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Need to Know | Car makers pass on excise cut, reduce prices

Need to Know | Car makers pass on excise cut, reduce prices
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First Published: Tue, Dec 09 2008. 01 00 AM IST
Updated: Tue, Dec 09 2008. 01 00 AM IST
New Delhi: A day after the Union government announced a 4% reduction in central value added tax, clubbed together with excise duty, car makers passed on the full benefit of the duty cut to consumers. In most cases, these cuts are in addition to the hefty discounts announced last week for sales of cars in December.
Maruti Suzuki India Ltd, the country’s largest car marker, reduced the price of the Maruti 800 by Rs6,593 to Rs1.86 lakh. The Alto will now be cheaper by at least Rs8,028 to Rs2.26 lakh and the Swift has had its price reduced by Rs12,458 for the Lxi model. The company has not reduced the price of the Grand Vitara as it’s imported as a completely built unit and hasn’t benefited due to the duty reduction.
Hyundai Motor India Ltd reduced the price of the Santro by Rs8,834 to Rs256,299 and the i10 by Rs11,247 (new price: Rs325,927). The i10 comes with free insurance and Rs5,000 worth of accessories in a company offer valid till 15 December. Toyota Kirloskar Motor Ltd cut the price of the Altis by Rs34,100 and the Innova by Rs23,980. Hindustan Motors Ltd said it would reduce prices of the Lancer by Rs25,000 to Rs7.74 lakh.
Staff Writer
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Jet may lease planes to Gulf Air, Turkish Airlines
Mumbai:Jet Airways (India) Ltd, the nation’s biggest domestic carrier, plans to lease five aircraft to Gulf Air Co. and Turkish Airlines Inc. to cut costs.
Jet will lease two Airbus SAS A330 aircraft to Gulf Air for four months, the carrier said in a statement to the Bombay Stock Exchange on Monday. Three Boeing Co. 777 planes will be leased to Turkish Airlines for six months, it said.
The aircraft became available after Jet restructured some routes and undertook other cost saving measures, the statement said.
Bloomberg
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RBI may further cut repo rate by 150 basis points
Mumbai: The Reserve Bank of India (RBI) could cut its repurchase auction rate, at which it infuses cash into the banking system, by 150 basis points (bps) more by mid-2009, Goldman Sachs Group Inc. said on Monday.
The reverse repo rate, at which the central bank absorbs surplus cash, could be cut by a further 100 bps, the financial firm said in a note.
RBI on Saturday cut both its key short-term rates by 100 bps each to boost economic growth in the wake of a global credit crisis and recession in some major economies.
The repo rate is now at 6.5%, and the reverse repo rate has been reduced to 5%, its lowest in more than three years. Goldman expects a corridor between 4-5% between the reverse repo and repo rate by mid-2009.
“The risks are clearly towards even more aggressive cuts as growth continues to falter, and inflation declines rapidly”, Tushar Poddar, economist at Goldman, said in the note.
Reuters
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UBI, HDFC Bank cut prime lending rate
Mumbai: At least two banks cut their lending rates on Monday, responding to the policy rate cut by the Reserve Bank of India.
Public sector Union Bank of India cut its prime lending rate (PLR), or the rate at which it lends to its best customers, by 75 basis points to 12.5%, effective 8 December. One basis point is one hundredth of a percentage point. With this cut, the bank has reduced its rates by 150 basis points in past one month.
India’s second largest private sector lender, HDFC Bank Ltd reduced its PLR by 50 basis points to 16% in two stages of 25 basis points each effective 15 December and 1 January.
Private sector lender Yes Bank Ltd had cut its PLR by 50 basis points to 16.5% on Saturday. India’s second biggest lender ICICI Bank Ltd. has reduced its home loan rate by 150 basis points to 11.5% for loans up to Rs20 lakh. However, it did not comment on a PLR cut.
Anup Roy
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Sugar output falls 21% as mills delay crushing
Mumbai: Sugar production in India, the world’s second biggest producer, fell 21% in the first two months of the crop year that began 1 October after farmers in the biggest cane growing states delayed crushing.
Output was 1.4 million tonnes (mt) in October and November, down from 1.77mt a year ago, Vinay Kumar, managing director of the National Federation of Cooperative Sugar Factories Ltd, said.
Lower output may reduce exports from the South Asian nation, worsening a global shortfall.
Sugar cane production may decline to 294.66mt in the year ending 30 June, 13.5% less than last year, after farmers shifted to crops such as grains, according to the farm ministry.
Bloomberg
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Court rules employee strike at Bosch illegal
Mumbai: A strike by employees at the Bosch factory near Jaipur has been ruled illegal by the government.
The government of Rajasthan, labour department has ordered all striking employees to report to work immediately, the company said in a release.
Workers at the Mico Bosch Labour Union had been on strike since 12 November 2008 protesting the retrenchment of workers and demanding higher wages. The strike had resulted in production to a fourth and the factory was down to making only 350 pumps a day.
Samar Srivastava/ Shally Seth
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Govt stimulus may not be effective: JPMorgan
Mumbai: JPMorgan Chase and Co. said on Monday it was sceptical about the government’s ability to boost spending in the remaining months of the 2008-09 fiscal year, given its preoccupation with elections.
The government on Sunday unveiled a $4 billion (Rs20,000 crore) stimulus package of extra spending for the rest of this fiscal. The government will also issue an extra $9 billion of bonds by 20 February, slightly higher than market expectations of $6-8 billion.
JPMorgan said the government might implement additional measures in the coming weeks but concerns exists that from the time of the announcement of the next election date and the formation of the new government, major fiscal policy change will not be possible under the Election Commission rules.
Reuters
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Jeya Kumar resigns as CEO of Mphasis
Mumbai: IT firm Mphasis Ltd on Monday said Jeya Kumar has resigned as a Chief Executive Officer (CEO) of the company. In a filing to the Bombay Stock Exchange, Mphasis said that Jeya Kumar would continue as the CEO and director on the board of the company till a successor is identified and smooth transition is ensured. Prior to Mphasis, Jeya Kumar was with Sun Microsystems.
PTI/Staff Writer
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Govt nod for Rs28,303 cr worth road projects
New Delhi: The government in November approved 21 highway projects to be built with private funding and are estimated to cost Rs28,303 crore, the finance ministry said in a statement.
Since January 2006, a government panel has approved 87 infrastructure projects worth Rs89,891 crore.
Reuters
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Mitsui plans Rs5,000 cr logistics park in India
Chandigarh: Japanese firm Mitsui and Co. will set up an integrated logistics park in Haryana at an investment of Rs5,000 crore. On Monday, the Japanese firm signed a memorandum of understanding with Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) and IL&FS Infrastructure Development Corp. for setting up the park in Haryana.
PTI
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‘Sebi to allow interest rate futures soon’
New Delhi: The Securities and Exchange Board of India (Sebi) will allow exchange-traded interest rate futures in January, a senior official said on Monday.
“We are on track to launch interest rate futures. It will be launched by January”, T.C. Nair, director at the markets watchdog told an industry conference. Sebi is also considering launching exchange-traded corporate bonds and would unveil it in a “couple of months”, he added. “We are looking at an exchange-traded corporate bond market, because there is more transparency and manipulations are not possible,” Nair said.
Nair also hinted at the possibility of a fourth exchange for currency futures in the near future. “There are some banks and financial institutions which have applied and we are considering their proposal,” he said.
PTI & Reuters
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‘NSE may get Financial Tech out of vendor list’
New Delhi: Financial Technologies (India) Ltd (FTIL) on Monday alleged that the National Stock Exchange (NSE), which has kept it on the “watchlist”, was also attempting to remove the firm from the panel of software vendors.
“NSE is also attempting to remove FTIL from its empanelled list of vendors rather than responding to the queries and resolving the issue,” FTIL said in a public notice published in ‘The Economic Times’. The row between the two started when FTIL sought permission for currency derivatives Application Protocol Interface (API) access to integrate with the current CTCL solution NSE members were using. The integration with CTCL is believed to help brokers to access all markets on a single screen. FTIL also demanded clarification from NSE for keeping it on the “watchlist”.
PTI
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CCMP Asia raises $1.2bn for third buyout fund
Hong Kong: Private equity firm CCMP Capital Asia Ltd said on Monday it raised $1.2 billion (Rs5,904 crore) for its third buyout fund, pulling the money together at a time when lending is tight, volatility high and valuations falling.
The new buyout fund will focus on sectors such as consumer and retail, industrial manufacturing and services in particular, Liu said in the statement.
CCMP Capital Asia also said it was changing its name to Unitas Capital when its affiliation with CCMP ends on 30 January.
Liu will remain chief executive of Unitas, the firm said.
Reuters
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Mayfield raises $110 mn India-dedicated fund
Mumbai: Venture capital firm Mayfield Fund has raised its first India-dedicated fund of $110 million (Rs541 crore), managing director Vikram Godse said on Monday.
The firm, which had earlier invested in India out of a global corpus, will continue to back growth stage companies catering to the domestic market. “Clearly, it is a tough environment, but our investors showed confidence in our investment thesis,” said Godse.
The firm, will invest the fund in growth deals in specialty retail, infrastructure ancillary and consumer ancillary industries such as logistics.
“We will also look at such companies in water and clean energy sectors,” said Godse. The firm plans to invest in 8-10 investments across the fund.
Namitha Jagadeesh
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New York Times Co to borrow $225 mn
New York: Media house The New York Times Co. is planning to borrow about $225 million (Rs1,107 crore) against the firm’s headquarters building in mid-Manhattan, as a measure to tackle the cash flow squeeze.
“The New York Times Co. plans to borrow up to $225 million against its mid-Manhattan headquarters building, to ease a potential cash flow squeeze as the company grapples with tighter credit and shrinking profits,” the firm said in a report published online.
PTI
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Cement makers may not pass on Cenvat benefit
New Delhi: The Union government’s effort to boost infrastructure through a stimulus package may not help as cement manufacturers are unlikely to pass on the benefit of a 4% cut in Cenvat due to increase in the Indian Railways freight rate.
Effective from Monday, the railways has increased freight rates on cement, coke and coal by up to 8% per tonne.
“It is a very complex situation. The increase in freight rates by the railways has compounded the entire thing. We are still working on how to address the issue,” Cement Manufacturers Association president H.M. Bangur said on Monday. He said due to the change in classification of cement from Class-140 to Class-150, the freight charges would now be costlier by about 8%.
PTI
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India tops Bric nations in real estate transparency
New Delhi: India as an investment destination has steadily moved up the value chain over the last six years with increasing transparency in the real estate sector, a study said here.
According to the Jones Lang LaSalle 2008 Real Estate Transparency Index, India scores highest among Bric (Brazil, Russia, India and China) nations with a large number of listed real estate players that adhere to the stringent guidelines by Securities and Exchange Board of India.
“The transparency Index helps the investor to assess the risk that can be associated against the expected returns across developing nations,” Jones Lang LaSalle Meghraj chairman and country head Anuj Puri said in a statement.
PTI
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DLF approaches govt to de-notify SEZ in Delhi
New Delhi: DLF Ltd has approached the commerce ministry for the de-notification of its 25-acre information technology (IT) special economic zone (SEZ) in New Delhi. “The construction on the SEZ has not started yet,” a DLF executive with knowledge of the development, declining to be identified, said. “We have applied for a de-notification because of the global economic slowdown. We feel that there will not be much demand for an IT SEZ.” Such zones enjoy fiscal incentives like lower duties and levies.
CNBC first reported this new on Monday. The SEZ adjoins the 38-acres of land that DLF had bought from DCM Shriram Consolidated Ltd and the Lohia Group in August 2007. DLF had an in-principle approval to develop an IT SEZ on this land.
Staff Writer
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Unitech, Idea awarded spectrum in Kolkata
New Delhi: The Union government on Monday awarded start-up spectrum to telecom operators Unitech Wireless Ltd and Idea Cellular Ltd in Kolkata to enable them to start operations.
In a statement to the Bombay Stock Exchange, Unitech said it had been allocated 4.4MHz of spectrum in 1800MHz GSM band in respect of Haryana, Himachal Pradesh and Kolkata service areas, while Idea said it had got radio waves for Kolkata circle.
PTI
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Trai explores promoters’ equity lock-in clause
New Delhi: The Telecom Regulatory Authority of India (Trai) will soon issue a consultation paper seeking the views of industry and experts on a proposal of the Department of Telecom, or DoT, to lock promoters’ equity in telecom companies for a certain period.
The government has referred two issues—the three-year lock-in period and spectrum charges for 3G and 2G services—to the telecom regulator, Trai chairman Nripendra Misra said.
The move follows two new telecom players, Swan Telecom Pvt. Ltd and Unitech Wireless Ltd, selling their stakes to foreign companies at high premiums after being allotted spectrum at a nominal price.
DoT has proposed a three-year lock-in period for promoters’ equity to avoid major shareholders (who have over 10% in a company) selling their stake at a premium even before starting the services.
PTI
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Taliban chief warns of more violence to come
Kabul: Fugitive Taliban leader Mullah Mohammed Omar is promising more violence over the coming year, even as the US plans to deploy thousands more troops in hopes of turning around the deteriorating war in Afghanistan.
In a statement posted on Sunday on a website, Omar also rejected Afghan President Hamid Karzai’s calls for peace talks until foreign troops leave the country.
AP
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‘Aid to Pakistan must be linked to terror record’
New York: Describing Pakistan as a “failed State,” an influential American lawmaker has underlined the need for the US to tie aid to Islamabad with the Islamic nation ensuring that the lawless areas bordering Afghanistan are not used by terrorists to launch attacks such as in Mumbai.
If Pakistan is not able to do that, the US itself should go in, Congressman Frank Pallone told a meeting organized to pay homage to the victims of Mumbai terror attacks.
PTI
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Garments exports slide for third month: AEPC
New Delhi: Garment exports continued to slide for the third month in a row, mainly due to falling sales in the US, according to the Apparel Export Promotion Council (AEPC).
In October, apparel exports from India totalled $658 million (Rs3,238 crore), down 9.62% from $728 million last year. Apparel imports by the US from India were down 4.08% between January and September over a year-ago period. “Exports of garments from India are likely to fall 24% short of the $11.62 billion target for the current fiscal (2008-09) and may total up to $8.78 billion,” AEPC chairman Rakesh Vaid said.
India, the fifth largest exporter of apparels, shipped $9.69 billion worth of garments worldwide in 2007-08.
PTI
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First Published: Tue, Dec 09 2008. 01 00 AM IST