M&M forms panel for Ssangyong integration  
MUMBAI: Mahindra & Mahindra (M&M) has formed a core committee to expedite the integration with Ssangyong Motors (SYMC) as it receives creditors' approval to buy out 70% stake in the Korean sports utility vehicle maker.

The committee, which comprises officials from M&M, led by its chief financila officer Dilip Sundaram, and the Korean management and members of the labour union, will meet in February to thrash out issues involving people and the business.

The integration process will begin with a communication exercise highlighting the growth strategies. A global consultant will drive the communication programme for 100 days, starting early February.

"So far, we were working on completing the acquisition process. Now we will work closely with the Ssangyong management. Work on the integration process will begin in the first week of February," said Pawan Goenka, president of the auto and farm equipment sector, M&M.

As Ssangyong has a history of labour problems, M&M will have to draw up strategies that would synchorise well with the Korean cultural sensitivities, feel leadership consultants. "Any acquistion is metaphorically like a marriage which will work if you approach the other with empathy, understanding and attention. M&M will have to spend time and efforts to understand the new company's cultural nuances," said Sangeeth Varghese , leadership consultant and the author of Open Source Leader: Future of Leadership and Organisations.

Analysts say one of the reasons why the earlier Chinese owner SAIC could not turnaround Ssangyong was owing to the trust issues between the management and the union. M&M has indicated that it will not cut jobs. In 2009, Ssangyong had a major strike which hit production and profitability, forcing it to cut its workforce to around 4,000 from 7,000.

The labour union of SYMC, M&M and the South Korean company have signed a tripartite agreement that contains provisions for employment protection.

M&M had started building bridges with the union as a contingent from SYMC visited to get a sense of M&M's operations in November last year. Though M&M has decided to continue with the Korean management, five or six senior executives will be shifted to Korea. "We are in the process of finalising the key executives for Ssangyong," said Mr Goenka.

The acquisition will help Mahindras to build a global footprint as the Korean maker of the Rexton II and Korando C also exports to Russia, Europe, China, and the Middle East.


Source : Economic Times (1/30/2011)

Repeat customers outnumber Maruti's first-time buyers  
NEW DELHI: The first time car buyers may have been driving the growth of Indian car market, but it is the repeat customers who are increasingly adding to the sales numbers, according to Maruti Suzuki that makes every second car sold in the country.

"We have observed that the percentage of first time buyers has come down marginally. So, additional car in the family and repeat buyers or exchange buyers have taken some more percentage," a senior Maruti Suzuki India official said.

The company, which sold 6,96,923 units in the April- December period this fiscal, has nearly 50 per cent share of the total Indian car market.

"In the last four years, the first time buyer percentage has come down from 52 per cent to 45 per cent (of the total sales)," the official said, adding that for the industry it would be slightly lower than 45 per cent.

Traditionally, it has been the first time car buyers who have been driving the growth in India, which has been dominated by small cars.

"Usually small car buyers are very high. Most of the sales are coming from this segment, specially models like Alto (Maruti) and Santro ( Hyundai )), where first time buyer percentage is very high," Society of Indian Automobile Manufacturers Director General Vishnu Mathur said.

The Indian passenger car market stood at 18,70,483 units in 2010, growing at 31.03 per cent over 2009.


Source : Economic Times (1/30/2011)

Future cars to decide if driver is drunk  
BOSTON: Future technology may put the brakes on drunk drivers and save many lives as researchers in Massachusetts are developing a system that will prevent a car from starting if the driver's blood alcohol level is higher than the legal limit.

The new technology, known as the Driver Alcohol Detection Systems for Safety, would use sensors that would measure blood alcohol content of the driver in two possible ways, by analysing a driver's breath or through the skin, using sophisticated touch-based sensors situated in places like steering wheels and door locks.

If the system detects the blood alcohol content in a person to be above the legal limit of .08, the vehicle would not start. The technology, being developed by research and development facility QinetiQ North America Inc in conjunction with companies in Sweden and New Mexico, would be optional for car manufacturers.

QinetiQ engineers said that unlike court-ordered breath-analyser ignition locks, which require a driver to blow into a tube and wait a few seconds for the result, their systems will analyse a driver's blood-alcohol content in less than one second.

The project was set up in 2008 with a grant of USD 10 million from the National Highway Traffic Safety Administration and the Automotive Coalition for Traffic Safety, an industry group representing many of the world's car makers. It ends in 2013. The first working prototypes of the systems were demonstrated near here at an event attended by US Transportation Secretary Ray LaHood.

National Highway Traffic Safety Administration head David Strickland said the technology could help prevent as many as 9,000 alcohol-related fatalities a year in the US. He added that the technology was still in its early stages of testing and might not be available for commercial use for another 8-10 years.

The systems would not be employed unless they are "seamless, unobtrusive and unfailingly accurate," Strickland said.


Source : Economic Times (1/30/2011)

Creditors okay SsangYong's rehab plan  
MUMBAI: Mahindra & Mahindra on Friday said creditors and shareholders of SsangYong Motor Co (SMC) have given a final approval to a rehabilitation plan, thus paving the way for its acquisition of the ailing South Korean firm.

ET reported in its edition dated January 20 about large creditors giving the go-ahead to the deal. M&M has signed a definitive agreement in November last year to buy 70% stake in Ssangyong for $463 million.

Mumbai-based automobile major, which has paid 10% of the total amount, will pay the balance 90% in February first week, hoping to complete the acquisition by March 2011. "Creditors and shareholders of SsangYong Motor Co passed an amended rehabilitation plan by an overwhelming majority on Friday, taking a major step in the finalisation of the merger and acquisition process with M&M and establishing a significant bedrock for revival," the company said in a statement.

Large creditors, including Korean Development Bank , Barclays Bank, have met in the South Korean Capital on Friday to approve the deal.

Post the approval, SsangYong can now seek to terminate the two-year long rehabilitation process, which began in February 2009, the statement added.

"This was the last step, where we could hear a potential no to the deal. From here on, there can be no road blocks," said Pawan Goenka, president (auto and farm sectors of M&M.

SsangYong Joint Receiver Yoo-Il Lee said M&M's international footprint, strengths in R&D and product development will enable SMC to emerge as a global SUV player. "We need to watch the financials and the turnaround business plan for Ssangyong. While M&M is paying up $463 million, it will need to pump in close to $50-70 million as working capital to ramp up operations in the company," said Mahantesh Sabarad, auto analyst at Fortune Financials.


Source : Economic Times (1/30/2011)