India
According to Indian media sources, Pawan K Ruia has voiced the intention of stepping down as executive chairman of his group companies. According to a report in the Business Standard financial newspaper, Ruia may relinquish his position and appoint separate professional management to the firms. The Ruia Group, of which PK Ruia is chairman, will remain the enterprises’ holding company.
London may have suffered enough torrential rain to close a couple of tube stations, but that nothing to the monsoon downpours experienced in countries like India. That’s why leading Indian tyre manufacturer, Apollo Tyres has kicked off a “Safe Drive” public awareness itiniative.
With heavy rains crippling normal life of Mumbai citizens, employees of Apollo Tyres drenched in rainwater, were busy at the Juhu and Andheri areas of Western Mumbai handing out the Safe Drive Handbook on Disaster Management, containing safety tips and useful numbers, to assist citizens of Mumbai in taking precautions to ensure a safe monsoon. This activity will continue till 14 July2009, at various traffic intersections and other important locations.
Apollo Tyres reports that its Hawkz 4×4 tyre has been selected as an original equipment feature on the Indian market Mitusbishi Pajero. The Japanese 4×4, said to be named after a certain South American wild cat – Leopardus pajeros (the vehicle is sold in the UK as the Shogun), is sold with the Apollo Hawkz in size 265/70 R15.
According to media reports, Dunlop India and Falcon Tyres owner the Ruia Group is in negotiations to acquire the government owned Tyre Corporation of India Limited (TCI). The West Bengal based TCI is said to currently possess only a limited tyre manufacturing capacity, and the government began the process of divesting the ailing manufacturer in 2007. The potential price tag of such an acquisition has not been disclosed.
With a record 1,443 exhibiting companies from 47 countries and 150,000 square metres of exhibition space, Autopromotec is recognised as a leading international trade exhibition for specialised automotive products and services. This biennial event was held at the Bologna Exhibition Centre in late May. The increasing number of exhibiting companies from outside the host nation was particularly apparent this year, with a total of 468 foreign businesses from 46 countries presenting their products.
Also, despite the current global economic downturn, the continually evolving international influence of the event is manifest in the number of foreign visitors present. During the five days of Autopromotec there were a total of 101,620 visitors, 16,689 of whom were from overseas. As part of a joint agreement sealed betweenthe Italian Institute for Foreign Trade, the Italian Ministry for Economic Development and the Italian Automotive Service Equipment Manufacturers Association, the show hosted 90 trade delegations from 16 countries including: Argentina, Brazil, China, Greece, India, Iran, Israel, Japan, Mexico, Portugal, South Africa, South Korea, Sweden, Turkey, USA and Vietnam.
Despite the fact that the Apollo/Vredestein takeover contracts were signed just a month before Tyres & Accessories visited Enschede, the integration process is said to be already well underway. What’s new is the announcement that in less than a year a full range of Apollo tyres will be launched into the European market. The newly merged Apollo Vredestein will be responsible for sales and marketing of all group brands in Europe. Of course when it comes to making major changes to the Apollo brand strategy this will have to be done in consultation with Delhi, but to all intents and purposes Vredestein will be masters of their own and Apollo's destiny within the bounds of the continent of Europe and the USA. In return Apollo will take the lead when it comes to selling Vredestein-branded tyres into the new Asian market territory the recent combination of the two companies brings.
Production of natural rubber in the seven countries that account for 93 per cent of world supplies – Thailand, Indonesia, Malaysia, India, Vietnam, China and Sri Lanka – is continuing to fall. Data covering the period to May 2009 indicated that natural rubber in Thailand (the country that supplies a third of the world’s requirements) dropped 22 per cent during the first four months of 2009 to 107,175 thousand tons. In the first five months of the year Malaysian output fell 28 per cent to 47,333 thousand tons due to a combination of factors including lower than anticipated rains which slowed tapping activity, poor export demand and an ongoing replanting programme. Replanting and the resultant reduction in tappable crop area were largely responsible for production in Vietnam declining 22 per cent year-on-year in the January to May period to 11,036 thousand tons, while natural rubber output in India fell nine per cent in the first five months of the year.
Truck and bus radial capacity at several Indian manufacturers is on the rise in anticipation of upcoming new vehicle launches. The country’s national industry body, the Automotive Tyre Manufacturers’ Association (ATMA), says an estimated Rs 26,15 billion (£329 million) will be invested in TBR capacity in the years to 2011, providing an extra 3.77 million unit capacity.
This news, reported by Indian business website livemint.com, comes following a fiscal period in which commercial vehicle sales decreased by 22 per cent to 384,122 units. Yet, as the Wall Street Journal partner publication notes, industry experts believe the investment is justified. According to PriceWaterhouse Coopers analyst Abdul Majeed, the completion of a number of road infrastructure projects and the likelihood that laws will be introduced to phase out older vehicles will boost demand for new commercial vehicles.
India’s Kesoram Industries intends to invest Rs 8 billion (£100 million) into its Birla Tyres operation over the next two years. Reuters reports group chairman B.K. Birla as saying Kesoram Industries will make this investment as part of a Rs 20 million investment programme that will also see Rs 7.5 billion directed into its cement unit and some Rs 4.5 billion into “existing plants.”
Mr. Birla also named his grandson, Kumar Mangalam Birla, as his successor at the helm of Kesoram Industries. “Since Kumar Mangalam is only 42 years old, he will take over the reins of Kesoram after me. This is as per my final will, which was approved by all family members a month ago,” he said.
With an annual road toll hovering at around 100,000 deaths – one of the highest in the world – Bridgestone’s launch of its global ‘Think Before You Drive’ campaign in India is perhaps timely. The campaign, first launched in 2005 and now operating with the backing of FIA member clubs in more than 60 countries, will hopefully help Indian motorists identify the main causes of serious or fatal crashes – and implement simple safety measures before heading off.
India’s national budget is due to be delivered on July 6, and the nation’s tyre manufacturers are hoping that a sought after reduction in natural rubber duty will be forthcoming. “As in the past we are looking forward to the correction of the inverted duty structure,” said Rajiv Budhraja, director-general of India’s Automotive Tyre Manufacturers Association (ATMA). “That is the first and foremost demand.”
According to a Reuter’s news brief, the ATMA has requested the government reduce the customs duty on natural rubber to 7.5 per cent; previous news reports indicated the ATMA was seeking a 10 per cent duty. Regardless of the desired rate, the association’s goal is to provide manufacturers some relief from what is seen as an unfair tax structure. While natural rubber currently attracts a customs duty of 20 per cent, the tax on imported finished tyres is only half that.
India’s commercial vehicle radial market has long been a sleeping giant, and Michelin is determined to be around when it wakes up. Comments made by group managing partner Michel Rollier point to the company’s eagerness to set up its new factory there within a short timeframe.
“We hope the factory will open within three years,” Rollier told Europe 1 radio. Production at the new facility will focus upon truck and heavy engineering tyres, a sector “where the Indian market is promising and we are virtually absent.” Rollier added “we don’t want to miss the take-off of the Indian market.”
A new facility belonging to Continental AG subsidiary Continental Automotive (Thailand) has opened in Amata City. The 11,500 square metre factory, built with an investment of approximately five billion baht (£90.2 million), will produce powertrain diesel injectors, high pressure pumps and common rail assemblies. The production of interior electronics is also planned.
While around 70 per cent of total output will ultimately go to domestic vehicle manufacturers – the factory will start supplying the Thai market next year – the first exports to Europe, China and India are expected to get underway before the end of June.
It is cutting back in France, yet planning big in India – Michelin is reportedly planning to invest some Rs 70 billion (£887 million) there over the next decade. The Economic Times newspaper states a person directly involved in the transaction informed it that the tyre major has sought government approval to acquire a 100 per cent share in Michelin India Tamil Nadu tyres, a company formed in April 2009. This company will be responsible for establishing a greenfield production facility; the site will be set up with an Rs 40 billion (£507 million) investment in the first phase, which runs until 2016. This first phase operation is anticipated to create 1,500 jobs, and eventually half the factory’s output will be exported.
Unrest at the MRF Ltd factory in Arakkonam, India is now entering its second month, and the tyre manufacturer has voiced its hope for a swift resolution to the strike. In early June the company sent a letter to the plant’s 1400 workers, requesting their return to work.
“You are all aware of the difficulties that we are facing for the past few days due to all the unfortunate incidents that have happened,” the letter states. “Every day, our factory is suffering a loss of Rs 3.5 crore (£445,000). In these difficult circumstances, you must have been aware of the bonus and the wholesome amount to be paid every month. Therefore, be cautious and keep the evil forces at bay and cooperate with us on the path of success.”
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