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Sunday, September 08, 2013

Tata Motors kick starts a new campaign – Panchmitra (The Five Friends)





In line with its “Ek Kadam Aage” campaign, Tata Motors kick started its Panchmitra “The Five Friends” initiative for M&HCV customers.

“Panchmitra” as the word suggest is the summation of five unique offerings which act as Friends at different life-cycle of a Truck. This initiative targets new M&HCV customers though existing customers too would be covered at a later stage as the program develops.

“Panchmitra – The Five Friends” stress primarily on:-

  1. 4 Year 4 Lakh Km Warranty offered by Tata Motors on its HCV Range of Vehicles.
  2. Extended Service Intervals in the form of Increased Oil Drain intervals to reduce over all maintenance cost of the vehicle and thus benefiting in the Total Cost of Ownership (TCO) of the vehicle.
  3. 4 Year Annual Maintenance Contract (AMC) – A step towards Increasing Uptime of the vehicles with peace of Mind.
  4. Insurance & Beyond – A Tata Motors Insurance offering covering Triple Benefit Insurance which provides risk covers against Depreciation at the time of claims, Income Loss during accidents & New Vehicle Replacement Cover.
  5. Last but not the least Tata Fleetman – A GPS Service with dedicated Call center well supported by the entire Dealer Network of Tata Motors.

The road show flags off from Delhi, the transport hub of India covering entire Delhi followed by Haryana, Rajasthan & Punjab. One of its kind of Road Show Program with which Tata Motors plans to cover entire country’s Length & Breath in days to come targeting Retail Customers, Drivers & Mechanics at various Transport Nagars & Dhabas.


Panchmitra:- The "Five Friends"

Amid this slowdown when Truck sales are on a record low with huge piled up inventories & restricted cash flows, OEMs are finding out new ways to maintain the momentum. Wishing success to “Tata Motors” for taking the lead at this new Endeavor which may in general appeal to masses for which benefits can be two way.





Wednesday, July 24, 2013

DTC’s foreign bus plan could hit Tata, Leyland




Roudra Bhattacharya
The Financial Express

New Delhi: In what could spell fresh trouble for the commercial vehicle industry caught in a slump, Tata Motors and Ashok Leyland could lose orders for about 600 low-floor buses to be purchased by the Delhi Transport Corporation (DTC) to Chinese, Polish and Swedish manufacturers.

Ramakant Goswami, transport minister for Delhi, told FE: “The price and maintenance costs quoted by Tata were unrealistic; so, we have asked a few foreign companies to run buses, on a trial basis, on Delhi roads.” Goswami said foreign manufacturers were willing to sell the buses cheaper, though he did not spell out the price difference. Safety and quality issues with the current fleet also prompted the government to invite foreign manufacturers for the bus tender. The DTC had acquired the current fleet in the run-up to the Commonwealth Games in 2010.

A DTC spokesperson said Tata Motors, which had quoted R51 lakh per bus in 2009, is now asking for R76 lakh, or 50% more. Maintenance costs too have soared from the initial R3/km to R75/km.

“The higher price quoted by Tata Motors is because the engines need to be more powerful than they were earlier,” the spokesperson added.

The 600-bus lot will be the first part of a 1,725-unit order under the JNNURM scheme this year.

The latest tender was cancelled and fresh bids invited, since the only bidder in the first round was Tata Motors, which quoted high prices. A foreign player agreeing to sell buses cheaper, at lower maintenance costs and with a promise of better quality, could win the tender.

A Tata Motors spokesperson said the company was working with the government to finalise bus specifications for city conditions including additional power requirements. “In spite of DTC floating a global tender, Tata Motors was the only manufacturer to respond. Tata Motors' competitive position also comes from its more than five years of experience in Delhi in maintaining their bus fleet of over 2,500 buses, ensuring on-road fleet availability of more than 95%. Tata Motors has not yet been officially informed on cancellation of the tender. The prices quoted were in line with the additional conditions of the tender,” the spokesperson said.

He added: “With respect to foreign competition, Tata Motors' product plans were made taking into account that there will be competition, and their entry was expected. We have introduced products with world-class platforms and new variants have been added, which place us well with the competition.”

Losing the DTC order could be a big blow for Tata Motors and Ashok Leyland since they had been banking on the extension of the bus-buying scheme to drive volumes. Analysts say that if Delhi – which runs out of every four JNNURM buses in the country – opts for overseas manufacturers, other cities could follow suit.

Sales of medium & heavy commercial vehicles (M&HCV) for the first quarter (April-June) of this fiscal are down 15.5% at 55,945 units. This year's slump comes on a low base of last year – in FY13, M&HCV volumes had dipped 23% at 2.68 lakh units.

Between 2009 and 2012, the purchase of 15,000 buses had been sanctioned under the JNNURM scheme across 60 cities, with the bulk of orders going to Tata and Ashok Leyland. Of this, DTC has purchased 3,750 buses. For FY14, the JNNURM scheme has been extended with an allocation of Rs 14,883 crore (from Rs 7,383 crore in FY13), of which Rs 4,900 crore has been earmarked for buying 10,000 buses.


Singur's farmers discover the lie of the land





Ishita Ayan Dutt
Business Standard

Kolkata: Singur has always been kind to Mamata Banerjee. First, it resurrected her political career. Then, just days before the panchayat elections this month, as angst over an unending wait for the return of land acquired for Tata Motors' small car project from farmers who did not wish to sell was growing, the Supreme Court suggested that the company return the land.

Banerjee and Singur share a history that dates back to 2006. On May 18, that year, a beaming Buddhadeb Bhattacharjee, who had just been sworn in for a second term as chief minister, announced - flanked by Ratan Tata and Tata Sons' brass at Writers' Buildings - that the project to make the world's cheapest car, the Nano, would be located in Bengal. "How do you like the beginning?" he asked reporters, a reference to his attempt to attract big business to Bengal. Little did he know that this signature project would mark the beginning of the end of the Left Front's 34-year dominance in the state.

It was Bhattacharjee's ambition to put Bengal back at the forefront of industrialisation, and he believed the Nano project was the first step towards realising it. Getting the project to locate itself on agricultural land about an hour's drive from Kolkata wasn't easy. Tata Motors' interest came with the rider that the state government should offer fiscal incentives equivalent to the value of those offered by Uttarakhand, whose backward state designation allowed it to deliver income tax and excise duty relief.

Naturally, the incentive package an eager state government devised for Tata Motors was extremely friendly. It offered the following:

(a) Industrial promotion assistance from the state industrial development corporation in the form of a loan at 0.1 per cent interest for amounts equal to the Value Added Tax and Central Sales Tax the Bengal government received on Nano sales in each of the previous years ended March 31. The loan, with interest, was to be repayable in annual instalments after the 30th anniversary of the plant starting sales.

(b) A 90-year lease for 645.67 acres at Singur at an annual rental of Rs 1 crore for the first five years. The rent would increase 25 per cent after every five years for 30 years; Rs 5 crore a year from the 31st year with an increase of 30 per cent every 10 years till the 60th year; Rs 20 crore a year from the 61st year to the 90th year.

(c) A loan of Rs 200 crore at 1 per cent interest repayable in five equal annual instalments from the 21st year.

(d) Electricity at Rs 3 per kwh. If the rates were raised more than Rs 0.25 per kwh in any block of five years, the government would provide relief through additional compensation to neutralise the increase.

It wasn't this package, which would have meant a significant forfeiture of state revenue, that exercised the politics of West Bengal as much as Banerjee's decision to make the discontent of 2,000-odd unwilling land-losers - who accounted for roughly 180 acres of land - the centre of her political campaign.

But from August 24, 2008, Banerjee and her party laid an indefinite siege to the area around the plant. She claimed unwilling land-losers accounted for 400 acres and not 181 acres as the state claimed. The 400 acres, she felt, could be retrieved from the vendors' park, which was adjacent to the mother plant, and the remaining 600-odd acres could be reserved for the project.

The demand was untenable to Tata Motors. To keep the cost of the Nano at Rs 1 lakh, it was imperative to maintain the integrated nature of the project. With Banerjee's energetic help, the protests reached such a pitch that Ratan Tata announced the headline-grabbing decision to relocate the project, which it did with even more fanfare to Sanand in Gujarat.

Despite this, Banerjee as chief minister never budged from her position. Hours after taking charge at Writers' Buildings, the state secretariat, she announced the Cabinet decision to return land to unwilling land-losers. After a flip-flop over an Ordinance, the Singur Land Rehabilitation and Development Bill was passed in the West Bengal Assembly on June 14, 2011, vesting the entire land allocated to Tata Motors and its vendors with the state government.

A week after the Bill was passed, Tata Motors moved court challenging it. The first round went to Banerjee. A Calcutta High Court single-judge order declared the Act valid. The Division Bench (moved by Tata Motors), however, set aside the single-judge order and struck down the Act, primarily because it was in conflict with the Land Acquisition Act of 1894. The state then filed an appeal in the Supreme Court.

It was while hearing an appeal challenging the quashing of the Act that the Supreme Court asked the Tata group to make its stand clear on the leasehold rights over Singur. But it is unlikely that the Tata group will give up the fight. It's not just about the land; for the group, it's as important to clear its name from the Banerjee government's allegation that it had "abandoned" the project, which is the basis for the Singur Act. In reality, the plant, at the time of pullout, was 80 per cent ready.

Tata Motors had invested over Rs 1,800 crore in developing and levelling the land, and constructed the plant in 13 months. Trial production had even started. "...no stone was left unturned to ensure that commencement of production happens in time to meet the targeted launch date of November, 2008," the company's petition to the court said. Thirteen vendors had also finished constructing their plants, and 17 others were at various stages of construction.

Hypothetically, even if the Supreme Court verdict goes against Tata Motors, returning the land would be well-nigh impossible. The land belonging to the unwilling farmers doesn't add up to 400 acres, as Banerjee has repeatedly claimed, and more importantly, it's scattered over the 997 acres. Then again, 11,000 farmers who willingly sold are likely to object if their land were bagged by unwilling farmers, when they had actually given it for an industrial project. Indeed, they, too, are in court challenging the Act.

Still, the court's comments have breathed fresh hope into the "unwilling" farmers of Singur. They have waited seven years. They took a leap of faith when Banerjee told them their land would be returned. But so far, they have neither received the compensation offered from the state government (because they refused to accept the cheques and thereby became unwilling) nor the land. They remain the biggest victims of Banerjee's populist politics.



In the last 40 years, we never shut operations in any market: Daimler Financial Services India Chief





Sanjay Vijayakumar
The Economic Times

Captive financing arms of auto companies have a stricter tier-I capital ratio requirement than non-captives. That should change, says Sidhartha Nair, Managing Director of Daimler Financial Services India, a Daimler arm, begs to differ. In an interview with ET, he says captives have a big role to play in markets such as India.

Edited excerpts:

With India having a well-spread-out network of banks and non-banking financial companies, is there a need for captives?

In India, 70% of the cars and 95% of the trucks are financed. So we have a big role to play. In established markets, manufacturers almost get double the repeat business when cars/trucks are financed by the captive (compared to other financial institutions). We talk to customers every month. (We ask) "Have you checked out the new Mercedes Benz car? Would you like test drive?" We hardly spend time on money collection. This is only possible in a captive. That's the reason you see big automobile manufacturers having captives.

But, in India, manufacturers have been in and out of the captives business?

In the last 40 years, we have been across the markets and never shut our operations. In many captives in India, the balance sheet isn't kept separately from the parent, so visibility is less. We are an independent and separate company. I should ensure that the 100 million euro investment should deliver return to Daimler shareholders. I cannot tell them I helped sell more Mercedes-Benz cars and Benz trucks, and in the process destroyed the money. That independence is often misunderstood and forgotten in many captives in India. There's a sea-change in last 4-5 years with foreign captives coming in.

So what are the changes you have brought in?

We operate on a branch-less model, operating out of dealerships. We have a sales organisation on the manufacturing side and also on financial services side. They both make sure the right product and right financial services are provided.

Definitely I am not the cheapest lender out there. What we offer is a value proposition. We were the first to offer operating lease solution in the country. About 10% of our business comes from operating lease. You as an individual running a self-employment or small business have significant tax advantage. Over a three-year ownership cycle, the amount of money coming out of you to own this (Mercedes-Benz) car is lower than if you were to finance it over a three-year period.

We also started offering a residual-value solution. Typically, Indian customers replace their vehicles every three or four years. So, (if so) why do you need to pay interest on the full amount? So, a four-year car, we can buy back from you for 40% of the value. We give you that guarantee today.

In trucks, we brought in branded insurance. In India, third-party is the way things have been done. So we have cashless services support at dealerships. Today, one in three BharatBenz trucks is financed by us. And about 50% of all BharatBenz trucks is insured with us.

What's your current portfolio size?

Portfolio is around Rs 1,500 crore. We do about Rs 100-125 crore business every month, and that continues to increase as volumes go up. Car is 80% of the business (20% trucks). Another way to say is 40% of business is dealer inventory and 60% is end-customer retail business. Our projection is, this will become 30% dealer inventory, 70% customer business. Eventually, it will become 50:50 car and truck. There have been no delinquencies due to the slowdown. It is less than 1%. We have 4,000 customers.

What do you think are the regulatory challenges?

The tier I capital ratio requirement is 12% (for captives) whereas everybody else (non-banking financial companies) can have 10%. We do not understand why we are punished.

If we are getting differentiated because we focus on a particular manufacturer, we should also be provided with funding opportunity in (the form of) external commercial borrowing, at least for commercial vehicles. Because the regulator can track where the money is being invested. But the regulator refused to accept the argument.

I can understand apprehensions about wanting funds for buying Mercedes-Benz cars. That might not be job creation, even though I beg to differ. But I can appreciate it. Today, one of the pain points for us is not being as price competitive as others. If I am allowed to borrow in euro, I can offer much cheaper loans.

Any plans for a further fund infusion?

When we came in two years ago, we brought in 100 million euros. At 15% capital adequacy, we do not need any money anytime soon. We can grow up to Rs 4,000 crore (with this), which should happen in the next two years.


Friday, April 19, 2013

All India Motor Transport Congress (AIMTC) Boycotts Collection of illegal Entry Tax by Goa Government.


In a new development against the illegal levy of Entry Tax by Govt. of Goa on all Non Goa registered vehicles, AIMTC president Mr. Bal Malkit Singh has issued circular to all its Managing Committees , District Level Associations & all its members for boycotting and not sending their vehicles to State of Goa. 

In his letter Mr. Bal also mentioned that Transporters from the market of Belgaum of Karnataka & Kohlapur of Maharashtra have decided against sending their vehicles to Goa as the talks between them and the Govt. failed on the decision to roll back of entry tax.

Govt. of Goa is charging Entry Tax of Rs.1000/- per trip. Few Transporters who ply their vehicles in and out of Goa on regular basis are coughing up money as high as Rs.30000/- per month.

Referring the Entry Tax as menace,  Mr. Bal in his circular added that the similar boycott will be initiated against other states which levy entry tax.

Increasing "Fuel" prices and decreasing "Freight" has already taken its toll on the transporters. CV sales have seen the sharpest decline since 2008 with M&HCV sales dropping 24% in FY(12-13).

Below is the circular issued by AIMTC:- 

AIMTC Boycotting Goa Entry Tax Circular

Thursday, April 18, 2013

Volvo to come out with new diesel engines and transmission

Volvo to come out with new diesel engines and transmission

Volvo i-ART engine
Volvo is all set to ditch its Ford-sourced engines with the introduction of the new Volvo Engine Architecture (VEA). This new family of engines focuses on high diesel fuel efficiency figures. The i-ART technology uses pressure feedback from individual injectors instead of single pressure sensor in a common rail engine. i-ART automatically monitors the fuel pressure and conditions to maximise fuel economy. Along with this engine, Volvo will also debut its first 8-speed automatic gearbox which is said to have seamless shifts.
Volvo further elaborates that its 4-cylinder engines will eventually replace the 6-cylinder ones by providing the same amount of power but the fuel efficiency of the former. This 4-cylinder engine, Volvo claims, along with some hybrid electrification will render V8s obsolete.



"Amazed" or "DZired" - The Real Question



With much fanfare Honda Cars India created history with the launch of its much awaited Sub 4 Meter Sedan, "Amaze". For the first time "Honda" globally has ventured into Diesel segment and came up with 1.5L Diesel Engine especially for Indian Market.

In recent times preference for Diesel Cars has shot up so rapidly that they represent close to 40% of Maruti's Total monthly sale. The same is true for the Hyundai's sale with Diesel Cars contributing approx. 30% of the overall sales. 

Coming back to the new launch, Honda has Priced "Amaze" quite competitively in direct competition Maruti's DZire which is by large the highest selling model in it's catagory with monthly sales of 15K.

Below is the quick Technical Comparison. Not touched are the Features on both the cars which in any case should be of secondary influence while making a decision.




Maruti DZire Diesel
Honda Amaze Diesel
What’s it all About
Type
DDiS Diesel Engine
4 Cylinder, DOHC i-DTEC
Maruti has a proven Power House; Honda will have hard time proving the reliability   of its very First Diesel Engine.
Displacement(CC)
1248
1498
Though Equal Capacity Engine for Petrol, Diesel engine capacity is 250 CC more than that of Maruti's.
No. of Valves
16
16

Power (ps @ rpm)
75@4000
100 @ 3600
Bigger Engine generates more HPs and yes at lower rpms adding to driving comfort.
Torque (nm @ rpm)
190@2000
200 @ 1750
More Torque again at lower rpms, much to an advantage to Honda
Manual
5 Forward & 1 Reverse
5 Forward & 1 Reverse

Automatic
NA
NA

Overall Length (mm)
3995
3990
Though an iota of difference in Length, Breath & Height but Honda's Amaze is all shorter than Maruti's DZire including the Wheelbase
Overall Width (mm)
1695
1680
Overall Height(mm)
1555
1505
Wheelbase (mm)
2430
2405
Ground Clearance (mm)
170
165
Low Ground Clearance much to the disadvantage to Amaze.
Kerb Weight MT (kg)
1050(Ldi),1060(Vdi), 1080(Zdi)
1060(E),1065(EX),1075(S,VX)

Kerb Weight AT (kg)

-

Gross Vehicle Weight
1505


Tyre Size
165/80R14(Lxi/Vxi/Ldi/Vdi) - 185/65R15(Zxi/Zdi)
175/65 R14
With same Rim Size at 14" Amaze comes with an advantage of  broader tyres for better stability
Fuel Tank Capacity (Litres)
42
35
Bigger the Better
Seating Capacity
5
5

Boot Space (Litres)
360
400

Type
Rack & Pinion Type - Electric Power Steering with Tilt
Collapsible Electric Power Steering

Turning RadiusMT (m)
4.8
4.7
 Lesser the Better
Turning Radius AT (m)
4.8
-

Front
McPherson Strut
McPherson Strut

Rear
Torsion Beam
Torsion Beam

Front
Ventilated Disc
Disc

Rear
Drum
Drum





IFTRT Report: 35,000 repossessed Trucks, Trailers pile up with lenders

Banks and other lenders are sitting on a huge inventory of over 35,000 repossessed (loan defaulting) trucks/trailers, even as medium and heavy truck sales crashed 25.6% in 2012-13, according to a report by independent agency Indian Foundation of Transport Research and Training (IFTRT).

Multi-axle trucks and tractor trailers led the sales crash with a 32.5% drop reflecting the poor cargo offerings from manufacturing sector, infrastructure sector and import-export trade.

Quarter on Quarter drop is tabulated below:-

MHCV Sales2011-122012-13%Change
Q175,05466,048-12
Q285,72674,645-12.9
Q384,14157,832-31.8
Q4104,29570,184-32.7

“The economic scenario across sectors remained gloomy as cargo dispatches displayed negative trends and fleet utilisation dropped by 20-25% on the trunk routes leading to truckers shying away from expanding their truck fleet. New entrants kept away from truck purchases despite heavy discounts and soft auto loan schemes at the end of the fiscal. Bankers /NBFCs are facing multiplied delinquencies across the country for non-payment of EMIs and large number of fleet owners have been surrendering their loaned trucks to the financiers,” the report said.

During the fiscal ended March, truck sales were down by 89,505 units, with 2,60,144 units sold in FY13 against 3,49,649 units sold during the corresponding period last year. It added that the resale market of old trucks witnessed a drop of 25-30% in market price leading to truckers holding on their truck fleet as most of the trucks by end of fourth year of new purchase happened to be encumbrance free.

This move has helped the fleet operators to bear with the adverse impact of negative economic trend and drop in truck rentals by 7-8% during the fiscal ending March 31, 2013. On the outlook for the current fiscal (FY14), IFTRT said that truck sales and particularly heavy multi-axle category, is not expected to see any major change till the first half because manufacturing sector and export trade does not show any major positive indications of improvement in a big way.

A revival in medium and heavy truck sales seems unlikely in the near future. Data on the Index of Industrial Production released on Friday show the manufacturing sector (which has a weight-age of 75 per cent in the index) grew a mere one per cent in the April-February period, against 3.7 per cent in the year-ago period. Mining output contracted 2.5 per cent during the same period.



Wednesday, April 17, 2013

Honda unveils new 110cc DREAM NEO under ‘Dream’ series for INR43,150 (Ex-showroom Delhi) [Company Press Release]



  •          ‘Most Affordable’ 2Wheeler ever from Honda in India
  •          At 74 kmpl, Dream Neo gives ‘Highest Fuel Efficiency’ too!
  •          With Dream series, HMSI aims over 150% growth in 100-110cc mass segment
  •          HMSI confident of achieving 43% growth in FY14 to 39.3 lac unit sales

New Delhi, April 17, 2013: Eyeing exponential growth of its business in India, Honda Motorcycle & Scooter India Pvt. Ltd. (HMSI) today unveiled the much awaited second ‘Dream Series mass motorcycle’– the 110cc DREAM NEO.  

Honda Dream Neo
Honda Dream Neo
                                                
Talking about Honda’s strategic direction, Mr. Keita Muramatsu - President & CEO, Honda Motorcycle & Scooter India Pvt. Ltd., said “DREAM NEO is Honda’s next big leap towards creating deep inroads into the Indian commuter segment. Our newly opened Technical centre comprising of R&D, Engineering, Purchase & Quality team, overcame the challenge of improving Mileage and meeting the competitive price point. Backed by our new product launches & network expansion, Honda aims to grow over 150% in 100-110cc motorcycle segment YoY. Overall, we are confident of customer demand for Honda 2Wheelers and eye 43% growth with 39.3 lac unit sales in FY’14.

Elaborating on Dream Neo, Mr. Y. S. Guleria, Vice President – Sales & Marketing, Honda Motorcycle & Scooter India Pvt. Ltd., said “Creating a new paradigm in mass mobility, DREAM NEO is Honda’s Most Affordable and Most Fuel Efficient 2Wheeler ever in India. While DREAM NEO is loaded with attractive & best in class features like Top Mileage of 74 kmpl*, it is being delivered at a truly aggressive pricing to delight Indian customers. Finally DREAM NEO is a package which is hard to resist by 100-110cc mass segment motorcycle customers”.

In the heart of DREAM NEO is the superior refined 110cc air-cooled 4 Stroke SI Honda engine. Delivering an astonishing fuel efficiency of 74kmpl *, DREAM NEO is Honda’s Most Fuel Efficient 2Wheeler in India.

On the performance front, DREAM NEO generates highest peak power of 6.15KW (8.25 BHP) @7500 RPM and Best in class torque of 8.63Nm@5500 RPM in low as well as high rpm range. DREAM NEO leaves competition way behind when it comes to initial and overtaking acceleration.

The extended wheelbase of 1258mm maximizes top speed stability while the unique 5 step adjustable rear suspension provides maximum comfort for rider and pillion. Further, Dream Neo’s high ground clearance of 179mm and lightweight Single tube diamond frame translates to stress free natural riding even in the worst of road conditions.

DREAM NEO will be available in three variants and 6 dual tone colors –
  1. Self / Drum / Alloy with tubeless tyre
  2. Kick / Drum / Alloy with tubeless tyre
  3. Kick / Drum / Spoke with tuff-up tube

 Showcasing the next leap in technology and features, Dream Neo will rewrite the commuter Mass motorcycle equation in India with an extremely attractive price starting Rs. 43150 (Ex-Showroom, Delhi).