Scooters India

 

The iconic Scooters India (SIL) could be up for revival with the government looking to divest its stake fully to a player who can infuse technology and funds. The move, if implemented fast and successfully, could see Congress challenge the Mayawati regime on the industrialization plank ahead of the 2012 elections. Scooters India was a leading manufacturing unit in Lucknow which produced the fashionable Vijay scooters before slipping into the red. Today, it manufactures three-wheelers and has a market share of 2.7%, employing 1,255 people. Though owned by the central government, it has become a symbol of general decline of Uttar Pradesh.

According to sources, the Centre would shed its 95% equity in the company to a strategic partner who would bring in money and technology to restore the cutting edge to the one-time giant. The Centre would identify the investor and decide the terms. The government feels the company, which lost its sheen after it stopped making two-wheelers 15 years ago, can hope for revival in long-term if money and technology are injected. Under the new owner, the company would offer a Voluntary Retirement Scheme (VRS) to 900 workers to attract joint venture partners. The VRS would cost Rs 78 crore, while other employee benefits would be borne by SIL.

It is expected that the symbolic value of SIL's revival among voters can paint broader agenda of Congress for the state, while taking a dig at the local government. The Rail Coach Factory, which made news for facing resistance from UP, would roll out its first wagon soon, and Congress is eager to make political capital over BSP ahead of the 2012 assembly polls. Industrialization and employment are votecatchers which go with the Congress campaign that development in UP has slipped under regional outfits. Industrialisation had triggered a major political tussle between Congress and BSP when CM Mayawati resented that the Congress first family was setting up units on its turf of Sultanpur-Rae Bareli-Amethi. UP blocked land acquisition for the rail factory in Rae Bareli and it led to a showdown when Sonia Gandhi threatened to court arrest in protest. The state then gave in.

A revival of Scooters India can appeal outside the limited Gandhi family turf to highlight the Congress agenda for the state, party observers said. The Lucknow-based unit attempted to reinvent itself in 1997 when it went for manufacturing three-wheelers. But an attempt at forging a JV later found no response. It is now a sick company with 83% machines older than 1970 and 43% workers aged above 55 years and set to retire in three years, sources said.

Stake sale likely in HMT Bearings and Scooters India

BS reported that the Indian ministry of heavy industries and public enterprises is considering an outright sale of government’s stake in sick public sector units HMT Bearings and Scooters India.

While HMT Bearings had reported a net loss of INR 15.3 crore for 2009-10, Scooters India had registered a net loss of INR 22 crore.

A senior ministry official confirmed the development and said the proposal had been sent to the cabinet for approval. The official said that “We are considering selling the government’s entire stake in Scooters India and HMT Bearings, as both are in bad financial position.”

He said that “Competitive bids would be called for offloading stake in the companies. The companies can be revived with fresh capital infusion by the new owner.”

Last year, the ministry had approved a 74% stake sale in the loss making two and three wheeler maker Scooters India. The then heavy industries minister, Mr Vilasrao Deshmukh had said Mahindra & Mahindra was interested in buying the government’s stake in the company. However, the process was stalled following opposition from other ministries.

The government owns 95.4% in Scooters India. Buyers are expected to show keen interest in the company, as it owns 150 acres of land, worth more than its accumulated losses of INR 826 crore. The government had infused 600 crore into the company in 1996, but the move failed to revive the company.

HMT Bearings has cumulative losses of INR 81 crore. Production has declined over 60% over the last three years due to inadequate availability of raw material, arising out of shortage of working capital. The company’s revival plan is also affected, as it has failed to secure a loan of INR 17.4rore against government guarantee. The loan has been pending since 2006. HMT Bearings is trying to sell surplus land around the factory’s premises in Hyderabad to infuse working capital.

While the move, if approved, may breathe new life into the two entities, concerns persist as the ministry’s earlier proposals of outright sale of sick state-owned units, such as Indian Telephone Industries, had met with stiff opposition from trade unions and political parties, both in the opposition and the ruling alliance.

Govt could sell its all stake in Scooters India

He said unless Scooters India Ltd (SIL) gets fresh capital infusion, it cannot survive for long as it is not in a good financial position.

Government was earlier considering a joint venture with private sector for revival of SIL, which has piled up a loss of Rs 22.03 crore in the fiscal 2009-10.2nd hand cars

Patel had earlier said that there was an "absolute" case for privatisation of the PSUs which have remained closed.

Government holds 95.38 per cent in Scooters India.

Its Shares hit the upper circuit today and jumped 10% to Rs 28.15 on the BSE.

Located near Lucknow, Scooters India is an integrated automobile plant, engaged in designing, developing, manufacturing and marketing a broad spectrum of conventional and non-conventional fuel driven 3-wheelers. Mahindra First Choice

New Generation Gearless Scooters

Scooter manufacturers, especially those who have introduced new-generation gearless scooters, are enjoying the fruits of their labour, as sales have continued in top gear in December.used autos in India

Surprisingly, December sales have made current market leader Honda Motorcycle & Scooter and Bajaj Auto, the erstwhile leader in the scooter segment, mere spectators, as other manufacturers enjoyed bumper sales, that too in the last month of 2010. Auto sales in December are often lower compared with previous months.

In December, TVS Motor and Hero Honda Motors witnessed sales growth of over 100%, while sales for current market leader Honda grew by just 9%. Others, like Mahindra Two Wheelers and Suzuki Motorcycle India saw their scooter sales increase by 72% and 71%, respectively. However, looking at these bumper sales figures, one cannot but help feel bad for Hamara Bajaj, which last year decided to exit the scooter market.

Honda remained the market leader with sales of 76,307 units, taking its nine-month sales (April to December 2010) to 6,65,051 units from 5,22,399 units in the previous corresponding period. However, despite finding favour with customers, the company is still finding it difficult to deliver scooters in time. According to sources, Honda Activa has a waiting period of six to eight months.Tata Showrooms in India

This waiting period for an Activa is proving to be beneficial for others like Hero Honda and TVS Motors. Especially TVS, which has seen demand soar for its newly-launched Wego scooter, on easy availability and a loyal customer base built around its Scooty brand. Hero Honda, on the other hand, has benefitted from its brand image and large dealer network. Increased demand and non-availability of Activa may have played an important role in people trying out the models of other manufacturers.electric bikes in India

While, TVS's Wego, Mahindra's Rodeo and Duro and Suzuki's Access do have features similar to Activa, people did not think much about these products previously. But since the delivery time for an Activa has increased, those not prepared to wait long are turning to other models, and this is propelling sales of Wego, Access, Rodeo and Duro.

During the nine months do December, scooter sales rose 49.2% to 14,92,342 units, while motorcycle sales increased 24.6% to 66,54,280 units. This makes one wonder about the decision by Bajaj to 'sacrifice' scooters to push its motorcycle business.

One of the problems has been that while all scooter makers launched products based on fresh R&D and improved features (such as auto gears), performance and mileage, Bajaj did not make much of an effort on this front. The company continued with its iconic (now defunct) geared scooters.maruti second hand

In effect, Bajaj's scooter segment appears to have died an unnatural and untimely death, mainly due to the lack of support from the family. Last heard, managing director Rajiv Bajaj has said that the company would drop the name 'Bajaj' from its products, showrooms and service centres and re-brand them as 'Pulsar' or 'Discover', after the names of two of the company's best-selling motorcycle variants.

Sonalika to buy scooters india

Sonalika has joined the race to pick a stake in the sick public sector enterprise Scooters India (SIL). The company is in talks with the department of heavy industry which is scouting for a strategic partner for Scooters India following the recommendation of the Board for Reconstruction of Public Sector Enterprises (BRPSE).

Sonalika Group chairman L D Mittal confirmed that he is negotiating with the government for purchasing a stake. “It is still at an initial stage, so I can't say how much we will pick up. But yes we are examining the options,” Mittal said.

Confirming the government’s plan to look for a strategic partner for Scooters India, minister of state for heavy industries, Arun S Yadav told FE, “We are considering different models which include looking for a strategic partner for Scooters India.” He declined to divulge details. Sale of majority stake or complete divestment are among the options being considered for SIL, a source told FE. Mahindra & Mahindra (M&M) is among other companies which have shown interest in Scooters India, the source added.