This week in Auto: Harley-Davidson to develop mini bikes, Fiat blocks Mahindra's entry into US

This week in Auto: Harley-Davidson to develop mini bikes, Fiat blocks Mahindra's entry into US

Annual general meetings can become really interesting, especially when humble shareholders get their one chance in the year to ask the management some tough questions.

These are often uncomfortable questions accompanies by an accusatory tone, alleging lack of effort from the management to improve business. More on that later in the copy. Here is what made headlines last week.

Fiat blocks Mahindra’s attempt to sell Willy’s Jeep lookalike

Fiat Chrysler Automobiles (FCA) has filed a petition with the US International Trade Commission seeking ban on sales of Roxor, a off road utility vehicle sold by SUV-specialist Mahindra & Mahindra in the US. The American-Italian car maker has alleged that the Roxor is an infringement on the design copyright held by FCA on the Willy’s Jeep.

Tata Motors posts first quarterly loss in 3 years

Mumbai-based automotive major Tata Motors posted its first quarterly loss in three years during the June quarter as muted demand and high costs at Jaguar Land Rover hurt margins. The company posted a loss of Rs 1863 crore for the quarter as against a Rs 3200 crore profit posted in the same quarter last year

Harley Davidson to fight Royal Enfield with smaller bikes

US cruiser specialist Harley-Davidson surprised the world stating that the company would be developing a 250cc bike for markets including India to grab a pie of the burgeoning segment. This will put the Milwaukee-based company direct competition with the Indian leisure and cruiser specialist Royal Enfield.

Car makers raise prices before onset of festive season

Utility vehicle specialist Mahindra & Mahindra said on July 30 that it will raise prices of its passenger vehicle range by up to Rs 30,000, or 2 percent, to offset the rise in the price of raw material. New prices will come into effect from August. M&M joins Hyundai, Maruti Suzuki, Tata Motors and Honda who have also announced price hikes.

Trucks makers left confused over new axle load norms

Lack of follow-up clarity on the new axle load norms announced by the government has left truck manufacturers undecided over moving their production processes to suit the new norms. Manufacturers said they have experienced a dip in retail offtake after the announcement as customers have opted to wait for some clarity on the matter.

N Chandrasekaran facing shareholder backlash

Tata Motors’ annual general meeting began with Chairman N Chandrasekaran making a keynote speech highlighting the company’s performance during 2017-18. He then invited shareholders, no less than 40, to make comments and ask questions about the company’s operations.

For the next four and half hours shareholders grilled the chairman on issues ranging from the phasing out of Nano to the salary structure of the senior management to the poor performance of Jaguar Land Rover (JLR).

“I bought into the right issue of the company at Rs 450 a share and their value right now is Rs 250. Every company Maruti Suzuki, Bajaj, Ashok Leyland, Hero are rewarding shareholders with dividends we are yet to see it since the last two years,” a distraught shareholder said.

“Forget bonus if we get dividend we would consider ourselves lucky,” said another shareholder. Tata Motors last issued bonus shares in 1995 and last paid a divided to its shareholders in 2016.

The automaker’s operations came under pressure last year with JLR facing several headwinds including a slowdown in China, its biggest market, and a fall in demand for diesel-powered cars in Europe and UK. JLR’s net profit fell by 10 percent last year, while at the consolidated level net profit grew by 20 percent.

Tata Motors’ total debt ballooned 13 percent to nearly Rs 89,000 crore from Rs 78,600 crore in 2016-17 as JLR continued to consume more cash because of a variety of new technology initiatives started by the company.

Some of the shareholders pointed at lack of efforts from the senior management to push new products into the market effectively. They spoke about the company’s insignificant market share of 6 percent in the passenger vehicle market and how it was still lower than the 14 percent share it held earlier.

“Directors and senior management cannot be allowed to sit in their air-conditioned cabins and perfectly cushioned chairs to take decisions. Put them out in the market place to learn what is required,” said another shareholder.

Chandrasekaran assured shareholders that the company will turn profitable at both standalone and consolidated levels this year, and that the upward movement of sales and market share in passenger and commercial vehicle segment will continue. At the same time strict cost cutting measures across the channels will yield positive results.

Let’s block ads! (Why?)

Source link

About Craig Ballantyne 17710 Articles
I love anything to do with Harley Davidson and have two beautiful children and a beautiful partner. In my spare time i like building websites and love anything to do with the internet.

Be the first to comment

Leave a Reply

Your email address will not be published.


This site uses Akismet to reduce spam. Learn how your comment data is processed.