Tata Motors will commence deliveries of India’s first electric cargo four-wheeler EV Ace from the September quarter as it seeks to tap into the burgeoning demand for sustainable last mile delivery vehicles by e-commerce companies. The prices of the electrified version of the Ace, the sub-one tonne offering launched in 2005, will be revealed at the time of the commercial launch.
The Tata Group flagship took the wraps off the model on Thursday and signed an agreement with a clutch of e-commerce companies including Amazon, Big Basket, City Link, DOT, Flipkart, LetsTransport, MoEVing and Yelo EV. Cumulatively, it has bagged an order for 39,000 units from these companies for the ACE EV.
“Sustainable mobility is a trend as well as an imperative and is irreversible. It’s a global mega trend. At the at Tata Group and Tata Motors in particular, we have embraced this fully and made it into a business model that integrates sustainability as one of the key pillars,” N Chandrasekaran, chairman, Tata Sons said at the unveiling.
The Ace has been a category creator and the company is deeply encouraged by the interest the EV version has generated. Tata Motors will continue to engage and build e-cargo solutions not only on ACE platform but also in other categories, said Chandra....Read More
ts electric vehicles (EVs) and will look at serving many markets outside India with the range of EVs it plans to bring over the next few years, N Chandrasekaran, chairman of Tata Motors and Tata Sons, said at the unveiling of Avinya, Tata Passenger Electric Mobility’s (TPEM) first pure electric car concept in Mumbai on Friday.
“Our goal is to go global eventually and we are benchmarking to be the best whether it is in terms of software, electric and electronic architecture or the intuitive experience. We have really high aspirations,” said Chandra without divulging details on the markets the company would be keen to tap into with its range.
This will mark the beginning of the globalisation strategy of Tata Motors passenger vehicle business which has been confined to India and South Asia all these years due to the variance in emission standards. The EVs open up a whole new set of possibilities for the company, said Chandra.
The model developed ground up by the Tata Group flagship is expected to go on sale by 2025 and marks a significant step forward in Tata Motors EV journey. Based on the third generation architecture, the word Avinya has been derived from the Sanskrit language and means innovation. It marks the beginning of a new breed of EVs that the company plans to introduce in the coming years....READ MORE
The commercial vehicle (CV) industry, already under pressure due to the economic slowdown, axle load norms, GST and other issues, is now facing another challenge in the coronavirus outbreak. These factors are likely to lead to a further contraction of 8-10% in FY21, with profitability and credit metrics of CV OEMs likely to remain under pressure.
ICRA said that it continues to maintain a negative outlook for the commercial vehicle (CV) segment over the near-term, given the slowing economic growth, current overcapacity in the CV ecosystem and not so benign financing environment, with challenges further aggravated by the recent and rapid spread of novel coronavirus in India. The demand headwinds are expected to continue over the near-term given the macroeconomic challenges in view of the recent pandemic outbreak, coupled with weakening financial profile of fleet operators and significant price hikes because of transition to BS-VI emission norms. This would exert pressure on earnings and overall credit profile of CV OEMs, which have witnessed sharp earnings contraction over the past 3-4 quarters.
Shamsher Dewan, Vice President, ICRA, said that in particular, the M&HCV (truck) segment has been significantly impacted over the past year, with volumes contracting by a sharp 42 per cent in 2019-2020.
The excess capacity created in the system after the revision of axle load norms in July 2018 and faster turnaround of vehicles post GST implementation, coupled with a slowdown in the economy and infrastructure projects and the resultant lower freight availability continue to weigh on demand prospects.
Moreover, the rapid spread of coronavirus and the lockdown imposed in the country has had a significant impact on the movement of goods and freight availability over recent weeks and is likley to continue over the near-term. Accordingly, the outlook for the next fiscal, especially the first half, remains weak given the macroeconomic headwinds in view of recent pandemic outbreak coupled with significant price hikes because of transition to the new emission norms. Any recovery in the latter half hinges on a pick-up in construction activity. However, despite some channel inventory filling measures of OEMs, M&HCV (Truck) sales are expected to close the upcoming fiscal with a further decline of 12-14% during FY21, said Dewan
The 40 per cent correction in benchmark indices from their January 2020 peak has prompted promoters of companies to buy/raise their stake in group companies. According disclosures made by the companies to stock exchange, promoters of 277 firms large as well as mid-and small-sized companies bought 267 million equity shares worth of Rs 3,745 crore in the month March alone via open market purchase.
Indian markets have seen an unprecedented correction over the last two months with the Nifty50 and S&P BSE Sensex corrected 40 per cent and 39 per cent from their respective all-time highs touched on January 20, 2020. The benchmark indices slipped 23 per cent thus far in the current month. Last week, the indices hit their lowest level since May 2016.
Analysts say the promoters are using this opportunity to buyback is a typical feature of a bear market that serves two basic purposes - one is to buy shares at an attractive price and the second is to instill confidence in the minds of shareholders that the promoters are still backing the company even in turbulent times. That apart, some promoters also believe cash could be put to better use through buybacks rather than being locked up in a fixed deposit or remain idle.
“The trigger for hiking stake has been the price crash. If the return on capital employed (ROCE) is in double digits and the company is fundamentally sound, it justifies the long-term objectives of the company also. If a promoter is sitting on cash, it is always beneficial to invest where there can be a healthy ROCE going ahead. Buyback is better in such bear markets as the money invested can get better return than a bank deposit or any other investment,” explains G Chokkalingam, founder and managing director at Equinomics Research.
Among the lot, the highest quantum of promoter buying was seen in Tata Group companies that includes Tata Chemicals, Tata Steel, Indian Hotels, Tata Motors, Tata Power and Tata Consumer; Bajaj Group firms Bajaj Finance, Bajaj Finserv, Bajaj Holdings and Bajaj Auto; and Godrej Group companies - Godrej Industries and Godrej Agrovet.
Tata Sons has bought total equity shares worth of Rs 1,011 crore of six group companies during the month. The stock price of Tata Steel, Indian Hotels Company and Tata Power Company slipped between 38 per cent and 46 per cent in CY20. On the other hand, Mphasis’ promoter, Marble II, acquired 7.5 million shares representing 4 per cent of total equity worth of Rs 525 from the open market. The stock of the information technology (IT) services firm hit 52-week low of Rs 612 on March 23, and has corrected 33 per cent in CY20.
A K Prabhakar, head of research at IDBI Capital, too, says that the promoters are utilizing this opportunity to instill confidence in the retail investors via the buyback route. “Valuations are attractive for promoters to buy aggressively in case they have surplus cash in their balance-sheet,” he says.
The promoters of HCL Technologies, JSW Steel, Adani Ports and Special Economic Zone, Mphasis, Maruti Suzuki, Sun Pharmaceutical Industries, GMR Infra and Indiabulls Housing Finance, too, increased their stake in their companies. Many stocks have seen significant and meaningful corrections thus far in the calendar year 2020 (CY20) with prices of several of them crashing more than 50 per cent their respective 52-week high.
International
News
Poor
demand from Indian consumers could dampen the mood during festivals
next month, especially for automobile makers and retailers that count
on the season for a sales boost, analysts predict.
Indians
typically buy everything from new cars to shoes for themselves and as
gifts during celebrations steeped in religion and tradition. Yet the
slowest economic growth in six years, unemployment at a 45-year high
and tepid private consumption may see sales fall short of recent
years, even after the government’s $20 billion tax break to
companies earlier this month.
“You
can make the product 50% cheaper, but there has to be income to
spend,” said Nitin Gupta, an analyst at SBICAP Securities Ltd. in
Mumbai. “In the short-term, I don’t see any kind of an income
boost. Rather than giving cash to individuals, they have given it to
companies.”
Car
sales in August fell the most on record and Maruti Suzuki India Ltd.
Friday reduced the price on its Baleno RS model by 100,000 rupees
($1,420) to pass on the benefit from the tax cut. Market researcher
Nielsen has lowered its 2019 growth estimate for fast-moving goods to
9%-10% from 11%-12%, while a stock gauge of consumer discretionary
firms is set for its first annual back-to-back losses since at least
2005.
Even
so, the industry’s fortunes beyond the approaching festival season
are poised to improve, according to BNP Paribas SA. Plentiful
rainfall seen this monsoon season and cash handouts to farmers will
help lift rural incomes, helping sales of staples recover in the
second half of the year that began April 1, the brokerage said in a
recent report.
Poor
demand from Indian consumers may dim festive cheer despite tax
cut...READ
MORE
Shares
of automobile companies, including auto ancillary firms, traded lower
on Wednesday on report that the goods and services tax (GST) panel is
unlikely to approve lowering the tax for the sector this week, as a
study has warned of major revenue losses.
According
to this Reuters report, a government study, attached to the agenda of
a September 20 GST panel meeting, has said the total annual revenue
loss could be as much as Rs 50,000 crore ($6.95 billion), if the
panel decided to lower tax rates for the auto sector to 18 per cent
from 28 per cent.
Another
report by The Economic Times said the government body blamed the
current liquidity crisis and troubles of non-bank lenders for the
woes of the automobile sector.
Meanwhile,
state officials in Kerala, Punjab and West Bengal say they are also
opposed to any cut in tax rates in the autos sector, or even consumer
goods, because of lacklustre tax collections this fiscal year.
Consequently,
the Nifty Auto index dipped nearly 1 per cent on Wednesday as
compared to a flat benchmark index Nifty50. Among individual stocks,
Hero MotoCorp, Escorts Limited, Tata Motors, and Bosch dipped in the
range of 1-2 per cent. Maruti Suzuki India slip 2.3 per cent while
Ashok Leyland was down as much as 4.2 per cent on the National Stock
Exchange (NSE).
The
automobile industry has been facing challenges since past three
quarters in terms of additional burden of new insurance policy,
constraints on loan disbursement from financial institutions and
higher axle load norm impacting commercial vehicle (CV) sales, say
experts.
The
sector has pushed for a lowering of tax rates at the September 20 GST
panel meeting, in a bid to revive vehicle demand.
India's
largest two-wheeler maker, Hero MotoCorp has decided to close its
manufacturing facilities for three days. The reasons stated are
annual holiday and due to the prevailing market condition. After car
makers announced plant closures for a few days, Hero will be the
first two-wheeler maker to officially announce a temporary stop in
production.
The
company stated that production planning is a matter of advance
monitoring of market dynamics and prudent demand forecasting. This
helps us to plan our production well in advance, thereby enabling us
to stay flexible, both in terms of volumes and production schedules,
it said."In line with this trend, our manufacturing facilities
will be closed from August 15 to 18. While this has been part of the
annual holiday calendar on account of Independence Day, Raksha
Bandhan and the weekend, it also partly reflects the prevailing
market demand scenario," said the company in an announcement to
the NSE.
Mahindra
& Mahindra (M&M) has already announced the closure of its
plants for 8-14 days in July-September. Similarly, Tata Motors has
announced closure for eight days, Maruti Suzuki for three days,
Toyota Kirloskar also for eight days, Ashok Leyland for nine days,
Bosch for 10 days, Jamna Auto for 20, and Wabco for 19, according to
reports.
While
Hero MotoCorp has five plants in India, the construction of its sixth
manufacturing facility, at Sricity in Andhra Pradesh's Chittoor
district, has reached an advanced stage. It will have an annual
installed capacity of 1.8 million units. Once this facility is
completed, it will take the company's total installed capacity to
around 11 million units.
The
company reported sales of 535,810 units in July 2019, slipping 21 per
cent from the same month a year ago, when the two-wheeler
manufacturer had reported overall sales volumes of 679,862
units...Read
More
Following
the National Company Law Tribunal (NCLT) directive, Reliance
Communications (RCom) on Wednesday informed the stock exchanges that
the administration of the corporate debtor would be taken over by the
interim resolution professional (RP) and the corporate insolvency
resolution process (CIRP) would resume.
“The
powers of the board of directors or the partners of the corporate
debtor, as the case may be, shall stand suspended and be exercised by
the interim resolution professional,” the company said in the
filing.
The
NCLT has also directed the interim RP to file a progress report of
the CIRP. The next hearing is on May 30.
Operational
creditor Ericsson, in September 2017, had originally filed for
insolvency proceedings against RCom. This was accepted by the NCLT
over RCom's failure to pay dues to the tune of Rs 1,500 crore.
However, it was later stayed by the National Company Law Appellate
Tribunal (NCLAT) as both parties reached a settlement, with RCom
agreeing to pay Rs 550 crore to Ericsson by September 30, 2018.
Meanwhile,
RCom moved the Supreme Court, seeking an extension of the deadline to
pay the amount to Ericsson because of a delay in completion of
spectrum sale and other assets, to which the apex court granted it
time till December 15, 2018.
After
RCom had failed to pay the agreed amount, Ericsson moved the apex
court wherein the court ordered Anil Ambani, Reliance Telecom
Chairman Satish Seth, and Reliance Infratel Chairperson Chhaya Virani
to pay Rs 453 crore within four weeks (March 18, 2019) or face a jail
term of three months.
Ambani
had paid by the deadline.
Ericsson
was opposed to RCom’s move of undergoing insolvency proceedings as
it would then have to let go of the money it received.
Auto
major Mahindra & Mahindra (M&M) Thursday said it will
increase the price of its passenger and commercial vehicles by Rs
5,000 to Rs 73,000 from April to partially offset the impact of
rising input costs.
The
price of the company's vehicles will go up by 0.5 per cent to 2.7 per
cent from next month due to the price hike, the company said in a
statement.
"This
year has seen record high commodity price increases. Further there
are regulatory requirements effective April 1 that have also led to
cost increases.
While
we have made efforts to reduce our costs, it has not been possible to
hold back the price increase," M&M President Automotive
Sector Rajan Wadhera said in the statement.
Consequently,
the company is taking a price increase from April 1, he added.
The
company sells various utility vehicles ranging from newly launched
compact SUV XUV300 to premium SUV Alturas G4. M&M also sells
various commercial vehicles including Supro and Jeeto in the domestic
market.
Earlier
this week, French car maker Renault had announced increase in price
of Kwid range in India by up to 3 per cent from April.
Last
week, Tata Motors had also announced increase in price of its
passenger vehicles by up to Rs 25,000 from April on account of rising
input costs and external economic conditions.
M&M
joins the likes of Toyota and Jaguar Land Rover which have also
stated that they would raise price of select models from April.
