“India's July auto sales bring cheer; stocks upbeat - Forbes” plus 4 more

India's July auto sales bring cheer; stocks upbeat - Forbes
July auto sales bring cheer; stocks upbeat - Economic Times
City fire department struggles to collect fees for ambulance service - McAlester News-Capital & Democrat
'Clunkers' program gets mixed reviews - Mansfield News Journal
ArvinMeritor, TRW earnings drop - Detroit News

India's July auto sales bring cheer; stocks upbeat - Forbes

Posted: 05 Aug 2009 03:39 AM PDT

By Janaki Krishnan

MUMBAI, Aug 5 (Reuters) - Cars and utility vehicle sales in India grew about a third in July, their best performance in a year, thanks to new launches and easier availability of finance, raising hopes for a strong pick up in the coming months.

The revival, which began in February after a six-month slide, has been mainly led by cars, especially in the compact segment, spurred by launches of new models such as Maruti Suzuki's Ritz premium hatchback and Tata Motor's much-hyped Nano.

Maruti, India's top carmaker in which Japan's Suzuki Motor Corp has a 54 percent stake, reported a 33.4 percent jump in July sales, also riding on strong demand for its Swift and A-Star exports.

The company, which sells every second car in India, has posted higher sales for six months in a row and its June quarter profit unexpectedly jumped a quarter, helped by lower commodity prices.

On average, July sales for Maruti, Tata, Mahindra & Mahindra Ltd, the country's top utility vehicle and tractor maker, and Hyundai Motor India have risen by about one-third, according to Reuters calculations.

Official industry-wide figures are expected next week.

The improving outlook has lit a fire under automobile stocks, with Mahindra and Maruti leading the by way, both rising about 80 percent in the past three months.

Shares in Maruti, which has a market value of $9.1 billion, hit 1,515 rupees on Tuesday -- their highest since the company went public in 2003.

'If auto sales show further growth the stocks will rise more. I believe there is further upside to these stocks,' said Milind Pradhan, head of equities at Standard Chartered-STCI.

The auto sector index has rallied 64 percent in the past three months, more than double the 31 percent rise in the main index.

'Besides the improving finance availability in the automobile sector, it is the slew of new launches in the past few months that has helped the automakers to increase their volumes recently,' brokerage Sharekhan said in a note.

The rebound is in sharp contrast to troubles in major world markets, where sales have crumbled in the past 12 months due to an economic downturn and tight credit markets, driving U.S. firms General Motors and Chrysler to bankruptcy and restructuring.

TRUCKS IN SLOW LANE

But Indian trucks sales, which are seen as a barometer of economic activity, are yet to pick up.

Top truck maker Tata Motors, which also owns the premium Jaguar and Land Rover brands, reported a 27 percent rise in trucks sales in July, helped mainly from its small trucks. Demand for medium and a heavy trucks remain sluggish.

Deepesh Rathore, auto analyst at IHS Global Insight, said the research agency was set to upgrade its growth forecast for cars and small trucks later this year although there was the risk of interest rates rising at some point when the economic picks up.

'Our original forecast for 2009 was 5 percent. But we are watching the sales ... we will look at this month's sales and what they have for the festive season and then we are thinking of raising our forecast to 7 percent,' he said.

The festive season starts in August and extends to October.

If crude climbs beyond $80 a barrel it will start to pinch auto sales, but rising prices of steel and aluminium will not have an immediate impact because of long-term contracts already tied up, Rathore said.

Brokerage Indiainfoline said it expected sales and profit margins to improve for at least another two quarters.

(Editing by Ranjit Gangadharan and Lincoln Feast)

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

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

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July auto sales bring cheer; stocks upbeat - Economic Times

Posted: 05 Aug 2009 03:17 AM PDT

MUMBAI: Cars and utility vehicle sales in India grew about a third in July, their best performance in a year, thanks to new launches and easier availability of finance, raising hopes for a strong pick up in the coming months.

Maruti, India's top carmaker in which Japan's Suzuki Motor Corp has a 54 percent stake, reported a 33.4 percent jump in July sales, also riding on strong demand for its Swift and A-Star exports.

The company, which sells every second car in India, has posted higher sales for six months in a row and its June quarter profit unexpectedly jumped a quarter, helped by lower commodity prices.

Official industry-wide figures are expected next week. The improving outlook has lit a fire under automobile stocks, with Mahindra and Maruti leading the by way, both rising about 80 percent in the past three months.

Shares in Maruti, which has a market value of $9.1 billion, hit 1,515 rupees on Tuesday -- their highest since the company went public in 2003.

"If auto sales show further growth the stocks will rise more. I believe there is further upside to these stocks," said Milind Pradhan, head of equities at Standard Chartered-STCI.

The auto sector index has rallied 64 percent in the past three months, more than double the 31 percent rise in the main index.

"Besides the improving finance availability in the automobile sector, it is the slew of new launches in the past few months that has helped the automakers to increase their volumes recently," brokerage Sharekhan said in a note.

The rebound is in sharp contrast to troubles in major world markets, where sales have crumbled in the past 12 months due to an economic downturn and tight credit markets, driving US firms General Motors and Chrysler to bankruptcy and restructuring.

TRUCKS IN SLOW LANE

But Indian trucks sales, which are seen as a barometer of economic activity, are yet to pick up.

"Our original forecast for 2009 was 5 percent. But we are watching the sales ... we will look at this month's sales and what they have for the festive season and then we are thinking of raising our forecast to 7 percent," he said.

The festive season starts in August and extends to October. If crude climbs beyond $80 a barrel it will start to pinch auto sales, but rising prices of steel and aluminium will not have an immediate impact because of long-term contracts already tied up, Rathore said.

Brokerage Indiainfoline said it expected sales and profit margins to improve for at least another two quarters.

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City fire department struggles to collect fees for ambulance service - McAlester News-Capital & Democrat

Posted: 05 Aug 2009 08:18 AM PDT

Published: August 05, 2009 09:24 am

City fire department struggles to collect fees for ambulance service

PUBLIC SAFETY | Calls going up but revenue falls; FD claims billing backlog

By Kandra Wells
Staff Writer

McAlester's city council last week tabled two fire department purchases, including a plan to contract out billing and collections for ambulance services.

Over the past four years, municipal ambulance runs have increased an estimated 80 percent, from about 100 each month in 2006 to 180 this year. But the city billed more than $500,000 in ambulance services last year, down about 15 percent from the previous year and expected to fall again this year. Fire officials say that's because billing for those ambulance runs is so far behind, even with part-time and temporary help hired for the task.

"It is just overwhelming," Fire Chief Harold Stewart told the council at its July 28 meeting.

The agency hopes to hire Intermedix of Fort Lauderdale, Fla., to automate billing each time a city ambulance is used.

The council deferred review of the 61-page proposal to its Audit and Finance Committee, tabling a decision until the Aug. 25 council session.

The Intermedix cost would be 10 percent of the fees it collects, and 20 percent for those delinquent fees sent to collections.

Presently the city pays a 30 percent capture fee for delinquent collections.

Another bidder for the job was RAM Software Systems of Slippery Rock, Pa., at a cost of $11,882 for the first year, plus 7 percent of all collections, plus 30 percent for delinquent collections. After the first year, RAM's annual cost declines to $3,600 , in addition to the 7 percent fee, and 30 percent for delinquent collections.

According to Stewart, another option would be hiring a part-time employee and buying new software at a cost of $63,683 for the first year. After that the cost would be an estimated $28,642 per year, plus the 30 percent now paid for any delinquent collections.

In other Fire Department action July 28, the council tabled the purchase of a $22,944 truck from an Oklahoma City auto dealer so that local bids could be sought. The money comes from a 2008 state grant for a truck outfitted especially for fighting grass and brush fires. According to Stewart, recent ice storms have left "a heavy fire load in much of the underbrush" in and around the city.

Stewart explained that the Oklahoma City auto dealer, Bob Hurley, was bidding a reduced cost as a state contractor. He told councilors one local dealer, Nix Ford, had bid $810 more than Hurley's state contract cost.

Also pulled from the council agenda at the July 28 meeting was the purchase of another city truck for the Parks Department, also to solicit local bids.

In other Fire Department action at the meeting, the council approved spending $52,447 in equipment to outfit the new fire truck, once it is purchased.

In a capital project request submitted in March for this year's budget, Stewart had estimated the equipment would cost $30,000.

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'Clunkers' program gets mixed reviews - Mansfield News Journal

Posted: 05 Aug 2009 07:42 AM PDT

MANSFIELD -- The federal government's "cash for clunkers" program is proving to be a mixed bag for local dealers and their customers.

Both feel the Car Allowance Rebate System has been good financially, but they are not happy with paperwork delays and they wonder whether it will have any long-term effect.

"In the short term, it's been a wonderful thing, and I truly think it's been a plus because it's generated sales that probably would not have happened except for the stimulus," Graham Auto Mall general manager Ken Williams said. "There also are a lot of hoops to jump through to process the sales, some people don't have their registration or certificate of insurance and the (federal registration) Web site is overloaded."

The biggest concerns for Williams and Dirk Schlutter, president of Whitey's Auto Group, were the time it is taking for application approvals and the recent announcement that the initial $1 billion allocation for the program is nearly exhausted.

The two said they have sold quite a few cars, the applications for which are approaching the maximum 10 days federal officials said they would need to review and approve them.

"It just seems like they were not prepared," Schlutter said. "I've heard that some dealers have a lot of cars sold and can't get them filed into the system."

Ryan Sponsler, vice president of the Donley Auto Group, said it seems the program has cleaned up some problems and paperwork is moving more quickly.

Sponsler called the program a good shot in the arm for dealers leading into the fall. He said sales success the rest of the year, particularly after the program ends, will depend greatly on the overall condition of the U.S. economy.

Schlutter was not convinced the program will do enough to correct the auto sales slump.

Williams said it could take time for dealer inventory of fuel-efficient cars to recover after the program wraps up.

Most customers visiting dealer showrooms Tuesday said they probably would have waited to buy a new vehicle if cash for clunkers had not come along. Clifford and Marilyn Johnson, of Mansfield, were giving up a 1992 Ford F-150 for a new Toyota.

"Four or five years ago we brought (the truck) in and the dealers offered us $300 for it," Marilyn Johnson said. "The program definitely was an incentive to make the purchase this time -- no question."

Clifford Johnson said it is good the program is getting gas-guzzlers off the road. He said the only problem he has had is that he test drove a car, shopped around and came back to find the first car had been sold.

Chuck and Kathy Kirchberg were trading in a pickup for a fuel-efficient Hyundai that Kathy will drive to work in Bucyrus.

"Our original idea was to drive the truck until we couldn't drive it any more," Chuck Kirchberg said. "I'm not doing this strictly for the CARS incentive, but the timing was right."

Chris McQuillen, a retired Mansfield resident, searched for two years for a good deal to replace her Jeep. She found a Honda she felt will allow her to save on gas. She said the cash for clunkers program will help the country go a little more green.

"It's only a little bit, but if we can cut emissions, use less gasoline and be less dependent on other countries, don't you think that's a good thing?"

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ArvinMeritor, TRW earnings drop - Detroit News

Posted: 05 Aug 2009 08:18 AM PDT

But other financial results show better times may be ahead for Troy, Livonia auto suppliers

Alisa Priddle / The Detroit News

Financial results at ArvinMeritor Inc. and TRW Automotive Holdings Corp. Tuesday showed there might be light at the end of the tunnel for the restructured suppliers.

Earnings for both were down from last year, but there were positive signs in their cash generation and ability to retain liquidity to ride out a year that will be challenging with uncharacteristically low production volumes.

ArvinMeritor reported third-quarter results based on its fiscal year. The Troy-based supplier's sales of $993 million were down 47 percent from last year. Cash flow was $99 million compared with $114 million a year ago.

TRW's second-quarter sales of $2.7 billion were down 39 percent from 2008. But the Livonia-based automotive supplier of safety systems said it was encouraged by $70 million in operating income, largely attributed to restructuring. TRW's global work force shrank 20 percent by cutting 5,200 employees this year and 10,000 in 2008, said chief executive John Plant. Factories have been closed and consolidated to be profitable at lower volumes.

ArvinMeritor is reinventing itself as a commercial-vehicle supplier and made a major move to exit the light-vehicle industry Tuesday with the signing of an agreement to sell its wheels business to a Brazilian company for $180 million.

ArvinMeritor hopes to finalize the deal with Iochpe-Maxion S.A., which makes wheels and frames, by Sept. 23, said ArvinMeritor chief executive Chip McClure.

Approvals are still needed from the U.S., Brazil and Mexico governments, where Iochpe-Maxion has operations, and financing must be finalized.

If the sale proceeds, ArvinMeritor expects to meet all loan covenant obligations for the next 12 months, McClure said.

ArvinMeritor has signed agreements to divest the majority of its chassis businesses as well. ArvinMeritor also wants to sell the body division on the light-vehicle side of the business, but those efforts are at an early stage, McClure said.

On the commercial vehicle side, the supplier has new contracts to supply axles to Navistar, Chinese bus company Yutong Group Co. Ltd., and a multi-year agreement with Daimler Trucks North America.

For the quarter, net loss was $162 million, compared with net income of $44 million in the third quarter of fiscal year 2008. Included are net losses of $134 million from discontinued operations as the company continues to restructure and divest.

At TRW, the second-quarter net loss of $11 million with net earnings of $127 million in the prior-year period. In that loss is $26 million in restructuring charges. Restructuring costs in the third quarter are expected to be $15 million.

TRW's Plant said he sees the industry stabilizing and forecasts production this year will be 8 million units in North America and 16.4 million units in Europe. TRW expects full-year sales to range between $10.5 billion and $10.9 billion with third-quarter sales forecast at $2.8 billion.

"We remain optimistic the first half of 2009 was the trough in global automotive production for the current downturn," Plant said. "Vehicle production forecasts are indicating higher levels of production for the remainder of 2009 and into 2010."

apriddle@detnews.com (313) 222-2504