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.

M&M revs up for Italian ride

The tractor and utility vehicle maker is learnt to have set sights on Italian motorcycle marque brands — Cagiva and MV Agusta — famed for designing high-end, high-performance superbikes that are a rage on the speed motorcycle circuit.

M&M is keen on entering the two-wheeler space and has been talking to a number of Italian and domestic two-wheeler brands. The utility and tractor major is understood to have held talks with Ducati at one point in time, but it failed to materialise.

While it’s too early to peg a value to the deal size, the Italian company is estimated to have posted a combined revenue of euro 141.3 million in 2007 (around Rs 1,057 crore) and a loss of euro 34.4 million during the same year.Although India is a large two-wheeler market with annual sales of over 7.5 million units, the country can’t still boast of high-end, high-performance bikes.

Read more in The Economic Times article.

M&M in talks to buy Kinetic Motors

Mahindra & Mahindra (M&M), the country’s largest utility vehicle maker, is in talks to acquire Kinetic Motors, the Pune-based two-wheeler manufacturer. The move signals M&M’s interest in the two-wheeler segment, which has seen sharp growth and fierce competition in the past few years. The maker of Scorpio has been trying without success to get into the segment for the past few years.

People close to the development said both companies are in the final stage of due diligence and M&M is expected to pick up a majority stake in the company. Kinetic Motors has been valued at close to Rs 150 crore and the deal size is expected to be in the range of Rs 70-80 crore.

Read more in The Economic Times article.

M&M board meet on May 3 for pref issue

Mahindra & Mahindra (M&M) plans a private placement of equity shares by way of preferential issue.According to a release issued by M&M to the BSE today, the company's board is scheduled to meet on May 03 to consider a proposal from prospective investor(s) for private placement of securities by way of preferential issue at a price of to be determined in conformity with the terms of the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000.

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.

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.

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.

Nissan, Leyland in small truck alliance

The Chennai-based commercial vehicles maker and Japan’s Nissan Motor, in which France’s Renault is the single-largest shareholder, today agreed to form three joint ventures to develop, manufacture and market light commercial vehicles (LCVs). The joint venture will produce 100,000 vehicles annually in the medium term.

Renault already has a joint venture with utility vehicles maker Mahindra & Mahindra, which is rolling out the Logan sedan, and has announced another one with two-wheeler maker Bajaj Auto for a low-cost car.

The first of the three ventures will make Nissan commercial vehicles in India for the domestic market and overseas sales. Ashok Leyland will control a majority stake in the company.A venture for assembling engines and related parts is also on the cards. It will be controlled by Nissan.

The third company, equally owned by the two partners, will develop LCVs and engines, and market them in India and overseas. The products developed will be sold under both the Ashok Leyland and Nissan brands.

The two companies are also thinking of collaborating in sales and distribution. This may include giving Nissan an access to Ashok Leyland’s vast dealer network. Ashok Leyland may use Nissan’s dealer network in identifying export markets.Ashok Leyland expects to sign a final agreement with Nissan in October after completing a feasibility study.

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.

Tatas may be sole bidder for Jaguar, LR

Tata Motors is inching closer to acquiring Jaguar and Land Rover. Sources in the know told DNA Money that the Tatas are the only serious bidder for the Jaguar-Land Rover (JRM) marquee now.According to them, Mahindra & Mahindra is yet to put in a formal bid for the two brands.

Tata Motors is on a good wicket, because the other strong contenders, namely the who’s who of global private-equity firms, named as possible bidders, may also not pass muster.Ford Motor Company, it seems, is keen on selling the two brands to dedicated car companies only.

The Tatas have appointed Morgan Stanley as their merchant banker for the transaction and they may be ready to pay between $1.5-2 billion.

Read more in The DNA Money 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.

M&M ups stake in Punjab Tractors to 64.6%

Mahindra and Mahindra on Thursday said it has consolidated its stake in Punjab Tractors to 64.6 per cent after completing its open offer to pick up a 20 per cent stake in the company.

Mahindra and Mahindra along with Mahindra Holdings and Finance Ltd had made an open offer to the shareholders of Punjab Tractors Ltd for acquiring 12,151,140 equity shares of Rs 10 each at Rs 360 per share.Over 1.21 crore shares amounting to 20 per cent stake were tendered in the open offer by Punjab Tractors shareholders.

The total valid shares tendered under the offer were 15,948,911 and the total shares accepted under the offer are 12,151,140 amounting to an acceptance ratio of 76.19 per cent, M&M told BSE.With this, M&M along with Mahindra Holdings and Finance Ltd holds over 3.92 crore shares, aggregating to 64.6 per cent.

Read more in The Economic Times article.

Nelcast lists at 15% premium to issue price

Nelcast Ltd. listed at Rs 252 at a 15% premium on the NSE against issue price of Rs 219 per share. At 10:21 AM, the scrip was at Rs 221.40, up Rs 2.40 or 1.10% on the NSE with volume of 16,97,197 shares. So far, it rose to a high of Rs 274 and low of Rs 215.

The company has raised Rs 95.26 crore from its public issue of 43.50-lakh shares of face value Rs 10 each. The IPO, which was open from June 4-8, was subscribed 7.36 times.

Nelcast caters mainly to commercial vehicle and tractor industries. It plans to use the issue proceeds for expansion and modernisation of its iron casting units at Gudur in Andhra Pradesh and Ponneri in Tamil Nadu, to reach a production capacity of 1,50,000 MT per annum by 2008-09.

The company’s customer base includes Tata Motors, Ashok Leyland, Eicher Motors, Tata Cummins, Mahindra and Mahindra, TAFE, International Tractors and New Holland India. It exports to the US, Europe and Australia, its client list comprising Arvin Meritor, Volvo, SIGMA and Dobbie Dico Meter.

Mahindra Forgings merges three firms with self

Shares of Mahindra Forgings were down 0.47% at Rs 234.95 after the board approved the scheme of amalgamation envisaging the merger of the Mahindra Stokes Holding Company Ltd, Mahindra Forgings Overseas Ltd and Mahindra Forgings Mauritius Ltd with the company with effect from April 01.

The Board has also accepted the share swap ratio recommended for the scheme. The company will issue 20 equity shares of Rs 10 each to the equity shareholders of MSHCL, MFOL and MFML.

The shares will be allotted at par for every 103 equity shares of Rs 10 each in MSHCL, 49 equity shares of €1 each in MFOL and 73 equity shares of €1 each in MFML.

Once the scheme comes into effect, the resulting shareholding of Mahindra & Mahindra Ltd is expected to be around 60.56%.

Mahindra, Renault, Nissan to pay JV fee, share Chennai unit equally

The yet-unnamed joint venture of Mahindra and Mahindra Ltd, its subsidiary Mahindra-Renault Pvt. Ltd, and Nissan Motor Co. that will make four lakh vehicles a year from 2009, will be a contract manufacturer with the three companies equally sharing the capacity, said Pawan Goenka, president (automotive), Mahindra and Mahindra. He added the company was in talks with Nissan to market its cars in India similar to the venture it has with Renault for the Logan sedan.

The joint venture company would not develop or sell cars on its own, said Goenka. The three companies, which would market the products made by the venture, will pay a fee to it in proportion to the goods manufactured.

“Mahindra’s greatest advantage is to get access to the technology of Nissan and Renault through this plant in Chennai,” said Umesh Karne, senior research analyst with Emkay Share and Stock Brokers Ltd. “The joint venture company will be developing cost-advantageous products. So, royalty (fee for manufacturing) would not be an issue.”

Global players such as Fiat SpA and Nissan Motor Co. are entering into contract manufacturing alliances with Indian companies to gain from the low cost of manufacturing in the country and benefit from economies of scale.

Nissan Motor Co. has a tie-up with Maruti Udyog Ltd, which sells one of every two cars sold in the country, to make 50,000 units a year of a small car, which it will export to Europe. Fiat SpA and Tata Motors Ltd are spending Rs4,000 crore to build a factory in Pune which will roll out models designed by the two companies.

Mahindra and Mahindra will hold a 50% equity in the contract manufacturing unit; the chairman and CEO will also be its appointees. Nissan and Renault will work out how to split the other half between themselves.

Read more in The Livemint article

Batliboi acquires Canada's Quickmill

On an expansion spree in the North American market, Mumbai-based machine tool and engineering company, Batliboi Ltd has acquired Canadian firm Quickmill Inc to leverage on the latter's distribution network and research and development capabilities.

The 100 per cent equity acquisition deal is estimated at Rs 22 crore and is the first foray by Batliboi into the mergers and acquisition space.

Batliboi primarily manufactures machine tools, specialised machines, textile air engineering machines and air conditioners at its Surat and Bangalore facilities. The company's clients include textile manufacturers, automobile manufacturers like TVS, Honda, Mahindra and Mahindra and power makers like BHEL besides hotels which use its air conditioners and refrigerators.

Mahindra-Renault launch Logan

Fuelling competition in the Indian mid-size car market, Mahindra-Renault on Tuesday unveiled 'Logan' - an entry-level no frills sedan - with prices starting at Rs 4.28 lakh for the base petrol variant.

The joint venture company between India's Mahindra and Mahindra and French auto maker will be rolling out 50,000 units of Logan this year from Mahindra's Nashik facility set up at a cost of Rs 700 crore.

While the 1.4 litre petrol engine variant is priced at Rs 4.28 lakh (ex-showroom Mumbai), the 1.61 litre carries a price tag of Rs 5.69 lakh. The 1.5 litre diesel engine car, which has two variants, comes at a price of Rs 5.47 lakh to Rs 6.44 lakh.
Initially, Logan will hit the roads in the top 10 cities of the country in the second week of this month.

Read more in The Times of India article.

Mahindra offers to up stake in PTL by 20%

India's top tractor and utility vehicle maker Mahindra & Mahindra on Monday made a Rs 4.9 billion ($110 million) open offer for a further 20% in Punjab Tractors and its subsidiaries, as required by law after it won the bidding for a 43.3% stake.

Mahindra, India's top tractor and utility vehicle maker, and subsidiary Mahindra Holdings & Finance Ltd are buying stakes held by private equity firm Actis and India's Burman family in a deal that values Punjab at approximately Rs 22 billion.

Read more in The Times of India article.