Automobile Sector

Delphi suffers $2.4-bn loss for ’05 on GM output cuts-July 13

DETROIT: Delphi, General Motors’s largest parts supplier, reported a $2.4bn (e1.88bn) loss for ‘05 in a delayed annual report filed on Tuesday with the Securities and Exchange Commission.

The company, which filed for bankruptcy protection in October, blamed the loss of $4.21 (e 3.31) per share on accounting charges, price pressures from a reduction in GM’s North American vehicle production and increased costs for raw materials.

The red ink is an improvement over ‘04, when the company had a net loss of $4.8bn (e3.77bn), or $8.59 (e 6.74) per share. But the ‘04 loss included a $4.7bn (e3.69bn) tax write-off in the fourth quarter, the company said.
Delphi’s annual report for ‘05 and its first-quarter ‘06 earnings were delayed as the company awaited the results of wage and benefit reduction talks with its unions and GM.

The company also reported Tuesday that it lost $828mn (e650m), or $1.48 (e1.16) per share, in the fourth quarter of last year, compared with a loss of $4.9bn (e3.85bn), or $8.74 (e6.86) per share, in the same period of ‘04.
 
Auto parts majors eye Doktas buy- July 14

NEW DELHI: Top Indian names are in the fray for the global sale of Doktas, the automobile casting company that is part of the $18.7bn Turkish conglomerate Koc. According to sources in the auto industry, investment bankers Citi, HSBC and ABN Amro are learnt to be involved in sounding out several component biggies including M&M, Bharat Forge and Amtek Auto.

When contacted, an M&M spokesperson refused to comment. similarly, Amtek Auto MD Arvind Dham declined comment. As for Bharat Forge, in an email response executive director Amit Kalyani said: “We are not involved in the matter at this time.”

Also interested are several global bidders including European engineering company Georg Fischer and US major Intermet Corp. A $220-250m company, valuation estimates for Doktas Dokumculuk are pegged at around $200m.

Auto industry sources say there are two reasons why companies like M&M and Amtek will check out this deal. First Doktas manufactures die-cast products for the automobile industry.

Given the company’s expertise in both iron and aluminium castings and the Indian component industry’s interest in global assets in that segment, the deal has triggered off interest in India.

The other reason, of course, is Turkey’s strategic location which would make Doktas attractive to companies like M&M which is looking at European acquisitions. Turkey’s costs are lower than Europe so it’s a potentially interesting supply base for components. But investment banking sources say that the valuation is not cheap and Indian players will face competition from global rivals as well.

Doktas operates two factories in Bursa and Manisa, Turkey. It has over 1,900 employees on its rolls and exports its products mainly to Japan, France, Germany, United Kingdom and Spain.

It’s parent Koc Holding has a presence in the automotive, durable goods, food, retailing, energy, financial services, tourism, construction and IT industries spread across 118 companies, 87,000 employees and 12,000 dealers. The group’s consolidated activity profit without amortisation was $1.5bn in ‘05.

Koc has a significant presence in the auto industry. Group company Turk Traktor in which Koc and CNH (New Holland parent) have 37.5% each, is the market leader in Turkey’s farm equipment sector with 60% market share and a capacity of 35,000 tractors.

Another group company which makes commercial and passenger vehicles Ford Otosan is the leader in the Turkish automotive market. A third group company Turk Otomobil Fabrikasi AS (TOFAS) assembles automobiles, engines, parts and spares under license from Fiat.
 
Auto on track despite soaring oil-July 12

Rising fuel prices and higher financing costs have not dulled demand for automobiles, as was feared. The June’06 quarter has seen a substantial growth in sales of passenger cars and commercial vehicles on a year-on-year basis.

Both passenger car and commercial vehicle sales are up, while two-wheeler sales continue to be buoyant as expected.

Passenger cars sales were up 24% to 2.43 lakh units in the June’06 quarter. Trends indicate that sales in the compact segment (Swift, Alto and Santro) grew by about 30%. Rising fuel and interest costs have shifted demand to lower-value and more fuel efficient cars. FY’07 will see this segment remain the mainstay for most car companies.

The other segments, mid-size and executive, saw good growth too. However, compact being the largest segment had a bigger impact on growth.

In commercial vehicles (CV), the ban on overloading of vehicles, growing demand and new product introductions like Tata Motors’ Novus have spurred growth. In fact, Tata Motors’ sales numbers seem to have propped up growth for the entire segment. In LCVs too, Tata Motors’ cargo vehicle Ace sparked high growth. The M&HCV segment grew by 54% during the June’06 quarter while LCV sales grew by 48%.

Demand for CVs reflects higher demand from the logistics sector, which is in line with robust economic growth. Car companies will have to beef up their small car offerings to capture growth in coming years; not surprisingly, more companies are targeting launches in this category.
 
New Charge: eBikes set to start up, roar in-July 14

NEW DELHI: Call it the charge of the e-brigade. India’s 7m unit strong two-wheeler industry is ready for the electric revolution. According to a latest survey by AC Nielsen spanning 10 cities, the electric two-wheeler market is estimated at nearly half a million units with the creamy layer comprising 2,90,000 units across 70 towns.

The strongest demographic support to electric vehicles comes from teens, commuting adults and women. Clearly today’s kids and ladies believe smoke-belching is uncool and green wheels are the way to go.

Not surprisingly, top bike and scooter makers like Hero Honda, Bajaj, M&M and Kinetic are researching e-vehicles while smaller players like Pune’s Ace Motors are simply importing Chinese vehicles into India.

The ACNielsen study sub-divided the electric vehicle segment into four categories : eBikes which don’t need a licence and can do 40 kms per charge; eBike Plus which is a higher variant and can do 45 kms per charge; the basic eScooter is like the eBike in terms of speed limit and kms/charge while the eScooter Plus is a higher performance variant.

According to the survey, over 80% teens surveyed like the eBike as a concept and over 30% said they were willing to buy one. Overall 62% of the respondents were positive about the concept and about 28% were “extremely positive”. An equal number were willing to buy these bikes.

For the eBike Plus range, over 80% women and three-fourth commuters said they liked the concept and over 20% were willing to buy one. Overall 61% gave a thumbs up to the product and 24% were ready to purchase it. In e-Scooters, 65% of those surveyed liked the concept and 17% said they would buy it and in eScooter Plus category 79% liked the concept and 30% were willing to buy it.

The potential of e-vehicles has prompted top players to look into this segment. Says Anil Dua, vice-president-marketing, Hero Honda: “We are looking at all options and can’t close our eyes to options like electricity-run scooters and we are doing our bit of research to understand its potential. Whether we have plans of commercially launching one is something I cannot comment at this stage.”

Others like Kinetic are already in the prototype stage and have shown it to the government for productionising support.

Kinetic is looking at two segments in the electric two-wheeler market-a short-range vehicle with a motor power of a maximum of 3 kilowatt and a range of 30 kms, after which it would need a recharge.

The other is a full-size scooter, with motor power of a maximum of 5 kw and a range of 50-60 kms. Others like Mahindra & Mahindra and Bajaj are looking at electric three-wheelers instead.

Mahindra & Mahindra displayed an electric powered zero emission three-wheeler named Bijlee at the Auto Expo. Meanwhile, Bajaj is in the midst of “testing an electricity-run, three-wheeler to understand how the technology can work and overcome the hurdles of initial costs. I think the technology is at least five years away,” says Ravi Kumar, VP (business development) at Bajaj Auto.
 
Harley Davidson revving up for India-July 10th

Guess who’s championing Harley Davidson — the iconic American motorcycle brand — in India? No need to think too hard; it’s none other than the US government.

Uncle Sam has sought import duty reduction and easier emission standards for the popular bike, which enjoys cult status in the US and many other parts of the world.

Officials of the US administration have been making a ‘dhoom, dhoom’ push for Harley Davidson, while the mobike company has made a presentation to the Indian authorities. The two sides discussed the issue via a digital video-conference, highly-placed government sources said.

The interesting aspect that has come out of the consultations is that Harley Davidson was finding it difficult to meet the stringent emission standards set by the Indian government. The US side has sought a different set of emission standards for large motorcycles as compared to the smaller bikes manufactured in India.

While Harley Davidson is keen to export 500cc mobikes to India, the popular products in India are of much smaller capacity.

To ally the apprehensions of Indian mobike manufacturers, the American side has said that Harley’s 500cc bikes will not compete with Indian motorcycles. In fact it will compete with the smaller cars, the company and the US government representatives have said.

A Harley Davidson bike of 500cc would cost between Rs 2 lakh to Rs 3 lakh, bringing it on par with a small car in terms of price. The US side has also argued that the market for large bikes in India is limited and the potential could be tapped only if import tariff is reduced. As of now, basic customs duty on bikes is 60%.


After loading on countervailing duty of 16%, 4% special additional duty of customs and education cess, the effective duty leads to doubling of the price in terms of landed cost.

Therefore, Harley Davidson wants a lower duty on its products in India. “Considering price and restrictions on use in terms of road and traffic conditions, only a few hundred bikes (of 500cc) could be sold in India,” is the argument of the American side.

While the Indian side is still weighing the American proposal, officials have asked for a detailed paper covering all aspects of the issue. They have tried to explain that the stringent emission norms are due to the large proportion of two-wheelers in the population of Indian automobiles.

Nearly 80% of the automobiles in Indian cities comprise two-wheelers and it is necessary to control their emission in a stringent manner it has been said.
 
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thanks alot for shouldering me with the project wish u all the best
 
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