News : 12 October 2008

News digest

Compiled by Clive Goldthorp

1) Aston Martin

Aston Martin fans queue up to buy a One-77 at £1.2m
Birmingham Post, 10th October, 2008

Car enthusiasts are ignoring the world financial crisis to get their names down for a £1.2 million new car. UK luxury vehicle company Aston Martin has had around 100 expressions of interest for its new limited edition 200mph car codenamed the One-77. The 7.3-litre vehicle is being made at the company’s plant at Gaydon, Warwickshire, and is due to be available in the last three months of next year.

With just 77 being manufactured, some will be unlucky. It is thought that those keen to buy will have to put down a deposit of around £200,000. ‘It’s fabulous we’ve had so much interest in the new car,” said Aston Martin spokesman Matt Clarke. He went on: ‘Perhaps this shows that there are certain levels of affluence which are just not affected by the economic downturn. ‘We will try to be as fair as possible in working out just who will be getting the new car. There has been a lot of interest from people abroad, particularly from Russia, the Middle East and China.”

2) Jaguar and Land Rover

Jaguar boss calls for UK government support
John Revill, Automotive News Europe 10th October, 2008

The boss of Jaguar Land Rover has called for more action from the UK government to boost car sales by restoring consumer confidence. Jaguar Land Rover CEO David Smith met UK Prime Minister Gordon Brown to discuss the current financial crisis, which has been blamed for falling car sales across Europe.

“The bold and concerted actions announced by our government this week to unblock the banking system and the vital first cut in interest rates from the Bank of England are welcome, but we still need to take action to stimulate the real economy,” Smith said. He said the current situation was having a severe impact on the automotive and supplier industries, and could lead to job losses.

Jaguar Land Rover is already cutting production at its three plants in the UK in response to falling sales in Europe. The company’s sales are down 19.4 percent to 72,150 in the first eight months of 2008, according to the European manufacturers association, ACEA. Throughout the summer, Jaguar Land Rover had non-production days at its Halewood plant as well as at its other plants in central England at Castle Bromwich and Solihull.

Smith said virtually all car companies are taking the same kind of short-term actions to maintain stability. He said: “The economic environment is getting more challenging by the day and I do believe that, unless we introduce further measures to reignite the UK economy, there is significant risk.”

Land Rover extends CO2 offset 10th October, 2008

The programme, which started on 1 October, will balance emissions from the first 72,000 km (45,000 miles of customer use on vehicles sold in the Gulf and Levant region and the CO2 generated by Land Rover’s manufacturing operations in the UK.

The extension to the Middle East follows an announcement made last week at the Paris motor show that France would implement the programme next year, bringing the number of participating markets to eight, with more to follow. Land Rover’s managing director Phil Popham said: “At Land Rover we are determined to ensure sustainability is integral to our business. Despite a tough economic climate it is important that [we carry] on showing strong leadership in this area to secure a sustainable future for our business.

“While we work to reduce our impacts through the development of new technologies we continue to be proud of our CO2 offset projects we run with Climate Care that positively and profoundly affect both infrastructure and behaviour in many countries around the world. In 2009 we shall bring more of our markets into the programme.” The company also unveiled its Freelander 2 TD4 e in Paris, which Land Rover claims is its most fuel-efficient vehicle to date.

The TD4 e is the first production vehicle to incorporate technologies from the company’s programme of sustainable engineering initiatives, collectively named ‘e terrain’ technologies.

3) India Watch

Stadco sets up R&D in Chennai
Kevin Jacobs

UK-based body structure manufacturer Stadco has opened its first R&D centre in South Asia, setting up in Chennai to provide design and engineering services for cars and light commercial vehicles. According to the supplier’s director of emerging markets, Peter Spackman, the new facility will focus on developing computer aided design and computer-aided engineering analysis and early-phase production.

“The engineering centre will offer all of the services provided by Stadco’s engineering operations and will be fully supported by technical expertise from the UK,” he said. The company plans to develop a prototype manufacturing operation and a manufacturing unit in India in the second phase of operations but no timing has been set.

Starting with just 15 engineers, Stadco will add some staff from the UK and increase headcount above 100 over the next 18 months. Product development director Paul Jaggers said the company was already operating in India and had a good working relationship with customers. The opening of a technical centre is a natural progression and part of plans to further develop activities here.

Stadco also operates in South America and has recently announced plans for Russia. Its core capabilities are aluminium and steel stampings, assemblies, painting and product facility design. Rolling out more than 70m parts from its various units, it employs around 1,200 people and posted a turnover of around GBP150m last financial year.

Tata Nano exit shows power of state politics in India
Automotive News Europe, 6th October, 2008

MUMBAI (Reuters) — Tata Motors’ exit from West Bengal state after protests against a factory for its low-cost Nano car is a sign companies investing in India will need to pay heed to state politics and villagers in the large, complicated democracy. Tata Motors, India’s biggest vehicle maker, on Friday said it was pulling out of the eastern state after having suspended work for more than a month in Singur, where it had planned to make 250,000 units of the Nano from around October.

Protests by farmers unhappy with the compensation paid for their land by the state had led to a blame game between the state government and the main opposition party that backed the farmers. But for investors in India, the lesson may be that state governments and companies will have to pay more attention to the needs of farmers in a country where industrialization pressures are mounting.

“It is not that difficult to do,” said V.K. Jairath, an infrastructure consultant in Mumbai, pointing to states such as Maharashtra, Tamil Nadu and Gujarat, where large industrial projects are underway with little or no opposition. “Ultimately, states have to come up with clear policies. Companies also have to get involved in the land acquisition and compensation procedure, alongside NGOs who can liaise with farmers and other stakeholders,” he said.

Unlike China for example, analysts say that India’s democracy of 1.1 billion plus people means industrial projects cannot just bulldoze through villages opposed to plans. “In China, for example, if they say it will be done, it gets done,” said Mohit Arora, a senior director at auto consultancy JD Power & Associates in Singapore.

“Whereas in India, the policy framework can change frequently and without warning because opinion matters.” Some economists say the reported compensation of 1.2 billion rupees ($25 million) offered by West Bengal government was too low, even after the state offered to raise it by 50 percent, for villagers for whom land is the one precious asset they can hand down generation after generation.

Columnist Prem Shankar Jha wrote in the Hindustan Times that Tata Motors would only have to have increased the price of its Nano by around 250 rupees — a little more than $5 — to have afforded extra compensation to farmers of 125,000 rupees an acre. “Today it is imperative for industrialists not to draw the wrong lessons from the Nano debacle. The Tatas may be able to (go) to Uttarkhand, Haryana, Karnataka or Maharashtra,” he wrote.

“But (those governments) haven’t faced their people yet, and the poor will also be drawing their lessons from Singur.”

A colonial-era law that determines land acquisitions by states for undefined “public purposes” has led to a call for reform. “Our land acquisition policy is flawed, the issue of compensation is extremely complicated and environment has become a global imperative now,” said Darryl D’Monte, chairperson of the Forum of Environmental Journalists of India.

Analysts have said the immediate effect of the Tata pullout would be limited to the communist-ruled state of West Bengal, which is already lagging other states in terms of investment. But other states have also seen courts intervening to resolve disputes such as the grant of vast tracts of forest land for POSCO’s $12 billion steel plant in eastern Orissa and mining rights for Vedanta Resources, also in Orissa.

As demand for land grows from industry as well as increasing urbanization, there is also greater incentive for politicians and other vested interests to get involved, said R.S. Deshpande, a professor at the Institute for Social and Economic Change. “The farmers are not in a good bargaining position in this equation, but at the same time there is also growing activism as civil society takes a more active role in development,” he said.

Tata ends plans to build Nano at West Bengal factory
Birmingham Post 6th October, 2008

India’s Tata Motors has pulled the plug on a new factory in West Bengal set up to manufacture its low-cost Nano following repeated protests over land compensation. The company, which owns Jaguar Land Rover, had been threatening the move for some time, despite an investment of around £175 million.

The Nano, billed as the world’s cheapest car, is too important a project to be delayed and the company has opted to cut its losses now and set up a new plant in a more stable region. Chairman Ratan Tata said: ‘Taking all things into account, mainly the wellbeing of our employees, the safety of our contractors and in fact our vendors also, we’ve taken the very regretful decision to move the Nano project out of West Bengal.”

He made the announcement after meeting state Chief Minister Buddhadeb Bhattacharjee in Kolkata. Tata, the country’s top vehicle maker, had originally hoped to launch the new car this month. ‘We will have to make the best of the deadline that we have,” added Mr Tata. ‘We are going to do everything possible to come close to the deadline we had established.”

Tata said the firm had not decided where to build the Nano but was examining offers of sites from three or four states. ‘We hope we would be able to find a location that has a congenial environment. All these issues we will announce in the next few days when we have a clearer picture,” said Mr Tata. The company, India’s third-biggest carmaker, had planned to make 250,000 cars at the Singur plant in West Bengal initially, later increasing capacity to 350,000 units.

There are now concerns that the revised production proposals will increase the cost of the vehicle, which had been expected to retail for the equivalent of £1,250. Eventual demand for the Nano is expected to be about one million units, Tata has said. Trouble began after the communist state government acquired farmland for the factory using a colonial-era law which allows land to be taken over cheaply.

Work on the plant was nearly complete when farmers, backed by the state’s main opposition party, Trinamool Congress, stepped up their protests, saying they had been forced off their land without adequate compensation.

Keith Adams

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