Archive for ‘joint venture’

24/05/2017

India’s electric vehicles push likely to benefit Chinese car makers | Reuters

India’s ambitious plan to push electric vehicles at the expense of other technologies could benefit Chinese car makers seeking to enter the market, but is worrying established automakers in the country who have so far focused on making hybrid models.

India’s most influential government think-tank unveiled a policy blueprint this month aimed at electrifying all vehicles in the country by 2032, in a move that is catching the attention of car makers that are already investing in electric technology in China such as BYD and SAIC.

The May 12 report by Niti Aayog, the planning body headed by Prime Minister Narendra Modi, recommends lower taxes and loan interest rates on electric vehicles while capping sales of petrol and diesel cars, seen as a radical shift in policy.

India also plans to impose higher taxes on hybrid vehicles compared with electric, under a new unified tax regime set to come into effect from July 1, upsetting car makers like Maruti Suzuki and Toyota Motor.

The prospect of India aggressively promoting electric vehicles was a “big opportunity”, a source close to SAIC, China’s biggest automaker, told Reuters.

“For a newcomer, this is a good chance to establish a modern, innovative brand image,” the source said, although they added the company would need more clarity on policy before deciding whether to launch electric vehicles in India.

Earlier this year SAIC set up a local unit called MG Motor which is finalising plans to buy a car manufacturing plant in western India. A spokesman at SAIC did not comment specifically on the company’s India plans.

Warren Buffett-backed BYD already builds electric buses in the country, while rival Chongqing Changan has said it may enter India by 2020.

BYD said in a statement the company would have “a lot more confidence” to engage in the Indian market if the government supported the proposed policy. The company said it would look at increasing its investment in India but did not give details on how it would expand its business and market share.

HIGH COSTS

While the Niti Aayog report has not yet been formally adopted, government sources have said it was likely to form the basis of a new green cars policy.

If so, India would be following similar moves by China, which has been aggressively pushing clean vehicle technologies. But emulating China’s success could be tough.Electric vehicles are expensive due to high battery costs, and car makers say a lack of charging stations in India could make the whole proposition unviable.

The proposed policy focuses on electric vehicles, and is likely to also include plug-in hybrids. But it overlooks conventional hybrid models already sold in India, such as Toyota’s Camry sedan, Honda Motor’s Accord sedan and so-called mild hybrids built by Maruti Suzuki.

Hybrids combine fossil fuel and electric power, with mild hybrids making less use of the latter.

In doubling down on electric power India would be shifting away from its previous policy, announced in 2015, that supported hybrid and electric technology.

That could delay investments in India, expected to be the world’s third-largest passenger car market within the next decade, according to industry executives and analysts.

“All these policy changes will affect future products and investments,” said Puneet Gupta, South Asia manager at consultant IHS Markit, adding that most car makers would need to rethink product launches, especially of hybrids.

ECONOMIC GAP

Mahindra & Mahindra is the only electric car maker in India but has struggled to ramp up sales, blaming low buyer interest and insufficient infrastructure.

Pawan Goenka, managing director at Mahindra said the company was working with the government and other private players to set up charging stations in India. Mahindra was also focusing on developing electric fleet cars and taxis, Goenka said.

The cost of setting up a car charging station in India ranges from $500 to $25,000, depending on the charging speed, according to a 2016 report by online journal IOPscience.

While the proposed policy suggests setting up battery swapping stations and using tax revenues from sales of petrol and diesel vehicles to set up charging stations, it does not specify the investment needed or whether the government would contribute.

“For full electric vehicles, the economic gap remains huge and the charging infrastructure needed does not exist,” said a spokesman at Tata Motors. The company makes electric buses and is working on developing electric and hybrid cars.

DELAYED PLANS

Most automakers have focused on bringing in hybrid models that are seen as a stepping stone to electrification. Toyota recently launched its luxury hybrid brand Prius in India, while Hyundai Motor plans to debut its Ioniq hybrid sedan next year.

Maruti’s parent Suzuki Motor, along with Toshiba and Denso, plans to invest 20 billion yen ($180 million) to set up a lithium ion battery plant in India which would support Maruti’s plan to build more hybrids.

But the apparent sharp shift in policymakers’ thinking in favor of electrification is forcing automakers like Toyota and Nissan Motor to seek more clarity before finalising future products for India, while Hyundai may delay new launches.

Toyota, the world’s No. 2 carmaker by sales, had planned to have a hybrid variant for all its vehicles in India, but the company’s future launches would now depend on the new policy, said Shekar Viswanathan, vice chairman of its Indian subsidiary.

Nissan, which plans to launch a hybrid SUV later this year, said in a statement it was waiting for more clarity before deciding whether to bring electric cars to India.

A plan by Hyundai to launch at least three hybrid cars in India in 2019-2020 would likely to be delayed, said a source.

Hyundai did not comment on queries related to delays.

“If the government will be aggressive on electric vehicles and not support other technologies, companies will need to rethink investments,” said an executive with an Asian carmaker.

Source: India’s electric vehicles push likely to benefit Chinese car makers | Reuters

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22/05/2017

India announces policy for strategic partnerships in defence | Reuters

India on Saturday finalised a policy that would allow local private companies to work with foreign players to make high-tech defence equipment, in a boost to Prime Minister Narendra Modi’s bid to cut reliance on imports.

The policy, whose finer details are still to be formalised, will initially allow the entry of private companies into the manufacture of submarines, fighter aircrafts and armoured vehicles through foreign partnerships, a statement issued by the Defence Ministry said.”In future, additional segments will be added,” the statement said.

Industry experts have said that delays in finalising procurement policies have undermined India’s efforts to get local, largely inexperienced, companies to tie up with foreign manufacturers, a necessary step if domestic firms are to utilise the latest technology.

Prime Minister Modi has vowed to reverse India’s dependence on imports by building a local manufacturing industry. The government is forecast to spend $250 billion on modernisation of its armed forces over the next decade.The policy, announced on Saturday, would allow Indian companies to partner with global defence majors “to seek technology transfers and manufacturing know-how to set up domestic manufacturing infrastructure and supply chains,” the statement said.

Foreign manufacturers such as Lockheed Martin, Boeing, BAE Systems and Saab are looking to India as one of the biggest sources of future growth.

Source: India announces policy for strategic partnerships in defence | Reuters

22/05/2017

China, Russia formalize Shanghai venture to build wide-body jet | Reuters

China and Russia on Monday completed the formal registration of a joint venture to build a proposed wide-body jet, kickstarting the full-scale development of a program that aims to compete with market leaders Boeing (BA.N) and Airbus (AIR.PA).

State planemakers Commercial Aircraft Corporation of China (COMAC) [CMAFC.UL] and Russia’s United Aircraft Corp (UAC) said at a ceremony in Shanghai the joint venture would aim to build a “competitive long range wide-body commercial aircraft”.

COMAC, which is increasingly looking to break the hold Boeing and Airbus have over the global commercial jet market, successfully completed the maiden flight of its home-grown C919 narrow-body passenger jet earlier this month.

“The long-haul, wide-body passenger jet is a strategic project for China and Russia, followed closely by the two governments,” said Guo Bozhi, general manager of COMAC’s wide-body department.

COMAC and UAC first announced the twin-aisle jet program in 2014 but the project has so far been slow to materialize.

In November, the firms said they had set up a joint venture in Shanghai and unveiled a mock-up of the wide-body jet, based around a basic version that would seat 280 and have a range of up to 12,000 kilometers (7,500 miles).

UAC president Yuri Slyusar said the firms were aiming to complete the wide-body jet’s maiden flight and first delivery between 2025-2028. He added the plane would look to take 10 percent of the market from the Boeing 787 and Airbus 350.

Previously, the firms had been aiming for a maiden flight of the jet in 2022 and delivery from 2025 or later.

While the target is tough, it is more realistic than recent aircraft programs that have sought results in 5-7 years and then come in late, industry analysts said. COMAC’s first homegrown jet, the ARJ-21, obtained permission to enter domestic service more than 10 years behind its original schedule.

COMAC and UAC hold equal shares in the joint venture.

Last July, Boeing forecast the world’s airlines would need 9,100 wide-body planes over 20 years to 2035, with a wave of replacement demand to come between 2021-2028.China has plowed billions of dollars over the past decade into a domestic jet development program as it looks to raise its profile in the global aviation market and boost high-tech manufacturing at home.

Source: China, Russia formalize Shanghai venture to build wide-body jet | Reuters

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