Swiss Finance Corp raises its stake in Amtek Auto to 8%

Mauritius-based Swiss Finance Corporation (SFC) has bought an additional 4% stake in Amtek Auto through open market purchases.The foreign investor acquired a total of 57.2 lakh shares for about Rs 31 crore on December 12 ‘08. Post-acquisitions, SFC’s
stake in the company has gone up to 8.2% of the equity, according to disclosures filed with the Bombay Stock Exchange.

The Amtek Auto stock has risen sharply by 52% in the past one month. Warburg Pincus, Citigroup, Credit Suisee Singapore, CLSA Mauritius and Sansar Capital Mauritius are among other major foreign institutional investors holding a substantial stake in the company.

Amtek Auto is part of Amtek Group, one of major players in automotive components industry with production facilities located across North America, Europe and Asia.

Stimulus effect: Auto makers slash prices

With government announcing a 4% cut in CENVAT across the board, the Auto industry today announced price cuts across various models and segments. The cut has been in the range of Rs.2000 to Rs.50,000. Rate cut comes as a blessing for the auto industry which has been hit hard by the global recession and a slowdown in the India economy.

Pune-based Bajaj Auto today announced cut in prices of its vehicles by up to Rs 4,400 on account of four per cent reduction in CENVAT.The prices of two-wheelers have been reduced by up to Rs 2,100, while that of three-wheelers have been cut by up to Rs 4,400, Bajaj Auto Ltd (BAL).

Maruti Suzuki said in a statement that the price of its top-end SX4 sedan will go down by Rs.23,000 to Rs.760,542, while the small car Maruti-800 will be cheaper by Rs.6,500 at Rs.193,561. Hyundai Motor, the second largest car maker in the country, has cut the prices of its flagship model Santro (GL) by Rs.8,834 (non AC), while the top-end luxury car Sonata will see a drop of Rs.44,792.The company's new sensation i10 will be cheaper by Rs.11,247 and Rs.18,381 depending on its models.

Toyota Kirloskar said the price of its popular multi-purpose vehicle would be reduced by up to Rs.32,780, while high-end models like Corolla would be cheaper by Rs.40,750.

Germany's MAN to be 50:50 partner in Force Motors JV

Force Motors Ltd today announced that it would sell up to 14.50 per cent stake in its auto components joint venture with German truckmaker MAN for about 3 bn rupees, sending the former's shares up.MAN would acquire additional equity in the joint venture to increase its stake to 50 percent, via a rights issue for up to 2.5 bn rupees.

Force Motors currently holds 70 percent stake in the JV, MAN Force Trucks Pvt Ltd, while the German firm holds the rest.The joint venture would start designing and make trucks and bus chassis over the next few months to widen its footprint in the Indian market.

Force Motors will reduce its stake in the heavy commercial vehicle joint venture with MAN Nutzfahrzeuge to 50% from the current 70%.Force will sell 14.2% stake to MAN for Rs 300 crore. Later, MAN will infuse Euro 40 million (around Rs 250 crore) in the JV through subscription of a rights issue. Force will refrain from subscribing to the issue. As a result, MAN’s stake will go up to 50% from the current 30%.

The transaction, which is to be completed over the next few weeks, will peg the enterprise value of the JV at Rs 2,000 crore. Both the parties have signed the deal on Tuesday in Munich.

Auto sales for November down

Economic slowdown seems to have taken a toll on the Auto sector as well. Auto companies today reported their monthly sales figure, with all the top auto makers reporting disappointing set of figures.

India's leading car maker Maruti Suzuki sales declined 24.3 per cent in November this year compared to sales in the same month last year.The company sold 52,711 vehicles in November this year as compared to 69,699 in the like period a year ago.

Company's volumes in the domestic sedan segment, called the A3 segment, which comprises SX4, Esteem and Swift D'zire models, grew by 40.3 per cent from 4,260 cars in November last year to 5,975 this year.

The sales in the high-end small car segment, called the A2 segment, comprising Alto, Wagon-R, Zen, Swift, and A-Star models declined 26.6 percent from 47,641 in 2007 to 34,976 this year.

Tractor major Mahindra and Mahindra too announced that it will it could cut down productions and temporarily shut plants due to slowdown in sales in domestic as well as overseas markets.

The economic turmoil has cast its spell on country's oldest automobile company Hindustan Motors too, with sales of Ambassador cars dipping by more than 33 per cent in the past few months.A company official told reporters that Amby sales which were in the region of 900 cars per month have come down to 600 units now.

HM mulling components business.

Hindustan Motors is moving ahead to become more of an automobile component manufacturer than developer of new models."The key to our revival will be our components business comprising forgings, castings and stampings produced at our Uttarpara factory near Kolkata," company Chairman C.K. Birla said.

As long as the Ambassador remained the car of choice for all Indian government purchases, whether at the federal or the state level, the company managed to stay in the green even as other manufacturers aggressively attacked the rapidly growing Indian automobiles market.

Hindustan Motors refused to move away from the Ambassador. But when government orders began drying up in 2004, the company, once India's largest carmaker, was hit hard; it has been ailing ever since.

Read more in The Economic Times article.

Mahindras have designs on Stile Bertone

Mahindra & Mahindra has set sights on Italian automotive style company, Stile Bertone — famed for designing iconic models like the Alfa Romeo, Lamborghini, Aston Martin and Ferrari.The Mahindra group, which developed close business ties with the Bertone group after the Italian company designed some of its utility vehicles, is learnt to be talking to the Bertone family to explore options of buying an equity stake.

The unlisted Italian company is estimated to post a revenue of E39.1 million in 2008.A deal with the Bertone family will give Mahindras access to high-tech design and also help the Indian auto company in its plans to build a global R&D centre.The move will also help M&M cater to global auto OEMs at a time when even the Tatas are planning to open a global R&D design centre in the UK.

Besides providing an European footprint, it would help M&M leverage technologies and skillsets, and enhance product development by harnessing the talent pool of designers and engineers, said analysts.

Read more in The Ecomomic Times article.

Tata gets US antitrust OK for Jaguar, Land Rover

US antitrust authorities have cleared India's Tata Motors Ltd's purchase of Jaguar and Land Rover from Ford Motor Co.Antitrust authorities completed their review of the $2.3 billion deal without taking any action to block it, the U.S. Federal Trade Commission.

In March, Tata announced it would buy Jaguar and Land Rover, giving the Indian automaker a line-up of products ranging from the world's cheapest car to some of the most expensive.

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Hero, Daimler join hands for commercial vehicles

Daimler, the world's largest truck-maker, signed a joint venture (JV) agreement with the Hero Group on Monday to manufacture a full range of commercial vehicles for the Indian market.

The JV, Daimler Hero Motor Corp, will see investment of Rs 4,400 crore over five years and Daimler will hold 60% stake, while Hero the rest. The companies would shortlist a location for a greenfield plant from among Tamil Nadu, Maharashtra and Haryana and plan to produce light, medium and heavy-duty vehicles with an initial capacity of 70,000 units. Daimler will contribute Rs 1,386 crore to the JV and Hero Rs 900 crore, while the rest would be raised via debt.

Read more in The Times of India article.

M&M, ICICI Venture to buy Italian gear maker

A consortium of Mahindra & Mahindra (M&M) and ICICI Venture Funds Management today signed a pact to buy 100 per cent stake in Italian gear manufacturer Metalcastello SpA they did not disclose the size of the deal.

Metalcastello has revenues of around $100 million (Rs 400 crore). The company’s product portfolio features gears and shafts used in vehicle transmissions and drivelines.Customers of the independent gear maker included original equipment manufacturers in tractor, off-highway and construction equipment space.Currently, financial investors hold 84.7 per cent in the company and the top management holds 15.3 per cent.

Hindujas eye French giant Valeo

The Hinduja Group, promoters of India’s second-largest truck-maker Ashok Leyland, is in talks with Europe’s third-largest auto component manufacturer Valeo SA to buy a controlling stake in the company in a deal that is expected to be around $1.5 billion (Rs 6,000 crore).

Valeo has a market capitalisation of $3.03 billion according to the company’s last trading day data. At current valuation a controlling stake of 51 per cent would be over $1.5 billion.

The Hinduja Group has projected an investment of $50 billion (Rs 2 lakh crore) over the next 5 to 7 years in diversified growth opportunities. Ashok Leyland had also talked about entering the auto component business at a recent analyst meet.

Valeo reported operating revenues of $15.32 billion in 2007, a1.5 per cent growth over the previous year. The company’s net income for the year was a mere $127.9 million, a 1.7 per cent drop from the previous year.

Hedge fund Paradus European Special Opportunities Master Fund LP is Valeo’s largest shareholder with 18.54 per cent, according to data up to December 31, 2007, available on the company’s website. Morgan Stanley & Co International holds 11.11 per cent as the second-largest shareholder

Ford sells Jaguar/Land Rover to Tata-source

U.S. automaker Ford has agreed to sell its luxury brands Jaguar and Land Rover to India's Tata Motors for more than $2 billion, according to a source familiar with the matter. Ford, which signed the deal on Tuesday, plans to publicly announce the transaction in New York at 0800 EST on WednesdayThe deal will also see Ford pay about 300 million pounds ($598 million) into Jaguar and Land Rovers' pension funds, according to unions. Ford declined to comment.

Tata, India's top vehicle maker, has been in talks with Ford since it was chosen as the frontrunner to buy Jaguar and Land Rover a few days into 2008. Tata is pursuing the deal to gain a substantial foothold outside India. But analysts have questioned how Tata will incorporate the luxury brands into its stable of sturdy trucks and functional passenger cars, including the Nano, the world's cheapest car which it unveiled in January.

While Land Rover has generated three years of record sales with its iconic SUVs, the fit of Jaguar is far less clear. Ford, which lost $2.7 billion in 2007 and $12.6 billion in 2006, is spinning off Jaguar and Land Rover to focus on turning around its loss-making operations in North America.

The sale will include a commitment by Tata to continue buying engines from Ford, according to unions. All Jaguar and Land Rover's petrol engines are built in a Ford plant in South Wales, supporting hundreds of jobs there.

Read more in The Economic Times article.

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Daimler to buy 26% in Sutlej Motors

Daimler AG of Germany has taken a call option to buy 26 per cent in Jalandhar-based bus body builder Sutlej Motors.The proposal was recently cleared by the Foreign Investment Promotion Board (FIPB).

The Indian company had signed an agreement with Daimler last year to jointly make fully-built buses from Daimler’s Chakan facility based in Pune.Under the agreement, Daimler will produce and supply bus chassis and Sutlej Motors will attach the body.

Daimler India, which is a 100 per cent subsidiary of Daimler AG, will also handle sales and after-sales services of the coaches, which are expected to be launched in India in the first quarter of 2008.

Amtek Auto buys UK's Triplex-Ketlon

Auto parts maker Amtek Auto Ltd said on Wednesday it had acquired UK-based precision machining firm Triplex-Ketlon Group for an undisclosed sum.With this, Amtek's revenue from international operations will rise to $770 million a year, and it expects to cross $1 billion per annum within the next two years.

Triplex Ketlon was acquired by the UK-based Barr family in September 2003. According to the company’s website, Triplex, it has three manufacturing sites — at Hereford, Stratford-upon-Avon and Paddockwood. The company supplies fully-machined components and sub assemblies to passenger car makers, commercial vehicle makers and tier-I manufacturers.The auto component sector has seen some aggressive deal making in recent times with Bharat Forge, M&M and Amtek being the most active in the deal space.

Read more in The Economic Times article.

Maruti gets board's nod for joint venture

Passenger car maker Maruti Udyog, which has been renamed Maruti Suzuki, has secured the nod from India's Foreign Investment Promotion Board to establish a joint venture with a Japanese firm for exhaust system components.

The 49:51 joint venture with Japan's Futaba Industrial Company will manufacture exhaust system components at a factory to be set up at Manesar in Haryana with an investment of close to Rs.2 billion ($50 million), official sources said.

Futaba is a leader in exhaust system components for automobiles, in areas such as tubular and fabricated exhaust manifolds, exhaust pipes, catalytic converters and mufflers.The proposal will be put up before Finance Minister P. Chidambaram for a formal nod.

Ramkrishna Forgings close to Trinity buy

Auto parts maker Ramkrishna Forgings Ltd is close to acquiring unlisted Trinity Engineers Pvt Ltd in a deal worth around Rs1.5-2.0 billion, three sources close to the deal said on Tuesday.

The acquisition is almost complete, expect for a few finer points, a source said. "They are working towards finalising it, but I cannot put a time stamp. It will be very soon." A Ramkrishna Forgings spokesman refused to comment, while Trinity's Joint Managing Director Asheet Pasricha said he would not comment on rumours.

Ford to retain upto 50% in Jaguar, Rover biz

The line-up of suitors, including Tata Motors, Mahindra & Mahindra and a slew of private equity players, currently circling Ford’s Jaguar and Land Rover brands may not need to pick up the ailing businesses at one fell swoop.

According to auto analysts quoted in international media, Ford is planning to retain a 30-50% holding in the Jaguar and Land Rover businesses, the backbone of Ford’s luxury stable.

By opting not to sell the entire stake, Ford may, in fact, make it somewhat easier for the deal to go through because it may substantially reduce the acquisition cost for any bidder and also enable Ford to get a good price. While Ford has never publicly discussed the deal, analysts have estimated the valuation of the two entities at $1.9 billion.

Read more in The Economic Times article.

M&M seeks to buy Lokesh Machines

Mahindra & Mahindra, the Rs 18,000 crore auto major, plans to buy Lokesh Machines Ltd, India’s biggest engine-block manufacturer.M&M has approached the management of the Hyderabad-based company with an offer to acquire over 51% equity.

Buying Lokesh, which had a turnover of Rs 113 crore last fiscal, will give M&M an assured and captive supply of cylinder blocks and engine heads for jeeps, tractors and the Scorpio utility vehicle.Lokesh supplies about 2.3 lakh engine blocks for M&M’s vehicles, which constitutes 35% of its business.For M&M, the move would be in line with the sales target set for Systech, its aggressively expanding auto component division — of $1 billion by 2010, or a 33% increase over current revenues.

Read more in The DNA Money article.

Dynamatic Tech buys UK's Sauer-Danfoss

In yet another Indian acquisition of a British company, the Swindon-based engineering company Sauer-Danfoss has been purchased by the Bangalore-based Dynamatic Technologies Ltd.

Sauer-Danfoss was based in Swindon for the last 50 years. It was formally Plessey Hydraulics Ltd before becoming Sundstrand Hydratec Ltd and then Sauer-Sundstrand. It has been manufacturing hydraulic gear pumps and valves mainly for the off highway mobile equipment industry.

Dynamatic Technologies Ltd has six manufacturing plants, three in Bangalore and three in Chennai, and manufactures highly engineered products in the automotive and defence sectors as well as the agricultural and construction equipment industries.

The acquisition of the Swindon business will increase the number of employees in Dynamatic to approximately 2,000 worldwide. The official completion of the sale took place with an unveiling ceremony and celebration with employees and suppliers at the Cheney Manor site in Swindon recently.