German luxury carmaker BMW is evaluating over 100 component manufacturers in India to outsource engines and chassis for its global manufacturing operations, according to a board member.
“We are impressed with the quality of die casts and forgings in India that we use for our global operations. The quality of products from second- and third-tier is impressive. Once our pilot project evaluating 100 ancillaries is completed we will outsource engines and chassis for our cars,” said Ind Herbert Diess, who is on the BMW AG board.
The German car-maker’s international purchasing office in Gurgaon, Haryana, currently sources motorbike handles and die casts from India. The India outfits of multinationals like Mico Bosch and Conti also supply it software solutions.
The car-maker sells the 3 and 5 series assembled from CKD (completely knocked down) kits at its plant in Chennai.
BMW’s Indian operations added 200 people in 2007. “The number of jobs we add in India depends on our market growth,” said Norber Reithofer, chairman of the BMW Board of Management.
“India is an important growth market for us. Our estimate is that by 2015 the market for premium cars will reach 10,000 units a year. We also plan to increase the share of our CKD units in the country,” Reithofer added.
“BMW sports utility vehicles like the X3, X5 and the 7 series could be locally assembled at the Chennai plant if we reach a critical number of 500 units,” said Frank Peter Arndt, head of production.
The company also plans to launch the Mini next year to coincide with the iconic small car’s 50th anniversary. However, Kay Segler, senior vice- president, Brand Management Mini, said the process of homologation (adapting to Indian conditions) is time-consuming and expensive.
“It costs about ¤200,000 and takes six months to complete the homologation in India, which pushes up our cost and delays the launch of this compact car in India,” Segler said.
According to BMW, the small car could cost between Rs 25 lakh and Rs 30 lakh and will be available as a CBU. The company said the Mini’s diesel engine could deliver 25 km to the litre under test conditions.
The Mini engine will be supplied by Fiat. “Mini engines will also be supplied by other vendors. We are in discussions,” said Klaus Draeger, another board member.
Understanding Short Term Trading
Before I begin, this blog is not for intraday traders. My definition of short term implies duration of around 2 to 3 months.
Short Term stock picking is no rocket science, but rather a visual interpretation of technical charts. A basic moving average on a time frame chart will show the direction of the securities movement.
Moving averages is a mathematical results calculated by averaging a number of past data points. Moving averages (MA) in it's basic form is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. Once the value of MA has been calculated, they are plotted onto a chart and then connected to create a moving average line. Typical moving averages used for short term trading are 50 MA and 100 MA.
Types of Moving Averages
1) Simple Moving Average (SMA)
SMA is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. The usefulness of the SMA is limited because each point in the data series is weighted the same, regardless of where it occurs in the sequence. Critics argue that the most recent data is more significant than the older data and should have a greater influence on the final result.
2) Exponential Moving Average (EMA)
EMA overcomes the limits of SMA, where more weight is given to the recent prices in an attempt to make it more responsive to new information. When calculating the first point of the EMA, we may notice that there is no value available to use as the previous EMA. This small problem can be solved by starting the calculation with a simple moving average and continuing on with calculating the EMA.
The primary functions of a moving average is to identify trends and reversals, measure the strength of an asset's momentum and determine potential areas where an asset will find support or resistance. Moving averages are lagging indicator, which means they do not predict new trend, but confirm trends once they have been established.
A stock is deemed to be in an uptrend when the price is above a moving average and the average is sloping upward. Conversely, a trader will use a price below a downward sloping average to confirm a downtrend. Many traders will only consider holding a long position in an asset when the price is trading above a moving average.
In general, short-term momentum can be gauged by looking at moving averages that focus on time periods of 50 days or less. Looking at moving averages that are created with a period of 50 to 100 days is generally regarded as a good measure of medium-term momentum. Finally, any moving average that uses 100 days or more in the calculation can be used as a measure of long-term momentum.
Support, resistence and stoploss can be infered by referring the closet MA below or above the market price. The other factor that is used in short term momentum is the trading volume. The moving averages along with the trading volume can provide a better insight to short term movement.
Markets are moved by their largest participants - I believe this is the single most important principle in short-term trading. Accordingly, I track the presence of large traders by determining how much volume is in the market and how that compares to average. Because volume correlates very highly with volatility, the market's relative volume helps you determine the amount of movement likely at any given time frame--and it helps you handicap the odds of trending vs. remaining slow and range bound.
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