9,000, but that is also significantly less than the cost of a new base model heavy duty pick-up, which can cost as much as $30,000. While Mahindra's cost advantage may partially be because its Indian origin, the company is also tapping some of the tierone suppliers in the US, including Bosch, AVL and Lear to cater to American tastes. Back to Top Electric cars poised to give auto industry a jolt

16 July 2009 msnbc.com In the next year or so, after only a century or so of trying, the electric car may break free of the lunatic fringe and become a mainstream transportation option for everyday drivers. The next step forward for electric cars will come on Aug. 2, when Nissan is expected to unveil the first of three electric models in three vehicle segments that the automaker will reportedly sell en masse by 2013 in the United States, Japan and Europe. In fact, fanatics (aka early adopters) have been gutting regular car cars and packing them with a thousand pounds of golf cart batteries for years. But very soon it will be possible for drivers other than those who already have a homebrewed solar array atop their home to have a chance to whir quietly to work using household electric current for propulsion. This comes after a long history of mostly dashed hopes, unrealized dreams and no shortage of P.T. Barnum-esque wild claims unsupported by reality. But this time, mass-produced electric cars really are preparing to begin trickling into showrooms, a reality cemented by U.S. government loans to the three companies that are gearing up for production. Ford, Nissan and Tesla have received U.S. government loans that the companies say will help them tool up to manufacture their planned electric models, with the first cars arriving in 2010 from Ford and Nissan. Tesla says production of its sleek $57,400 Model S will commence in late 2011.

Growing market
Within five years, the market for electric cars could reach between 270,000 and 335,000 units per year in the U.S., predicts Art Spinella, president of CNW Research, a market research firm in Bandon, Ore. That would certainly confirm the arrival of the electric car as a real product in a way that has never happened before, though it would still represent only about 2 percent of total sales, Spinella points out. That means that the cars that are supposed to save the world will still sell in total numbers in the U.S. that are similar to those of the number three-selling pickup truck, the macho Dodge Ram pickup. So while everyone wont be propelled by electrons anytime soon, for the first time, everyone can at least consider that as an option when the buy their next car. These cars arent likely to be cheap, but Nissan at least is promising to be price-competitive in the premium compact car segment. The company wont say whether that competitive price will be the one before or after the $7,500 federal tax credit, but it seems likely that the tax break will be needed to help make these cars reasonably competitive with gaspowered alternatives. No sooner did consumers come to embrace the notion that hybrid-electric cars need not be plugged in than battery electrics will arrive to test drivers willingness to rely on plug-in-only cars. Nissan has demonstrated its electric drive system installed in its trendy Cube compact model, but the production car will be its own model, said Mark Perry, Nissans director of product planning. The car will have space for five occupants and will have a driving range of 100 miles on a charge, a distance that is sufficient for the daily driving needs of 98 percent of Americans, according to the company.

Nissan will target an up market customer with its electric model, complete with the premium amenities and safety features expected by the kind of customers who might otherwise buy a Mini Cooper rather than say, a Toyota Yaris. Nissan will begin offering this new model in 10 to 15 markets nationwide in 2010, gradually expanding to full availability in 2012, said Perry.

Electric minivan
Ford, meanwhile, is gearing up to offer its Transit Connect commercial minivan as an electric model next year. This will also start out in limited numbers, reported Rob Stevens, Fords chief engineer for commercial vehicles. The Transit Connect will be available with either of two lithium-ion battery packs, a 21 kilowatt-hour pack or a 28 kWh pack. The first will offer a driving range of about 70 miles and the second will go about 100 miles, he said, and the vehicle will have a top speed of 70 mph. Ford isnt ready to talk about the electric Transit Connects price, but acknowledges that even after the tax credit it will be higher than that of the gasoline model. Smith Electric Vehicles, the British company providing the electric drivetrain, enjoys the benefit of selling these vehicles to customers who are able to escape Londons congestion fee. The electric Transit Connect will only sell through select Ford dealers, but in 2011 the company will follow that with a higher-volume electric version of either its Focus or Fiesta small car, which will be sold through all of its dealers to regular customers. With the recent grants of federal money, both Ford and Nissan are solidly positioned to begin manufacturing regular production versions of the cars that already exist in drivable prototype form. Back to Top Bridgestone recalls another 127,000 tyres 1 July 2009 www.ohio.com Bridgestone Corp., the world's largest tire maker by sales, disclosed Tuesday it is recalling 127,183 Firestone-brand tires sold in the U.S. because a faulty tread could separate and cause an accident. Bridgestone, based in Tokyo and the parent of Bridgestone Firestone operations that employ about 900 in Akron, extended an October recall to additional production weeks for Firestone FR380 tires, according to a letter posted on the National Highway Traffic Safety Administration's Web site. The size P235/75R15 tires were produced in 2007 and 2008 in Costa Rica, Bridgestone said in the letter. The tires are primarily used on light trucks, pickups and sport utility vehicles, said Dan MacDonald, a company spokesman. There have been no reported incident or injury claims from the tires, the company said. The recall was expected to begin Monday. Tires will be replaced free until Oct. 31. A message left at Bridgestone Americas Tire Operations LLC in Nashville, Tenn., wasn't immediately returned. A 2000 Bridgestone recall involved 6.5 million tires, mostly on Ford Motor Co. Explorers, that were linked to at least 271 highway deaths from tread separations. The recall was the biggest in the U.S. for tires and led to a battle between Ford and Firestone over responsibility for the deaths.

The Costa Rica tires were made at a San Jose plant in 2007 and 2008, Bridgestone said. The company said the tires ''were produced with insufficient tread base gauge and continued use of these tires may lead to vibration and groove cracking. Extended use could potentially lead to tread distortion or tread separation and possible loss of control.'' Bridgestone said the earlier recall ''covered approximately 135,000 Firestone FR380 tires in size P235/75 R15.'' Back to Top Bridgestone to Build a Retreaded Tire Plant in Thailand 20 July 2009 www.japancorp.net Bridgestone Corporation has announced plans to build a new plant for the production of procure tread for retread tires. This production base will help Bridgestone increase sales of its retread products as well as develop its solutions business in Japan, Asia, and China. Tires are retreaded by removing the worn tread (the part of the tire that touches the ground), adding new tread rubber and vulcanizing it so that the tire can be reused. Compared to new tires, retread tires can contribute to resource conservation by reducing as much as two-thirds the consumption of raw materials such as natural rubber, reducing CO2 emissions generated in tire production, and contribute to reducing the number of tires scrapped by maximizing their total life. Bridgestone's retread tires are widely used on trucks and buses, aircraft, and construction and mining vehicles. The retread tire markets for trucks and buses are rapidly growing in Japan, Asia, and China. Bridgestone has positioned Japan, Asia, and China as growth markets. In Japan, it has been developing its Eco Value Pack business and expanding its solutions business, which supports customers as they implement their environmental management activities and work to reduce their total tire-related costs. In addition, in Asia and China, it has been further expanding its network of Bandag franchises, and with the establishment of this new plant, Bridgestone will secure a production base of retread materials which enables further development of its retread and solutions business in each of these markets. Construction of the new plant in Chonburi Province, Thailand, about 60 km from Bangkok, is scheduled to start in July 2009, and production is expected to commence at the facility in November 2010. With approximately 43,600 square meters, the new plant will require an investment of 5.2 billion yen and employ about 100. Back to Top GM sales rise 38% in China 1 July 2009 The Straits Times GENERAL Motors (GM) China said vehicle sales in the world's most populous nation were up 38 per cent year-on-year as the market continued to outpace expectations for growth. The struggling US automaker and its joint ventures sold more than 800,000 vehicles in China in the first half of 2009. Sales were boosted by a massive Chinese stimulus programme as well as growing demand in medium-sized cities and rural areas, according to a statement issued by the company.

'China's vehicle market continued to outpace most expectations for growth,' GM China Group President Mr Kevin Wale said in the statement. 'The market benefited from stimulus policies adopted by the Chinese government as well as growing demand for personal transportation in tier-three and tier-four cities and rural areas.' GM China's fortunes mark a sharp contrast to its US parent, which has filed for bankruptcy, reflecting the Asian market's growing importance for the global auto industry. China overtook the United States to become the world's largest car market for the first time in January. GM's troubles have been further highlighted here in recent weeks after Sichuan Tengzhong Heavy Industrial Machinery Co, a little-known Chinese machinery maker, placed a bid to buy its iconic Hummer brand. Sales from GM's commercial-vehicle joint venture in China with Shanghai Automotive Industry Corp Group jumped 49.9 per cent to 524,598 units while sales from the passenger vehicle joint venture, with Shanghai General Motors Corp, reached 288,843. GM China said it is optimistic about the outlook for the rest of the year. 'Vehicle sales in China are expected to remain strong in the second half of 2009,' Mr Wale said. -- AFP Back to Top China Car Sales Jump 48% on Economic Stimulus, Most Since 2006 9 July 2009 Bloomberg.com Chinas passenger-vehicle sales rose 48 percent in June, the biggest jump since February 2006, as government stimulus spending spurred a revival in the worlds third-largest economy. Chinese motorists bought 872,900 cars, sport-utility vehicles and other passenger vehicles last month, the China Association of Automobile Manufacturers said in a statement today. Overall auto sales, including buses and trucks, rose 36 percent from a year earlier to 1.14 million. A 4 trillion yuan ($585 billion) economic package has helped China surpass the U.S. as the worlds largest auto market this year and boosted sales for companies from General Motors Corp. to Alcoa Inc. The country is a positive force that will help drive growth as the world emerges from the global recession, billionaire George Soros said yesterday. Chinas downward slide is clearly over, said Wang Qingtao, an analyst at First Capital Securities Co. in Shenzhen. There is also huge natural demand for vehicles, which will continue to drive the industry for years to come. The trade group raised its full-year vehicle sales forecast to more than 11 million from 10.2 million previously. First-half sales jumped 18 percent to 6.1 million after the government cut some retail taxes and handed out vehicle subsidies in rural areas to spur demand. Stocks Jump

The Chinese auto group is cautiously optimistic about the industry in the second half, it said. SAIC Motor Corp., Chinas biggest automaker, rose 8.6 percent, the most in almost two months, to close at 19.00 yuan in Shanghai. The stock has more than tripled this year, compared with a 71 percent gain for the Shanghai Composite Index. Dongfeng Motor Group Co., the largest Hong Kong-listed automaker, rose 9 percent, the most in three weeks, to close at HK$7.30 in the city. The stock has more than doubled this year. U.S. vehicle sales plunged 35 percent in the first half to 4.8 million. Sales slowed to an annual rate of 9.69 million cars and light trucks in June, according to Auto data Corp. Chinas passenger-vehicle sales climbed 26 percent to 4.53 million in the first half, while commercial-vehicle sales fell 0.5 percent to 1.57 million, the Chinese association said. The government acted to boost auto demand after sales dropped in five of the six months ended January. Given the low monthly sales numbers late last year we may continue to see surging sales growth in the following months, Wang said. Back to Top

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