Sunset for Maruti 800 in 13 cities from Thursday

New Delhi, Wednesday, Mar 31, 2010: Twenty six years after revolutionizing personal transportation in India, Maruti Suzuki will bid adieu to its once bread-and-butter model 'M800' from 13 cities as new emission norm comes into effect.

With the company deciding to let business rule over sentiments, M800, which was first was rolled out from Maruti's Gurgaon plant in December 14, 1983 in the presence of then Prime Minister Indira Gandhi, will no longer sell in major cities, including the National Capital and Mumbai.

Lots of nostalgic value is attached with the car (M800), but we can't allow sentiments to dictate business.

We have not upgraded it to Bharat Stage IV (BS-IV) norms as we do not consider it a good business proposition, "Maruti Suzuki India (MSI) Chairman R C Bhargava said.

From tomorrow onwards, 13 cities, including the NCR, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad and Ahmedabad, will switch over to BS-IV emission norms, while rest of the country will adopt BS-III norms from October.

Source: Indianexpress.com

Tata Nano on Flames

There is another sad news for Tata Motors and people who have great expectations from Tata Nano. A brand new Nano car by Tata motors, countries largest automobile company, was on fire on March 24, 2010. The incident is reported to be the fourth in the string. The company has ordered inquiry into the incident.

The car was recently purchased by Satish Sawant, an insurance broker by profession from a showroom in Prabhawati, Mumbai. Tata Nano catching fire incident took place when Satish was on his way back home to LIC, colony in Mulund. It was less than hour before the delivery that hisbrand new silver Nano was engulfed in flames.

Satish had paid Rs. 2.4 lakhs to get his dream car, a silver Nano from Concorde Motors showroom and got fitted a power steering and A/C. He was provided with a driver to take car home as he can not drive. Shocked Satish could not take the sight of shinybrand new car turning into debris of carbon in few moments. A fire tender was rushed to the spot and doused the fire. A case has been registered at Navgarh police station (Mulund E).

“I have no idea what happened. A motorcycle rider overtook me and told me that the vehicle was on fire,’’ said Satish Sawant. “The engine was behind me and I did not realize that the car was on fire,” he added. Satish however managed to get out of the car. He informed that company has taken the car and will investigate the cause of fire.

Earlier also three similar cases of Tata Nano catching fire were reported and in each incident the car was parked. The first incident took place last year in September. In all the three cases a faulty switch which was placed near the steering wheel was said to be the cause of fire. A short circuit in an indicator stalk was the root of the fire yet the company refused to recall the car. Tata has however reportedly fixed the problem.

A Tata spokesperson says, “This is a unique case. We are trying to figure out what went wrong.

Smooth going for Hero Honda Motors

The stock of Hero Honda Motors touched a new high of Rs 1,932.75 per share on Wednesday. At the current market price, the stock trades at 15.8 times its estimated earnings for 2011.

The analyst community is positive on the stock. “With increased ancillarisation and the 200 basis points increase in excise duty, margins on vehicles produced at Haridwar plant will be about 600 basis points (or six percentage points) higher than those at other plants,” In a note to clients on Monday, Jatin Chawla of IIFL Research wrote.

The Uttaranchal government increased excise duty to 10% from 8% in the Budget. Hero Honda’s Uttaranchal plant enjoys many tax incentives including 100% excise duty exemption for the first ten years, 100% income-tax exemption for the first five years and 30% income-tax exemption in the consequent five years.

Hero Honda plans to increase production from Uttaranchal plant to 37% of total volumes in FY2011 from 28% in FY2010. The company manufactures its high-margin product, Splendor, at its Uttarakhand plant, which provides substantial tax incentives. This would help Hero Honda’s operating profit margins and profitability, as overall tax rate will also decline.

Going forward, Hero Honda expects its sales volumes to rise 10% year on year in FY2011. Implementation of proposed GST should lead to decline in prices of vehicles in FY2012. This should boost demand and help improve volumes in FY2012.

Hero Honda’s sales volumes increased 16.1% year on year in February to 382096 units. However, sales fell 2% over January.Bajaj Auto and TVS Motor performed comparatively better. Bajaj’s Discover got a good response from the market.

Discover competes with Splendor, which accounts for about half of the company’s profits. Hero Honda’s relative market share against Bajaj Auto and TVS has dropped by 160 basis points in February over January. Some analysts attribute the loss of market share to lower base of competitors and maintain that further marginal loss cannot be ruled out.
Higher raw material costs are also a dampener for the stock.
IIFL has an ‘add’ rating on the stock with a 12 month target price of Rs 2,200 apiece. Investors could consider the stock on declines.

Source: DNAIndia.com

India to be Small Car hub for Ford

NEW DELHI: Alan mulally, the 64-year-old messianic chief executive of Ford Motor Co, aims to realise in India the dream of his company’s legendary founder Henry Ford: opening up the highways for everybody.

The former Boeing executive, under whom Ford avoided the embarrassment of having to seek a US government bailout that rivals General Motors and Chrysler had to avail of, is a fan of India’s “frugal engineering” capabilities and plans to make the country Ford’s small car hub. In a departure from the past, Ford also plans to bring all its models into India, attempting to catch up with rivals and gain greater traction in the red-hot Indian car market .

“This is a new Ford,” Mr Mulally told ET NOW in an interview. “Our commitment is that we will bring all the vehicles that we have to the markets that we serve. The Figo is just one part of that larger vision.”

Ford, which rolled out the rickety Escort cars in 1998 in a joint venture with the Mahindras, is realising its folly of not producing right-sized and right-priced vehicles in India, a flawed strategy that saw it cede space to Asian rivals such as Hyundai and Honda. It has now launched the small car Figo to take on Maruti Suzuki’s WagonR and Swift, and Huyndai’s i-10.

Mr Mulally has been on course to deliver what he had promised for the US auto maker. He cut costs, eliminated staff and helped the company post a quarterly profit, though an annual profit still eludes him. Its shares are soaring and its sales have beaten cross-town rival General Motors in February — after more than a decade.

He achieved most of the targets because of what he calls “laser focus” on his ‘One Ford’ plan, which he announced when he took over in 2006. He pledged the Ford brand and other assets to borrow $23 billion, which he then termed as “the world’s largest home-equity loan”.

While global car makers, such as Italy’s Fiat and France’s Peugeot, are looking for alliances to improve efficiencies, Mr Mulally is selling brands, factories and cutting jobs.

“Back then we took a very important call — that we will be laser focused on the Ford Blue Oval brand worldwide,” Mr Mulally said. “It’s a brand people recognise and appreciate, and we want to grow it and be focused on it.”

That has meant saying goodbye to a cache of iconic European brands — Aston Martin, Jaguar-Land Rover and now Volvo Cars — so that the focus of all innovation and attention of the group is on the mother brand.

Like Carlos Ghosn, CEO of Renault-Nissan, Mr Mulally is a fan of India’s frugal engineering expertise. And with the Figo, he is looking to make India Ford’s small car hub.

“(Ford will) absolutely make India its small car hub. India is a tremendous operation for us, it has tremendous capability in all elements of the automobile business, including design, and it’s already integrated with our entire global system. So India will continue to take a more important role for us worldwide,” he said.

And his larger mission is to fulfil the dream of its founder. “Henry Ford used to say, ‘We want to open up the highways for everybody’,” said Mr Mulally. “We want to do just that in India.”