In your interest.
Online Personal Finance Magazine
No beating about the bush.
India is one of the fastest-growing aerospace markets in the world, driven by continued economic growth, resulting in growing passenger traffic and domestic aircraft demand
The rapidly-expanding aviation sector of India can absorb as much as $120 billion in investments by the year 2020, civil aviation secretary Madhavan Nambiar has said.
"As per reports, the Indian aviation sector has the potential to absorb up to $120 billion of investment by 2020. Analysts predict that domestic traffic can reach 160 million-180 million by 2020, with the international traffic in excess of 50 million," Mr Nambiar said in his keynote address to the US-India Aviation Partnership Summit in Washington, reports PTI.
The summit is being attended by around 200 corporate leaders from the sector from both India and the US. "Airport infrastructure in India is the one area which has huge opportunity for investors. The airport upgrade action and modernisation plan, launched by the government of India, will see an investment of approximately $10 billion by 2010," he said.
Mr Nambiar said that the Indian aerospace industry is one of the fastest-growing aerospace markets in the world, driven by continued economic growth, resulting in growing passenger traffic and domestic aircraft demand.
"As per estimates, the Indian civil aircraft market is valued at $90 billion involving sale of 1,000 aircraft during the period 2008 to 2020. At present, the sector has around 407 aircraft with almost the same number on order as well," he said.
In 2008, scheduled operators and companies were given permission to import 62 aircraft.
"However, it is a fact that the current downturn has seen many deliveries being deferred, but significantly not cancelled. It is in this growth that lies our challenge in creating safe, secure, efficient and environment-friendly systems conducive to meet this growth," he said.
India is also emerging as a potential international hub for manufacturing and Maintenance, Repair & Overhaul (MRO) on the back of its talent and engineering workforce, manpower cost competitiveness, fast-developing engineering services, research and development (R&D) expertise and strategic position in South-east Asia.
"India’s MRO segment is estimated to grow at 10%, reaching $1.17 billion by 2010 and $2.60 billion by 2020," Mr Nambiar said.
Aerospace products have also emerged as the fastest-growing component of US exports to India. Mr Nambiar said that the successful retention of India in Category-I status by the US Federal Aviation Administration (US-FAA) has helped India bring back aviation safety into the spotlight. "This reaffirms that Indian safety standards are compliant with international safety standards," he noted.
The FAA audit under the International Aviation Safety Assessment Programme gives the Directorate General of Civil Aviation (DGCA) a level playing field in the area of safety and maintenance standards.
This, Mr Nambiar said, paves the way for allowing Indian carriers to expand service into the US by adding flights through new access points and code-share agreements with US carriers.
In the automotive industry, where globalisation and diversification proceed in parallel, both VW and Suzuki are planning to establish a cooperative relationship while respecting each other’s independence as a stand-alone entity
Europe's largest car manufacturer Volkswagen Aktiengesellschaft (VW) said it has signed a pact with Japan’s Suzuki Motor Corp (Suzuki) to establish a long-term strategic partnership and would also buy a 19.9% stake in Suzuki for 2,061 yen per share or for 222.5 billion yen (about $2.54 billion).
In a release, the company said that Suzuki, in turn, intends to invest up to one half of the amount received from the stake sale into Volkswagen.
“Two of the world’s leading car-makers are joining forces and preparing to meet the growing challenges that lie ahead. Together we can maximize our opportunities for growth. We are proud to be cooperating with such an esteemed and valued partner,” VW chief executive Martin Winterkorn said.
Representatives of both the companies signed a framework agreement on Wednesday. The companies plan a joint approach to the growing worldwide demand for environmentally friendly vehicles, the release said.
The deal is expected to close by January 2010 subject to approval of relevant authorities."Both parties are focused on achieving synergies in the areas of rapidly growing emerging markets as well as in the development and manufacturing of innovative and environmentally friendly cars", Suzuki said in a release.
In the automotive industry, where globalisation and diversification proceed in parallel, both companies will establish a cooperative relationship while respecting each other’s independence as a stand-alone entity, the release added.
Commenting on the deal, Suzuki's chairman and chief executive, O Suzuki, said,"“We were very much impressed by the enthusiasm of Volkswagen towards manufacture of splendid automobiles. The companies shall cooperate taking advantage of the strength of the other with the maximum consideration to the global environment. We will also continue to extend our utmost efforts for customer satisfaction."
As demand continues to rise for smaller cars and for powertrains with higher fuel efficiency and lower CO2 output, Volkswagen and Suzuki will offer a compelling solution for customers in emerging markets buying a car for the first time and also for customers in advanced economies seeking to lower their CO2 footprint while still enjoying the freedom of transport offered by an exciting range of cars, the release added.
Suzuki, Japan's third-largest car-maker, holds a 54% stake in India's largest car-maker, Maruti Suzuki India Ltd.
GM’s China partner can drive the fortunes of GM India. The ramifications can be huge for the auto sector—and the country—at large
General Motors, GM, is slated to give up a crucial 1% stake of its China passenger-car venture to its partner SAIC, the state-owned Chinese automaker. Simultaneously, the two companies have launched a 50-50 joint venture based in Hong Kong for Asia Pacific region. So how does the new joint venture with China’s SAIC impact the position of General Motors in India? As usual, behind the complicated manoeuvring lies a simple truth—General Motors India (GMIL) will now be—plain and simple —under Chinese control. The new venture will take over GM's India assets and be able to sell small cars and light trucks in the world’s fastest growing car market after China. It is clearly apparent to anybody who understands the dynamics of the Chinese automobile industry that SAIC have used their considerable clout to twist General Motors USA (GM) into accepting a position that leverages the tenuous and shaky position GM has in China into letting the Chinese dominate in India.
China is now the world’s largest automobile market, and the way joint ventures are structured in China, GM would be extremely reluctant to put their JV with SAIC in China at risk. Better to let SAIC have a share of the GMIL pie, and in the bargain pick up some cash to try and repay the US government. So this is how it looks to us in India:
General Motors India is no longer under General Motors Asia-Pacific (DAT), Australia. Instead, it will now be part of a 50/50 joint venture between SAIC and GM. And SAIC shall call the shots, since SAIC has a majority shareholding here. This is in no way to be compared to the IBM-Lenovo deal. This is an outright entry by a Chinese automobile manufacturer into India.
In a slightly related move, GM has bought out Suzuki from a 50/50 JV in Canada. This will have an impact on Maruti Suzuki India Ltd—which is not very clear as yet.
Indian automobiles are rapidly acquiring a reputation for quality in neighbouring countries, while Chinese vehicles are, to put it gently, much cheaper, but not quite there yet. The introduction of extremely low cost Chinese vehicles into the Indian domestic market will probably spin off dynamics which can not be predicted, and GMIL will have to protect the carefully nurtured image that it has with great difficulty managed to build over the last few years.
GMIL was just about beginning to hit the market-share numbers in India. And now comes this news of them becoming a Chinese joint-venture under Chinese control. GMIL will need to be extremely careful about how they go forward here. Otherwise the whole house of cards could collapse, given the sad reputation some Chinese goods have acquired in India.
The Indian government is also sure to have a view on this development. Chinese trucks from India facing up with Chinese trucks from China on a disputed road in Kashmir is just one part of it. Wait and watch. And anticipate a Chinese-driven price war in the automobile market very soon.
General Motors seems to be racing ahead with new vehicle launches in India under the Chevrolet brand. A few months ago it was the diesel-engined Cruze taking the Honda Civic and Toyota Corolla head on. Then it was the turn of the electric Spark. Last week the motoring media was treated to a preview of their small hatchback, the 1.2-litre petrol engine Beat. With the Tavera a runaway success in the people mover category, and a decent 4WD in the Captiva, the reasonably successful Optra, GM's portfolio now needed an ultra-luxury car and some more commercial vehicles in the small- to medium-size ranges. Unconfirmed rumours about the Cadillac coming to India usually sink without a trace. Massive changes in the structure of the Board at General Motors in the US don’t really make headlines in India either. GM’s IOU to the US government now exceeds $52 billion, and the burn rate is not slowing down. All these were the key issues about GM in India. All that pales in comparison with the latest development of the JV with China.