News digest
Complied by Clive Goldthorp
1) Jaguar and Land Rover
Hybrid blitz for Jaguar/Land Rover,
Julian Rendell, www.autocar.co.uk 27th May, 2008
NEW Jaguar and Land Rover hybrid models will go on sale in the
UK within five years. Engineers are experimenting with a range of technologies
based around two new engines a 3.0-litre version of today's 2.7-litre
V6 diesel and the all-new direct-injection 5.0-litre V8, to be launched late
next year. A micro-hybrid using stop-start technology and based around the 3.0-litre
V6 diesel will be the first to be launched in the Land Rover Discovery 3, Range
Rover Sport, Jaguar XF and Jaguar XJ in 2010.
On its own it could boost the fuel economy of the four vehicles
by up to 10 per cent. The diesel is the engineering priority because it makes
up the bulk of JLR sales in Europe. Land Rover is understood to also be engineering
a 'mild-hybrid' version with a super-capacitor for short-term storage of electricity
and a starter-generator capable of recharging the battery during engine-braking.
This could also appear as early as 2010. An eight-speed ZF gearbox is key to
this development. It features a completely new approach to the internal design
of an auto, itself a fuel-saving feature, and a separate hydraulic reservoir
that makes the 'box compatible with stop-start devices unlike today's six-speed
ZF unit.
Jaguar Land Rover is also looking at the technology that will be
used in Mercedes' S-Class hybrid. It uses ZF's Dynastart electric motor to replace
the torque convertor. It can be engineered for either mild hybrid operation,
in which the electric motor acts as a torque booster, or full-hybrid operation
in which the electric motor can power the car alone. Jaguar is considering the
system for a full-hybrid version of the next XJ and it could be on the market
as soon as 2012. Land Rover is looking at a different hybrid solution using
its rear-mounted 'Electric Rear Axle Drive' electric motor.
Longer-term JLR plans to develop green technologies have won government
financial backing under the Low Carbon Vehicle programme. These are likely to
result in production developments over the next five to 15 years and include
the REHEV (Range Extended Electric Vehicle) for a plug-in hybrid, a new flywheel-based
energy recovery system, and a 120g/km luxury Jaguar, the so-called 'Limo-Green'
project using full-hybrid technology.
Tata plans rights issue to fund JLR buy
just-auto.com 28th May, 2008
Tata Motors has said it would raise up to $1.7bn through three
simultaneous rights issues of various securities to help fund its purchase of
the Jaguar and Land Rover brands, which it expects to close by June. According
to Reuters, Tata said it would then raise $500-$600 million by way of issuing
securities in foreign markets, as previously planned, and was considering various
options including the Tokyo Exchange.
The funds would be mainly used for the $2.3 billion purchase of
the Jaguar and Land Rover brands from Ford, which is being done through a wholly
owned UK subsidiary, the report added. "Though the initial acquisition
cost will be financed through bridging loans provided by a syndicate of banks,
these loans would be fully repaid through the above-mentioned capital raising
schemes," India's top vehicle maker said.
The three rights issues comprise equity shares, "A" shares
and convertible preference shares, it said. Tata Motors has previously announced
plans to raise $4 billion for its local and overseas plans, Reuters said. On
Wednesday it said it would spend about INR100bn to expand manufacturing capacities
and develop more than 100 new products and variants for an increasingly competitive
market.
It will also continue to look at acquisitions and strategic alliances
for growth in the local and overseas markets, it said. Tata , which has manufacturing
and distribution ventures with Fiat, also said it was in discussions with the
Italian automaker on deals with truck maker Iveco on various options, the news
agency added.
Tata shares fall on rights issues plan
Automotive News Europe 29th May, 2008
MUMBAI (Reuters) -- Shares in Tata Motors fell nearly 7 percent
today on concerns about its proposal to raise $1.7 billion from rights issues
to help fund its purchase of Ford Motor's Jaguar and Land Rover. The top truck
and bus maker in India said on Wednesday it would raise 72 billion rupees from
three rights issues comprising equity shares, "A" shares with limited
voting rights and convertible preference shares to help fund the acquisition.
On completion of the rights issues, Tata Motors plans to raise
a further $500-$600 million from an overseas equity issue, it said. The Ford
brands purchase, which is expected to be completed by end-June, will give Tata
Motors a range that includes luxury marques as well as its own Nano, possibly
the world's cheapest car. But analysts say the purchase will not contribute
to Tata Motors' profits in the near term, while the rights issues will result
in a dilution of earnings per share.
"While we had factored a mix of debt and equity resources,
the company has announced a predominantly equity route for its immediate funding
needs," said Ramnath S, auto analyst at IDFC-SSKI Securities, which is
maintaining its "neutral" rating on the stock. "We estimate this
to lead to a dilution of 26 percent on the fully diluted equity capital over
the next two years... we see a downside of 21 percent to our EPS estimate for
FY09 and FY10."
Also, pending disclosure of detailed financials of Jaguar and Land
Rover, there is an assumption of no profit contribution to Tata Motors in the
near term from the purchase, he said. Shares in Tata Motors fell as much as
6.9 percent to 591.1 rupees, its lowest level in more than four months, and
were trading at 595.95 rupees at 0630 GMT. "Debt would have been cheaper
than an all-equity route," said Vineet Hetamasaria at B&K Securities,
which is advising clients against buying the stock.
"We had expected a debt-equity mix. They are not that heavily
leveraged, and could have taken some debt on their books instead of diluting
equity," he said. Tata has said it expects the Jaguar and Land Rover deal
to improve its balance sheet over the long term, but Moody's Investors Service
said in April it was reviewing the company for a possible downgrade due to considerable
integration challenges and the high uncertainty in the near to medium term.
"The rating outlook is likely to be negative upon the completion
of Moody's rating review in Q2," S&P said at the time. Tata Motors
on Wednesday reported a net profit of 21.7 billion rupees for the year ended
March, nearly flat from the previous year, and said it would spend about 100
billion rupees to expand capacity and develop new products to take on growing
competition. Its operating margins, a key gauge of profitability, fell to 10.76
percent from 12.5 percent a year earlier.
2) MINI
Mini Crossman Concept to Debut
at Paris Motor Show?
Clinton Deacon, World Car Fans 28th May, 2008
HAVING already been confirmed by BMW, we know there will be a definitely
be a brand new SUV variant added to the range. What we don't know is how long
we are going to have to wait to see the styling and we are also yet to receive
any firm confirmation of the name – although rumours circulating the internet suggest it will be the
Crossman. Latest information that has now surfaced is
that we are likely to see a concept version of the Mini SUV at the Paris Motor
Show later this year.
There have been numerous sightings of what appears to be a mule
for the new Mini SUV sporting the body of the Clubman riding curiously higher
than we are used to on the regular production model. Unfortunately we are yet
to see any true prototypes, therefore artists renderings (such as those seen
in this article) are purely on guess work, although BMW has stated the SUV will
retain the classic Mini styling clues.
The new SUV will share the same platform as the upcoming BMW X1
and reports even state that it will only be offered in front-wheel drive as
standard with the 4-wheel drive option also available – kind of weird
for an SUV don't you think?
Following the concept debut we would expect the full production
model to follow early next year before it is launched in the Spring of 2009.
3) Aston Martin
Aston
Martin “is not for sale”
Michael Taylor, AUTOCAR.co.uk 28th May, 2008
ASTON MARTIN is not on the market, company chairman and Prodrive
boss David Richards has said. “This speculation is only there because
we are talking to people all the time about engines. But we are always talking
to people, and it doesn’t mean we’re for sale,” Richards said
during this weekend’s Nurburgring 24hr race, where his N24 Vantages finished
first, second and third in their class. “The company is not for sale,”
he insisted.
Ever since Richards led the partnership that bought Aston Martin
from Ford last year, rumours have circulated that he and his investors would
be happy to turn a quick dollar on the deal, but this denial is his most emphatic
statement yet about Aston’s long-term prospects. The company’s future
engine supply is less certain. Aston Martin’s V8s are built near Cologne,
Germany, in an Aston-branded engine factory inside a Ford compound.
While there are whispers that future Astons could be powered by
Mercedes-Benz engines, Richards would only confirm the company’s immediate
powertrain source. “We are guaranteed engine supply by Ford until 2012
and we are talking to Mercedes, but then we are talking to Ford and we talk
to everybody,” he said.
4) India Watch
The next 1 Lakh car?
Mehul Srivastava , Automotive News 26th May, 2008
Nissan, Renault, Indian company eye a rival to Tata Nano
NEW DELHI — Three more automakers have plunged into what
may become a hot segment: the $2500 car. Although suppliers see opportunity,
U.S. parts makers could have trouble getting a piece of the action. Bajaj Auto
Ltd., the Indian maker of the country's ubiquitous three-wheel auto rickshaw,
is leading the design and manufacture of a $2500 car to rival Tata Motors Ltd.'s
Nano. Bajaj is working with Nissan and Renault to develop the basic auto for
India and other emerging economies.
Suppliers around the world helped Tata engineer the Nano and have
been enthusiastic about low-cost cars. But Bajaj likely will source almost all
of its components from suppliers in India, say company executives and major
suppliers. "When you talk about a $2500 car, you are talking components
so cheap that it's doubtful that European or American manufacturers can even
compete," says Sanjay Labroo, president of India's Automotive and Component
Manufacturers Association.
That largely narrows the field to companies — both Indian-owned
and subsidiaries of foreign suppliers — that manufacture components inside
the country, says Labroo. He is also the managing director of Asahi India Glass
Ltd., the country's biggest automotive glass manufacturer. In the past, Bajaj
has preferred suppliers within four hours of its plant in Chakan, in western
India.
East Asian suppliers, especially those associated with Maruti Suzuki
Corp. and Hyundai Motor India Ltd., could be competitive, but taxes and customs
surcharges might rule them out, says Labroo. Maruti Suzuki and Hyundai manufacture
small cars in India. Bajaj is India's second-biggest motorcycle manufacturer
and has no experience building four-wheeled cars. It will assemble the vehicle
with two partners, Renault SA and affiliate Nissan Motor Co. Bajaj will own
50 percent of the venture, and Renault and Nissan will own 25 per cent each.
Bajaj does assemble a three-wheeler, commonly used either as auto
rickshaws for urban commuters or as small cargo carriers. It holds almost 80
percent of the three-wheel market in India. Tata wants to sell the Nano to dealers
for a wholesale price of $2500. The Nano, which is scheduled to arrive in showrooms
in October, has a two-cylinder engine that produces 33 hp.
Emerging markets
Like Tata, Bajaj intends initially to focus on India but has said
it intends to export to Africa, Asia and Latin America within two to three years
of launch. The Bajaj car, code-named the ULC, already is past the concept stage.
A 60-person team, mostly from Nissan and Renault, is working on design issues,
says Ravi Kumar, vice president for development at Bajaj. "We are not at
the prototype stage yet," he says. "Sourcing issues are a little far
away."
5) The Demise of MG Rover Group Limited
Costly MG Rover inquiry drags on
Jean Eaglesham, Chief Political Correspondent, The Financial Times 27th May,
2008
THE MG Rover investigation has taken three years, cost more than
£12m, and there is no deadline for it to conclude, according to the latest
government figures. Ministers ordered the Companies Act investigation a month
after the collapse of the carmaker in May 2005, amid a furore over the role
played by the “Phoenix Four” directors who bought Rover for £10
in 2000. The inquiry was initially expected to take 18 months.
But by the end of April the costs of the inquiry had mounted to
£12.2m including £1.8m of value added tax and more than £437,000
in “disbursements”, according to the Department for Business. The
department has declined to spell out how much of the disbursements related to
expenses for hotel and other costs for the investigation team. It has been led
by inspectors Guy Newey QC and Gervase MacGregor, a senior partner at BDO Stoy
Hayward, the forensic accountancy firm.
Richard Burden, a Labour MP whose Birmingham Northfield constituency
includes Rover’s Longbridge site, warned that the cost and duration of
the inquiry – three years this Friday – was in danger of eclipsing
its eventual findings. “I don’t know how long it took to write War
and Peace but it certainly looks like the Rover inspectors are trying to trump
it,” he told the Financial Times. “The clock is ticking, the costs
are mounting and the people of Longbridge are left waiting.
“My real concern now is not just that it is taking so long
– but that there is an absolute silence on why it is taking so long. If
there is a problem, then we need to know.” Peter Luff, the Tory head of
an influential commons committee, said reforms to the legal system for investigating
companies should be considered in the wake of the inquiry. He said he did not
blame John Hutton, the business secretary, for the inquiry’s escalating
cost and duration. “John Hutton’s hands are tied… the Companies Act rules mean [that] the government cannot intervene,” he told the FT.
But he said there was a case for changing the procedures to require
inspectors to issue progress reports, giving information on the state of their
investigation without in any way prejudicing any potential subsequent prosecution.
“It’s the secrecy around the process that breeds suspicions,”
Mr Luff said. A change to the rules was “something the [business select]
committee might look at”, he added. When asked about the three-year duration
and consequent rising cost to the taxpayer, an official said: “The department
and the inspectors intend to complete this inspection as quickly as possible
with due regard to the fairness of procedures, and the thoroughness of the task."