“BUY OR SELL-Indian auto shares: more to travel or end of road? - Forbes” plus 4 more

BUY OR SELL-Indian auto shares: more to travel or end of road? - Forbes
Hanging Out With the Repo Man - Spectator.org
Weird noises and a window that doesn't always work - Gloucester Daily Times
Editorial: Clunker choices - Detroit News
GM and eBay join hands to sell new vehicles online - The Money Times

BUY OR SELL-Indian auto shares: more to travel or end of road? - Forbes

Posted: 11 Aug 2009 04:22 AM PDT

By Janaki Krishnan

MUMBAI, Aug 11 (Reuters) - Automobile shares have been the second best sector performer in India this year, powered by higher sales for six months in a row and unexpectedly strong earnings in the June quarter on lower commodity prices.

The sector index has more than doubled in 2009, outperforming the main index that has climbed 56 percent. Top utility vehicle and tractor maker Mahindra & Mahindra has led the rally by nearly trebling.

Analysts are upbeat on the outlook for Maruti Suzuki India Ltd, which sells every second car in the country, but are cautious on leading motorcycle maker Hero Honda Motors Ltd as poor monsoon rains could hurt rural income and dent demand in its main market.

GAS IN THE TANK

Maruti, 54.2 percent owned by Japan's Suzuki Motor Corp , remains popular with brokers after it posted a 25 percent jump in quarterly profit. Eighteen of 31 brokers rate it buy or strong buy, according to Reuters data, versus six with a sell or underperform rating.

Shares in Maruti, which has a market value of $7.6 billion, hit 1,515 rupees earlier this month, their highest since the company went public in 2003 and almost tripling from the close of 2008. They have, however, shed 15 percent in the past five days on a broad-based profit taking.

The sector index has also shed 9 percent this month.

'We are advising investors to buy Maruti. After the recent correction, it is looking good,' said Gaurav Dua, head of research at brokerage Sharekhan. 'Also, it is the market leader and its new launches are getting a good response.'

Maruti's A-Star has found strong demand in European markets such as Germany, the UK, France, the Netherlands and Greece and has sold more than 50,000 cars since it started exports in January.

Bajaj Auto, the No. 2 motorcyle maker, is being sought after the company made a re-entry into the popular 100cc bikes and has announced plans to step up production by around 25 percent this month.

'We are recommending buy on declines,' said Dua. Bajaj shares have fallen 18 percent in the last five days, but are up 173 percent on the year.

Demand for automobiles in India usually rise during the festive season that begins in August and runs till October, when most companies give annual bonuses to staff.

Vaishali Jajoo, analyst with Angel Broking also recommended Mahindra, though the weak monsoon rains could have an impact on the company, which depends on the rural market for more than 50 percent of its sales.

'That is the only thing which will affect it and the impact will be delayed for some months,' she said.

TOO PRICEY?

Hero Honda Motors, in which Japan's Honda Motor Corp has a 26 percent stake, which has gained 77 percent this year after shedding 12 percent in the past five days could be pricey because of its reliance on rural customers for its sturdy bikes.

'It is the most expensive stock among autos,' said Dua.

'They have a heavy dependence on rural sales and the lack of monsoons can hit them hard. Also with their fast pace of growth in the last few months, it will be difficult for them to sustain double-digit growth,' said Jajoo.

'We see muted growth numbers for them,' she said. 'Investors can sell Hero Honda and switch to Bajaj Auto.'

Shashi Nigam at Antique Stock Broking suggested investors book profits in top truck maker Tata Motors, which hit a 52-week high of 468 rupees early this month.

The company, which began delivering Nano, billed as the world's cheapest car, in July also makes the hatchback Indica and Indigo sedans.

While the company's Indian operations look good, its UK-based Jaguar Land Rover unit was a drag on its performance, Nigam said.

Both its Indian shares and ADRs in New York have gained more than 150 percent this year.

(Editing by Ranjit Gangadharan and Lincoln Feast)

((janaki.krishnan@thomsonreuters.com, +91-22 6636 9138; Reuters Messaging: janaki.krishnan.reuters.com@reuters.net)) Keywords: BUYSELL INDIA/AUTOS . Keywords: BUYSELL INDIA/AUTOS=2

(If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)

The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.

Neither the Subscriber nor Thomson Reuters warrants the completeness or accuracy of the Service or the suitability of the Service as a trading aid and neither accepts any liability for losses howsoever incurred. The content on this site, including news, quotes, data and other information, is provided by Thomson Reuters and its third party content providers for your personal information only, and neither Thomson Reuters nor its third party content providers shall be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon.

This posting includes an audio/video/photo media file: Download Now

Hanging Out With the Repo Man - Spectator.org

Posted: 11 Aug 2009 05:48 AM PDT

Feature

Hanging Out With the Repo Man

By Andrew B. Wilson from the July 2009 - August 2009 issue

Business for the nation's top recovery agents (better known as "repo men") is booming. It has gotten to the point that some of them are feeling downright uncomfortable about their own success.

"Joe the Plumber used to be our friend and neighbor," says J. Patrick Altes, 54, the softspoken, red-haired president of Falcon Inter national in Daytona Beach. "Now we're repoing his truck."

Altes is dealing with a surge of delinquencies and defaults—coming at the end of a long boom in Florida's real estate and construction markets. With 50 employees and a fleet of 10 "self-loading" tow trucks, which can hook and remove a car or truck from a homeowner's driveway in a matter of seconds, Altes is bringing in 400 cars and trucks per month this year, up from 175 month in early 2008.

While business is better than ever, Altes does not like having to target "fellow church members and Rotarians." It's the price he pays for moving "from crack town to the gated communities." He's spending less time with "the usual con men, travelers, and deadbeats," and more time with "good people who, through no fault of their own, are unable to pay their bills." Though sympathetic to their plight, he has put the clamps on scores of struggling or outof- work real estate agents, appraisers, mortgage bankers, merchants, carpenters, roofers, carpet layers, and—yes—plumbers.

According to national statistics compiled by MVTRAC, a Chicago-based firm, repo agents will pick up an estimated 2 million vehicles in 2009, up from 1.8 million in 2008, 1.6 million in 2007, and 1.1 million in 2002. The repossession of boats has nearly doubled over the past two years.

In the steepness of the current economic downturn, the upturn in the repo business may be likened to a movie on runaway consumption played in reverse. Think of all the fancy cars, boats, jet skis, and Harleys that were flying off dealers' lots and landing in front of peoples' homes during the economic boom. Now think of the same objects flying back the other way, landing in lots similar to, if not identical with, the places where they were first sold, where they will now be auctioned off to a new set of owners at distressed prices. This is the forcible deleveraging of America.

Even if you are biased in favor of the consumer, it would be wrong to dismiss the man responsible for retrieving those backward-flying assets as some kind of blackguard profiting from the misfortunes of others. Believe it or not, the repo man is your friend. Like the butcher, the baker, and the candlestick maker, he exemplifies the power of the "invisible hand." Without a doubt, your own affairs as a consumer or small business owner would be more difficult without him.

If you have ever bought anything on installment—from a car or a truck to the equipment needed to run a farm or a small- or medium-sized business—you can thank the enterprising and resourceful repo man for helping to make you a creditworthy risk in the eyes of the lender. You can also thank him for the fact that you pay a much lower interest rate on your installment loan than you do on your credit card, which is not secured by any collateral. You might even thank him for your job—if you still have one.

This is how Jack S. Barnes, a nationally recognized expert on the repossession and liquidation of collateral, explains it in his book Collateral Recovery, published in 2008:

The ability to repossess collateral to reduce losses from a defaulted loan, and the right to dispose of that collateral, are two of the most important laws affecting the financial health of the United States! In 1990, 41% ($288 billion) of all installment loans outstanding were for the purchase of cars. The latest report indicates enormous growth. The current report by the Federal Reserve estimates the amount of installment loans in this country to be $1.3 trillion and that 60% or $780 billion is in outstanding auto loans. The ability to repossess an automobile if the loan defaults provides the security for these loans.

Without the ability to repossess, funds would dry up…with devastating results to both the auto industry and the nation's economy. It is easy to see the immediate impact on the auto manufacturer, the corner gas station, the auto parts store, radiator shop, the tire shop, auto mechanics and dealers, fabric manufacturers, electronic manufacturers, glass manufacturers, and hundreds more. Add to that the grocer, department store, and every other merchant where those now unemployed shopped, well, the circle keeps growing.

I Decide to Pay the Repo Man a Surprise Visit

Earlier this year, a repo man knocked on the door of a friend of mine—the owner of a small business—and asked for the keys to the car. My friend had missed a couple of car payments because some of his clients had been slow in paying him, and also because he had over-stretched—leaving no margin for the possibility of late payments. Looking out the door, he saw his prized Mercedes dangling from the back of a tow truck. Like it or not, this was the old story of losing a favorite toy due to careless or negligent behavior. After arguing for a few minutes, he handed over the keys.

That incident piqued my interest in the repo trade, but it had nothing to do with how I came to know Pat Altes, Jack Barnes, and other members of the profession, including the legendary Ron L. Brown, an ex-CIA agent who has repoed "everything from a million-dollar oil rig…and 40 head of cattle…to seven prostitutes" sought as witnesses in a celebrated Hous ton murder case. (Acting, in effect, as a repo agent for the Texas Rangers, Brown was able to track the badly frightened girls down to a hiding place in Corpus Christi and secure their safety, before the murderer and his friends discovered their whereabouts—and secured their silence.)

My introduction to the repo trade came about as an unexpected result of a trip I made to Daytona Beach in mid-April. When my wife and I stopped for lunch at the famous Shores Resort & Spa, the lobby was filled with a boisterous convention crowd. Over lunch I wondered aloud about the identity of the group.

Letter to the Editor

This posting includes an audio/video/photo media file: Download Now

Weird noises and a window that doesn't always work - Gloucester Daily Times

Posted: 11 Aug 2009 03:17 AM PDT

Q: My wife drives a 2005 Nissan Maxima that has been beset by electrical problems. Since we bought it used, the passenger rear window has worked only intermittently. Recently, when she uses the remote entry, the car unlocks, but a funny buzzing noise can be heard coming from the right front door. I am afraid of being locked out if the system fails. I have tried replacing the batteries in both remotes, no luck. The right front was damaged in an accident. I have also read up on similar electrical problems online and have been unable to find any factory service bulletins or recalls. Should I bring this to the dealer? I am afraid of them changing all kinds of parts with no solution.

A: The problem with the right front door sounds like the lock actuator has gone to sleep or the wiring to it is having a problem. The right rear window also sounds like the wiring to it has a problem. Stripping down the doors and using a digital volt ohm meter on these wires should help to trace the problems. In most cases, the problem lies in the web of wires between the door and the door frame. This is the wire harness that gets flexed every time the doors are opened and closed.

Q: I have a 2000 Ford Ranger XLT truck with 85,000 miles, in great condition. Initially (a year ago) when I applied the brakes, it would either stop the truck severely (lock up) or barely do anything. After taking it to a brake service chain for the fourth time, I'm still having a problem. All rotors, drums, pads and shoes have been replaced. There are no fluids leaking, and I have been told there were no issues with air in the lines. The brakes do seem to be a little better. But now, usually after startup driving, if I don't pump the brakes a few times, when going slow and turning (i.e., pulling into a parking spot), the truck seems to continue to slide a few feet more than it should.

This is becoming scary and obviously a safety issue, as I never know whether I will stop where I want to, or if the brakes will just grab and stop severely. I am figuring it has be an air line leak somewhere. Is there anyway that this can be diagnosed?

Also, the truck seems to be losing big-time mpgs lately and a loss of power when going uphill. Could these two problems be related? Any insight would be appreciated, before I really do end up going through a "drive-through" window.

A: The Alldata information system did not have any similar problems listed. However, I sure do. There is a huge problem with the rear spring shackles. When the shackles rot out and break, the rear end shifts when you step on the brakes. Most likely, this is what is going on with your truck. Secondly, get the heck away from the national chain, go see your local NAPA auto care repair facility. There you will find ASE-certified technicians who have been trained to repair your vehicle correctly and send you back on the road safely.

Car Care Tip: Don't hesitate to ask to see the ASE (Automotive Service Excellence) credentials at the service facility you employ for car repairs.

¬¢¬¢¬¢

Larry Rubenstein is a master technician who owns a North Shore service station. His column appears every Tuesday. Write to him at Auto Scanner, care of the Gloucester Daily Times, c/o, 36 Whittemore St. Gloucester MA019130, or send e-mail to scanauto@aol.com.

This posting includes an audio/video/photo media file: Download Now

Editorial: Clunker choices - Detroit News

Posted: 11 Aug 2009 04:15 AM PDT

Buyer preferences show gas tax hike will be best option for creating more fuel-efficient fleet

The Detroit News

The cash-for-clunkers program has been hailed as a success and has just been replenished by Congress. It has boosted vehicle sales and generated some excitement in auto showrooms. But many are using the program to buy new pickup trucks and SUVs.

That fact should be instructive to Congress and the Obama administration. Vehicle buyers still like their trucks and SUVs and future government policy should take account of that fact. If government wants to nudge buyers toward smaller, more fuel-efficient vehicles, it's time to talk about a gas tax hike.

The cash-for-clunkers program offered consumers up to $4,500 to trade in their used vehicle for a new, more fuel-efficient one. The program quickly ran out of money and new funds had to be allocated.

Analysts credited the clunker program with boosting July auto sales above the level they could have otherwise been expected to reach.

Early data from the National Highway Traffic Safety Administration showed the leading choice for buyers trading their clunkers to be the Ford Focus. The top 10 included the Ford Escape, an SUV, and the Dodge Caliber, a hatchback that could qualify as a small SUV. The rest were mostly small cars.

But Edmunds.com, an auto sales analysis Web site, recalculated the top 10 selling vehicles using standard vehicle sales analysis methods. The government divided truck and SUV purchases by each model variation of such vehicles, which diluted their sales totals.

When all sales of such vehicles were counted together by Edmunds.com, two popular pickups, the Ford F-150 series and the Chevy Silverado, joined the top 10 choices for clunker traders. The Ford Escape SUV became the most popular choice, and the Jeep Patriot SUV joined the top 10 as well.

To qualify for an incentive, the mileage gains, particularly for trucks, did not have to be all that great -- as little as 2 miles per gallon for light trucks and one mile per gallon for large trucks. This isn't going to get the vehicle fleet average to 35 miles per gallon by 2016.

When four of the top 10 sellers in a program designed to increase fuel-economy as well as stimulate vehicle sales are trucks or SUVs, buyer preferences become clear. Ratcheting up fuel-efficiency requirements on auto producers won't be as effective as something much simpler -- if more politically painful: Increasing federal gasoline taxes.

This posting includes an audio/video/photo media file: Download Now

GM and eBay join hands to sell new vehicles online - The Money Times

Posted: 11 Aug 2009 05:41 AM PDT

The venture will allow customers to purchase cars and trucks online through EBay. To begin with, the project has been started by roping in some 225 dealers in California.

"Dealers who are participating see this as a great mechanism to get their products and information out to people where they're doing initial shopping and looking, which is on the Internet," said Dave Barthmuss, western regional spokesman for GM.

The tie up will allow consumers to place online bids for new vehicles on these dealerships. The eBay's normal "Buy It Now" and "Best Offer" formats would be available under the program.

Scheduled to begin on August 11, the program will run through Sept 8. Chevrolet, Buick, GMC and Pontiac brands will be up for grabs at gm.ebay.com during this period.

Substitute to dealer network
As a part of the GM restructuring plan, by the year 2010, the company will scale down its dealer network by as much as 42 percent to 3,600.

The new avenue would not only provide an opportunity to shore up the dwindling sales but also test the waters if the 'online world' proves to be a good distribution channel for a product like automobiles.

"Exploring new online distribution alternatives is a good idea as GM downsizes its brick-and-mortar distribution system," said Laura Martin, a Los Angeles-based analyst at Soleil Securities Group Inc.

GM is already using eBay for its certified pre-owned cars. Moreover, thousands of franchisees and independent dealers use eBay as an additional sales channel. However, the present arrangement with GM is EBay's first involving new vehicles.

Research suggests program should succeed
The impetus to go ahead with the tie up came from the revelation of a latest report from J.D. Power & Associates. Their study revealed that in 2008, three quarters of the new-vehicle buyers searched the internet during their decision making process of buying cars. In 2007, 70 percent of the consumers had used the internet for such a research.

The year 2008 also saw the largest year-over-year increase in online automotive shopping since 2001, revealed the J.D. Power study.

With increased number of people relying on Internet to take decisions to buy cars, the alliance should succeed.

"There's clearly an appetite on behalf of consumers to be able to negotiate price and purchase vehicles online," EBay Motors Vice President Rob Chesney said.