Yamaha Motor shows 55% sales increase in May

Two-wheeler maker India Yamaha Motor yesterday reported a 55 per cent increase in total sales to 38,812 units in May, compared to the corresponding month a year ago.

The company sold 25,033 units in the same month last year, India Yamaha Motor said in a statement.

In the domestic market, the company’s May sales stood at 27,959 units, as against 17,614 units in the same month last year, up 58.7 per cent.

Commenting on the sales performance, India Yamaha Motor Pvt Ltd CEO and Managing Director, Mr Hiroyuki Suzuki said: “We are seeing good sales growth this year and expect the momentum to continue for the rest of the year.”

Exports of India Yamaha rose by 46.28 per cent to 10,853 units in May, 2011, from 7,419 units in the year—ago period, the company said.

Nifty arrives at 3-month closing high

Bargain hunting after a four-day decline helped Indian stocks log smart gains in what was a global rally. A slide in crude oil prices from 2-1/2-year peak helped ease macroeconomic worries, aiding strong gains in Indian shares. The Sensex was up 434.32 points or 2.25% to 19,696.86, up 595.23 points from the day's low and off 34.51 points from the day's high. The barometer index BSE Sensex settled at one-week high while the 50-unit S&P CNX Nifty settled at 3-month high. The market breadth, indicating the overall health of the market, was strong.

Bank shares rose across the board on expectation of good Q4 results. Capital goods and auto stocks rose on renewed buying. IT stocks rose ahead of IT bellwether Infosys' Q4 result on Friday, 15 April 2011. Cigarette maker ITC scaled a record high on expectations of good Q4 results.

The market recovered after hitting 2-week low at the onset of the trading session, tracking recovery in Asian stocks. The market moved into the positive zone to hit fresh intraday high in morning trade. The market extended initial gains to hit fresh intraday high in mid-morning trade. The market trimmed gains in early afternoon trade. The market struck a fresh intraday high in afternoon trade. The Sensex extended gains in mid-afternoon trade. The barometer index surged to hit one-week high in late trade.

The BSE 30-share Sensex was up 434.32 points or 2.25% to 19,696.86, its highest closing level since 4 April 2011. The Sensex rose 468.83 points at the day's high of 19,731.37 in late trade. The Sensex shed 168.91 points at the day's low of 19,101.63 in early trade, its lowest level since 29 March 2011.

The S&P CNX Nifty was up 125.80 points or 2.17% to 5,911.15, its highest closing since 6 January 2011. The Nifty hit high of 5,923.60 in late trade. The Nifty hit low of 5,735.55 in early trade, its lowest level since 29 March 2011.

The market breadth, indicating the health of the market, was strong. On BSE, 1,941 shares advanced while 977 shares declined. A total of 93 shares remained unchanged. The breadth was negative at the onset of the trading session.

The BSE Mid-Cap index rose 1.40% and the BSE Small-Cap index advanced 1.30%. Both these indices underperformed the Sensex.

All the 13-sectoral indices on the BSE logged gains. The BSE Capital Goods (up 2.73%), the BSE Auto (up 2.54%), and the Bankex (up 2.32%), outperformed the Sensex. The BSE Healthcare (up 0.76%), the BSE Metal (up 0.80%), and the BSE Consumer Durables (up 1.11%), underperformed the Sensex.

Among the 30-member Sensex pack, 28 advanced while only two of them declined.

BSE clocked turnover of Rs. 3373 crore, higher than Rs. 2588.21 crore on Monday, 11 April 2011.

Index heavyweight Reliance Industries (RIL) rose 1.36% to Rs. 1020.80, off the day's low of Rs. 998 as refining margins are seen rising on the back of high crude oil prices. After market hours today, RIL said it has started work on large polyester projects in India to consolidate its position as the world's largest integrated polyester producer.

RIL said it has planned its capacity expansion in phases over the next few years including a 2.30 million metric tonne at Dahej, Gujarat, with an ability to increase the capacity by another 1.15 million tonne at a later stage. The expansion also includes a 3.95 lakh tonne of polyester filament yarn and 1.4 lakh tonne polyester texturized yarn at Silvassa.

ONGC gained 1.78% after chairman A. K. Hazarika was quoted by the media as saying that the company will sign an agreement during the week-end to purchase a 25% stake in the Satpayev exploration block in Kazakhstan. The government has approved a total investment plan of $400 million. This includes a signature bonus of $13 million and $80 million as a fee for taking the stake in the block. The rest will be spent on exploration activities.

IT stocks rose ahead of IT bellwether Infosys' Q4 result on Friday, 15 April 2011. India's second largest software services exporter Infosys Technologies rose 2.29%, with the stock gaining for the second straight day. The market has been abuzz with talks Infosys will give encouraging guidance for the year ending March 2012 (FY 2012) given underlying strong demand for offshore outsourcing. Infosys will give annual guidance for FY 2012 at the time of announcing Q4 March 2011 results on Friday.

A total of 6 brokerages expects a between 3.3% to 6.7% growth in Infosys' consolidated net profit as per International Financial Reporting Standards at between Rs. 1839.40 crore to Rs. 1899.20 crore in Q4 March 2011 over Q3 December 2010. The revenue is seen rising 4.2% to 6% at between Rs. 7407.80 crore to Rs. 7531 crore in Q4 March 2011 over Q3 December 2010.

India's largest software services exporter TCS advanced 2.23%. The company will announce Q4 result on 21 April 2011. India's third largest software services exporter Wipro gained 3.19%. The company will announce Q4 result on 27 April 2011.

Mahindra Satyam was down 0.91%. After market hours today the company said it won a large enterprise resource planning contract from Qatar University. As per the order, Mahindra Satyam will implement its strategic business solutions for Qatar's premier academic institution.

Cigarette maker ITC rose 2.81% to Rs. 190.15 on expectations of good Q4 results. The stock hit record high of Rs. 190.50 today.

India's largest dam builder by sales Jaiprakash Associates surged 7.58% after executive chairman Manoj Gaur was quoted as saying the company aims to maintain a growth rate of 40% and aims to scale down debt significantly in the year ending March 2012 (FY 2012). It was the top gainer from the Sensex pack.

Bank shares rose across the board on expectation of good Q4 results. India's second largest private sector bank by net profit HDFC Bank rose 3.65%. The bank will announce Q4 result on 18 April 2011. India's largest private sector bank by net profit ICICI Bank gained 2.68%. The bank will announce Q4 result on 28 April 2011.

India's largest state run bank by net profit and branch network State Bank of India (SBI) edged up 1.46%. Pratip Chaudhuri has taken over as the new chairman of State Bank of India the state-run bank said on 7 April 2011. Chaudhuri, 57, has been working with State Bank for 37 years and takes over from O.P. Bhatt. Before taking up the top role, Chaudhuri was deputy managing director in the international banking division of thebank.

Development Credit Bank jumped 15.40% after the bank reported a net profit of Rs. 11.34 crore in Q4 March 2011 compared with a net loss of Rs. 8.15 crore in Q4 March 2010. The private sector bank announced the results during trading hours today, 13 April 2011.

Capital goods stocks rose on renewed buying. Punj Lloyd, ABB, Larsen & Toubro, BEML and Bhel rose by between 0.85% to 5.38%.

Power utility major Reliance Infrastructure rose 1.98%. After market hours today, the company said it today bought-back 1 lakh equity shares under its buyback scheme.

Container Corporation of India flared up 7.05%. The company announces Q4 March 2011 results on 19 April 2011.

Auto stocks rose on strong domestic demand. India's top small car maker by sales Maruti Suzuki rose 3.41%, with the stock snapping last four days' losses. The company announced last week that it would recall 13,157 diesel engine cars. The company said it would inspect the 'connecting rod bolt' for units of its Swift and Ritz model diesel cars with engines manufactured between 13 November 2010 and 4 December 2010.

Maruti Suzuki increased the prices of its products by 0.2% to 2.4% from 4 April 2011, depending on the models to offset rising costs of key inputs viz. steel, aluminum, copper and natural rubber.

India's largest truck maker by sales Tata Motors gained 2.61%, with the stock snapping last three days' slide. The company had hiked prices of some car models by Rs. 7,000 to Rs. 36,000 from 1 April 2011.

India's top tractor and utility vehicles maker by sales Mahindra & Mahindra rose 2.73% with the stock snapping last two days' fall. The company has reportedly raised prices on most of its models by 1.5% to 2% recently to offset higher commodity prices.

India's largest bike maker by sales Hero Honda Motors gained 6.34% with the stock snapping last two days' losses after company today declared an interim dividend of Rs. 70 per equity share for the year ended March 2011. Hero Honda's total sales rose 24.4% to 5.15 lakh units in March 2011 over March 2010. The monthly sales in March 2011 were record monthly sales.

India's second largest bike maker by sales Bajaj Auto rose 1.6% with the stock snapping last three days' losses. The company's total vehicle sales increased 12% to 3.07 lakh units in March 2011 over March 2010. The company announced its March 2011 sales figures on 4 April 2011.

Cals Refineries clocked highest volume of 6.92 crore shares on BSE. Bampsl Securities (1.54 crore shares), Development Credit Bank (1.05 crore shares), Resurgere Mines (72.19 lakh shares) and Teledata Technology Solutions (67.98 lakh shares) were the other volume toppers in that order.

Gruh Finance clocked highest turnover of Rs. 178.20 crore on BSE. Mahindra & Mahindra Financial Services (Rs 134.26 crore), DLF (Rs 92.51 crore), State Bank of India (Rs 92.37 crore) and LIC Housing Finance (Rs 78.06 crore) were the other turnover toppers in that order.

The stock market remains closed tomorrow, 14 April 2011, on account of Dr. Ambedkar Jayanti. The near term major trigger for the market is Q4 March 2011 results which will start trickling in starting this week when IT bellwether Infosys unveils earnings on Friday, 15 April 2011. Investors will scrutinize post-result management commentary to gauge outlook on earnings at a time when rising salaries, raw materials prices and interest rates are pressurizing profit margins of India Inc.

European stocks rose Wednesday, boosted by strength in the auto sector and tracking gains in Asia, as investors looked to the next round of US earnings reports. The key benchmark indices in UK, Germany and France were up by between 1.13% to 1.29%.

Japanese stocks led recovery in Asian markets on Wednesday on reports Japan's Renesas Electronics Corp. would restart a key factory that was hit by last month's quake in June 2011, a month earlier than expected. The key benchmark indices in Japan, China, South Korea, Indonesia, Singapore, Hong Kong and Indonesia rose by between 0.55% to 1.56%.

Meanwhile, Japan's government on Wednesday downgraded its assessment of the economy for the first time in six months, saying it is showing weakness after a devastating earthquake and tsunami last month battered the northeast coast.

US stocks dropped on Tuesday on worries falling oil prices could set off a reversal in the high-flying energy sector, while Alcoa's leaner-than-expected revenue disappointed. US trade deficit shrank in February as a slowdown in demand both at home and abroad hit imports and exports. The trade gap totaled $45.8 billion, down 2.6% from January despite another monthly rise in oil prices to their highest since October 2008, the Commerce Department said on Tuesday.

Trading in US index futures indicated that the Dow could gain 73 points at the opening bell on Wednesday, 13 April 2011.

Back home, high global commodity prices will add to pressure on profit margins of Indian firms caused by rising salaries and higher interest rates. Investors can take some solace in a recent slide in crude oil prices from 2-1-/2-year highs.

A surge in crude oil prices over the past few months has sparked inflation and interest rate worries. The Reserve Bank of India (RBI) is seen raising key short term policy rates by 25 basis points at its annual 2011-2012 monetary policy review on 3 May 2011.

India imports majority of its crude oil requirements and high oil prices have raised concerns about widening current account deficit. High oil prices have also raised concerns about higher oil subsidy bill for the government and its negative impact on the government's fiscal position. US crude futures were up 48 cents or 0.45% at 106.73 a barrel.

Industrial production rose 3.6% in February 2011, lower than market expectations of a 4.8% growth, data released by the government on Monday showed. Manufacturing output, which constitutes about 80% of the industrial production, rose an annual 3.5% in February 2011. January's industrial output annual growth rate was revised upwards to 3.9% from 3.7%.

The data of Wholesale Price Index for the month of March 2011 is due on Friday, 15 April 2011. A Capital Market poll pegs a median rate of rise in inflation at 8.4% in March 2011, higher than an annual rise of 8.3% in February 2011.

The International Monetary Fund has marginally cut its 2011 economic growth forecast for India to 8.2% from 8.4% as persistent inflation pressure forced aggressive monetary tightening.

Suzuki Motorcycle shows 26% increment in its sale in March

Two-wheeler maker Suzuki Motorcycle India reported a 25.94 per cent growth in March sales to 27,361 units from 21,725 units in the same month last year.

"We have received a very good response from the market to all our products including the newly-launched, Suzuki SlingShot series. We are committed to continue this growth momentum in future," Suzuki Motorcycle India Vice President (Sales and Marketing) Atul Gupta said in a statement.

The company also attributed its growth to the good response to its GS150R motorcycle and Access125 scooter, besides the recently launched SlingShot bike, the statement said.

Garware in a plan to make 250-cc Hyosung bikes in India with new JV

Pune-based Garware group is set to form a joint venture with the South Korean S&T to manufacture and sell motorcycles in India. The company already assemble and sell S&T’s Hyosung heavy bikes in India. “S&T is keen to enter India. We plan a manufacturing JV by mid-2012,” Diya Garware, managing director, Garware Motors told HT. “If and when the JV is formed we will enter the 250-cc segment.”

Garware Motors has set April 20 as the launch date for its first two S&T heavy bikes — the 650-cc GT650R and the 700-cc ST7. “The homologation process is over. We expect to get the ARAI certificate next week,’’ she said.

The company has reduced the noise level and added Indian parts to meet the specifications set by the Automotive Research Association of India (ARAI).

The GT650 and ST7 superbikes will be priced below Rs 5 lakh and Rs 6 lakh respectively.

The company plans showrooms in Delhi, Mumbai, Goa, Bangalore, Chennai, Hyderabad, Chandigarh, Kochi and Kolkata, apart from Pune.  It has set up a Rs 20-crore assembly plant in Wai near Pune, and is targeting annual sales of 2,000 bikes. It is forming a pan-India bikers’ club, Hyfliers, to promote its bikes.

The heavy bike segment is attracting global leaders — Harley-Davidson, Ducati, Suzuki, Yamaha and Honda are all present. Most of these bikes are in the 800-cc plus, Rs 9 lakh-plus range. Garware is trying to carve a 600-800 cc niche.

Auto CKD imports going to be taxed at 30%

The auto industry may be a high revenue generator for the government, but some of the recent policy decisions do not consider this sector’s importance to the exchequer.

Consider this: after a lot of deliberations, the government has introduced a new slab in the budget, which will tax certain completely knocked down (CKD) kit imports at 30%. In this year’s budget the government had proposed 60% tax.

Any kit, which includes pre-assembled engines or gearboxes for either cars or two-wheelers, will have to pay this hefty levy - this virtually includes all CKD imports since engines and gearboxes are typically the last products to be localised.

Of course, the new duty would adversely impact assembly operations of luxury car makers such as BMW and Audi besides bike makers such as Harley Davidson. Spokespersons for both BMW and Audi in India declined to comment on the CKD duty issue. Earlier, senior Audi officials were quoted as saying they will review business in India if the CKD levy were to continue.

Not just luxury car makers, other vehicle makers would also be hit in their respective CKD operations. Industry veterans point out that Suzuki Kizashi, Hyundai Santa Fe, products from the Jaguar Land Rover range, which Tata Motors was planning to import in CKD condition for assembly and sale in India - all these products and their possible assembly here would now be impacted.

After the Ssangyong buyout, Mahindra & Mahindra had also spoken of bringing some of the Korean company’s flagship products to India as CKD - these plans are also likely to get impacted adversely owing to the new import duty levy.

But it is not just the CKD levy that is making vehicle makers see red.

Even the issue of easing excise duty on utility vehicles (UVs) has not been addressed for many years now. The industry has been seeking lower excise - at present UVs are taxed at 20% alongside other big cars - for these vehicles saying they are primarily for use in rural areas and hence should be differentiated from sports utility vehicles (SUVs). Even the Ministry of Heavy Industries (which is the administrative ministry for automobiles) is in favour of such a move, having repeatedly asked the finance ministry to lower excise on UVs by 4-5 %.

In the 220th report of the Committee on Industry, Heavy Industries ministry has said it has recommended, at various stages in the past that the finance ministry bring down excise duty on multi-utility vehicles 4-5% from the existing 20%.

It has also recommended withdrawal of additional excise duty of Rs15,000 imposed on all cars, other than small cars, and has also asked for increasing depreciation rates on vehicles from 15% to 20%.

Suzuki’s 200cc and 500cc bikes in India

When Government Of India opened the gate for superbikes in 2007, everyone expect the Hayabusa and R1 to hit India market. Recently, Yamaha launched superbikes – R1 and MT-01 in India. Now its Suzuki’s turn but unlike Yamaha, Suzuki plans a CKD (Completely Knocked Down) route that means more affordable superbikes.Assembling the bikes in India will cut the cost of a superbike significantly, compared to importing it as a CBU(Completely Built Unit). Also,Suzuki is planning to assemble 400-600cc bikes in India that could see prices of power bikes come down to Rs 4-5 lakh.  Suzuki Motorcycle India V-P Atul Gupta told that the company would shortly be sending some of the bikes to Indian vehicle certification agency Automotive Research Association of India (ARAI), Pune, for homologation. “The homologation process is likely to take between three to six months and we can expect some of these bikes possibly by Diwali,” he said. “Indian Government move to relax certification process for 800-cc plus vehicles (by accepting certification from EU against existing policy of only from the country of origin) would also help in launch of these bikes in India”, he added. Suzuki may bring superbikes like GS500, GSR600 and RMZ-450 to indian market.

125cc,150cc and 200cc..

Suzuki launched  two new models in 2008. While one will be in the 150-cc segment, the other could be a premium offering in the 125-cc segment. Suzuki is also looking at launching a 200 cc bike, though Gupta said a final decision would be taken closer to the launch.

After Honda, Suzuki speeds up 100cc motorcycle plans!

The 100cc segment is suddenly showing some real signs of action with Suzuki Motorcycle India, all set to hasten it’s own foray into the bread and butter, commuter segment of the Indian motorcycle market. This motorcycle segment, which consistently has enjoyed massive volumes and along with delivered huge profits to the two biggest players, Hero Honda and Bajaj Auto respectively. Close on the heels of the Hero-Honda Joint Venture split and Honda deciding to up the ante with it’s own 100cc commuter offering, compatriot Suzuki too is speeding up it’s original plans to usher in a 100cc commuter motorcycle with the sole goal of big volumes.

Suzuki, in fact was one of the first manufacturers to bring a 100cc motorcycle to India in the form of the 98.8cc Ind-Suzuki AX100 Two Stroke commuter motorcycle way back in the eighties, when it had collaborated with TVS Motors. In a way, life has come a complete circle for Suzuki in India even as it has a myriad range of products ranging from the humble Access 125 Scooter to the high end Suzuki Hayabusa sportsbike. With the 100cc commuter motorcycle, Suzuki hopes to make a bigger dent in the ever growing Indian motorcycle market. Here’s what Atul Sobti, the of Suzuki Motorcycle India had to say about his firm’s 100cc foray.

Suzuki decides 200cc and 500cc bikes in India

When Government Of India opened the gate for superbikes in 2007, everyone expect the Hayabusa and R1 to hit India market. Recently, Yamaha launched superbikes – R1 and MT-01 in India. Now its Suzuki’s turn but unlike Yamaha, Suzuki plans a CKD (Completely Knocked Down) route that means more affordable superbikes.Assembling the bikes in India will cut the cost of a superbike significantly, compared to importing it as a CBU(Completely Built Unit). Also,Suzuki is planning to assemble 400-600cc bikes in India that could see prices of power bikes come down to Rs 4-5 lakh.  Suzuki Motorcycle India V-P Atul Gupta told that the company would shortly be sending some of the bikes to Indian vehicle certification agency Automotive Research Association of India (ARAI), Pune, for homologation. “The homologation process is likely to take between three to six months and we can expect some of these bikes possibly by Diwali,” he said. “Indian Government move to relax certification process for 800-cc plus vehicles (by accepting certification from EU against existing policy of only from the country of origin) would also help in launch of these bikes in India”, he added. Suzuki may bring superbikes like GS500, GSR600 and RMZ-450 to indian market.

125cc,150cc and 200cc..

Suzuki will launch two new models in 2008. While one will be in the 150-cc segment, the other could be a premium offering in the 125-cc segment. Suzuki is also looking at launching a 200 cc bike, though Gupta said a final decision would be taken closer to the launch.

Expansion plan:

In line with the expansion of its product range, Suzuki will expand its dealer network to maximise its reach. Suzuki intends to set up a network of 400 outlets over the next three years, compared to 140 stores at present. And, during this period its investment could reach Rs 700 crore while the Gurgaon facility could be churning out 4 lakh two-wheelers by 2010, compared to 1.7 lakh at present.

Superbikes achieve steady motion on Indian roads

Superbikes, defined as bikes with engine capacities of 1,000 cc and above, are finding plenty of takers. The market, which grew more than 60 per cent selling over 2,000 units in 2010, is expected to grow by more than 50 per cent this year.

“People’s incomes are rising and they’re realising that superbikes can be used on Indian roads too,” said NK Rattan, operating head (sales & marketing), Honda Motorcycle & Scooter India. Honda sells superbikes like Fireblade, CB1000R and VFR1200S priced at Rs 9.5-12.5 lakh. “Since 2008, more and more people are buying these bikes,” he added.

The clientele, said Rattan, includes doctors, lawyers, and well-settled professionals in their forties, all of whom are indulging in their passion for superbikes. These high net worth professionals roughly form as much as half the superbike buyers. The rest, aged between 21 and 35, are split between those who buy superbikes as a status symbol and some who look for performance. “A person may have a Mercedes, but he likes to go for a ride on a superbike with his girlfriend,” said Roy Kurian, national business head, India Yamaha Motor. The company sells FZ1, R1, MT-01 and V-Max superbikes priced at Rs 8.5-20 lakh. “This segment doesn’t require promotion. These customers know more about the bikes than the makers,” added Kurian.

Improving road infrastructure in and around big cities is driving bike makers to introduce new superbike models. “Global auto majors are recognising that India is evolving as the next big destination for the super-premium segment,” said Kapil Arora, partner (automotive), Ernst & Young.

Ducati and Harley Davidson set shop in India to sell their imported superbikes costing between Rs 7 lakh and Rs 42 lakh, while BMW Motorcycles will hit the Indian roads later this year. “Demand for superbikes will continue to be driven from big cities which have good roads” said Abdul Majeed, auto practice leader, PwC.

Superbike demand took off after Suzuki Motorcycle India launched the Hayabusa in 2007. The firm also sells Gixxer and Bandit 1250S priced at Rs 8.5 lakh and Rs 12.5 lakh.

Superbike makers also seem to be attacking the premium bike segment between 150 cc and 250 cc at price points of Rs 1 lakh to Rs 2.5 lakh to provide a feel of the bigger superbikes in similar looking but underpowered models. Yamaha, which launched an India-specific R15 model (Rs 103,000) in 2008 based on its global R1 bestseller, has seen huge success with the bike. “Initially, the demand for R15 was for 2,000 units, which has gone up to 4,000 units a month,” said Kurian.

It’s the Right time to buy cars, bikes

Car and two-wheeler manufacturers have heaved a sigh of relief after Finance Minister Pranab Mukherjee proposed to maintain the excise duty at present levels while inviting companies to step up investments in the sector.

The Indian automotive market, the second-fastest growing in the world, recorded a 31 per cent jump in sales (14.82 million units) last year, leading market watchers to believe that excise duty could be restored to its earlier levels.

Excise duty on compact and large cars, utility vehicles, two-wheelers and CVs was raised by two per cent last year following robust growth in automotive sales in the previous year.

Keeping in mind the high base of last year, the Society of Indian Automobile Manufacturers expects sales to grow 15 per cent to more than 17 million units.

Maruti Suzuki Chairman R C Bhargava said, “It’s definitely a positive move by the finance minister to keep the excise duty unchanged. A rate increase, coupled with steeper interest rates and high inflation, would have hurt demand as there would have been far less disposable income in buyers’ hands.”

Mukherjee, in his speech said, he had chosen not to raise the excise duty as this would mean improved business margins resulting into better investment rates and also because of the upcoming goods and services tax.

The Union Budget has also brought relief to manufacturers of hybrid and electric vehicles through a cut in the Customs duty. Batteries imported by electric vehicle manufacturers for the replacement market will now be exempted from the basic Customs duty and a four per cent concessional rate of central excise duty will be charged.

Moreover, specified parts of hybrid vehicles are now exempted from the basic Customs duty and special countervailing duty. In addition, a concessional rate of five per cent excise duty is being prescribed to incentivise their domestic production.

Further, a National Mission for Hybrid and Electric Vehicles will be launched to encourage manufacturing and selling of the alternative fuel-based vehicles.

Excise hike likely to make cars, durables costlier – Budget 2011

Companies making cars, fast moving consumer goods (FMCG) and durables have been on tenterhooks since the government indicated a complete rollback of stimulus, including a 2% hike in excise duty.

A hike in excise rate will mean prices of automobiles and other consumer goods will dart up proportionately as producers, who are hemmed in by rising input costs, will have little option but to pass it on partially or fully.

“If the stimulus package is rolled back and excise duty increased, it will have to be passed on to the consumer,” said Mayank Pareek, executive officer (marketing and sales), Maruti Suzuki India.

Car sales had held firm despite a partial rollback of the stimulus package last year. However, the situation this time around is different, said Pareek.

“Fuel prices have increased by 17% till now this fiscal and financing rates have also been going up, rising by 23% till now. Even if auto finance rates haven’t risen as sharply, a customer’s total interest outgo on other things such as home loan EMIs has increased, thereby impacting sentiment,” he said.An increase in excise outgo would hit car makers hard since the last few months have also seen a steep increase in input costs.

While the industry has passed on a part of this increase to consumers, it has had to absorb a good part because of competitive pressures.

As of now, small cars which are less than 4 metres in length and have engine displacement of up to 1200cc petrol or 1500cc diesel, are charged 10% excise duty, and more powerful ones 22%. Cars more than 2000cc have to pay Rs15,000 over and above the 22% excise levy.

There is no clarity on whether the stimulus rollback would also affect two-wheelers, though bike makers say any increase in excise payout will automatically raise end prices and thus hurt demand.

Their refrain: two-wheelers should not be taxed more as they are a mode of transport for the common man. When the stimulus package was first announced in 2008, excise duty on two-wheelers was reduced to 8% from 12%. Last year, when there was a partial stimulus rollback, two-wheelers came into the 10% bracket.

A top official with a bike maker said finance rates for two-wheelers are far more than for cars — banks and finance companies charge 22-23% per year on bikes and scooters against 11-12% on cars. Besides, unlike car financing, two-wheeler financing is concentrated with two or three big financiers after big names withdrew from two-wheeler financing 2-3 years back.

The auto industry, accounts for almost a fifth of the government’s excise kitty, feels a rollback will hurt growth.

In April-January, car sales jumped 23.4% year on year, while bike sales rose 25.4%. Sales of commercial vehicles have also been on the rise.

The story is no different for consumer durables companies, which have started hiking prices of washing machines, air-conditioners and refrigerators by 5-15% in a bid to pass on the increase in the cost of raw materials.

LG Electronics India for one has raised the prices of air-conditioners 8-9% and washing-machines and refrigerators 6-7%, said Yasho V Verma, chief operating officer.

The durables makers say further hikes would have to be effected to pass on any increase in excise duty, given that their margins are already thin, and this could impact the industry’s strong double-digit growth.

“We have so far restrained from taking price hikes, but if the excise duty goes up, we will be forced to pass it on to consumers,” said Manish Sharma, head of marketing, Panasonic India.

The FMCG sector is also worried about a hike in excise duty, given the margin pressures, particularly on account of rising raw material costs, which have forced most players to hike product prices in recent months.Currently, categories like packaged water and biscuits are charged 8% and 4% excise duty, respectively, while categories like sanitary napkins and confectionery attract 10% excise. The industry is seeking full exemption or a reduction in the levies.

All consumer companies, from FMCG to retail, are looking forward to implementation of the goods and services tax (GST), which will mean uniform tax rates and help bring down product costs, boosting consumer off-take and volume growth.Any increase in excise duty on fuel is also likely to take air travel beyond the reach of many people. As such, aviation turbine fuel prices have also been on the rise and most full-cost carriers have already increased fuel surcharge to pass on the hike to customers.

Typically, fuel costs contribute around 40% to an airline’s total expenses. Thus, any increase in excise duty on fuel could mean another jump in fuel surcharge, said an analyst from a domestic brokerage firm.

Typically, excise duty and service tax are set on a par — 10% at present.
If service tax is increased, international air travel in premium class could go up, said Saloni Roy, partner, Ernst& Young. “Domestic (both premier and economy) and economy class on international routes have fixed rates at `100 per ticket and `500 per ticket respectively, which may not be impacted by a change in rate, unless these amounts are also revised.”

“Undoubtedly, any increase in service tax will reflect on the final ticket as it is part of the airfare (on premium international travel),” said a spokesperson for Air India.

Suzuki Sales Report

Japanese small car giant Suzuki Motor Corp on Monday reported a nearly three-fold jump in its consolidated net profit for nine months ended December 31, 2010, at 42.61 billion Yen (over . 2,350 crore) on the back of robust sales in Asia, including India and Indonesia.

The company had posted a net profit of 15.49 billion Yen (over . 855 crore) in the corresponding period previous year, Suzuki Motor Corp (SMC) said in a statement. Cars 4 Sale

The consolidated net sales during the ninemonth period also jumped by 8.37% to 1.93 trillion Yen (about . 1,06,430 crore) from 1.78 trillion Yen (over Rs 98,200 crore) in the year-ago period, it added. “Consolidated net sales of this first nine months increased because of the increased sales of automobiles in Japan and of motorcycles and automobiles in Asia, though the sales in North America and Europe were lower than the same period of the previous year,” SMC said. Used Cars Bangalore

During the nine-month period, the company sold a total of 19.02 lakh units of cars and 9.75 lakh units of motorcycles , up 18.43% and 6.09%, respectively. Buoyed by this strong performance, SMC kept its forecast for annual net income for 2010-11 to grow by 21% to 35 billion Yen (about . 1,950 crore), which it has already crossed in the last quarter.

Suzuki Recall 4000 Vehicles

Suzuki will recall 4,007 vehicles in China beginning February 28, including the TA04V -- 4M, TD04V -- 4M, and TD04V -- 4V, manufactured between June 2, 2008, and October 20, 2010, Xinhua New Agency reports.cars 4 sale in India

The company said the problem with the generator belt could undermine the function of the steering pump and remove steering power in serious cases.maruti service station in India

Chang'an Suzuki Automobile Co., a Sino-Japanese joint venture based in Chongqing, will oversee the recalls and replace the faulty parts for free.

Owners could contact the company by phone at 13816524549 or the General Administration of Quality Supervision, Inspection and Quarantine at 010-65537365.kerala used cars

GSX- R1000 Win CBU Super Bike Of The Year

Detroit-based auto manufacturer Ford dominated the 2010 edition of the ET-ZigWheels Awards, bagging three awards,used cars bangalore including the Car of the Year title for its first made-for-India small car-Figo. Besides taking home the coveted award of the evening, Ford Figo also won in the Premium Hatchback and the zigwheels.com Viewers' Choice Car of the Year categories, making it an eventful night for the automaker.

In the luxury segment, the big winners were Jaguar XF, which won the CBU Prestige Sedan of the Year, while the Luxury Prestige Sedan of the Year went to BMW 5 Series.cars 4 sale in india Mercedes Benz-SLS bagged the CBU Sportscar of the Year and the Porsche Cayenne was declared the CBU SUV of the Year. In the high-end bike section, Suzuki GSX- R1000 won the CBU Super Bike of the Year.

Suzuki Sales In December Up 78 Pc

Suzuki Motorcycle India today reported a 77.59 per cent growth in its sales in December at 25,837 units compared to 14,549 units in the same month last year.

"We have received very good response from the market to all our products including the newly-launched, Suzuki SlingShot series. We are committed to continue this growth momentum in future," Suzuki Motorcycle India Vice-President (Sales and Marketing) Atul Gupta said in a statement.