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Passenger car, two-wheeler demand to be hit after petrol hike

Petrol prices have been raised by Rs7.5/litre leading to further increase in difference between cost per km for a petrol v/s a diesel vehicle. This would cause a severe impact on demand for petrol vehicles especially passenger car and 2-wheelers.
 
Demand mix for passenger cars will shift in favour of diesel variants but fall in demand for petrol variants will eventually lead to slowdown in passenger car demand.
 
If diesel prices are also raised, inflation would increase further, which would delay any rate cut plans of RBI. This would further impact demand especially for passenger cars.
 
In a research note, India Infoline Research Team says, “While most automobile stocks have corrected, some more pressure cannot be ruled out. At current levels, Tata Motors and M&M are our preferred bets.”
 
This is the steepest-ever increase and came a day after Parliament's budget session ended. The highest increase prior to this had been by Rs. 5 per litre. This is the first upward revision in petrol price since November 4, 2011.

VW may drive into Gujarat

The German car-major Volkswagen reportedly seeking sites to grow in Gujarat, after putting hold to its Rs. 20bn investment plan in Maharashtra.

According to reports, the company had met senior officials in Gujarat and has seen some locations in and around Ahmedabad and Vadodara.

A Volkswagen Group India spokesperson was quoted as saying, company was not looking to set up a new plant in India "as of now".

Volkswagen currently has two plants in Maharashtra (Chakan and Aurangabad) with a combined 1.3 lakh-unit annual capacity.

However, a wrangle with the State authorities over discontinued VAT benefits may force it to seek alternatives, reports stated.

Till date, the Volkswagen Group has invested Rs. 38bn at the Chakan plant (near Pune) in India, with another Rs. 20bn in the pipeline, reports added.

Infocus News

IIFL recommends 'Add' on Bajaj Auto

IIFL Institutional Equities, a part of the IIFL Group, one of the leading players in the Indian financial services space, recommends “Add” Bajaj Auto.

According to reports, Bajaj’s 4QFY12 earnings of Rs7.6bn were largely in line with our estimates (<2% miss). Gross margins improved 20bps QoQ. Nevertheless, a slight operating deleverage, led by volume decline of 5% QoQ, offset this, resulting in Ebitda margin remaining flat. The management proposed dividend of Rs45/share (yield of ~3%).

Bajaj regrouped a part of other income from operating to non-operating income, starting Q4FY12. But for this change, Ebitda margin would have been 30bps lower QoQ.

The management stated that the domestic 2W market remains weak. Further, exports to Sri Lanka were affected following a steep increase in import duty. We also note that Bajaj lost 150bps market share in 2HFY12, report stated.

Despite these factors,the management retained its FY13 volume guidance of 5.0mn (15% growth). Themanagement also highlighted that it has hedged 80% of FY13 export receivables at USD-INR rate of 47-50, capping currency gains at least for FY13.

We will revisit our estimates for FY13 and FY14 following the earnings conference call today. Retain ADD, brokerage added.

The report was published by IIFL’s Institutional Equities Research desk

Domestic News

Toyota Etios series clocks One Lakh unit sales

Toyota Kirloskar Motor (TKM) announced that the Etios series - Etios and Etios Liva - has clocked sales of one lakh units. The company has achieved an important milestone since they entered the mass volume market in India. The Etios was launched in December 2010 followed by Etios Liva in June 2011. Etios  sold 50,157 units in the financial year 2011 - 2012 , making it the third largest selling sedan in its segment.
 
Etios - ‘World First, India First, My First’ is Toyota’s first product made especially for the Indian market. TKM forayed into the export market with the first consignment of  Etios shipped to South Africa in April 2012. The company plans to export 20,000 units of Etios series per annum. To cater to the growing demand, the company also plans to ramp up the production of the Etios series in its second plant at Bidadi , from the current production capacity of 1,20,000 units to 2,10,000  units in early 2013.
 
The domestic production of engine and transmission for the Etios and Etios Liva will be carried out at Toyota Kirloskar Auto parts. Approximately 100,000 engines will be produced per year starting in the third quarter of 2012 and approximately 240,000 transmissions per year starting in early 2013.  With the production of these critical parts, the localization ratio for Etios, currently around 70%, is expected to cross 90%.

In its endeavor to reach out to maximum customers after the launch of the Etios and Etios Liva, the company has expanded its dealer network from 97 dealerships in 2009  to 175  outlets currently. The company further plans to expand it to 220 dealerships by early  next year. TKM is looking at improving its reach and is targeting at setting up 25 additional outlets out of the targeted outlets in semi urban and rural areas this year.
 
Commenting on the occasion Hiroshi Nakagawa, Managing Director, TKM said “With the launch of Etios, TKM embarked on a very important and challenging journey and this is an important milestone. We thank the one lakh happy customers who have trusted the brand and also appreciated it. Despite unforeseen and unfortunate events like tsunami in Japan and the floods in Thailand, we have been able to achieve the One Lakh mark. We wish to give the common man an opportunity to drive a Toyota vehicle and we look forward to serving the Indian society by making more quality vehicles.”
 
Mr. Sandeep Singh, Deputy Managing Director, Marketing, TKM added “We are delighted to touch the One Lakh mark. The number reflects how the Etios family has grown and how Etios and Etios Liva has become a household brand in India. Customers have owned and appreciated the vehicles and we are constantly incorporating their feedback to be able to sere them better.  This is a small yet very important milestone in this large project that will place TKM on a higher pedestal in the global operations of Toyota.”

VW to donate proceeds of auctioned IPL Edition Vento and memorabilia to WWF

With curtains to soon come down on another year of a very successful association with IPL, Europe’s leading automobile manufacturer, Volkswagen would once again be donating proceeds from the online auction of the IPL Edition Vento to World Wide Fund for Nature - India (WWF - India). 

However this year the Brand has further extended its support towards  the conservation organization by exclusively putting up for auction the cricketing possessions of IPL stars like Lasith Malinga, Virender Sehwag and Chris Gayle at an event held here in Pune. The proceeds from this auction will also be donated to WWF - India.

Commenting on the occasion,  Neeraj Garg, Member of Board and Director, Volkswagen Passenger Cars said, “Keeping in line with our Think Blue. campaign we have been contributing to WWF - India for the last two IPL seasons. It is our privilege to provide support towards preserving our nature.”  

The auctioned IPL Edition Vento carrying the signatures of all the team captains on its bonnet has been on display at stadiums throughout the IPL season.

Hero MotoCorp's plans for Gujarat facility hits a delay

Triumph Motorcycles to set up plant at Kolar

Hyundai announces Petrol Price Lock Assurance

Maitreya Doshi, Promoter and Chairman & Managing Director, Premier Ltd.

Maruti Suzuki declines on petrol price hike

Yamaha YZF-R15 wins 1st edition of India Design Mark (I Mark) Awards

Survey of mechanics reveals best methods to keep cars running longer

DHL redefines Full Truck Load services in Delhi

Watch Top Drive Battle of the SUVs on IBN7

Global News

BMW Group expands activities in China

BMW AG and its joint venture partner, Brilliance China Automotive Holdings Ltd., are today opening the most sustainable automobile production facility in China and one of the most innovative and flexible automobile production facilities worldwide in the Tiexi district of Shenyang, China. Viewing China as one of its top three markets worldwide, the BMW Group is now preparing for future growth by taking the next logical step in meeting growing demand in the Chinese market by opening their second plant in Shenyang, which will increase BMW's capacity in China to 200.000 vehicles.

Together with its long-standing Joint venture partner – Brilliance, the BMW AG Group will further invest € 500 million in China, thus preparing for future growth. This investment will increase the total capacity of both plants to 300.000 units per year over the medium term. Realizing the tremendous potential for growth in China, especially in the premium segment, BMW AG has been producing BMW 3 Series and 5 Series models for the Chinese market with Brilliance in Shenyang since 2003. Available video includes footage of the new plant as well as production shots in China.
Fiat and Mazda announce global co-operation program

Fitch upgrades Hyundai Motor and Kia Motors to 'BBB+'

Blackrock, 2 others buy stake in F1 before IPO: reports

BMW fined $163 million by Swiss Competition Commission

Hyundai Motor expects to meet 2012 sales target

Toyota plans 8 compacts for emerging markets by 2015

Chrysler recalls 87,000 latest Jeep Wranglers

Volvo plans to sell Eicher trucks in China: reports

ACMA to partner with Messe Frankfurt

Michael Schumacher and Nico Rosberg drive new A-Class