Tata Motors to Receive Rs.95 billion from Gujarat Government for Nano Plant
Tata Motors will receive a loan of Rs.95 billion at an interest rate of 0.1 percent for 20 years from Gujarat government for building up a township and a ‘transport nagar’ in the adjacent region of Tata’s Sanand manufacturing plant. The car maker shifted its manufacturing plant of Nano Project from Singur in West Bengal to Sanand in Gujarat last month as Trinamool Congress-led farmers set up huge protests against Tata’s Nano plant.
Gujarat government, on the other hand, has lent its helping hand for the Tata to carry on its Nano Plant in the state and assured Tata of providing different concessions.
Times of India reported:
Tata Motors will get 20 years from the commencement of the project to repay the amount at an interest rate of 0.1 percent. The amount will be repaid by adjusting value added tax dues of the company, the sources said.
Local government officials refused to comment on the deal between the government and the auto maker.
However, Tata Motors officials said the total amount was an aggregate of “various concessions”, including the 100 acres, stamp duty exemptions and concessional power tariff.
Tata Nano is one of the most alluring car projects taken in the domestic car industry in India over the last few years. Tata Nano is touted as the world’s cheapest car which is expected to be priced at Rs. 1 lakh. No doubt, this car has huge room of getting success in the domestic car market of India. Coupled with its export demand, it is expected that Tata Nano will have a huge demand annually. So, Tata Nano plant is expected to be continued for a long time and this plant will create lots of employment and will make infrastructural development in the state. So, it is a win-win situation for both.
Hyundai India Plans to Launch a Car Smaller than Santro by 2011
Hyundai Motor India Limited (HMIL) is planning to launch a car which will be smaller than the company’s Santro model. According to reports out in the media suggest that Hyundai Motor India wants to roll out this new model of passenger car by 2011. Hyundai’s upcoming model i20 was supposed to have launched in India on November 6, but the date was postponed later on. Senior Vice-President of Hyundai Motor India Limited (HMIL), Arvind Saxena, has recently claimed that Hyundai India is yet to be affected by the global credit crunch.
Hyundai Motor India is India’s second largest car maker after Maruti Suzuki. The company saw extensive success thanks to its hatch back compact car Hyundai i10 that is being manufactured in India and exported to many countries around the world. India is a price-sensitive market. So, Hyundai India’s plan of rolling out a car smaller than Santro seems to work well for the company. Now, let us see if Hyundai Motor India can be successful with this new model too.
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Force India Aiming to Win F1 Title Within 2010
Indian billionaire Vijay Mallya’s Force India Formula One motor racing team is aiming to win Formula One race within two year. Force India has recently announced its collaboration with McLaren-Mercedes under a five-year technical deal. Under this deal Force India will be using engines, gearboxes and KERS system from McLaren in 2009.
Force India’s performance in F1 race was not satisfactory at all as they failed to score any point. Force India used Ferrari engines in 2008 and failed to win any point. The team is now looking for points in 2009 and then they will finally fight for title in 2010.
Autosport reported:
“We all know how long things take to actually happen in Formula One because it’s super competitive. We can’t take anything for granted,” Mallya told a selected group of reporters at the Force India factory.
“Other teams are also developing and improving and of course in 2009 it’s virtually a brand new car and a brand new design. At least from my perspective, winning races I think I can certainly aspire for maybe in 2010, but for 2009 I would be happy if we are regularly in the points. That would be already a major step forward.”
There is no doubt, winning a Formula 1 title will not be so easy for Force India, but the good thing is that they have made a plan and they are going ahead according to that plan. Even if they can not win Formula 1 title in 2010, they can go closure to it and within few years, they can win F1 title. Now, let us see if Force India can successfully win the Formula 1 title in 2010.
Car Sale in India Decreased in October 2008
Car sales have been dropped by 6.6 per cent in Indian car market in October 2008. This has been recorded as the fastest fall in three years. The most notable reason behind this fall is the decrease in consumer loans, steered by global economic recession. Car sales in India’s domestic market decreased to 98,900 units in October compared to 105,877 units in the same period of last year.
Smh reported:
Car sales slipped to 98,900 units in October from 105,877 units in the same month a year earlier, according to figures released by the Society of Indian Automobile Manufacturers (SIAM).
“Whatever steps that were taken up by the government and the RBI (Reserve Bank of India) to ease the liquidity crunch are not sufficient,” said SIAM director general Dilip Chenoy.
Motorcycle sales have been slipped by 18.17 per cent to 52,153 units. The company experienced 14.52 per cent drop in its total two-wheeler sales. Market leader Maruti Suzuki’s October car sales have been dropped by 6.42 per cent to 52,153 units. Car industry is one of the fastest growing industries in India with contributing 5 percent to its GDP. Around 1.5 million vehicles, wroth $US34 billion, are produced in India per year. A number of global car makers have moved to Indian car market with a view to holding a chunk of share in world’s one of the fastest growing car market.
Maruti Suzuki to Launch A-Star in Indian Market
Maruti Suzuki is going to bolster its compact car segment with its upcoming fuel-efficient car “A-Star” within a fortnight. With the launch of A-Star, Maruti Suzuki is expecting to grab more market share in India’s passenger car market. Maruti Suzuki is already India’s largest automaker and it looks to strengthen its ground in India’s fastest growing car market.
A-Star car will be manufactured Maruti Suzuki’s Manesar (Gurgaon) plant. Featuring new-generation 998-cc KB series engine, A-Star can produce 67 BHP power and offer excellent mileage of 19.59 km per liter. With A-Star, Maruti Suzuki is looking to create a sub-niche market for the price-conscious customers. Initially, Maruti Suzuki wants to at least 50,000 units of A-Star in India every year and from early next year, the company will start exporting A-Star in 150 nations across Europe, Asia, the Middle-East, Latin America, Africa and Australia.
First, their export target is around one lakh, but gradually Maruti Suzuki expects A-Star to contribute half of their export target of 2-lakh within 2010-2011. A-Star is said to be priced in the region of Rs. 3.25-4 lakh.
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Tata Motors Limited shut down plants to adjust demand. Ratan Tata advises top management to clear all loans and stop further acquisition plans.
In the face of lowering sales of automobiles, Tata Motors Limited (BOM:500570), the largest commercial vehicle producer in India, is going to shut down its two manufacturing plants from November 22 to November 27, 2008. On November 7, 2008, Tata Motors Limited announced that in order to avoid inventory build up, the company is going to shut down its plants in Pune and Lucknow for six days. The company is also adopting approaches like working single shift and triple shifts instead of double shifts to keep up with the demand of the vehicles. Times of India reports:
Tata said it was shutting production to avoid inventory build-up. A spokesperson said the Pune plant will be shut from November 21-26, while production will be halted at Lucknow from Nov 10-15. Unavailability of finance coupled with high interest rates was forcing customers to postpone purchases, the company said. “This will call for appropriate action from Tata Motors from time to time, to match production with demand and avoid unnecessary build-up of inventory in the company or with the company’s dealers,” the spokesperson said.
Workers at Tata Motors are given three day forced leave and three day leave on half-payment. They are also told to write and submit an application for leave for the six days. In October, Tata Motors laid off its 400 non-permanent workers at the Jamshedpur plant.
The other companies of Tata Group are also facing similar problems. On November 6, 2008, Ratan Tata, head of the Tata Group, forwarded an email to the top management of its 98 companies. In the email, he ordered the managing directors and CEOs to finalize all pending loans and funding agreements. He also ordered the top officials not to continue with any other acquisition plans. The $6.25 billion business conglomerate is under huge debt which has been caused by the funding of its aggressive acquisition plans. In 2007, Tata acquired UK-based steel producer, Corus Group Limited. This year, the group acquired Jaguar and Land Rover from America’s Ford Motor Company (NYSE:F). In his email, Ratan Tata said that he is not optimistic whether the ongoing economic slowdown would end next year. Ratan Tata ordered the top management of his companies to become proactive and cut down all unnecessary costs.
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Maruti Suzuki’s transition towards environment friendly car production
Famous Indian automaker, Maruti Suzuki India Ltd. (BOM:532500) is going to produce cars according to ‘end of life vehicle’ (ELV) specifications by 2010. In an age, where business organizations around the world are increasingly becoming pro-environment, Maruti Suzuki is also trying to follow the latest trend of producing cars that are recyclable and contains environment friendly materials. From now on, Maruti Suzuki India Ltd. is going to stop using hazardous materials for producing cars. It will also stop using or producing car components that contain hazardous materials. The company is going to start the new procedure with its ‘compact A-star’ and then it would follow on other models. Times of India reports:
“The idea behind the whole exercise is to see that a minimum of 85% of the car could be recycled after the end of its useful life,” he added. While India does not have ELV norms, they are in force in Europe, spelling out norms for making dismantling and recycling of vehicles more environment friendly. The norms set clear quantified targets for reuse, recycling and recovery of vehicles and their components and pushes producers to manufacture new vehicles also with a view to their recyclability.
Mr. Rao said that his company will change its entire production process and this change will start right from the stage of procuring raw materials for the cars. Maruti is also working with the auto-parts suppliers to make sure that they stop using hazardous materials such as lead, cadmium, and mercury. However, lead can be used in batteries. Mr. Rao also told reporters that his company will stop using “hexavalent chrome” for chrome plating.
Mr. Rao however also said that the biggest challenge is still ahead and that is upgrading the customers. In European countries where the ELV is going to be implemented, there are agencies that dispose off cars and give certificates to owners.
This is a great initiative for Maruti Suzuki India Ltd.. It was the first company to mass produce cars in India. Now, it is going to be the pioneer in producing environment friendly recyclable vehicles. I think, Indian government should also work on developing laws and regulations regarding automobile production and recycling. Growing industrialization has already affected India’s environment and people’s health. Indian government should focus more on developing rules and regulations and setting up strict standards regarding the use of hazardous materials in various industries including the automobile industry.
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Hyundai Motor is focusing on its overseas plants. Not interested in Chrysler LLC
Hyundai Motor Company (SEO: 005380), the largest auto maker of South Korea, said that it had no plans to buy U.S automaker Chrysler LLC’s Jeep brand. On November 7, 2008, Reuters published a news report saying that Hyundai Motor Company is having discussions with the owner of Chrysler LLC, Cerberus Capital Management, L.P., over buying the jeep brand and other assets of the company. Earlier, Chrysler LLC held talks with Nissan Motor Co., Ltd. (TYO:7201) but it was not fruitful. Chrysler was expecting a buyout from General Motors Corporation (NYSE:GM) but the company is already going through a tough time. In the third quarter, GM registered a $2.5 billion loss and now moving toward job cuts. Buying a new company is not a viable option for GM. Regarding the news, a Hyundai official said:
“The report is not true and we are carrying out our investment as planned.”
The official further said that the company is now focusing on the construction of its overseas plants. In middle of economic slow down, and high oil price, all the US automakers are experiencing serious sales drop. A buyout is a great option for Chrysler LLC at this moment. Though Cerberus Capital Management is interested to continue its negotiation with Nissan but Nissan Renault CEO, Carlos Ghosn, also gave the same expression like GM. At this moment, a merger between the two is not a very good option.
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Indian passenger car makers observe the fastest sales drop in October
Indian car market observed the fastest drop in sales in October in the last three years. Analysts are saying that stricter loan terms, high interest rate and high fuel costs are main culprits. According to the data obtained from the Society of Indian Automobile Manufacturers, car sales went down by 6.6% to 98,900 cars compared to the 105,877 of October 2007. Previously, the Indian car makers experienced an 11% drop in July 2005. It is also the third consecutive monthly fall. In August, the sales dropped by 4.4% and 1.7% in July. CNN.com reports:
Sales of Maruti, a unit of Japan’s Suzuki Motor Corp. (7269.TO), fell 6.4% in October to 52,153 cars, while sales of Ford’s India unit more than halved to 1, 515 cars from 3,048 a year earlier. Sales of Honda’s India unit plunged 73% to 1,373 cars. The auto maker will begin delivering its revamped City sedan to customers this month.
The local unit of South Korea’s Hyundai Motor Co. (005380.SE), however, posted a 10% increase in October sales at 20,001 units, helped by demand for the i10 small car. Tata Motors Ltd.’s (TTM) sales increased 1% to 14,100 units on demand for its upgraded Indica hatchback.
In terms of sales volume, the Indian automobile industry is the third largest industry in Asia. In order to keep up the sales figures, the auto makers are now introducing new models and new loan schemes with lower interest rates and easy payback system. Last week, Ford Motor Company introduced its upgraded Ford Ikon. According Dilip Chenoy, Director general, Society of Indian Automobile Manufacturers, passenger car makers should try hard to sustain single-digit growth.
Related article:
Great Ford Ikon Pictures
All these years, small cars always existed in the auto-industry but they never enjoyed such a lime light. Why? Because, they are small and can neither carry too many luggage, nor people. Fast forward today, the situation has changed entirely. Once what was considered to be an option for people of limited budget has become the latest craze. Yes, small cars rule the world. After the price of fuel had increased world-wide, people in both developed and under-developed countries moved toward small fuel efficient cars. In USA there was a time when SUVs, pickups and trucks from Ford Motor Company (NYSE:F), Daimler AG (USA) (NYSE:DAI) and General Motors Corporation (NYSE:GM) used to rule the roads. Now, they are being taken over by smaller fuel efficient cars made by Japanese companies like Toyota, and Honda.
Interestingly, India has always promoted small fuel efficient small cars. Maruti 800 is the first mass produced small car that revolutionized the Indian auto-market. Now, India is one of the rapidly growing economies around the world. The car industry of the country also grew leaps and bounds over the years. Growing middle class, high economic growth, easily available bank loans, have motivated many Indians to fulfill their dreams of owning a car. This huge growth potential has attracted many foreign automakers to the country. Famous automakers like Honda, Hyundai, Suzuki, and Ford have their business in India. Recently, Ford Motor Company released its latest model Ford Ikon. A sedan version of the Ford Fiesta Mark V on the Ford B3 platform, the Ford Ikon was an instant hit when first released in India. Now, to compete with other sedan models like Mahindra Renault Logan, Tata indigo and Maruti Swift Dzire, Ford refurbished its popular model and gave it a new look. In the following websites you will find some great pictures of the latest model Ford Ikon.
Ford Ikon official website:
Aside from getting all the information, you will get some great Ford Ikon pictures. In the download section, you will also get also get a 360 degree view of the car.
cars.about.com:
You will get to see a slide show containing 32 Ford Ikon images.
Related articles:
http://www.southasiafair.com/2008/11/new-ford-ikon-what-you-need-to-know/
http://www.india.ford.com/servlet/ContentServer?pagename=DFY/IN
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