Nissan’s Chennai car project on track

Putting all speculations about its Rs 4500 crore Chennai car project to rest, Japanese car maker, Nissan Motors, has said that its joint venture with Renault to produce cars near Chennai is on track and the plant is expected to roll out cars next year.

The car manufacturing unit, being set up at Oragadam near Chennai by the Renault-Nissan combine, is expected to roll-out its first made-in-India Nissan car in the entry level hatchback segment by May 2010. Nissan is developing a new global entry level car- a replacement of its March/Micra model.

The manufacturing unit, being built on 640-acre area, will initially have capacity to produce 200,000 cars a year, of which 110,000 units will be exported to over 100 countries. The plant will commence export of cars to Europe by the second half of 2010.

Nissan expects to scale up the export level to 180,000 units a year later. "India will be the single largest nation to receive bulk of Nissan's 2009 investments of 350 billion yen, "according to Kiminobu Tokuyama, managing director and chief executive officer, Nissan Motor India Pvt Ltd.

Renault Nissan Automotive India Pvt Ltd, a 50:50 JV of Renault and Nissan for car production at Orgadam, has already hired about 300 people and plans to have a total workforce of 1500 by May 2010. A supplier's park is also coming up on 160 acres near the car plant; at least 5-6 units of suppliers are also expected to be ready by May 2010.

Nissan plans to make Indian operations a key hub of entry level car production base for export markets as well as to procure components for other entry level car production units.

The company plans to launch three new products during this year, while it has chalked out a plan to unveil nine new products, including five locally made models, in India by 2012. The offerings will vary from entry-levelcars, hatchbacks, sedans, SUVs and to light commercial vehicles. Nissan is targeting a market share of 5.7 per cent in India by 2012.

It may be recalled that Renault-Nissan had originally planned to instal capacity for 400,000 units to be shared between the JV partners. As French carmaker Renault has suspended its plans in the wake of global market conditions, the capacity has been scaled down.

Nissan has appointed Hover Automotive India as its partner for marketing, sales, after-sales service and dealer development, co-ordina-tion of product development for the Indian market.

Fiat and Honda unveil new cars

Amid sluggish market conditions, new cars continue to hit the market as companies believe only new models drive growth.

Fiat India Automotive, a joint venture between Italian car maker Fiat SpA and Tata Motors, has launched Grande Punto, its latest offering in the premium hatchback segment. While the 1.2-litre petrol variant of Grande Punto comes with a price tag of Rs 3.99 lakh (ex-showroom, Delhi), three other petrol variants with 1.4-litre engines are priced between Rs 4.66 lakh and Rs 5.61 lakh. Its four variants with 1.3-litre multijet diesel engines are priced between Rs 4.85 lakh and Rs 6.11 lakh.

"Grande Punto is for demanding customers who love hatchbacks and yet want the luxury of a sedan. The high level of localisation which will increase to 85 per cent by December 2009, has helped us aggressively price the Punto," said Rajeev Kapoor, CEO, Fiat India Automobiles Ltd.

Internationally, Grande Punto has an excellent track record and has produced and already sold 1.6 million units across markets. The Euro-IV-ready hatchback will be manufactured at Fiat's Ranjangaon plant near Pune.

The company is planning to sell about 2500 units of Grande Punto a month and aims for a10 per cent per cent market share in the hatchback segment. "We believe that the B plus segment in India has been under-tapped and consumers are increasingly looking forward to driving world renowned, international brands on Indian roads. The Grande Punto will offer safety and quality standards that are particularly high for its segment at a very competitive price," said Kapoor.

Fiat, which is attempting a come back to Indian market, launched its mid-sized sedan Linea in January 2009. Mean while, premium car maker Honda Siel Cars India has rolled out its new compact car Jazz, which will be available in three types in manual transmission - Jazz, Jazz Mode and Jazz Active.

The Honda Jazz comes with 2+2 years or 80,000 km warranty and four years roadside assistance as standard value for all Jazz buyers. While the Jazz model comes with a price tag of Rs 7.18 lakh ex-showroom Chennai, the Jazz Mode comes with a tag of Rs 7.48 lakh and Jazz Active Rs 7.54 lakh.

Jnaneswar Sen, vice president - marketing, Honda Siel Cars India said that the Honda Jazz is loaded with all the values that are associated with Honda – global design, great drivability, fuel efficiency and safety. The Jazz will cater to a unique group of people who want the latest and most stylish models with the best of technology, safety and practicality in their car.
Sold successfully in over 130 countries with cumulative sales of more than 2.8 million units, the Honda Jazz has won over 40 international awards, according to a company statement.

TNEB's losses to widen; registers transmission

After seeking several extensions in the last six years, Tamil Nadu Electricity Board has taken the first step to restructure the Board. It has formed a separate company Tamil Nadu Transmission Company Ltd. to handle transmission of power and registered the same. Tamil Nadu was resisting the reorganization of TNEB, required under Electricity Act, indicating that they were performing well without unbundling.

Another company, TN Generation and Distribution Corporation, is being formed and will be registered later. It has been decided to restructure the Board into one holding company and two subsidiaries under the same. New Delhi-based Feedback Ventures has been given the task of providing the restructuring plan for TNEB.

Meanwhile, the losses of TNEB is expected to increase to Rs 7104 crore during the current financial year against Rs 6449 crore in the previous year: “the number of domestic consumers in the state is going up by 5 to 6 lakh each year. As a result, demand for power has also been increasing. The Board has been procuring power from the market to meet the increased demand. Due to scant rainfall during the last year, the generation from cheap hydel source had dwindled. Because of these factors also TNEB had to purchase power from the market at times at higher rates to meet the demand, which has ultimately contributed to high revenue losses, “according to policy note 2009-10.

TNEB is expected to spend Rs 15,677 crore to procure power during 2009-10 to meet the power demand in the state. TNEB’s revenues from sale of power and others stood at Rs 16,352 crore during 2008-09 as against Rs 15,959 crore in 2007-08. Thus, total revenue receipts including government subsidies, were Rs 18,169 crore in 2008-09 as against Rs 17,416 crore in 2007-08, according to the policy note.

However, total revenue expenses stood at Rs 23,943 crore in 2008-09 and Rs 20,914 crore in 2007-08, leaving a revenue deficit of Rs 6449 crore (2008-09 crore for 2007-08).

For 2009-10, total revenue receipts are estimated at Rs 19,508 crore while revenue expenses are estimated at Rs 26,613 crore, leaving a revenue deficit of Rs 7104 crore.

Though the installed capacity of the TNEB is presently estimated at 10,214 MW, including renewable energy sources, available capacity is lower than demand. Peak demand has increased from 7473 MW in 2004-05 to 9459 MW in 2008-09 (upto April 2009).

While the state has been attempting to manage deficit through wind sources that provide about 1000 MW, the remaining deficit is met from captive power plants and power purchases from the open market.

Ashok Leyland inks pact with Union Bank of India

In a bid to provide a fillip to commercial vehicle sales, Ashok Leyland, the Hinduja Group flagship, has signed a memoranda of understanding with Union Bank of India (UBI). Under the MoU, UBI will extend retail finance to Ashok Leyland's commercial vehicle customers as well as for dealers' inventories.

‘The tie-up with UBI is part of a drive by Ashok Leyland to fully utilize the vast networks of public sector banks to service the entire value chain from wholesale to retail, for mutual benefit’ according to K Sridharan, chief financial officer, Ashok Leyland.

SSridhar,chairmanandmanaging director, CBI, said that the bank would offer loans toAshok Leyland's customers and dealers at 100 basis points lower than its PLR Prime Lending Rate as against their (PLR) for other commercial vehicles.

It may be recalled that Ashok Leyland is awaitingRBI clearance for its non banking finance company. Hinduja Leyland Finance Ltd. Which is to provide affordable lending to truck buyers.