UMW Holdings Bhd subsidiary
UMW Corporation Sdn Bhd has proposed to acquire
two automotive components manufacturers in
India for a total of RM74.71 million.
In a statement yesterday, UMW said UMWC had
signed two separate share sale agreements
with the vendor Datuk Muthukumar Ayarpadde
for the acquisition of 51% of MK Autocomponents
Ltd (MKAL) for US$22.52 million (RM71.62 million)
and 50% of MK Automotive Industries Ltd (MKD)
for US$970,993 (RM3.09 million). MKAL owns
Sathya Auto Private Ltd (SAPL) and Castwel
Autoparts Private Ltd (CAPL). SAPL makes mechanical
jacks, radiator caps and sheet metal components,
while CAPL produces aluminium gravity die
castings, aluminium alloys, water pump body,
cover and brackets.
UMW
said MKD owned 50% of Dongshin Motech Private
Ltd (DMPL), which is the major original equipment
manufacturer (OEM) for stamped automotive
body parts for Korean car manufacturers. In
a separate statement, UMW said its 65% owned
subsidiary UMW India Ventures (L) Ltd (UMWIV)
had entered into a share sale agreement with
Jogen N Buragohain for the acquisition of
a 60% stake in Jaybee Drilling (P) Ltd (JDPL)
for US$1.89 million (RM6.02 million).
It had also entered into a share subscription
agreement with Jogen and UMW Sher (L) Ltd,
a company wholly owned by UMWIV, for the subscription
of up to 40% of the enlarged paid-up capital
of the latter for US$2 million. UMW said upon
completion of the exercises, JDPL would be
the operating company for the charter hire
onshore drilling activities in India while
UMW Sher would be the asset owner holding
all new assets required for the operations
of the onshore drilling activities in India.
UMW said the proposed acquisitions of the
automotive component business and the formation
of the joint venture in oil drilling would
strengthen its manufacturing and engineering
division as well as its oil and gas exploration
and development support operations. Meanwhile,
Bernama quoted UMW managing director Datuk
Dr Abdul Halim Harun as saying in Melaka that
UMW expected to record double-digit year-on-year
growth for its first quarter ended March 31,
2008. He said the group expected the result,
which would be released soon, to be better
driven by strong performance of its automotive
and oil and gas businesses.
Abdul Halim said the group would continue
to launch new car models going forward otherwise
it may lose its market share. He said demand
for the Camry, Unser, Vios, Rush models would
continue to be strong and it expected to sell
over 90,000 units of all models and marques
this year from 82,000 units last year. On
the oil and gas business, he said a significant
growth this year was expected following strong
global demand for the products and services.
He said the company also planned to list the
unit on Bursa Malaysia as UMW Oil & Gas
Bhd this year. UMW derives 60% of its business
from the auto division, oil and gas (25%)
and other businesses (5%).
Source: http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Article_795ab4a4-cb73c03a-c1186f00-12466e49
Automobile sales drop
4.7% in 2007-08
The total automobile sales
in India dropped by 4.7 per cent during the
fiscal year 2007-08 at 9,648,105 units as
compared to 10,123,988 units in the last financial
year.
According to the figures released
by the Society of Indian Automobile Manufacturers
(SIAM) today, the domestic passenger car sales
rose by 11.79 per cent in 2007-08 to 12,03,531
units from 10,76,582 units in the April to
March period of the earlier fiscal.
Motorcycle sales in the country
during the year were down by 11.9 per cent
at 57,68,341 units, against 65,47,195 units
in 2006-07.
While total two-wheeler sales
in FY'08 also slipped 7.92 per cent at 72,48,600
units, compared to 78,72,334 units in the
last year.
The sale of commercial vehicle
sales during the 2007-08 fiscal increased
by 4.07 per cent to 4,86,817 units from 4,67,765
units for the year, SIAM said.
Sales of the domestic passenger
car rose by 12.2 per cent in March 2007-08
to 128,074 units from 114,145 units in the
same month last year.
As per SIAM figures, motorcycle
sales in the country during the month was
down by 0.04 per cent at 506,884 units, against
507,124 units a the same month year ago.
Total two-wheeler sales in
March also slipped by 0.41 per cent at 630,976
units, compared to 6,33,591 units in the same
month last year.
Commercial vehicle sales
during the month increased by 14.16 per cent
to 56,262 units from 49,281 units for the
year-ago period, SIAM said.
Indian vehicle
makers to post mostly lower profits
India's top vehicle
makers are set to post mostly lower quarterly
net profits as high commodity prices and interest
rates weighed on margins and slowed sales
in Asia's third-largest economy.
But greater economies of scale
as production facilities expand and a cut
in the excise duty on small cars, motorbikes
and buses will offset pressure in the coming
quarters, analysts said. Top car maker Maruti
Suzuki India, No 1 motorbike maker Hero Honda
Motors and leading utility
vehicle maker Mahindra &
Mahindra are forecast to report gains, helped
by modest sales growth and cost efficiencies.
But other vehicle makers,
including top truck
maker Tata Motors, are set to post declines
as higher costs bite. Asian steel makers,
passing on their own higher costs, have asked
automakers and other users to accept price
hikes of 20-40 percent or more in recent months,
while prices for rubber, oil and other raw
materials have also risen sharply.
"Factors such as increasing
input costs and greater volatility in foreign
currency exchange rates, coupled with lack
of traction in volumes have been areas of
concern," said Amit Kasat, auto
analyst at brokerage Motilal Oswal.
"(But) the worst phase
of the volume decline and stagnation in profitability
has been negotiated. The benefits accruing
from productivity improvement and cost reduction
would continue to partially offset the pressures
from rising input prices."
The Indian economy has grown
at an average rate of 8.75 percent in the
last four years, but is expected to slow to
8.1 percent in the year to March 2009, a Reuters
poll showed. Firmer interest rates, designed
to check rising inflation, have bumped up
vehicle loan rates by 200-300 basis points,
and depressed demand for motorbikes and heavy
trucks in particular.
It has also eased the pace
of manufacturing, forcing vehicle makers to
cut inventory levels and adjust production.
But a cut in the excise duty in February on
small cars and buses to 12 per cent from 16
per cent, and on bikes and scooters
to 16 per cent from 24 per cent, will boost
demand.
New model launches, particularly
of passenger vehicles, and new legislations
on emissions and safety will also encourage
demand for trucks and buses in the long-term,
analysts say. Maruti gains Total car sales
in India in the year ended March rose 11 per
cent from a year earlier to 1.2 million.
Passenger vehicle sales are
widely forecast to top 2 million units by
2010. Maruti Suzuki, majority owned by Suzuki
Motor Corp, is forecast to post a 3 per cent
gain in net profit to 4.6 billion rupees ($115
million), helped by sales of more premium
cars like the new DZire sedan.
Competition for Maruti will
come from Nano, a car from Tata Motors priced
at about $2,500 and scheduled for launch later
this year. Bike maker Bajaj Auto is also building
a $3,000 car with Renault and Nissan
Motor.
Tata Motors, which recently
agreed to buy Ford Motor Co's Jaguar and Land
Rover brands, is forecast to post a 6.5 per
cent decline in profit to 5.4 billion rupees
on the back of sluggish sales of high-margin
medium and heavy trucks.
Commercial vehicle sales edged
up 4 percent in 2007/08, on the back of light
trucks like the Tata Ace, slowing from an
average growth of more than a fifth in the
previous three years. The segment is dominated
by Tata and Ashok Leyland Ltd, which has ventures
with Nissan Motor. New launches are planned
by a several producers including a venture
of Mahindra and Navistar International; Volvo
with Eicher Motors, and Daimler with the Hero
Group. The auto index fell 20 per cent in
the March quarter, compared to a 23 per cent
decline of the key index.
