Bajaj plans small car with Nissan and Ashok Leyland tie ups with Renault for LCVs

Bajaj Auto has been in the limelight of the media this week. The Bajaj XCD 125 cc DTS-Si bike has registered sales of 65,000 units in the first 50 days of its launch, while the company is entering into a global alliance with Renault-Nissan for the manufacture of the $3,000 small car. In connection with the tiff with TVS Motor regarding the infringement of intellectual property rights on the DTS-Si technology, Bajaj Auto has reinforced its stand. Meanwhile, the Tata group is all set to participate in the second round of bidding for Land Rover and Jaguar, while Ashok Leyland and Nissan have entered into a joint venture to manufacture LCVs in the country.

- Chillibreeze Business Research Team

Ashok Leyland-Nissan to produce LCVs

Ashok Leyland and Japanese automaker Nissan have entered into a master co-operation agreement (MCA), under which they will set up 3 joint ventures. One of the joint ventures will be focused on the manufacture of light commercial vehicles (LCVs). In this venture Ashok Leyland will hold 51% equity stake and Nissan will hold 49% equity stake. While the location of the facility to manufacture LCVs has not been finalized, the likely locations seem to be in Tamil Nadu, Uttarkhand and Andhra Pradesh. This facility is pegged to have an installed manufacturing capacity of 1 lakh units per year. Meanwhile, the second joint venture between the two companies will be for the manufacture of engines for the LCVs, where Nissan will hold the majority 51% stake and Ashok Leyland will hold the balance. The third joint venture will be for the development of LCV products and related goods, which are intended to be sold under Ashok Leyland and Nissan brand names. This venture, where both companies will hold equal equity stake, will be set up in Chennai.

October 29, 2007
Source: NDTV Profit via Press Trust of India

Maruti to spend extra $1.75 bln on India expansion

Maruti Suzuki, the leading car manufacturer in India, will make an additional investment of $1.75 billion. The investment will be used for expanding the company’s production facilities. It will also be used in marketing, research and development. Maruti Suzuki, which holds nearly 50% of the Indian car market, has recently entered the premium car segment with models like the Swift hatchback and the SX4 sedan. During July-September 2007 the company has recorded a 27% increase in its net profit to Rs4.67 billion.

October 29, 2007
Source: NDTV Profit

Mahindra Q2 profit drops 26 pct, shares up

Mahindra and Mahindra Limited (M&M) has posted a 26% year-on-year decrease in its net profit at Rs2.86 billion during July-September 2007. During July-September 2006 the company had posted net profit of Rs3.87 billion. During July-September 2007, M&M’s net sales increased to Rs24.91 billion from Rs28.02 billion in July-September 2006. In terms of units, the company’s sales during the period increased by 19% to 79,530 units. M&M’s operating margin during July-September 2007 dropped to 13.8% from 14.8% in July-September 2006. M&M, which is the largest utility vehicle and tractor manufacturer in India, has attributed the drop in its profits to sluggish tractor demand, rising finance costs and effects of rupee appreciation on export profitability.

October 29, 2007
Source: NDTV Profit

XCD sales cross 65,000 units: Bajaj

Bajaj Auto Limited (BAL)’s 125 cc DTS-Si bike XCD has sold 65,000 units in the first 50 days of its launch. According to BAL, more than half of the sales have arisen from competition, chiefly from 100cc users. Encouraged by the fantastic sales, the company is increasing the monthly production of XCD from the present 50,000 units to 75,000 units by November 2007. The XCD was launched in line with BAL’s desire to exit from the 100cc segment and offer customers a product that will provide the features of both 125cc and 150cc motorcycles.

October 28, 2007
Source: Economic Times

Tatas in bid to take over Jaguar

The Tata group is all set to participate in the second round of bidding for Land Rover and Jaguar, which have been put up for sale by Ford. In this round, where 2 contenders will be selected out of the existing 6, the Tata group faces stiff competition from JP Morgan’s private-equity arm, One Equity. Ford has been seeking to wash its hands off Jaguar and Land Rover, as it is encountering trouble returning to profitability on account of rising healthcare and pension costs in addition to competition from foreign carmakers. However, the sale has been getting delayed because of the postponement in finalizing future supply agreements with Ford, which provides engines to the two British brands. Further, there are ambiguities over European Commission’s plans for a limit on CO2 emissions, which the two brands are unlikely to meet.

October 28, 2007
Source: Financial Express

Bajaj Auto to take all necessary steps to defend DTS-i patent

Bajaj Auto Limited (BAL) has reinforced its stand that it will go through all the required steps to safeguard its intellectual property right on the Digital Twin Spark-ignition (DTS-i) technology. BAL has been on a tussle with TVS Motor Company that the latter has infringed its patent on the DTS-i technology in its new 125cc Flame motorbike. Meanwhile TVS, which will release the Flame in November 2007, has denied the allegations and has filed a Rs 250 crore defamation case against BAL. However, BAL is asserting its charges against TVS, stating that it had obtained patent for the technology in July 2005.

October 27, 2007
Source: Economic Times

Bajaj Auto to drive $3,000 small car project

Bajaj Auto Limited (BAL) is entering into a global alliance with Renault-Nissan for making the $3,000 small car. The small car project will be led by BAL, which will be involved in development, manufacturing, marketing and distribution of the car. Meanwhile, Renault-Nissan will be supporting the project in areas like chassis and body design. BAL will use its existing two-wheeler dealer network for the distribution of the small car. Presently, the companies are carrying out a feasibility study on the project in areas such as badging, marketing, distribution rights, branding, and royalty. Besides the small car, the alliance will also work on light vehicles, including both passenger and cargo.

October 26, 2007
Source: Economic Times

Cabinet okays steps for disinvestment of TCIL

The disinvestment in Tyre Corporation of India (TCIL) has been approved by the Government of India. The disinvestment will be achieved through an amendment in Tyre Corporation of India Limited (Disinvestment of ownership) Bill, 2007. P R Dasmusi, the Information and Broadcasting Minister, has stated that TCIL can be revived only through a joint venture, necessitating changing the nature of the company. TCIL, which has become a sick unit due to lack of working capital, was set up in 1984 as a wholly-owned central public sector enterprise and had taken over the operations of Incheck Tyres and National Rubber Manufacturing. However, in the present state the company has stopped production under its own brand name and has been making tyres for other well-known tyre brands.

October 25, 2007
Source: Economic Times

Audi mulls A4 production in India

Audi, the luxury car manufacturer of Germany, is mulling over raising the production of its models in India. It is planning to execute this idea with its A4 sedan. Although the Indian market is presently small for Audi, it foresees tremendous growth in the premium segment in the country. Meanwhile, the company has also stated that it will continue to launch its global premium vehicles in India through imports.

October 24, 2007
Source: Financial Express