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This tracker has been compiled from external sources and does not necessarily reflect the views of the company. Links provided will take you to the full articles appended at the end of the file.

© 2008 Zenith Optimedia.

 

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1. Airlines cut surcharges to spur summer demand – March 29

Low-cost carriers SpiceJet and Indigo effected a cut last week, while Jet Airways and national carrier Air India followed this week. Industry sources said Kingfisher was evaluating a similar move from April. Both SpiceJet and IndiGo have introduced an all-inclusive advance booking fare of Rs 1,722 for short-haul sectors, while the fare for long-haul sectors stands at Rs 2,700. Normally, the fuel surcharge for short-haul sectors itself is Rs 1,950, while the surcharge for the long-haul sectors is Rs 2,700.
This week, Jet Airways introduced advance booking fares starting from Rs 2,071 on all sectors, while its subsidiary and value-carrier, JetLite, introduced fares of Rs 1,722. Air India is offering fares between Rs 1,891 and Rs 2,611, inclusive of taxes and surcharges.
Most fares offered by carriers are valid for the entire summer season. However, like other special fares, airline executives admitted that only a limited inventory would be available in this case too.
“We have ten classes or buckets in our domestic flights. If our lowest bucket is selling well, we go to the next bucket, and so on,” said an Air India executive. Airline executives said the increase in the number of passengers would not make up for the cut in fares. “The fare cut we are going in for is just one airline reacting to the other. It may not lead to larger volumes,” said an airline executive.
Travel company executives said the results had started to show. “We have had a 20 per cent increase in bookings in the last three days and the increase has come solely from advance bookings. Apart from starting to stimulate the market, the move has also increased advance bookings, which is good news,” said Mohit Srivastava, head of online sales, Makemytrip.com.

 

 

2. JAI surprises with a 70% fare cut – April 21

There is certainly something to cheer about for air travellers. The national carrier and state-owned Air India has decided to cut fares by as much as 70% on 35 sectors, starting Tuesday. The massive cut in fares will take place despite a 6.7% increase in aviation turbine fuel (ATF) prices last week. Air India’s direct competitors — Kingfisher Airlines and Jet Airways — have hiked fares by around 8% two days ago, while low-cost carrier SpiceJet said that it will increase fares in a few days. A senior Air India official confirmed the fare cuts to ET and said the company wants to increase its passenger load factor (PLF) to boost bottomlines. The load factor for domestic carriers dropped to around 65% in March from 73% in February.
“The reduced fares have no hidden conditions like being for a limited offer period. Passengers have to buy their tickets 10 days in advance through the website, travel agents or the company’s sales offices. These reductions in fares are mainly on tier-II routes connecting Mumbai and it is over and above our offer on the summer fares,” the senior official added.

For example, on the Mumbai-Hyderabad sector, Air India has brought down the one-way fare to Rs 2,694 — this is all inclusive except the User Development Fee (UDF), and is a drop of 70%. Similarly, the one-way Mumbai-Mangalore fare is now down to Rs 2,494, which is down by almost 60% from the earlier price of Rs 5,875. Mark Martin, senior advisor, KPMG, said: “Airlines need to stimulate the market as load factors have been falling since August. Aggressive pricing is a gamble and it may hurt airlines in the long run.”
The plunging domestic air traffic has hit airlines hard which have been forced to hike fares. Ticket prices need to go down to attract more passengers. “Passengers have actually opted for travelling by trains,” said an analyst with domestic brokerage firm. A drastic cut in airfares would perhaps be able to prop up the balance sheet of the sagging airline industry, which is expected to post a combined loss of $2 billion for fiscal 2009, said industry trackers.
On Sunday, the Kingfisher and Jet Airways combine increased fuel surcharge by Rs 200 for sectors less than 750 kms and by Rs 300 for sectors over 750 kms after oil companies raised ATF prices for the third consecutive time in a month. Jet fuel prices vary at airports depending on local taxes. The average ATF prices are now at Rs 2,066 per kl, which accounts for 40% of an airline’s costs.
 

 

 

 
3. GoAir offers spl fares of Rs 500 across select sectors – April 23

Joining the bandwagon of domestic air-carriers offering special fares to stimulate demand, GoAir, on Thursday said that it was offering
special all inclusive fares (one way) of Rs 500 across select sectors.

The offer is a part of the budget carrier's summer bonanza to air passengers and applicable for travel across Delhi, Jaipur, Chandigarh, Cochin and Bangalore sectors, a company press release said here.

The special fares were, however, for only a limited period as well as limited number of seats, it said.

In addition, the airline offers benefits of carrying luggage upto 25 kgs on economy class and 35 kg on GoBusiness class, it said.

National air-carrier, Air India, recently slashed its fares by 70 per cent on select routes. Naresh Goyal-promoted Jet Airways has also announced 10-and-20-days apex fares on select routes.

 

 

 4. Jet Airways’ JetPrivilege Enters Into A Unique Mileage Accrual Programme With TripAdvisor - April 22

 

In the very first promotion of its kind, in the Indian aviation sector, Jet Airways’ JetPrivilege, India’s largest frequent flyer programme, has entered into an exclusive partnership with TripAdvisor, the world’s largest and most popular travel community, allowing JetPrivilege members to earn up to 1000 JPMiles by sharing their hotel reviews on TripAdvisor.in., the world’s largest and most popular travel community.
During this 2 month offer period effective April 13, 2009 and June 12, 2009, JetPrivilege members will have the opportunity to accrue JPMiles depending on the number of hotel reviews written and published on TripAdvisor.in. While members with 3-6 published hotel reviews may earn 500 JPMiles, members with 7 or more hotel reviews published may earn 1000 JPMiles. In addition, members with 7 or more hotel reviews published would also qualify for an entry into a monthly draw for 5000 JPMiles.
According to Mr. Rahul Kucheria-General Manager, Relationship Marketing, "This exclusive offer from Jet Airways and TripAdvisor, a first in India, is yet another attempt in our constant endeavour to provide JetPrivilege Members with a number of exciting value-additions. JetPrivilege Members may add to their JPMiles by sharing their hotel reviews on TripAdvisor.in, helping fellow travellers make better, more informed choices, adding up to a delightful travel experience." With more than 20 million reviews and opinions on hotels, destinations, attractions and restaurants in India and around the world, TripAdvisor provides people with real information, advice, and opinions from millions of fellow travelers, to help them plan and take that perfect trip  

 

 

5. New world wines take India by storm – April 2

When it comes to wines, the well-worn cliché is there is no one to beat the French. French wine is still the first choice the world over, but the toast of India seems to be wines from the new world. Wines from Argentina, Chile, Australia, the US, South Africa and New Zealand go off shop shelves faster than French wines in India.
“The so-called new world wines have greater acceptance in India as they are more approachable, their labels are easier to pronounce, the bottles are easier to open and they are fresh and fruity,” says Dharti Desai, chief executive officer and founder of Finewinesnmore.
Above all, they are cheaper and marketed more aggressively by wineries – the reason why these wines sell more at retail stores. But wine consumed at ritzy hotels presents a different picture. That’s because connoisseurs still prefer a good vintage, says Desai. European wine, particularly French, rules their palate. “If you talk about quality, they prefer wines from Burgundy or Bordeaux. But diversity is never a bad thing.”
Another factor that weighs in favour of new world wines in India is their high alcohol content, a definite draw for a nation that has grown up on hard liquor and is willing to try wines, long considered a lady’s drink and not macho enough.
Ritu Dalmia, celebrity chef, author and restaurateur, too sees the new world giving the old a run for its money. “The opening of several wine clubs has helped in spreading awareness,” says Dalmia.
Neethu Seth, managing director of Wine Rack, a company which imports and distributes wines from seven different vineyards in South Africa, agrees that new world wines are less expensive and more approachable for their simplicity and style.
Adds Vishal Kadakia, a wine enthusiast and the proprietor of The Wine Park, which bottles and distributes foreign wines in India, sees it as a global trend. “New world wines are popular and have gained acceptance not only in India but around the world.”
In India, which took to wines only recently, white wine is a preferred choice. “When you are drinking for the first time, it is good to start with white. But I expect red to catch up soon due to it’s health benefits,” says Stephane Soret, a sommelier at New Delhi’s Imperial Hotel. “As you graduate in experimenting wine, you develop your palate and begin to enjoy vintages from France, Italy and Germany.”
Desai too sees an Indian bias towards white, specially among women, “because it is more suitable to the Indian climate and is light on alcohol.”
Sooner or later, say vinters, India will see wines sold in tetra prisma packs and cans, innovations already being marketed elsewhere. One reason why many Indians are switching from hard liquor is the growing awareness about wines and their health benefit. It has also to do with the influence of western culture, lifestyle, and living standards. Wine clubs and wine educators are doing their bit by spreading awareness about wine. Big hotels and swish restaurants regularly hold wine promotion weeks.
“Indians travel abroad more frequently to places where wine is almost a way of life. This exposure is reflected in the growing demand in India,” Arindam Chakraborty, F&B manager at Shangri-la Hotel in the capital. According to one estimate, wine consumption has increased at an annual growth of 15 per cent in three years.
Soret credits the growing business to women, who began drinking wine, “which was socially more acceptable than hard liquor.” There has been a general consensus on a 20-25 per cent increase in the market for domestic wines over the past four years.
Like everything else, the economic downturn has touched wine drinking too. Calendar 2008 saw a slight drop in imported wine sales. That has not deterred the wine business from raising a toast to the future. “India accounts for just one per cent of the global wine market. But this will grow. Kadakia foresees China, Brazil and India emerging as major wine drinking markets

 

 

 6. Belvédère Duty Free signs India distribution deal – April 17  

Liquor distributor Kyndal India will be responsible for Belvédère Duty Free’s brands in the Indian sub-continent Liquor supplier Belvédère Duty Free has signed a distribution agreement with Kyndal India to make its brands available in the Indian sub-continent. Kyndal will be responsible for the distribution of Danzka and Sobieski vodkas in the Indian duty-free and domestic markets. Kyndal managing director Sid Banerji said: “I know Danzka vodka from my travels and from my many years of close cooperation with V&S Absolut Spirits, and I am proud to be the first to launch Danzka in the region.”
Belvédère Duty Free sales director Torben Vedel Andersen added: “We were delighted to be contacted by Sid Banerji last year with the idea of a close partnership. We believe the launch of Danzka vodka in [Indian] duty-free is the first step in a fruitful and long-term relationship.”

 

 

7. India's on a high – April 22

 
India’s favourite homegrown tipple is the Rs 150 bottle of Old Monk. Unfortunately, it doesn’t do anything for Jorge Galbis who is CEO of RCP, the company that owns Zacapa, a Gautemalan rum that has just been introduced in India for an intimidating Rs 10,000.
Rs 10,000 for a bottle of rum? “It’s made from the first pressing of virgin sugarcane juice,” Galbis says. Old Monk, on the other hand, like 95 per cent of the rums around the world, is made from molasses, which is a byproduct of sugarcane juice from which the sugar content has been removed. As a result, the distillate for Zacapa has a sweeter finish than Old Monk or Contessa or that army staple Hercules XXX ever will. “That’s just the starting advantage,” explains Galbis. Zacapa could well be the single malt of the rum world, its distinctive taste the result of pampered ageing in as many as five different barrels — the first American oak in which bourbon is aged, the second American oak again, but charred so it results in a toasted nutty flavour, and later in barrels used for ageing sherry before, finally, an oak vat “to balance out the different flavours”. By this time the Zacapa in your bottle could be anywhere between six and 23 years old. The younger vintages might be a little more affordable at Rs 4,700, in the hotel bars and in duty free stores, which is where the brand is initially available for sale in India. “The product lends itself to the Indian market, which favours brown spirits,” Galbis says, “and its intrinsic quality of sweetness is conducive to Indian palates.”
After a little stagnation in the market, luxury spirits marketers are back in India, and the price of the peg is becoming irrelevant as brands push for their space in the bar. Spirits major Diageo has just introduced Ketel One, possibly the most expensive vodka in Indian retail for Rs 3,200 a bottle in Mumbai and Bangalore (Rs 2,500 in Delhi), but you need to be somewhat loaded if you’re wanting to open a bottle of bubbly. Till recently, the most expensive champagne in the market was Armand de Brignac (Rs 60,000 plus taxes at the Taj group of hotels), but it’s been pipped to that honour with the opening of the Aman New Delhi which stores Champagne Salon Blanc de Blanc in its cellar, something it’s only willing to plonk in the cooler once you’ve agreed to sign a cheque for Rs 2,45,000. The taxes, yes, are extra.
Even that’s nothing compared to some rare Macallans that were made available on offer in India recently when malts director Ken Grier was in town to position it innovatively. In truth, these bottles of Macallan “fine and rare” span 36 vintage years from 1926 to 1976 and were in a private collection that has recently been acquired by the Macallan Company in Scotland.
Only 17 of those malt vintages are available in India and could blow a hole in your bank vault. For instance, 16 bottles of the 1947 vintage are on offer for sale in India and Asia — and since the vintage commemorates India’s independence, each bottle is available for Rs 25- lakh to Rs 28 lakh in Indian hotels (after taxes). “Every bottle comes with a certificate of authenticity,” says a company spokesperson, “and you can only buy directly from the company, which will then import it for you from Scotland where the stock is kept.”
The market for single malts was first developed in India by Sandeep Arora, who has grown that segment with whiskies “for those who are discerning, so the impact of the slowdown has been minimal”. It is evident that the drop in tourist traffic has affected inventories in hotel bars, but Arora says “home consumption has increased”.
Arora is quick with numbers. You want an expensive malt, pick up the Glenfiddich 1937 at Hong Kong duty free for £35,000 (Rs 25 lakh). Something a little cheaper? A Glenfiddich 40 Years for £1,700 (Rs 1.25 lakh) or Girvan 1964 for £500 (Rs 36,500). But in India, in his repertoire, the most expensive malt is Glenfiddich 50 Years, a dram of which is for Rs 90,000 and the full bottle for Rs 15 lakh at hotel prices. You could, of course, get it cheaper at duty free for just £8,000.
Which makes the Zacapa a whole lot more affordable. It might be just Rs 10,000, but it is the first crush of virgin sugarcane juice — remember?.

 

 

8. Mr. Abhishek Khaitan, Managing Director, Radico Khaitan Ltd says consumption of IMFL would be highly leveraged to the income profile of population – April 18

 
Radico Khaitan Ltd is one of India's oldest and largest liquor manufacturers. It was formerly known as Rampur Distillery, which was established in 1943. It was only in 1999, that Radico decided to launch and market its own brands, thereby embarking on a period of phenomenal growth. To further boost its production capacity of bottled and branded products, the company has tied up with bottling units in various parts of the country. Radico Khaitan has brands that straddle almost every market segment - whisky, rum, brandy, vodka & gin - and price category. It has three millionaire brands in its portfolio - 8 PM Whisky, Contessa Rum and Old Admiral Brandy. Mr. Abhishek Khaitan is the Managing Director of Radico Khaitan Ltd. He has a Bachelors of Engineering (Industrial Production) degree from Bangalore, and has done a Managerial Finance & Managerial Accounting course at Harvard, USA. He joined Radico Khaitan in 1997, and supervised the establishment of the company's Marketing Division in the same year. The first brand to be launched by the division, 8 PM Whisky, was a runaway success. In the first year alone, it sold one million. Under Mr. Abhishek Khaitan's leadership, Radico Khaitan's brand portfolio is wide and deep, with brands that straddle almost every market segment, taste preference and price category. In an e-mail interview with Hemant P. Maradia of India Infoline, Abhishek Khaitan says that consumption of IMFL would be highly leveraged to the income profile of population.
Over the past few months, the spirits segment of the liquor industry has done well despite the economic downturn. What would you attribute this to? Do you expect this trend to sustain over the long term?
Ans. Changing lifestyles & income profile, rising disposable incomes are some factors which can be attributed towards sustaining the sales of liquor. IMFL is a premium beverage. Unlike other countries where the average rate of beverages is similar in India the IMFL drink is substantially higher there is a diff of approx 650% compared to cola. This indicates that the consumption of IMFL would be highly leveraged to the income profile of population. But even in economic downturn liquor companies ‘spirits’ are high because it is a part of an individual’s lifestyle. We do feel that this trend will continue there has been some shift from on premise to off premise which is to cut on certain expenses due to the added frills. But overall the 10-12% growth in the IMFL industry continues.
How was the fiscal year 2008-09 for Radico Khaitan, especially considering the global market turmoil and the economic slowdown?
Ans. The year 2008-09 was a good year for Radico Khaitan Ltd. Our sales volume graph has grown from 13.07 million cases to 13.2 million cases. We have seen an overall growth rather some brands have come out as focus brands for us like Magic Moments Vodka, 8 PM Whiksy, Whytehall Whisky etc. We recently launched Magic Moments vodka ‘remix’ in six flavors which have seen tremendous sales in the Indian liquor market.
What kind of pressure did you witness on the raw material side in FY09? Were you able to pass on the high input costs to customers?
Ans. There have been pressures on the bottom lines due to the raw materials but we have tried to either have storage of molasses which has reduced the pressure or in certain states have been able to take price hikes.
What do you foresee in the financial year 2009-10 in terms of raw material prices? What kind of price increases do you expect in FY10?
Ans. In the financial year 2009-10, prices of liquor will increase as the area under cultivation for sugar cane produce is low, so prices for molasses will increase by April. The hike in prices can be seen in regular brands IMFL.


Tell us about the current business environment for Radico Khaitan? How are things shaping up?
Ans. Magic Moment was the big initiative for the company, so this present perspective the vodka industry is only 4.5%, so vodka accounts for 4.5% of the entire liquor category, whereas worldwide if you see vodka category is 80%, and vodka category per se in India is growing at a rate of about 40%. Luckily our company could analyze and see that gap because there was no semi-premium vodka in that category, we launched our Magic Moments Vodka, and from the budgets the volumes have already doubled. So, going forward this would add healthy contribution to the bottom line in the next 1-2 years.
As the consumption of vodka is bound to increase, in the next 3-4 years we expect this 4.5 – 5% to easily become up to 8-10%. Most of the users would be attracted to our Magic Moments Vodka. So, we are going to concentrate on the Magic Moments Vodka for the next two years as a vodka category. We are exploring both organic and inorganic growth. The company intends to launch two new brands in the next 15 months, and also enhancing the distillation capacity by putting up a new distillery in Maharashtra.
What is the outlook for the liquor industry over the next 2-3 years?
Ans. The Indian liquor industry graph has always shown upward trend even in the worst economic scenarios. With increase in disposable incomes, brands like the premium whisky segment have seen tremendous growth this year. Radico is planning to launch two new brands in near future. The Brand, which will be owned by Radico, will be in the premium and semi-premium segment. In the next five years, we can see more successful brands entering the Indian market.
Tell us about your joint venture with Diageo in terms of its brands, sales, etc.?
Ans. Masterstroke Deluxe Whisky features in the prestige liquor range and is priced at a very competitive rate of Rs 300-400 for a bottle (750 ml) varying from state to state. This launch spearheads the company's aggressive growth plans in the fastest growing prestige whiskey segment of the Indian market. The segment is very competitive and it will take some time for the brand to gain more market share.
Which are your top five brands? What is the company's strategy for growing these brands in future?
Our top 5 brands are: 8 PM Whisky, Contessa Rum, Old Admiral Whisky, Magic Moments Vodka and Whytehall Whisky. The focus will be on marketing activities related to these brands.
You have three million-dollar brands. Do you expect to add to this tally? If yes, which brand will it be that will cross million-dollar cases a year?
Ans. We have added the brand Magic Moments to the million case band wagon this year with our three earlier millionaire club brands i.e. 8 PM Whisky, Contessa Rum & Old Admiral Brandy.
What is your view on competition? How do you plan to tackle the same?
Ans. Competition exits in every developing and developed society. It’s the competition, which helps in bringing best brands or products (both quality and quantity wise, which not only gives consumers wide variety of choices but helps the company to reach and sustain at the top. In the last 10 years no other company has been able to launch successful brands except for our brands 8 PM Whisky, Old Admiral Brandy & Magic Moments Vodka this says a lot about our company.


Are you planning any inorganic growth?
Ans. We have recently started our distillery in Aurangabad and now with two distilleries in the top sugarcane producing belts of the country we will focus on the same. Strategic Bottling unit tie-ups will be an on-going process.
What is your message to the shareholders?
Ans. Radico has always worked towards maintaining and strengthening the bond between company and the shareholders. And we expect our shareholders to continue to have faith in our services and creditability

 

 

9. Prestige Wines to distribute four new wine brands across India – April 8
 
New Delhi based alcobev distributor Prestige Wines and Spirits Pvt Ltd is in the process of expanding its portfolio with the addition of four new wine brands. Apart from the company's maiden offerings in India – Torres Wines, Angove and the single malt Glenfarclas, the company plans to introduce an international vodka, tequila and a fortified wine to its spirit portfolio. These are likely to be launched in the due course of FY 2009-10.

The company has also established its presence in Goa, Karnataka, Tamil Nadu and Kerala, which will extend its distribution network across India. “In the financial year 2009-10, the company plans to expand its reach on a pan India level. Presently, we are in the process of registering a few new wine labels, these should roll out into the market shortly,” Marc Perello, Vice President, Prestige Wines and Spirits Pvt Ltd, informed during a conversation with Hospitality Biz.

Last year, the company sold nearly 5000 cases of wines. This year, its sales are projected to be about 6000 cases, of which only 15 per cent is likely to be sold in the southern region. Perello opines that the 'duty free' segment will be the main revenue generator while retail sales only account for 25 per cent of total distribution. These wines will be priced between Rs 700 – Rs 7000 ex duty.

Prestige Wines is also likely to introduce a South African wine brand and plans to set-up a local distribution partnership in Kolkata are also in the pipeline. The company is presently handling Central Purchasing Contracts (CPCs) with the 'Taj' brand and ITC hotels.

Upcoming brands

Taittinger Champagne (4-5 labels)
Maison Joseph Drouhin from Burgundy (8-10 labels)
Mahler Besse from Bordeaux (7-8 labels)
Piccini from Italy (8 labels)

 

 

10. Aspri to bring in 7 new liquor brands- April 22

 
Aspri Spirits, a liquor importer, distributor and marketer, is planning to bring seven new brands from South Africa, France and Italy over the next few months. These include Nederburg wines from South Africa priced between Rs 1,500-2,000; Olivier Leflaive (Rs 3,500-4,000) and Gerard Bertrand (Rs 2,000-2,500) wines from France and Italy’s Molinari Samboca specialty liquors (coffees, crème’s and citrus drinks) costing Rs 1,700-1,800.

“In the next three months, we will import brands from seven international liquor companies,” said Arun Kumar, director of Aspri Spirits. Each brand will include three-to-four variants or categories, which makes the tally of the total number of different labels above 30, Kumar added.

The liquor company is in talks with an Irish whiskey maker, an international vodka company, an international beer group and a cognac brand to import their labels in the country. However, Kumar refused to divulge the names since the talks were still in progress and no completion of paperwork was done.

However, Kumar said that Aspri’s brands had seen a decline in sales in the northern and western parts of the country during the past few months, while performance in the south had been stable.
“Mumbai was the most heavily (negatively) impacted because of the terrorist attacks. High-end liquor brands in five-star hotels of tourism driven destinations like Agra and Rajasthan were also affected because of low occupancy levels in the hotels there,” Kumar added.

Aspri will foray into exports this financial year with Indus Wines, a Maharashtra-based wine maker with which Aspri recently signed a marketing, sales and distribution deal.

 

 

11. Auto sector weathers slowdown blues in 2008-09 – April 9

The Indian automotive market managed to stand up to the vagaries of the economic meltdown to show slightly positive growth during fiscal 2008-09. Overall vehicle sales at 97.23 lakh grew 0.71 per cent from 96.54 lakh units in 2007-08.
“When major automotive markets reported a 30-40 per cent decline, only a handful of countries managed to show positive growth. A few months ago, India was looking at negative growth but has turned around. It is actually better than expected,” Mr Dilip Chenoy, Director-General, Society of Indian Automobile Manufacturers (SIAM), told Business Line.
Passenger vehicle sales at 15.51 lakh registered flat growth while commercial vehicle sales showed a 21 per cent drop. “The automotive market has recovered from the downturn that happened during September-October. However, the commercial vehicle segment is not fully out of the woods yet,” he added.
SIAM has a positive outlook for the current financial year. While it foresees a 7-8 per cent growth for the commercial vehicle segment, the industry body predicts a 3-5 per cent growth for passenger vehicles. The three-wheeler segment may grow 5-8 per cent growth while two-wheelers may show 3-5 per cent growth, Mr Chenoy said
The passenger vehicle market has weathered the downturn largely due to market leader Maruti Suzuki which holds 48 per cent of the market. The compact car giant clocked 7.22 lakh units for 2008-09. Closest rival Hyundai Motor India sold 2.44 lakh cars, a growth of 13 per cent. Tata Motors’ sales grew 1.3 per cent at 2.30 lakh units while Mahindra & Mahindra posted 2.5 per cent growth at 1.06 lakh units.
Most premium carmakers saw volumes shrink last fiscal. Toyota Kirloskar Motor’s numbers fell 15 per cent to 46,892 units while Ford India’s sales were down 17 per cent to 27,976 units. Honda Siel Cars India also saw a 17 per cent drop at 52,420 units while General Motors India was down eight per cent to 61,526 units.
Among commercial vehicle makers, all major players saw substantial fall in volumes. Market leader Tata Motors with a 60 per cent plus share, showed 22 per cent drop in numbers at 2.34 lakh units while Ashok Leyland showed 37 per cent drop at 47,632. Eicher’s sales volume fell 37 per cent at 17,341 units and Force Motors was down 28 per cent at 7,819 units. “The freight movement is unlikely to improve this fiscal which will impact truck sales. However, the passenger carrier market will grow because of largescale orders from state transport undertakings,” said Mr Navin Matta, an analyst with Dolat Capital Market.
Two-wheeler sales grew 2.6 per cent to 74.38 lakh units. “Hero Honda has made up for the erosion of sales volume for other two-wheeler makers including Bajaj Auto and TVS Motor Company,” said Mr Matta. Hero Honda clocked 36.40 lakh units, a growth of 12.5 per cent. Bajaj Auto’s volumes dropped 23 per cent to 12.86 lakh units while TVS saw a marginal decline at 11.36 lakh units. Honda Motorcycle and Scooter India’s sales surged 16 per cent to 10.15 lakh units.

 

 

12. General Motors planning new cars, expansion in India – April 21

 
General Motors is reportedly planning new cars and expansion in India. The company has said.

Global auto giants have been given a lifeline by robust growth in car sales in February. Maruti Suzuki registered its largest ever sales in a single month, while Hyundai India Motors bettered its last performance.
In the meantime there is news that GM India is thinking over the expansion of its operations in India. As an alternative to step up the sales of General Motors cars, the company is evaluating car financing. The company is talking with some banks for enabling car financing for its models throughout India. Some of the private banks squeeze their grips on financing that has resulted in the non appearance of credit in the market.

Karl Slym, the president of GM India President says that it could be very difficult for them to predict the graph of sales for the first half of year 2009 but it is expected that the market would recover by 2009.

He goes on to say, “Our facility in Talegaon, Maharashtra, is being expanded to have an engine/powertrain plant. The target was to sell 2,500 units of Spark Muzic and 35,000 units of other Spark variants this year”.

General Motors India expect 10% of growth in car sales for the current year 2009 as well as plans to sell 72,000 units throughout the country as compared to 2008.

 

 

13. Skoda sees sales slow to single digit in 2009 – April 8

 
Bangalore: Skoda Auto India Pvt. Ltd, the local arm of Czech-based Skoda Auto AS, a subsidiary of Volkswagen AG, is hoping for single-digit sales growth in 2009, far lower than the 38% rise it registered last year.
Cautious note: Thomas Kuehl (L) and Ashutosh Dixit of Skoda India at the launch of two Superb variants in Bangalore on Wednesday. Shailendra Bhojak / PTIThe maker of premium vehicles sold 16,200 cars in 2008, including 8,500 Octavia and Laura sedans and 7,000 Fabia hatchback. “My first target is that we at least have single-digit growth,” Ashutosh Dixit, general manager, sales, said at the launch of two variants of the Superb in Bangalore.
The company is confident of growth in 2009 “even though the conditions in our segment are difficult, especially the Laura, Octavia segment,” he added.
Dixit is banking on the Superb and the Fabia to drive sales in 2009. As the economy slows and customers delay purchases, domestic passenger vehicle sales in 2008-09 is estimated to have grown only 3.5% year-on-year, down from 13-14% in the past couple of years, V.G. Ramakrishnan, senior director (automotive and transportation) at consulting firm Frost and Sullivan India Pvt. Ltd, said recently.
Skoda is targeting a 2010 launch for its sports utility vehicle Yeti and is conducting feasibility studies to introduce its multi-utility vehicle Roomster and premium sedan Combi.
Skoda plans to draw from its parent Volkswagen group’s expanding presence in India. For instance, the Fabia will share engines with the Polo, which is set to enter India in 2010, as will Volkswagen’s Jetta with Laura

 

 

14. Renault puts on hold India car launch plans indefinitely – April 11
 
French auto major Renault has put on hold indefinitely its plans to introduce its cars in the Indian market from the upcoming Chennai
plant on account of global slowdown, which has affected the firm's worldwide operations.

"We have indefinitely put on hold our product plans...it is because of slowdown that has affected us globally," a senior Renault India official said.

The company, which had already stopped hiring for production activities in its upcoming Chennai facility, is waiting for market conditions to improve.

When contacted, a Renault India spokesperson said, "The construction of the plant is going on, but we have frozen our product plans due to downturn in the global economy.

"However, we have left our product plan at such a stage that whenever we want to defreeze it, without loss of any time we can do (that) and ramp up the production."

While investment for construction of the plant was going on, it has been put on hold on product plans, he added.

Renault India had last year announced plans to invest Rs 4,500 crore over a period of seven years to produce four lakh cars annually from the Chennai plant in alliance with Japanese firm Nissan.

 

 

15. Audi bullish on India; sees ‘metropolitan’ strategy as the way forward – April 20

 
Global sales during Jan-March show that we are right on track and this is equally true for India where 2008 saw 1,050 customers, a jump of 200 per cent. — Mr Rupert Stadler, Chairman of the board
Mr Rupert Stadler, Chairman of the Board of Management of Audi AG, was in India recently for the Volkswagen plant inaugural at Chakan near Pune. The German luxury carmaker is bullish on prospects in this country despite the global slowdown that has had its fallout on the auto industry. Mr Stadler believes that even in such trying times, companies with a clear strategic vision will survive. He took time off to speak to Business Line.
What do you have to say about the effect of the global financial crisis on the auto sector?

There are no two ways about the fact that this crisis, which began in late 2007 and the beginning of 2008, has hurt the automotive industry. If you look at Spain, which lost 50 per cent of the whole market in the last 6-8 months, or the US where the market is down to 9.5 million units (from 16-17 million) annually, it is clear that we are living in absolutely different market conditions where only companies which are best prepared will survive.

The US market has always shown a lot of overcapacities and the Big Three (General Motors, Ford and Chrysler), in my view, possibly did not care too much about that. They did not invest considerably in innovations. As for European brands, mass producers are under pressure and those companies that did their jobs well during the last few years are in good shape.

How has Audi fared in these conditions?

When we look to our business history, 2008 was the thirteenth year of continuous, profitable growth for Audi. We invested heavily in products, new innovations, technology and markets.

For example, we are the clear premium brand leader in China. We decided to come to India 2-3 years ago and this was a new market for us.

From our point of view, the way forward is to invest in a metropolitan strategy which means being in big cities like New York, Los Angeles, Moscow, Frankfurt or Berlin. At Audi, we do the right things at the right time and are well prepared.

Does that mean the slowdown has not quite affected your company?

Well, when we at Audi talked about fighting a tough situation in 2009, we knew that the markets were declining which meant lower volumes. However, we wanted to gain market share which is not easy.

Global sales during January-March show that we are right on track and this is equally true for India where 2008 saw 1,050 customers, a jump of 200 per cent. This is thanks to the right investments in the brand to communicate its core values.

Have priorities of global carmakers changed overnight with the economic crisis?

I would like to reiterate that Audi had, years ago, defined a clear strategy for the years 2010 and 2015 with the focus now on 2020 also. We have a clear approach in terms of product, countries and investments.

The global auto industry is stunned with the financial crisis and the levels of damage inflicted. But if you have a good strategy, it can still work in tough times. Those who don’t have one are suffering and lamenting that things have changed.

For instance, there is a lot of talk about climate issues and carbon dioxide emissions but these are not subjects that cropped up yesterday. At Audi, we have adopted a long-term approach where we really challenge our engineers to work on areas like cleaner emissions. There are programmes we began 15 years ago and continue to work on even today.

We know what we need to do and where we want to be, which is being the most successful premium brand in the world. This is not about volumes alone but about emotion and perfect cars, profitability and also being an attractive employer. We know people drive business, and want to retain the best talent.

Experts believe that a handful of global platforms are enough to keep costs in check. Would Audi follow a similar model?

As a premium brand, we work with one fundamental structure which is common to the US, Europe or China. When you talk of economies of scale, I would personally prefer an excellent shape and nice design. I would rather not talk about platforms but look at emotional design and technological innovation.

Would the single brand focus be equally true for countries like India where volumes are much smaller for Audi?

I am absolutely convinced that there is only one business paradigm which is one brand and one standard. There could be marginal alterations for different markets. For instance, the Chinese prefer soft seating while Indians go in for gadgets in a big way. From our point of view, we have to understand circumstances in different countries but the brand value is one.

Would Audi go in for multiple branding with group companies, Volkswagen and Skoda, at the retail end in India?

Absolutely not! If you compare Volkswagen to other big automobile groups in the world, you can see how it has given independence to individual brands. Each of us has to do our job and not ask mama’s help all the time! This is what finally drives brands in the business.

When will you graduate to full-fledged manufacturing from the present assembly route?

This is a difficult question to answer because you need volumes and the premium market in India is still very small today. It will grow but it will take time. Whatever is needed in the future, we are flexible enough to act accordingly.

 

 

16. Hyundai spreads its word across Rural India via Hyundai Utsav – April 17

In today’s competitive world, it has become important that one takes the initiative to spread the awareness and importance of their brand. In an attempt to spread the awareness of the brand, Hyundai takes an innovative step with its new initiative targeted at the rural sections of India called the ‘Hyundai Utsav’.

While all automotive company brands concentrate on the major metropolitan cities of India, Hyundai takes a brave step by driving in to the rural sections of the country. From 18th April onwards, the company aims at reaching over 50 venues in Andhra Pradesh and Punjab markets. The world’s fifth largest automaker plans on reaching to the prosperous farmers, money lenders, business community, private companies, government employees, doctors and lawyers, who are located mainly at non-dealership towns.

Arvind Saxena, Sr. Vice-President (Sales & Marketing), HMIL commented, “Rising rural incomes, healthy agriculture growth, boost in demand, tremendous growth in rural infrastructure and growing consumerism have opened up new avenues for automobile manufacturers. We feel that 50 percent of the 220 million rural households are potential car buyers and to tap this vast unexplored market we have launched the ‘Hyundai Utsav’ campaign. In order to facilitate rural financing, we have also tied-up with various PSBs offering a deeper network in rural villages. Hyundai has a strong brand value in these markets and we are confident that a vast chunk of prospective car buyers would prefer our products.”

Hyundai banks on the hinterlands of India with their well-trained activation team, who will be present across all the locations to supervise the entire activity. They will duly attend to the visitors, provide test drives, educate and inform consumer about loans and schemes and they will also pool in the valuable consumer data over a period of close to 42 days

 

 

17. Hyundai set to launch Hyundai Santa Fe car in India – April 14

 
Car major Hyundai is all set to launch Santa Fe very soon in India. One of the best cars from Hyundai, the car is seen as of the same class as Honda CRV and may give CRV a tough competition in the days to come.

Earlier there were plans that the sedan will be launched last year, but now the company has said that it will launch the vehicle in India very soon.

The Hyundai Santa Fe is a mid-size crossover SUV based on the Hyundai Sonata platform. It was introduced for the 2001 model year as Hyundai's first SUV, released at the same time as the Ford Escape/Mazda Tribute and Pontiac Aztek.

The Hyundai Santa Fe was a milestone in the company's restructuring program of the late 1990s because, despite receiving criticism from journalists for its obscure looks, the car was a hit with the American buyers. The car was so popular that at times, Hyundai had trouble supplying the demand.

The 2nd Gen Hyundai Santa Fe was awarded 2008 Consumer Reports "top pick" and was among the top 10 vehicles for 2008 unveiled in the magazine's issue. The magazine's annual ratings, based on road tests and predicted safety and reliability, are considered highly influential among consumers.

Successfully running in the international markets, the rugged SUV Santa Fe seems to borrow its style and design from coupe and promises to quench the thirst of a buyer for sportiness as well as style. It will possess the ground clearance and power of a SUV but the visual appeal of a stylish coupe.

 

 

18. Toyota Fortuner coming to India – April 8

 
Japanese automaker Toyota has revealed that they are planning to introduce their Fortuner sports utility vehicle in the Indian market later this year.

This model would come powered with a 3 liter diesel engine.

Toyota is aiming to price this model at around Rs. 20 lakhs in the Indian market.

Toyota India representative Sandeep Singh spoke about their plans: “The Fortuner is an important addition to our product lineup in India and we are currently in the process of finalizing details for the launch.”

This model is likely to be assembled at their factory at Bidadi.

Toyota already has on sale their Land Cruiser Prado SUV in the Indian market.

 

 

19. PC vendors pin their hopes on India - April 21

 
PC shipments across the world including India declined quite significantly during the last two quarters, an offshoot of the global financial meltdown. However, that has not dampened the spirit of the PC vendors regarding the opportunities that emerging markets like India still hold.

A report by MAIT, the apex body that represents the hardware sector in India, said the total PC sales between October and December 2008 stood at 1.4 million units, registering a decline of 19 per cent over the same period last fiscal. This included both desktop computer and notebooks segments. The report stated that given the current macro-economic conditions and the buying sentiment in the market, PC sales for 2008-09 were expected to remain at the same levels as in the last fiscal at 7.3 million units.

A recent report by analyst firm Gartner stated that the PC shipments worldwide had declined 6.5 per cent to 67.2 million units in first quarter of 2009. The report, however, said that despite the global meltdown, the Asia Pacific region was relatively less affected. This was because the home market was comparatively less affected as vendors were “aggressive in stimulating demand by adjusting prices downward, bundling promotions, and conducting road shows targeting the market.”

During the first quarter of 2009, PC shipments in the Asia Pacific region saw a decline of 5.5 per cent, said the report. Major international PC vendors including HP, Dell and Lenovo have increased their focus on the Indian market by launching products suitable for the Indian consumers and the enterprises. Despite being under pressure due to the fall in demand of PCs, Indian players like HCL and Wipro have launched many a new products targeting specific segments in the Indian market. The strategy is expected to help them in the period of recession and even when the revival happens.

Anticipating softness in the demand in its tradition markets, world’s second biggest computer maker Dell has now increased its focus on emerging markets including India, China, Brazil and Russia.

Last quarter, the company rolled out its first brand campaign in India roping in real life business heros and entrepreneurs to endorse its products, targeting the SMBs. This is in a slight change in its marketing strategy, which was earlier largely focused on the large enterprises. According to Mark Jarvis, chief marketing officer, Dell, the company feels that despite the softness in demand, the economic slowdown can also be an opportunity for the company.

“Dell is a well-known brand in India, but among the SMBs we are not the brand leader. Our campaign will convey the SMBs the stories of real life Indian business heros who have used IT and have become successful in their own business,” said Jarvis.

Wipro for example, recently launched its e.go range of cheaper but stylish notebooks. The company said even though it knew how the global meltdown had impacted every walks of life, it did not change the plans to launch the notebooks.

HCL Infosystems, the hardware business of HCL Enterprise, too launched a new range of laptops under the ‘Leaptop Series 39’. The laptops are designed for Indian climatic conditions, where the ambient temperatures are higher and the surface temperature of laptops tend to become uncomfortable.

 

 

20. Dell sees slowdown in IT spending by enterprises in India- April 2

 
Computer maker Dell on Thursday said it may see slight slowdown in IT spending by the large enterprises in the country due to the current economic scenario.

However, the company is bullish to grow in the small and medium size business (SMB) segment in the country.

"There will be slight slowdown in IT budget in the enterprises segment in India. But they still have to spend on IT.

The small and medium size business will continue to grow in the country," Dell India Country General Manager Sameer Garde told reporters after launching PowerEdge servers and Precision workstations here.

Public sector Enterprise is also a growing segment for Dell. In two years, the market share in the public sector segment grew to 9 per cent.

Dell had recently restructured its business operations in India around four segments -- consumer, large enterprise, public sector, and small and medium businesses -- from the earlier two (consumer and enterprise).

The enterprise segment contributes significantly towards the revenues of Dell.

Talking about the challenges faced by customers due to the global slowdown, he said different business segments would be impacted differently, while the enterprise would be significantly impacted, SMBs might face some constraints due to the credit crunch

 

 

21. HP, Dell, Acer log on to green computing – April 11

After consumer electronics and mobile phones, it’s now the turn of computers to turn green. Leading vendors such as Hewlett-Packard (HP),
Dell and Acer are adopting ‘green computing’ in a major way in India. Apart from rolling out energy-efficient computers made from recyclable materials, the vendors are launching recycling programmes in India to reduce e-waste.

The vendors feel their latest initiatives will boost sales amidst the slowdown, since green computers consume much less energy and reduce the total cost of ownership. Analysts, too, feel green computing could become the next growth driver at a time when market watchers like IDC have projected that there could be a drop in PC sales in India this year.

Interestingly, the government is also coming up with energy efficiency standards for computers. Bureau of Energy Efficiency (BEE) secretary Saurabh Kumar said the organisation is already collecting data to come up with the standards by March 2010. “Initially, we will come up with energy standards for desktops and monitors, and eventually for laptops,” he said.

Be that as it may, the vendors claim sensitivity for green PC is already growing amongst corporates and IT/BPO firms. “Corporates are, for sure, seeing the benefits of cost savings. However, the consumer segment is yet to wake up to green computing,” said Acer India chief marketing officer S Rajendran. The BEE labelling is expected to fill that gap and create consumer awareness about energy efficient computers.

HP has just rolled out a notebook battery replacement programme in India. “During discussions with CIOs, we found that many of them are clueless about the best way to dispose their notebook batteries. We expect more than 500 enterprise customers in India to benefit from this,” said HP India country manager - commercial attach (PSG) Deepak Jagtiani.
Dell, too, is betting on green computing to drive growth.

“At a time when companies are reducing costs, energy efficient computers and servers will find more acceptance. It makes business sense for enterprises and consumers since these products enable huge savings on power bills throughout the product’s lifecycle,” a Dell India spokeswoman said.

Apart from innovations in the product line, Dell and HP have rolled out recycling programmes in India for safe disposal of old equipment in an environment responsible manner. Dell is even innovating packaging by making them from sustainable material. HP’s design centre in India is working on developing several such products.

 

 

22. Dell Working on Mini 11 NetbookTechtree - April 07
 
Dell had introduced Dell Inspiron Mini 12 in India followed by their 10-inch Mini 10 and the first netbook Mini 9. The Dell Mini 12 costs around Rs. 30,000 in India. As per Netbooknews.de, new slides from Dell show different Mini 10 models and also a Mini 11 netbook that will join the Inspiron Mini line-up.

As per the available slides, different versions of Mini 10 will be rolled out in May. A Mini 1010v (Bear) with a 10-inch display, 1.6GHz Intel Atom N270 CPU with 2.5 W TDP, and 120GB/160GB HDD or SSD options at a price of $299 (Rs. 15,000 approx.).

The new Mini 1110 dubbed as Argos will be slotted in the very thin and light category and will have a 11.6-inch HD display. Packing 2GB memory for running Windows Vista and a 250GB HDD, the Mini 11 prices will start from $499 (Rs. 25,000 approx.). This 11-inch Mini 11 version is expected to come out later this year.

In terms of pricing, the Mini 11 would ideally be priced between Mini 10 and Mini 12. In terms of hardware, we can expect the freshly launched 1.66GHz Intel Atom N280 processor with a TDP of 2 watts. This processor is paired with the new Intel GN40 chipset that offers Intel GMA X4500HD graphics capable of encoding 720p HD movies

 

 

23. Acer plans retail push – April 2

 
Buoyed by its success in the netbook category and marketshare gains in consumer PCs, Acer India is planning an aggressive retail push in 2009.

The company intends to expand its consumer PC portfolio by bringing into India globally successful brands such as Gateway and eMachines. It also plans to grow its retail network in 2009 and boost its share in the netbook category.
“Worldwide, we are less than a basis point away from taking the leadership position from HP in the mobile computing space. Our growth rate in 2009 would be far in excess of that of the overall industry, particularly in India where we will launch our new brands in Q2,” said S Rajendran, CMO, Acer India.
In 2008, Acer India recorded a marketshare of 15 percent and 6 percent in the consumer notebook and desktop segments respectively. Its share in the emerging category of netbooks was even more impressive at 40 percent.
The company plans to increase its retail network. “We have 275 stores across 150 cities. Over 100 are exclusive stores in 60 cities. We will expand this to 350 stores by year-end with 150 exclusive stores. The major focus for retail expansion is upcountry as we look to consolidate our retail operations via modern retail stores in major metros,” informed Rajendran.
Acer expects smaller cities to emerge as key battlegrounds that will grow faster than the overall market. “Despite the economic uncertainty, we expect notebooks to grow at 30 percent in 2009 and netbooks to grow by over 100 percent. Nearly 35 percent of our consumer business will come from upcountry markets,” said Rajendran.
Quoting IDC figures, he stated that the netbook segment worldwide is expected to grow from 10 million units in 2008 to 25 million in 2009. With a first-mover advantage in this emerging category, Acer sees it as the key engine to gain leadership in PCs. The company plans to launch different variants of netbooks and will soon have special zones within exclusive stores and multi-brand stores to showcase its netbooks.
Also on the cards is the launch of netbook’s desktop cousin, the nettop. Acer believes that the nettop has tremendous potential in India where PC penetration is less than 5 percent.
Elaborating about the companies strategies to help partners to cope with the slowdown Rajendran said, “We have already taken steps such as reducing targets by over 30 percent while maintaining the rebate payouts. We are organizing several meets to share global retail best practices with our retail partners. To create demand, we plan to go heavy on outdoor marketing in upcountry locations in Q2.”
Regarding the increased competition faced by IT retailers from LFRs Rajendran opined, “We do not look at the situation in terms of ‘LFRs vs IT retailers.’ Instead, we believe that both these constitute important segments within the retail fold."

 

 

24. Demand from schools to aid computer sales in Q2 – April 17

Sales of personal computers are expected to bounce back sequentially in the second quarter, with increased spending from the government, students and educational institutions seen boosting demand.

According to a recent study released by Gartner, worldwide PC shipments totalled 67.2 million units in the first quarter of 2009, a 6.5% decline from the first quarter of 2008.

The research firm did not provide details of the Indian market, but said Indian PC shipments would show a positive growth rate by the fourth quarter on year-on-year basis.

"In India, the first quarter grew marginally on sequential basis as the Indian government spent a lot with their term coming to an end. But we expect the second quarter to grow much more rapidly as students, colleges and educational institutions would again start buying computers ... and by the fourth quarter we can expect yearly growth as well," Diptarup Chakraborti, principal research analyst at Gartner India, told DNA.

In the first quarter, HP maintained its top slot in the overall PC and notebook market, while HCL was the market leader in the desktop market. Dell was ranked No 2 in the notebook market, followed by Acer.

Chakraborti added that 2008 was severely affected by delayed PC replacement orders by enterprises as they slashed their IT budgets.

"In the notebook market, firms delayed their decision by 3-4 months, while in the desktop market the delay was for 6-7 months. So we expect to end the year with many new orders coming in," Chakraborti added.

 

 

25. Microsoft Launches Entry-Level Server Platform for Small Businesses – April 4

 
Microsoft India today announced that it has expanded its industry-leading Windows Server family of operating systems with the launch of Windows Server 2008 Foundation. Built for businesses with 15 or fewer users - Windows Server 2008 Foundation delivers the reliability, security and manageability of the Windows Server platform - at a price affordable and within reach of small businesses. Now available in 40 countries including India, it will empower small businesses with the ability to run business applications and databases, host websites and will also offers basic server functionality such as file and print sharing and remote access.

In India, Microsoft has already partnered with HP and Dell in the first rollout phaze to provide Windows Server 2008 Foundation preinstalled on servers for customers. In the coming months - the company will establish similar partnerships with multiple Original Equipment Manufacturers (OEMs) to further strengthen its distribution channel for Windows Server 2008 Foundation.

Commenting on the launch, Bob Muglia (President, Server and Tools Business, Microsoft Worldwide) said, “Microsoft’s goal is to provide a Windows Server-based solution for every customer need, size and budget. We are proud to announce the India launch of Windows Server 2008 Foundation, our new low-cost server platform. This platform will empower small businesses with access to the power of server based business software at an affordable price – in the all familiar Windows environment. As businesses grow, customers can upgrade to other members of the Windows Server family - which provide additional functionality such as integrated e-mail, simplified management, virtualization and other advanced features�.

According to leading analyst firm AMI Partners - small and midsize businesses (SMBs) employ 90 percent of the world’s workforce and account for more than 50 percent of GDP worldwide. “Over the last few years, technology has emerged as a key business enabler for the rapidly expanding SMB segment in India. Keeping the market potential in mind, Microsoft expects the new Windows Server 2008 Foundation platform to be especially popular in small businesses across the country. With a promising proposition that delivers extraordinary value without breaking the bank – we are confident that Windows Server 2008 Foundation will make it possible for the SMB segment to grow, innovate and stay competitive in the Indian and global marketplace�, added Pallavi Kathuria (Director, Server Business Group, Microsoft India).

As a part of Microsoft’s strategy for this launch, original equipment manufacturer (OEM) server hardware makers will be instrumental in bringing Windows Server 2008 Foundation to market. Microsoft has currently partnered with HP and Dell to offer the platform in the Indian market landscape. "Microsoft's portfolio for growing businesses has been significantly augmented by Windows Server 2008 Foundation. HP ProLiant is the undisputed leader in the x86 server space, and has a wide range of products customized for the unique requirements of midsize and growing businesses. The partnership between HP and Microsoft on the Windows Server 2008 Foundation brings a compelling new choice to our customers", said Rajesh Dhar, Director, Industry Standard Servers, HP India Sales. In the second phase of distribution - Windows Server 2008 Foundation will be sold preinstalled on servers from other OEMs in the coming months.

 

 

26. Asus to Enhance Notebook Visibility in India – April 9
 
Asus has outlined an aggressive product roadmap to consolidate its notebook business in India this year. As a part of its go-to market strategy, it will increase the retail visibility of its notebooks, and also continue to add more products in the entry level notebooks category.

The vendor is in talks with some of the large format IT and CE retail chains like Vijay Sales, Staples, e-Zone, etc, across the country to ensure the brand visibility.

Additionally, it will build up a loyal partner base to increase the market penetration. The vendor is currently distributing its notebooks through three national distributors: Ingram Micro, Rashi Peripherals, and Netplace Technologies. "We will be appointing more channel managers in more B and C class cities, and continue with our partner benefit programmes to engage an increased number of channel in the process," said Stanley Wu, Country Manager (Notebooks and Eee PC), Asus India.

On the product front, Asus will continue to focus on introducing new technology and bring more innovations in the entry level notebooks category.

Despite a plunge in the notebook sales from the Q4 onwards, the vendor is quite optimistic on its Eee PC growth in India. "We are way ahead of our competitions with the variety we are offering on features in diverse form factors. We will extend the range further by introducing some new models this year," said Wu.

Asus has also launched its first green U6V Bamboo Series notebook in India. The company has treid to make a distinctive design statement with the product by showcasing a new green design innovation. Instead of the usual plastic and metal moulds, it features an eco-friendly and biodegradable bamboo casing and touchpad. Being energy-efficient, the Super Hybrid Engine technology of this notebook can extend the battery life up to 70 percent, the company said. It will also reduce the carbon dioxide emission by 12.3 kg per notebook annually, claims the vendor.

"With the ever increasing concern over global warming and the ecological imbalance, we find it necessary to innovate products that are not only eco-friendly but also commercially viable," said Wu.

The product is priced at Rs.1,10,000, and will be available through Rashi Peripherals in India.
 

 

 

 

27. Zenith launches new range of laptops – April 24

Zenith Computers announced the launch of a new range of laptops—Zenith Admirale Plus, Zenith Presidio and Zenith Director Ultra Plus. The highlight of the range is ICT (Indian Condition Testing) which certifies the laptops for work environment of India.
Zenith Admirale Plus is a corporate laptop with a metal finish and has IntelGM45, it is suitable for running graphic presentations or calculating complex spreadsheets. The laptop is available with an option of processors ranging from Celeron to Intel Core2Duo.

Zenith Presidio is light in weight bundled with a biometric finger print reader for secured computing. It is based on the 965 chipset from Intel, runs on Windows Vista Business and offers features such as Bluetooth, 2 MP Camera and Giga LAN, DVD writer and memory card reader.

The laptops will be available at all 500 Zenith PC world showrooms and retail outlets such as Next, Vijay Sales, Croma, etc. Zenith will also sell directly to Corporate Clients and through its website.

 

 

28. Computer giant Acer launches mobile phones in Asia – April 22
 
Taiwan-based computer giant Acer on Wednesday launched a series of advanced mobile phones for the Asia-Pacific region, ramping up its
expansion into the wireless communication market.

Company executives said Acer was banking on its experience as a leading computer brand to gain a share of the lucrative market for "smartphones" -- feature-packed devices with multi-media functions including web surfing.

The unveiling of the products here will be followed by similar launches in Southeast Asia, Hong Kong, Taiwan, India, Australia and China, they said.

It came two months after the company announced a move into the mobile phone market in February at an industry event in Barcelona.

Best known for its laptops, Acer said its smartphones come equipped with powerful processing and memory capabilities.

"We are facing a very large opportunity here," said Roger Yuen, Asia Pacific vice president for Acer's smart hand-held device business group.

About 200 million smartphones are sold each year and Acer believes the market should grow at 15 per cent annually in the next five years.

"Our ambition is to be among the top five smartphone vendors in the world in the next three years," Yuen said.

Finland's Nokia leads the market for smartphones, followed by Canada's Research in Motion, which makes the popular Blackberry, and California-based Apple which boasts the iPhone, industry research firm Gartner has said.

Other laptop makers are joining the fray, with Toshiba already manufacturing handsets, and there are rumours that US-based Dell is preparing to launch its own range.

One of the models Acer unveiled on Wednesday is the DX900, which has a dual SIM card function and comes with a 3.0 megapixel camera.

Another model, the DX650, is uniquely designed to be used on both sides, featuring a touch screen panel on one side and a keypad on the reverse.

Prices will range between 599 and 799 Singapore dollars (397-530 US). In all, five models will be unveiled in the first half of this year.

In the second half, Acer will roll out three more models geared for the mass market, meaning they will be cheaper but still contain multi-media functions, the company said.

"One of our goals in Acer is really to introduce smartphones that are more and more affordable," Yuen told AFP after the launch.

With the price gap narrowing, more people are expected to switch to from regular cellphones to smartphones, he added.

China and India are likely to drive demand in Asia, Yuen said.

 

 

29. HP Launches Ultra-thin dv2 Notebook in India - Apr 9
 
HP has announced the new ultra-thin dv2 notebook in India. Less than one inch in thickness, it weighs 1.64 kg. HP would be selling the dv2 notebook starting at a price of Rs. 37,490, exclusive of taxes.

The HP dv2 notebook has a 12.1-inch, 1280 x 800 pixel, BrightView LED backlit widescreen display. The dv2 is equipped with a 1.6GHz AMD Athlon Neo processor with ATI Radeon X1250 integrated graphics and optional ATI Mobility Radeon HD 3410 discrete graphics. AMD Athlon Neo MV-40 is the single-core processor for the platform announced back in January. Clocked at 1.6GHz, Athlon Neo has a 512K cache and supports 32-bit as well as 64-bit operating systems with a TDP rating of about 15 watts.

This ultra-thin notebook can support a 4GB RAM and has 320GB HDD 5400 RPM storage. The notebook has a glossy finish and runs the Windows Vista Home Premium.

High-definition junkies can opt for the Blu-ray optical drive for watching high-definition movies. For wireless connectivity, the dv2 also supports an optional built-in WWAN; but to be noted, there is no 802.11n support. Also, dv2 includes an integrated HP webcam and microphone.

Though the notebook belongs to the ultra-thin segment, it is a bit overpriced when compared to other normal notebooks. But if notebook makers come up with more models in the ultra-thin segment, the prices might come down if competition increases.

 

 

30. Logitech Rolls Out Notebook Riser N110 – April 24 
Prolonged hours of notebook computing can take a toll on one's back, neck or/and eyes. Logitech helps address these needs with the Notebook Riser N110.

You love your laptop. But you don't like hunching over to use it. Logitech has introduced the Logitech Notebook Riser N110, which helps make the laptop experience more comfortable around the home.

"We've identified two ways in which people use their laptops around the home - in structured spaces such as the home office, and unstructured spaces like the living room," said Denis Pavillard, vice president, product marketing, keyboards and desktops, Logitech. "Logitech now offers a range of solutions that enhance the laptop experience with designs based on our deep understanding of how people use their laptops around the home - and their desire to enjoy the convenience of a laptop, without sacrificing comfort."

"Logitech aims to make the notebook computing experience more enjoyable with the new ergonomically designed Notebook Riser N110 designed to raise a notebook's display to an optimal viewing level," added Subrotah Biswas, country manager, India and SAARC, Logitech.

You can use the Notebook Riser N110 with external keyboard and mouse - such as the Logitech V550 Nano and the Logitech diNovo Keyboard for Notebooks - and arrange each peripheral individually to enhance your typing posture.

The Notebook Riser N110 also features an adjustable tilt - with 20-, 30- and 40-degree angles - and a rubber-soled swivel base, so you can choose the position that feels best to you. For your convenience, the Notebook Riser N110 flips open and folds flat for easy setup, transport and storage. With light gray surfaces, Tuscan green accents and rounded edges, the Notebook Riser N110 will look good in any room you use them.

The company also plans to introduce products like Logitech Comfort Lapdesk and Logitech Notebook Cooling Pad N100 in the coming months.

Logitech Notebook Riser N110 is priced at Rs 1,595 and will be available at all leading electronic stores in India from end of April 2009. It enjoys a replacement warranty of three years and is distributed by Rashi Peripherals Pvt Ltd and Tech Pacific (earlier known as Ingram Micro).

 

31. Lenovo Intros New Range of Entertainment PCs - April 15
 
Lenovo has introduced a new range of entertainment PCs in India - Lenovo IdeaCentre A600 all-in-one desktop and Lenovo IdeaPad Y650 notebook. The two products are not only the thinnest in their respective categories, but are loaded with some game-changing features, not seen in the Indian market, the company claimed.

"At Lenovo, we always keep pushing the limits of good design, balancing form and function, as exhibited in our Lenovo IdeaPad Y650 and Lenovo IdeaCentre A600. This unique blend of design and engineering sets us apart from competitors and gives consumers a new kind of entertainment and computing experience," Ramprasad L, Vice President, Transactional Consumer Sales, Lenovo India.

The new IdeaCentre A600 all-in-one features a 21.5-inch frameless screen, and provides users a modern design that measures only one inch. The Lenovo IdeaCentre A600 features a 4-in-1 optional remote which enables four unique features. For the entertainment enthusiast, it offers a 16:9 aspect ratio screen with full HD resolution, while the integrated speaker system with bass sub-woofer and Dolby Home Theater audio certification completes the home cinema experience. Users can also take advantage of the TV tuner for watching and recording their favorite TV.

At the core of the all-in-one is a desktop computer with choices of Intel Core2 Duo processors, optional ATI Radeon graphics card technology with DirectX10 support, up to 4GB of fast DDR3 memory for improved multitasking and up to 1TB (1,000GB) of hard drive space for storing hundreds of videos, music and other documents. Equipped with the latest high-performance mobile processor technology, the all-in-one runs whisper-quiet even when performing intensive tasks.

The Lenovo IdeaPad Y650 has been designed in a modern soft black design with an interlocked hexagon pattern on the top cover along with a discrete copper accent around the perimeter of the laptop. The machine also features touch-sensitive controls and ambient light sensor technology. The keyboard is similar to the ThinkPad keyboard and has bevel sides.

The notebook comes with integrated Nvidia GT105M with CUDA acceleration graphics processor supporting high-definition graphics bringing images to life with vibrant colors and 16:9 format viewing experience. It uses JBL Speakers along with Dolby Home Theater, and its OneKey theater software gives users an easy option to switch the PC display and sound effect from normal to movie mode.

 

 

32. Sony India to gain market share in low-end segment - March 19

Sony India is looking to gain market share in its low-end segment across categories by rolling out more products in the lower price bracket
at the entry level. At the same time, it will continue its focus on the mid and high segments which now contribute 70-80% of its turnover.

This comes at a time when the global slowdown has resulted in Sony India undertaking a downward revision of its FY08 targets. It is expected to close this year with a 20-25% growth, as compared to its earlier projections of 30-35%. In 2007-08, Sony India’s turnover was Rs 3,000 crore.

"For FY09, we are targeting a growth of 15-20%," said Sony India general manager (CAV sales department) Sunil Nayyar. He was speaking at a press conference in Kolkata on Thursday to unveil Sony’s latest digital imaging product line-up with a total 19 models for the Indian market.

"In the domestic digital still camera business, we expect the sub-Rs 10,000 category to grow the fastest in FY09 and account for 40% of the sales in that segment. In FY08, the Rs 10,000-12,000 category was the strongest with 25-30% share in our digital still camera business," Sony India manager-marketing mobile and entertainment department Takahiro Hirata told ET.

Mr Nayyar added that despite the slowdown, the LCD TV and digital still camera segments were expected to be the biggest growth drivers next fiscal, though categories like laptops, play-stations and digital players were also expected to show significant growth.

The audio and CRT TV categories were the underperformers, with the latter being the worst hit.

He did not rule out a revision in prices, given that the company relies primarily on imports which have been costlier due to the depreciation of the rupee. "If the exchange rate condition worsens, then we may have to consider an upward revision of prices. However, we are not thinking of it right now," said Mr Nayyar.

 

 

33. Philips to roll out new line of domestic appliances - March 24

Dutch electronics biggie Royal Philips Electronics is developing a totally new line of consumer lifestyle products in India, which will be
positioned in the value segment.

While these products are under development at the Philips Innovation Campus in Bangalore, the company plans to export these products from India for its growth cluster markets — China, Brazil, Russia, Poland, Ukraine and Argentina.

The products under development are in the domestic appliances space, which include electric irons, mixer grinders, juicers and rice cookers. The latest range will be around 30-50% cheaper than Philips’ existing product-line.

In fact, Philips has recently commercialised its water purifiers — the first major product developed in India — in other emerging markets.

Talking to ET, Philips Electronics India head (consumer lifestyle) Mahesh Krishnan said the company expects to roll out its new range by September to coincide with the festive season.

"The strategy is to develop products that can compete with those available in the unorganised sector. The kitchen appliances segment is vital in India as it is recession proof," he said.

Philips had formed the consumer lifestyle division by merging its domestic appliances and consumer electronics businesses last year. The estimated Rs 5,000 crore domestic appliances market in India is growing at 10%.

Philips is one of the largest players in the market. The company plans to gain presence in Tier II and III markets with its new value portfolio.

"These products will target the low income group consumers in urban markets and overall rural markets. We will export them to other growth clusters where there is huge potential for similar entry-level products. This testifies the importance Philips is now giving to the Indian operations," said Mr Krishnan.

Philips also expects to roll out its smokeless chullah (stove) for the rural Indian consumers by September. The company plans to tie up with NGOs, micro finance companies and rural co-operatives to sell this product.

This apart, Philips is also looking at computer and mobile phone accessories as a key growth driver in India.

"We are setting up a new distribution channel and sales team for the accessories business in India. We will soon launch products like Bluetooth stereo headphone, digital wireless headphone, iPhone and iPod docks and lifestyle IT peripherals like keyboard. We expect to double sales in this business year-on-year," said Mr Krishnan

Philips forays into home healthcare business - March 21

Dutch electronics major Philips, on Friday, announced its entry into the home healthcare business in India. The company rolled out the Philips
Respironics range of products for management of obstructive sleep apnea and home respiratory care.

India is the first country where the Philips Respironics portfolio has been launched outside the US.
Philips had acquired Respironics Inc, a leading provider of innovative solutions for the sleep and respiratory ailments market, for nearly $5-billion in 2008.

ET was the first to report Philips’ entry into the Indian home healthcare market in October 2008. The company also strengthened its position in the hospital segment by rolling out Respironics’ non-invasive ventilation and respiratory monitoring products in India.

Priced between Rs 40,000 and Rs 1.5 lakh, the products will help the euro 26-billion company to further drive growth in the Indian healthcare market. "A core part of Philips’ healthcare strategy is to take leadership position in the home healthcare segment. Philips is now present throughout the cycle of care," Philips Electronics India CEO Murali Sivaraman said here on Friday.

This apart, Philips also announced a slew of launches in the Indian home decorative lighting market and the Philips Aluminum range of small appliances. It rolled out 150 decorative lighting products, juicers and blenders.
"We are currently in the process of setting up an entirely new pan-India distribution network for decorative lighting.

Initially, we plan to hit the top 35 markets and expand our portfolio to 1,000-odd products by end-2009. The range will be segmented into functional products, the decorative range and lifestyle products," Philips Electronics India senior marketing director (lighting) Mathew Job said.
Philips will be the first organized player in the estimated Rs 400-crore market for home decorative lighting in India.

Around 90-95% of the market is currently controlled by imported products from China. Presently, around 50% of Philips’ revenues in India come from lighting division and the company enjoys 30% share in the overall domestic lighting market.

The company plans to make substantial marketing investment to set up ‘Light Lounges’, which are experience centres to showcase the entire home decorative lighting range. The company is looking at setting up at least 35 such standalone centres and several multiple shop-in-shop outlets inside retail chains.

 

 
 

34. Energy-efficiency is AC makers’ new USP – April 20
 
As the mercury rises, the battle between top air-conditioner manufacturers has also heated up. Players such as Samsung, LG and Carrier are trying their best to beat each other in the bid to grab the largest market share by launching a fresh range of products this season, with no additional costs.
The consumer durable majors are also betting big on energy-efficient ACs to help consumers cut down their electricity bills.
“Based on the new AC range and sales network expansion across 33 cities in the country, we expect to notch a 50 per cent growth in our AC volumes this year,” said R Zutshi, deputy managing director, Samsung India Electronics.
The company is targeting a 25 per cent share in the Indian AC market this year, which is slated to grow to 2.4 million units. Samsung has launched 18 split AC models and seven window ACs this season, priced between Rs 16, 090 to Rs 35, 990.
Not far behind, Carrier India, too, is focusing on energy-efficient ACs ranging from Rs 14,000 to Rs 42,000.
The company expects to beat the overall market, which is expected to rise 15 per cent this year from over 2008. “We are looking at increasing the number of retail channels. This expansion would be through multi-brand outlets but our exclusive retail stores would remain the same,” said Zubin Irani, managing director, Carrier India.
LG Electronics India, too, has launched 43 split and 19 window AC models. The products launched this year are five-star rated and consume less energy.
Indian government’s Bureau of Energy Efficiency (BEE) classifies white goods as per their energy consumption pattern with five-star rated products being the most efficient.
“With this range, we aim at grab a 30 per cent market share by this year end,” said Ajay Bajaj, business group marketing head, LG India.
While manufacturers have lined up products, industry experts expect the growth in the Indian AC market to moderate in 2009.
As per research agency ORG- GFK, the market is expected to grow between 10-15 per cent this year compared with 20 per cent achieved during 2008.
The AC market in India stood at 1.71 million units in 2007 and went up to 1.94 million units during 2008.

 

 

35. Mirc Electronics plans to start manufacturing refrigerators – April8
 
After launching mobile handsets last year, Mumbai-based Mirc Electronics Ltd, the company that markets consumer electronic products under the Onida brand, is looking at entering new product categories besides consolidating its position in those that it is already present in.
New categories: Mirc Electronics chief executive officer G. SundarThe company that primarily manufactured televisions has steadily diversified into products such as DVD players, microwave ovens, washing machines and air conditioners over the past three-four years. “One category we are not present in at the moment is refrigerators. We are considering to enter this segment,” said G. Sundar, chief executive officer, Mirc Electronics.
Sundar added that this year the company’s focus will be to consolidate its market share in all categories it is present in. The company has a market share of 12-13% in television and split air conditioner segments. In the rest of the categories, its market share is less than 10%. “...the target is to achieve at least 10% market share in categories we are present in at the moment,” said Sundar.
According to industry experts, the company’s entry into mobile phones segment has helped it increase its revenue and manufacturing refrigerators would complete its portfolio of products.
“About five million units of refrigerators are sold in India every year... These account for about 12% of the total consumer electronics and appliances market estimated at Rs30,000 crore,” said Suresh Khanna, secretary general, Consumer Electronic Appliances Manufacturers Association.
The company, however, will have to face stiff competition in the refrigerators segment, which is well served by consumer electronic manufacturers such as LG Electronics India Pvt. Ltd, Samsung Electronics India Pvt. Ltd, Godrej and Boyce Manufacturing Co. Ltd and Videocon Industries Ltd.
Mirc also plans to support its efforts to consolidate its position in the market with marketing initiatives. According to Sundar, the company will spend around Rs100 crore in marketing this year, including the Rs20 crore it is spending on advertisements during the Indian Premier League cricket tournament and the general election.
Besides entering new categories, Mirc is also expanding its manufacturing capacity. The company currently has manufacturing units in New Delhi and Wada (Maharashtra). It is now setting up another unit in Roorkee (Uttarakhand) with an investment of Rs65 crore, which is likely to be operational by June. “We intend to produce home appliances, washing machines, colour televisions and LCD TVs (in the new unit),” Sundar said. An additional line may be put up at the Roorkee facility to manufacture refrigerators.
The company is also exploring options to acquire a design company. “We are looking to strengthen our research and development, for which we are even willing to acquire a design house, but do not have anything on our hand right now,” Sundar said.
Mirc Electronics’ net sales for the nine months ended December declined to Rs1,125 crore from Rs1,186 crore in the year-ago period. The net profit also fell to Rs12 crore against Rs28 crore. “Our profits dipped because of the fluctuations in the value of rupee which made imports really expensive...and steep rise in input costs,” Sundar said.
Mirc is also currently streamlining its operations with its holding company Guviso Holdings Pvt. Ltd after the company’s board approved the amalgamation of the two companies. Guviso had no business of its own other than its 53% holding stake in publicly listed Mirc. Mirc electronics chairman Gulu Mirchandani had won the control over the holding company last year.

 

 

36. Range of Freshtech Ultima refrigerators from Samsung – Aril 3

R. Zutshi (left), Deputy Managing Director, Samsung India, with Dia Mirza, actor, launching the largest five-star rated refrigerator range in Hyderabad on Tuesday.

HYDERABAD: Samsung India is expecting a growth of 27 per cent in 2009 and is planning to clock a turnover of $2 billion in the country as against $1.7 billion last year.

Addressing a press conference here after the national launch of Samsung Freshtech Ultima refrigerators in the market, Deputy Managing Director of the company R. Zutshi said that 27 models of air-conditioners were launched in February this year. The economic slowdown did not affect the home appliances business.

Sales of frost-free refrigerators were growing at 42 per cent. The company would invest $8 million towards R&D in the home appliances segment. The 1,000-strong R&D staff worked for products for domestic market as well as the foreign countries.

The company launched 71 refrigerators in the price range of Rs. 9,350-25,200. The company was looking at enhancing its market share from 18 per cent to 26 per cent. A new testing lab was set up in Noida. The cool pack technology, embedded in the new range of Freshtech Ultima models, would keep the items in the freezer cool in spite of longer hours of power cuts with the help of a coolant. Model Diya Mirza launched the new range of fridges.


According to Mr. Zutshi, all the frost-free refrigerators were equipped with a unique freshness lamp that keeps fruits and vegetables naturally fresh for a longer period. “Given the growing environmental consciousness among consumers and Samsung’s own initiative towards producing eco-friendly products, we have introduced 71 ‘5 Star’ rated models that reflect the highest rating in terms of energy efficiency as awarded by the Bureau of Energy Efficiency (BEE). For saving energy when the refrigerator is not in use, these models have the ‘E-Saver’ mode, which when switched on, keeps the freezer running but turns off the fridge,” Mr. Zutshi said. Samsung is also planning to increase its market share. “Based on our innovative new range introduction, our channel expansion and our new marketing campaign to support this range, we are looking at attaining a 26-per cent market share in the refrigerator market in India by 2009,” he added. Samsung is also aiming at establishing its leadership in the frost-free refrigerator market by achieving a 50-per cent growth in the segment.

 

 

37. BoI launches scheme to finance Tata Nano car - April 2

 
In a move that will benefit loan seekers of the Nano, Bank of India said on Thursday that it has devised a scheme under which auto loan seekers will be granted a three-month moratorium on interest and principal payment.

The scheme, meant for existing customers, will also not recover any upfront interest from the borrower.

"The loan is highly beneficial to people who will get the allotment and delivery of vehicle as it shall be charging a floating rate of interest of 10.25 per cent with repayment period less than 36 months," Bank of India said in a release.

Borrowers will be charged 10.75 per cent between 3-6 years, the lowest rate on auto finance levied by banks," it said.

"On booking loan, it shall charge 12 per cent fixed rate of interest only till delivery of the vehicle. Booking loan may be for a short period of 90 days only and delivery period as declared by Tata Motors," it said.

Vehicle loans are for a maximum period of six years, at a rate of interest between 10.25 per cent to 10.75 per cent per annum, the lender said.

 

 

 

38. Banks rejig credit card limit – April 25

 
S Sinha, a customer of ICICI Bank, was shocked on Friday when he received an SMS from the bank which said, "Dear customer, effective April 23, 2009, the cash limit on your ICICI Bank Credit Card No XXXX is Rs 0 and the total credit limit is Rs 19,000.'' His earlier cash withdrawal limit was Rs 19,000 and total credit limit was Rs 60,000. This happened despite the South Delhi-based credit card holder never defaulted on payments.

On Friday, many ICICI Bank customers received similar messages. In fact, most of the private and foreign banks are lowering credit limits on cards as economic slowdown is affecting incomes of cardholders, following steps like salary cuts and layoffs being taken by many companies. Others like HDFC Bank, Axis Bank, Citibank, Deutsche Bank, Standard Chartered Bank, HSBC Bank have also reduced credit limits of their customers.

ICICI Bank ED V Vaidyanathan said cash limits have been tweaked on the basis of creditworthiness of cardholders. In many cases the limits have been enhanced for customers having good repayment records, he added.

A senior official of a foreign bank said due to global liquidity crunch, they are forced to cut exposure to credit given to card, where default rate is as high as 15% against below 5% in the normal banking business.

Banks can access to information about all cardholders from Credit Information Bureau of India Ltd (CIBIL). To contain default rates, banks are keeping a close watch on the creditworthiness of a customer in the light of total credit taken on various cards and changing the limits accordingly.

At present, there are 25 million credit card holders in the country. Total outstanding on the credit card, according to one estimate is around Rs 25,000 crore. A senior banker said that default rate on card business is not alarmingly high in India as in US, where total outstanding of card business is around $2 trillion.

 

 

39. ICICI Bank cuts interest rates, others to follow suit- April 21

The country's largest private sector lender ICICI Bank was the first to cut interest rates today after the RBI lowered its short-term lending and borrowing rates, but housing loan major HDFC said it has no plans to cut the rates now.
In fact, it was private sector banks which were reluctant to cut lending rates earlier when the RBI had eased money supply through a series of rate cuts.

The RBI reduced short-term lending (repo) and borrowing (reverse repo) rates by 25 basis points each to 4.75 per cent 3.25 per cent respectively. Taking cue from the RBI, ICICI Bank cut both lending and deposit rates by up to 50 basis points.

Describing the RBI's stance as an "innovative and far- reaching policy," ICICI Bank's Managing Director & CEO, K V Kamath, said it would have a significant impact (on spurring economic growth).

Commenting on RBI annual monetary policy 2009-10, SBI Chairman O P Bhatt said, "it (the RBI rate cuts) is a very clear-cut signal that interest rates should ease." Meanwhile, RBI Governor in his customary press meet said, "Indeed, the further policy rate cuts effective as a part of this policy should be a definitive signal for reducing lending rates." HDFC's Chairman Deepak Parekh said, "We have no plans to lower our interest rates as of now".

 

 

40. Bank of India to expand ATM network- April 12

Bank of India is planning to double the number of its ATMs across India during the current fiscal. The bank, which has around 500 ATMs
across India, will add 500 more during 2009-10, M Narendra, its executive director told reporters here on Saturday that a directive by Reserve Bank of India enabling free use of any ATMs for cash withdrawal from April 1 will not have any bearing on the bank's decision to expand its ATM network.

Each bank has to pay anywhere from Rs 12 and Rs 18 for each transaction conducted by its customer on another bank's ATM from April 1 and this can not be passed on to customer as well. The bank is also not thinking of being conservative while issuing new ATM-debit cards to account holders to ward of this problem. "This card is being issued to every new customer opening an account with us from centralised locations," he said.

On the other hand, Narendra said, "A move to issue more ATM-debit cards would lessen the pressure on our branches, most of which handle bulk pension accounts. Such customers insist on personalised care at the counters, and this may eat in to the time of other customers". These customers can as well use the ATMs for their various needs; he said and added a majority of 500 ATMs planned will be onsite ATMs.

Narendra added that the bank is bringing down its minimum lending rate to 12 per cent per annum and the deposit rates will head southwards accordingly. Deposits above Rs 1 crore per annum from April 15 will fetch an interest rate of seven and a half per cent and above Rs 1 crore will fetch seven per cent. On the bank's financial target for the current fiscal, Narendra said it would be decided by the credit policy to be announced by the RBI on April 21.

 

 
 

41. ICICI Prudential Life Joins Punjab National Bank in Rural Market Partnership – April 8
ICICI Prudential Life Insurance Co. [89580], a joint venture between India?s ICICI Bank and U.K.-based Prudential plc [85925], said it has formed a strategic partnership with Punjab National Bank to collect policyholders? premium payments and further expand its business networks in semi-urban and rural regions in India.
According to ICICI Prudential, the service will be provided in Punjab, Uttar Pradesh, Uttaranchal, Haryana and West Bengal in India during the first phase. The partnership with Punjab National will also enable the insurer to offer more than 10,000 contact points to consumers for premium payments by cash, check, demand drafts or direct debit across the bank?s 4,600 branches.

Anita Pai, ICICI Prudential Life Insurance?s executive vice president of customer service and technology, said in a statement that the insurer?s strategic partnership with Punjab National is ?a significant step? in enabling its customers to reach the company easily. It offers customers a way to pay their premiums at locations easily accessible through the bank?s network.

Punjab National?s deputy general manager, Ashwani Kumar, said the partnership will provide consumers? premium payment facilities at a location closer to them at ?no extra cost.? The partnership will also help the insurer in ?penetrating further in the semi-urban and rural locations where the need for insurance in growing.?

ICICI Prudential had earlier tied up with local institutions in key Indian states, including South Indian Bank in Kerala, Bank of Rajasthan in Rajasthan, Karnataka Bank in Karnataka, Federal Bank in Kerala, and with the Department of Posts to leverage the reach of those institutions in cities of the country.

For the nine-month period ended Dec. 31, 2008, Mumbai-based ICICI Prudential recorded total premiums of 99.18 billion Indian rupees (US$1.97 billion) and had underwritten more than 8 million policies since its establishment in 2000. The insurer has 2,099 offices and 272,920 advisors across India.

 

 
 

42. Perform or perish for ITC Foods - April 23
ITC Foods is gradually moving out of low-margin food products and will focus on building a more profitable portfolio, under pressure from an ultimatum set by its parent to turn profitable, several persons familiar with the matter said.
Cigarettes-to-hotels conglomerate ITC has warned its foods division that it will withdraw financial support unless it turns profitable within a specified period, they said.
ITC’s foods division, which owns top-selling brands such as Aashirvaad Atta, Sunfeast biscuits, Bingo snacks and confectionery items such as Mint-O and Candyman, has revenues of Rs 800-1,000 crore, but is yet to report operating profits.
The ITC management is running out of patience with businesses that are incapable of funding themselves after several years of operations, said a company official, requesting anonymity. But a spokesman for ITC denied that there was any pressure on ITC Foods to break even within a specified time.
“Our record of achieving rapid growth in marketshares in our newer FMCG businesses has been outstanding. The so-called losses are investments in brand building and product development, the vital foundations of any long-term business strategy,” he said.
But several persons familiar with ITC Foods’ operations said the business has been put on notice, and added that the unit would focus on the premium and more profitable end of the biscuits market while sidelining the basic glucose biscuits and other mass market products.
Trade officials also expressed surprise that ITC, widely viewed as a player with deep pockets, has suddenly turned jittery about the foods business.
“We understand from senior officials that there is some turmoil in the company. Some of the initial aggression has been toned down,” said a Mumbai-based FMCG distributor, who asked not to be named for fear of antagonising the company.
The group is also undertaking personnel changes to drive its new strategy for foods. Long-time CEO Ravi Naware is retiring in December, and officials said Chittaranjan Dhar, who worked in its Wills Lifestyle clothing and fashion accessories business, has been moved to the foods division.
ITC’s cigarette business now accounts for around 66% of its gross revenues and a bulk of its profits. The company has been under pressure in recent times due from a tough retail environment, fall in hotel occupancies, and massive investments needed to build its personal care portfolio and foods business.
The company has over the years invested heavily in building its food brands and has managed to turn the heat on its well-established rivals in the sector. In 2005, it roped in Shah Rukh Khan as brand ambassador for Sunfeast. It also got tennis player Sania Mirza on board and launched a tennis tournament.
ITC made an entry into the packaged foods business in August 2001 with the Kitchens of India brand. The following year, it broadbased its focus with launches in the confectionery, staples and snack foods segments. ITC’s offerings challenged established brands from players such as Britannia, PepsiCo and HUL in several categories.
But some of its rivals have struck back, saddling ITC with huge inventory, especially in Bingo, several people in the trade said, requesting anonymity.
Bingo took on Frito-Lay when it was launched in 2007 and gained 16% marketshare by the end of 2008. In biscuits, it competed with established players such as Britannia and Parle and cornered a more than 10% marketshare while its Aashirvaad brand is the leader in the branded flour segment.

 

 

 

43. Danone to sell 25.48% stake in Britannia to Wadia Group - April 6
The Wadia group is buying out 60.86 lakh shares of Britannia via Leila Lands, a subsidiary of Bombay Burmah based in Mauritius from its Globe's biggest M&A dealmakers equal JV partner French foods giant Groupe Danone.

Danone will sell its 25.48% stake in Britannia to the Wadias on April 14, the Wadias said this in a statement to the exchanges.

The move finally resolves the two-year long dispute between the Wadias and the French company over control of the biscuit company and will now lead the Wadias to gain complete control over Britannia.

 

 
 

44. Tata Tea brews consolidation plan - March 24
The Tata group is learnt to have set in motion a major revamp exercise at group company, Tata Tea, that would consolidate varied beverages
businesses such as tea, water and soft drinks under a single entity to simplify operational issues and also raise funds.
The consolidated entity will result in a clear holding, operating and reporting structure, which would cut costs sharply. As part of the move, the group is also exploring plans of merging Mt Everest Mineral Water with Tata Tea, and consolidating the Himalayan brand under the Tata fold.
While it is not clear whether the consolidated entity would be a local firm or an international company, people familiar with the development said Tata International could house the consolidated entity. Tata International is a trading house with a topline of $850 million in 2006-07, according to its website. When contacted, a company spokesperson said: “We do not comment on speculation”.
Senior executives at Tata Tea admitted that a consolidation exercise was on, and said costs were the main reason for such a move. However, bankers who have worked closely with the company say such a single consolidated entity could also be used to raise money for future expansion needs and to also reduce the group’s debt. “A consolidated entity will be able to strike better valuation and bargain terms with trade, and significantly cut costs in the system,” said a senior official.
The move by Tatas to consolidate is also a reflection of the fall in M&A activity in India and an increase in what investment bankers call restructuring activity, among large conglomerates which would want to reduce debt.
Tata Tea is keen to transform itself quickly into a global beverages company, focusing primarily on the growing health and wellness segment, with the youth as a major driver of growth. While the traditional black tea market is sluggish, markets for speciality tea, green tea, ready-to-drinks and fruit juices are growing sharply.
As per the financials of listed beverage companies under the Tata group, the combined entity had total sales of around Rs 5,370 crore and a net profit of Rs 1,560 crore. The debt of this combined entity alone is Rs 3,475.35 crore while total liabilities is Rs 8,511.45 crore. “But these numbers don’t include the unlisted overseas entities,” said an executive. The group has beverage companies, under Tata Tea, in the UK, the US and plantations in other countries as well.
Tata Tea, the main listed company of the Tata Group in the beverages segment, is 23% owned by Tata Sons, the Group’s holding company. Tata Coffee, which is also listed, is 35% owned by Tata Tea. Tetley, the British tea company, is 100% owned by Tata Tea. Merging the tea company with, say, Tata International, could be to create a large consolidated entity where the group could dilute a minority stake to raise funds.
Although Vedanta’s move was carried out when the markets were good, people familiar with the development said for a brand such as the Tatas, dilution of stake would attract buyers. This is also one of the options that the group has said it would explore to meet various financial commitments.
Tata Tea has a significant presence in over 40 countries. The consolidated worldwide branded tea business of the Tata Tea group contributes to around 86% of its consolidated turnover, with the remaining 14% coming from bulk tea, coffee and investment income.
Tata Tea had recently launched Tion, a cold beverage targeted at the youth in the Rs 10,000-crore branded cold drinks market. Officials in the know said Tata Tea is also looking at venturing into the 10% alcohol beverages segment, similar to the Bacardi Breezer.
The company has five major brands in the Indian market — Tata Tea, Tetley, Kanan Devan, Chakra Gold and Gemini — catering to most major consumer segments for tea. As Tata Tea increases its presence in beverages, the single entity structure would bring benefits such as in marketing, distribution and branding.
The group has made a series of acquisitions in the last five years in the beverages space, beginning with the Tetley group, Good Earth Teas, Jemca and Eight O’Clock Coffee to extend its presence in global markets.

 

 
 

45. FMCG firms see shrinking fortune at the bottom of the pyramid - April 10
Small may be beautiful, but not always. Fast moving consumer goods companies (FMCG), which depend heavily on the bottom of the pyramid market are in trouble as far as their small pack sales are concerned. And this is despite the fact that no price increases took place in this segment, even though FMCG companies raised prices roughly 17 per cent for soaps and 24 per cent for detergents. Sample this: According to the latest Nielsen data for the 11-month period from March 2008 to February 2009, soap and detergent sales at price points of Rs 10 and below have actually declined. This should be a cause for worry for most FMCG companies, since a quarter of soap sales and 60 per cent of detergent sales come from this segment.
Although overall detergent sales volume dipped 3.6 per cent, the bottom of the pyramid category fell at a sharper rate of 5 per cent. In the case of soaps, overall sales went up a marginal 2 per cent, but dropped 8.5 per cent for the small pack category. The picture would have been worse but for Bharat Shining, to some extent. Sales of detergents in small packs declined 10 per cent in urban areas but rural areas saw a 2 per cent dip. The story was the same for soaps: Urban areas saw an 11 per cent decline, rural areas a smaller fall of 7 per cent. The period also saw rural sales overtaking urban sales and accounting for close to 53 per cent of the overall FMCG market. Experts attribute this to the combined effect of good monsoons, the farm debt waiver and the fact that the financial meltdown hasn’t yet trickled down to the villages.
One of the reasons for the dip in small pack sales was the reduction in grammage. Owing to rising input costs last year, FMCG companies such as Hindustan Unilever, Marico and Godrej Consumer Products have been reducing grammage at price-sensitive market points without raising prices. "We had to increase rates or cut grammage to maintain profitability last year on account of increasing input costs," says H K Press, president, Godrej.
Faced with dwindling sales, companies are trying to pull out all stops to address the problems in the small pack segment. Amita Shetye, director, Client Service, The Nielsen Company, said it had become a tough task for marketers today to juggle the value-volume quotient of their products. "Over the years, this has resulted in an average increase in the value of washing powders and detergent bars, resulting in the overall decline in the average volume of these categories," he said.

 

 

46. Rural India driving growth for FMCGs – April 18
Even as urban consumers hold spending, rural India is giving fast-moving consumer goods (FMCG) firms a lot to cheer about. In an April 16 report, Nikhil Vora, Bhushan Gajaria and Shweta Dewan, analysts with IDFC SSKI India Research, said while FMCG is seeing a volume growth of just 6-7% in metros, in rural markets it is over 20%. The report said, "The under-penetrated rural market is providing the much-needed succour to consumption offtake. Rural India is witnessing stronger volume growth with companies going deeper and a new set of consumers being added to the fold. Around 60% of India still resides in rural areas and the 610 million consumers in rural markets are bigger than the total population of many countries." Little wonder then that FMCG majors such as Dabur India, Godrej Consumer Products Ltd, Godrej Tyson, Parle Agro, etc, are intensifying their rural focus. While some players already have a significant presence and a sound distribution base in rural markets, others are realising the potential of these markets only now when consumption in metros is falling. Dabur gets almost 50% of its revenues from rural and semi-urban areas and has planned initiatives to drive sales there.
It now has in place a sales network only for the rural belts. V S Sitaram, chief operating officer (consumer care), said, "Keeping the rural market focus in mind, we have also redoubled our efforts to launch small packs and sachets in villages. We have just introduced Dabur Amla hair oil in a Re 1 sachet." Parle Agro Ltd is adding new distributors across rural markets, said Nadia Chauhan, its joint managing director and chief of marketing. Godrej Tyson is strengthening presence in east India by establishing a new channel network there. An interesting point, analysts say, is that in rural markets, there seems to be no downtrading except in a few segments such as soaps, detergents and edible oils. According to the IDFC SSKI report, Marico's Saffola edible oil has seen some downtrading. But Godrej Consumer seems to have benefited immensely from the downtrading in soaps due to its mass segment play. Consumers have shifted from slightly expensive brands such as Hindustan Unilever Ltd's Lux to cheaper ones like Godrej No. 1. Similarly, HUL's Wheel is losing market share to the mass brand Fena in Bihar, Jharkhand and Orissa. An analyst from a leading brokerage said, "The downtrading to local or cheaper brands doesn't imply any serious cut in consumer spend in the short or long term."

 

 
 

47. Stirring plans, heady claims, on soup stakes – April19
The fight for the number two spot in the estimated Rs 100 crore branded soups market is intensifying, with Capital Foods’ Ching’s brand and Nestle India’s Maggi laying claim to this position in the three-player market. Hindustan Unilever’s (HUL’s) Knorr brand of soups is said to be the leader, with a 65 per cent market share in modern retail. However, Capital Foods, the Maharashtra-based makers of Ching’s brand of noodles and Chinese soups, launched in September 2008, says it occupies the second slot, claiming to have dislodged Nestle's Maggi soups. Ching’s Chinese soups, according to Ajjay Gupta, managing director of Capital Foods, claims to have cornered a market worth about Rs 20-22 cr in modern retail, ahead of Maggi soups that has about Rs 15-17 cr of market share. "Since the launch of our soups, the market has seen a lot of action. Our rivals, too, have been forced to play around with the positioning of their brands. We are currently holding the second position in the soups market and hope to challenge the leader in the next two-three years," Gupta told Business Standard. Indivision India Partners -- a $425 million Mauritius-based private equity firm -- has a minority stake in Capital Foods. Indivision has an alliance with Future Capital Private Equity, a part of the Kishore Biyani group, which runs retail formats such as Pantaloon and Big Bazaar. But, Nestle India also claims the number two position. “Modern trade is an important channel for products such as soups. We are number two in the business, and gaining share,” says Shivani Hegde, general manager (foods), Nestle India. Nestle launched Maggi soups on the health plank in 2005 under a 'taste bhi, health bhi' slogan. Since then, it has also introduced Maggi 'Sanjeevni soups', with traditional ingredients that are “good for you.” However, HUL's Knorr soup brand is clearly ahead in the race. Knorr is available in 17 variants, with the recent addition of the Indian soup range (launched in 2008). "Our new range is aimed at making soups more relevant with flavours inspired by the familiar Indian palate," a spokesperson of HUL said.
According to industry experts, the branded packaged soups business, that has crossed Rs 100 crore on retail prices, is growing at 20 per cent, year on year. Five years earlier, this market stood at around Rs 35 cr.Technopak's Purnendu Kumar says, “Soups is an under-penetrated category, where the incidence of purchase is less as compared to other FMCG categories, but with the coming of modern trade, the category will only grow.” To help their brands grow, HUL has already leveraged the Knorr brand by entering the ready-to-cook category in 2008, while Nestle India has launched the Maggi brand of 'Bhuna Masala' as a cooking aid. Capital Foods is keeping its focus on expanding the Ching’s brand. "There is no slowdown in the foods category. We are growing our Ching’s instant noodles and soups. We have already overtaken the Top Ramen brands in instant noodles, while we are the second players in the soups market," says Ajjay Gupta.

 

 

48. Litolier Group to open two new hotels in Goa and Mumbai - April 17
Ashok Mittal led privately held Litolier Group, which formally launched its first hotel Ramada Plaza in Delhi on Friday, said it plans to open two new hotels in Goa and Mumbai over the next few years. "We have invested about Rs 100 crore in the construction of our Delhi hotel," said Litolier Group chairman Ashok Mittal without disclosing how the firm plans to fund new hotel projects.

But he said that land for the two proposed hotels has already been acquired. The Litolier Group has interest in construction, real
estate and brokerage businesses. 

 

 

 

49. Fortune Park to set up 4 hotels - April 14
ITC-Owned Fortune Park Hotels plans to open four new hotels in Mussoorie, Jaipur, Bangalore and Manipal by July, said a top company

executive. The hospitality firm also announced that it is going to invest Rs 120-150 crore to build two hotels in Bangalore and
Coimbatore.

“So far Fortune Park Hotel was a hotel management company and has expanded by tying up with various real estate developers. Now, we
plans to invest and build two hotels under the brand,” said ITC-Hotel division senior executive vice-president Pawan Verma.

The company on Friday opened Fortune Inn Grazia at Noida. The mid-market brand currently has 26 operational hotels with plans to
doubling it in the next two years in collaboration with real estate developers.

The hotels will open under its existing Fortune sub-brands — Select, Park, Inn, Resort, Apartments, Faith, Spot, Stop, Lodge,
Indoville and Adventure. Fortune Hotels president Suresh Kumar added that the company plans to have five new hotels in the NCR in
addition to its existing two to cater to the upcoming Commonwealth Games next year.

“Despite the economic slowdown our occupancies on an average across all hotels are about 60% and we believe we have gained since
many corporate travellers are downgrading,” he said. But Mr Kumar agreed that room rates at the company’s hotels have dropped
15-20% in the past few months. Nearly 70% of the revenues for the company comes from business travellers.

 

 

50. Chatwal Hotels to invest Rs 5000 crore in India - April 4
Vikram Chatwal Hotels, a division of Hampshire Hotels & Resorts, has finalized an ambitious expansion plan in the country with a total investment commitment of Rs 5000 crore to set up a chain of projects in various Indian cities. Launching the Dream, Cochin, under the Dream hotel brand of the Group, Mr Sant Singh Chatwal, chairman and CEO, Hampshire Hotels and Resorts, said that the company will add 2000 rooms in Bangalore, Jaipur, Delhi, Hyderabad and Mumbai by 2010.

Hampshire Plaza, Hyderabad and Dream, Cochin are the first two projects of the Group in the country. The five star deluxe hotel in the city has been built at a cost of Rs 200 crore. Another Rs 350 crore hotel project is being planned in the city in Silver Sands Island, Mr Sant Singh Chatwal said.

Sites have been finalized in Banjara Hills in Hyderabad and Jaipur. Already the Group has invested Rs 1000 crore for its India foray. Further expansion is also being planned in Chennai, Calcutta and Goa. Speaking to reporters here Mr Sant Singh Chatwal said that of all projects the one in Kochi is closest to his heart. Mr Chatwal, who had a brief stint in the city four decades ago in connection with the naval aviation training said that he used to dream of setting up a hotel in the city. “The dream has now come true”, he said.

Dream, Cochin has 151 rooms while the second hotel being planned in Kochi will have 300 rooms. The Dream Hotel network, first launched in New York, has been expanding successfully. Two more hotels under the brand name are slated to open in New York in 2009 and 2010.

 

51. Hotel majors see revival by 2011 – April 3
A recessionary business environment has not deterred hotel chains such as Marriott, Accor, Hyatt and Royal Orchid from going ahead with their expansion plans. Hoteliers view the downturn as a cyclical phenomenon and expect a revival by 2010-11.

Accor is expanding its network in India with 48 hotels (9,980 rooms) that would be a mix of its Sofitel, Pullman, Novotel, Ibis, Mercure and Formule 1 brands. “Almost five years ago, we made a commitment to launch and grow our business in India to include Accor’s core brands and have 50 hotels by 2012. We are well on our way to achieving this ambition,” said Accor Asia-Pacific chairman and COO Michael Issenberg.

Global Hyatt Corporation, operating in India since 1982 and having full-service hotels like Hyatt Regency, Grand Hyatt and Park Hyatt brands, is planning 20 new properties. These would include six Hyatt Place hotels. Around 6,000 rooms will be added as part of the expansion. The growth plans are not only confined to leading markets in India. The company will also target tier II and III cities with its new upper mid-segment brand, Hyatt Place.

“We have completed more hotel transactions in India in the past year than any other time in our 25-year history,” said Steve Haggerty, global head of real estate and development at the Chicago-based Global Hyatt Corporation. Marriott is also setting up 24 new properties in the next few years, with room inventories exceeding 10,000 rooms. Royal Orchid, which currently has 12 hotels and 1,000 rooms, is adding 1,000 rooms in the 4-5 star categories in 2-3 years.

“During the recession, there is an increase in the demand for affordable business hotels,” said Royal Orchid VP (corporate affairs) Keshav Baljee. Hotel chains across the country recently cut prices by 15% to lure customers amid continuing global credit crunch.

Hotels are offering special packages, discounts and daily room rates to tackle the drop in occupancy, which now stands at 65-70% against the past year’s 85%.

The hotel industry has been witnessing a slowdown since November last year, with leisure and corporate travel taking a huge hit after the Mumbai terror attack. However, resort destinations such as Kerala, Jaipur and Goa have bucked the trend. The oversupply in cites like Pune, Hyderabad and Bangalore has also affected the room rates and occupancies. Moreover, India Inc’s cost-cutting moves contributed to the decline in room rates, experts feel.

 

 
 

52. Hilton to manage Manesar service apartment – April 11

More signs of movement in the real estate market. Hilton has leased a 100-room serviced apartment block in Manesar from Anant Raj Industries for 30 years.

The building is part of the 10-acre complex being developed by Anant Raj, which includes a 1.2 million sq ft IT Park. Hilton will be using the Hampton by Hilton branding for this property, which it has leased as a cold shell, and will be investing in fitting out this property appropriately. “Hilton has given a six months security upfront. According to the agreement, there will be a 15% escalation in the lease rental every three years,” says Amit Sarin, director at Anant Raj Industries. The IT Park at the Anant Raj Technology Park at Manesar is in the process of being leased out. “We are getting a good response. We are the first ones to have a finished property in the area, and there is a lot of pent up demand,” says Mr Sarin.

 

 

 

53. Leela Group announces special offers for summer vacation – March 26

Despite the global economic downturn taking its toll on the the hospitality industry, the Leela Group of Hotels, has announced packages at affordable prices for the coming summer vacation, a top official of the group said today.

The Leela group, compared to its peak period prices during summer, will provide offers around 30 - 40 per cent cheaper, but without compromising on its quality and standards, Leela Kovalam's General Manager Viswajit told reporters here.

"This year, we have witnessed a drastic reduction in business conferences as companies have cut down expenses. This is one of the reasons we are targeting families and holiday makers," he said. The Kovalam prices is ten per cent cheaper than prices offered at Leela Goa, he said adding that, the prices at the Kerala beach resort is less as compared to last year.

"This year, we are giving lot of value additions without dropping prices. One can have value for money packages to enjoy luxurious living," Leela Goa's GM Pascal Dupuis said.

The three night and four days summer packages starts from Rs 24,000, and covers taxes, food, airport transfers, and food charges.

 

 
54. India's office rentals fall on quarter - April 22

Office markets across India showed a decline in rental values in the Jan-March period from the previous quarter, according to the report by real estate services firm, Cushman & Wakefield.

Rentals in Lower Parel, Mumbai, eased the most, falling 37 percent to 190 rupees a sq. ft. per month on an average in Jan-March, the report said.

Markets moved towards over-supply mostly in response to plummeting demand from sectors such as banking and financial services industry and IT and IT services, Kaustuv Roy, executive director, said.

Mumbai's central business district rentals fell to 350 rupees a sq. ft. per month on an average, down 13 percent from the previous quarter.

The National Capital Region's central business district rentals fell 17 percent to 273 rupees a sq. ft on an average. Fresh office space supply across Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, National Capital Region and Pune was 11.5 million sq. ft., but absorption during the quarter was at 5.78 million sq. ft., the report said. 

 

 
 

55. Rahejas to launch up to 30,000 houses at Rs 4-25 lakh in NCR - March 26
Realty player Raheja Developers will build up to 30,000 apartments in the affordable housing category in the National Capital Region in the next two years, which will be offered at Rs 4-25 lakh. "Though there has been some correction in the realty market, demand is still there, especially in the affordable housing segment. We have already received approvals for developing about 20,000 apartments in the NCR," Raheja Developers Managing Director Navin M Raheja said.

The company has planned to develop up to 30,000 units in the NCR in the next two years, he added. "We have decided to fix the prices of the apartments in the range of Rs 4 lakh to Rs 25 lakh depending upon the size," Raheja said, adding that the minimum size of an unit would be 300 square feet. He, however, declined to give details about the size of investment that the company is looking to put in. "The launch of this affordable housing scheme will (take place) in the next two months ... We will not tie up with any partner," Raheja said, adding construction would be completed in two years and delivery would start in 2011.

About the current market scenario, Raheja said the country's property market has witnessed price corrections of about 10 per cent in the last couple of months.

 

 

 

56. BSCPL Infra to build mega township near Chennai - March 19

Hyderabad-based BSCPL Infrastructure has announced the launch of its first residential project off Old Mahabalipuram Road (OMR). Coming at a time when the real estate market is not exactly exuberant, the company said it has completed the structure for six lakh sq ft. The project named ‘Bollineni Hillside’ is to come up on 92 acres.

Touted as one of the largest integrated residential township projects in the city. the Rs 2,000 crore project offers flats ranging from 650 sq ft to 2800 sq ft including independent houses, row houses and villas.

BSCPL Infrastructure chairman B Krishnaiah said the project would be completed in two phases with a total space of about 6 million sq ft after completion. It is proposed to build 4,500 dwelling units.

"Structure for 100 villas are up and two blocks of apartments too are ready," BSCPL Infrastructure CEO Manmohan Varma said, noting that the first phase of development would be on 50 acres with more than 1,300 units.

The base price has been fixed at Rs 2,500 per sq ft, with additional charges for car park, corpus fund and electricity among other
things. Cost of a flat would work out to Rs 16.9 lakh to 19 lakh, he said.

Mr Varma said BSCPL has an equity base of Rs 450 crore. The company has tied up Rs 80 crore debt from IDBI apart from investing a
sum of Rs 25 crore. "If the product has the right price, it will find buyers. There is demand and we are offering a package of lifestyle at the right price," he added.

 

 

57. Govt approves foreign investment in Orange Realty - March 18
The government on Wednesday allowed a foreign investment proposal by Mauritius-based company IREO for operating a wholly-owned subsidiary in India under the brand Orange Realty.

The Cabinet Committee on Economic Affairs (CCEA) approved the proposal of IREO Investment Holdings-III to invest in the National Capital Region-based Orange Realty Pvt Ltd, under which a new subsidiary would be formed.

"The investing company is by the name of IREO-III... That company has a large of number of well-known investors. That company is now investing in Orange Realty Pvt Ltd," Home Minister P Chidambaram said after the CCEA meeting.

The proposal was earlier cleared by the Foreign Investment Promotion Board, but since the investment exceeded Rs 600 crore, it required the CCEA's approval, Chidambaram said.

An IREO spokesperson later said the application to the government was for opening a subsidiary under one of the project companies of IREO - Orange Realty Pvt Ltd - in which over Rs 2,000 crore has already been invested by the Mauritius firm.

 

 

58. Tata group co, Titan, to add 40 more stores by March 2010 - March 8
Tata group company Titan Industries plans to augment its store network across India by adding nearly 40 Titan stores by March 2010,
company's COO Harish Bhat said.

"We plan to add 40 stores, of which half would be company-owned and the balance franchisee stores. For our 'World of Titan' stores, we have earmarked Rs 50-lakh per store," Bhat told PTI here.

Titan has identified Chennai, Delhi, Kolkata, Salem, Pune and Madurai, among other locations for setting up its stores.

At present, the company has 260 stores. It plans to have a 275-strong network by end-March 2009. Of the existing 260 stores, 10 per cent are company-owned and 90 per cent are franchisee stores.

The global meltdown had not hit the company's business, Bhat said.

"There are a few sectors such as automobiles, real estate and those selling high-value goods that have been affected by the on-going economic slowdown.

 

59. Rural India promises growth for retail- April 8
There may be a slowdown in urban retail, but `Bharat' is still shining for retailers. The next phase of growth is expected to come from
rural markets with rural India accounting for almost half of the domestic retail market, which is valued over $300 billion.

Rural India is set to witness an economic boom, with per capita income having grown by 50% over the last 10 years, mainly on account of rising commodity prices andimproved productivity. Development of basic infrastructure, generation of employment guarantee schemes, better information services and access to funding are also bringing prosperity to rural households.

"Overall there is a huge market which is waiting to be served, ready to splurge, willing to explore new products and services, and retailers can tap on their wallets," said Ramesh Srinivas, national industry director (consumer markets), KPMG India.

In rural markets, consumers are practical and price sensitive. Even though consumers at the bottom of the pyramid do not seem to have predictable income (which affects purchasing dynamics), the rural market proved to be surprisingly loyal. So if companies get it right they could really reap the rewards, experts added.

This is particularly true as changes in the rural economy such as people moving from agriculture into manufacturing, which pays better, are likely to lead to a economic boom.

In order to earn brand loyalty in the rural market, product design will need to go beyond ideas like smaller sizes (such as single use sachets) to create genuinely new products that appeal to this segment.

"This requires a deep understanding of the market and an appetite for innovation, posing a challenge for both consumer products companies and retailers as there is still lack of shared understanding about the ever-changing Indian market and types of consumers that make it", says Pinakiranjan Mishra, leader retail and consumer products, E&Y India.

Also, with most of the retail markets in cities getting saturated, rural markets offer a sea of opportunity for retailers.

Retailers have devised different models to serve rural markets. For instance, ITC promoted `choupal sagar' has a hub-and-spoke model involving farmers. "Themodel offers a rural shopping mall where they can sell their commodities and can buy almost anything including garments, cosmetics, electronics and even tractors," says a KPMG report.

Other examples include Pantaloon Godrej's joint venture (Aadhar), Reliance Retail (Fresh & Fresh Plus), Hindustan Unilever (Shakti), DCM (Hariyali Kisaan Bazaar) and Mahindra & Mahindra (Shublabh).

 

 

 

60. Indian retailers put cash & carry on backburner – March 26

Indian retailers such as Kishore Biyani’s Future Group, Mukesh Ambani’s Reliance Retail, Videocon and the Wadhawan group are putting their cash and carry plans (bulk buying and sale to wholesale trade) on the backburner.

The aim is to conserve cash in view of the current slowdown, though analysts feel there is also a realisation of the problems in making the format successful.

Meanwhile, international players like Wal-Mart and Carrefour, cautious till now, may show more pace in starting their cash and carry operations here.

Expecting a growth rate of 35-40 per cent a year, a host of Indian and international retailers had announced plans to enter the space. Pantaloon, the country’s largest retailer, had plans to set up KB’s Wholesale Market at Mathura in Uttar Pradesh and Bardhaman in West Bengal at a cost of Rs 400 crore by March 2008. And, based on their expected success, it had plans to open more of these in West Bengal, Gujarat, Karnataka, Maharashtra, Uttar Pradesh and Chhattisgarh.

Reliance Retail had plans to launch its B2B format, Reliance Cash and Carry, by March 2008. It roped in Harsh Bahadur from Metro to lead the business. However, the company is now focusing on Ranger Farm, the smaller version. The team led by Bahadur has quit, say sources. “We are not doing any cash and carry now. We felt it was unviable,” said Pantaloon Retail Managing Director Kishore Biyani.

Said a Reliance Retail spokesperson: “We continue to operate and grow our ‘Ranger Farm’ format, which also addresses the needs of large-scale buyers.”

A Videocon group official said the company had deferred its cash and carry venture, Bolld, by six-nine months, due to the current slowdown.

Analysts tracking the retail sector feel the longer gestation period of cash and carry operations, coupled with lower margins, has made Indian retailers rethink. While the retail business takes three-four years to break even, cash and carry turns profitable in seven to eight years. While retailers have gross margins of 18-20 per cent, cash and carry operators have a much lower margin of 10-12 per cent, say analysts.

“In cash and carry, you need to sell at wholesale rates to shops and restaurants but buy goods at higher rates. You cannot increase the margins you get from suppliers. A very high presence of private labels and a strong sourcing base and supply chain efficiencies are required, which Indian retailers are yet to reach,” said Purnendu Kumar, associate vice-president, Technopak Advisors, a business consultancy. As the downturn deepens, retailers were concentrating on store-level profitability rather than diversifying, analysts said.

Retailers agree. “We have put our cash and carry venture on hold as we are consolidating our existing business,” said Kapil Wadhawan, director of Wadhawan Food Retail, which runs chains such as Spinach and Sabka Bazaar.

Global retailers have been treading cautiously till now. Germany’s Metro Cash & Carry, the European leader in self-service wholesaling, runs five stores, a cautious start after it set up operations in 2003. Wal-Mart, the world’s largest retailer, has postponed the launch of its cash and carry stores from 2008 to the first quarter of 2009. Carrefour, the world’s second-largest retailer, is planning its Indian foray in 2009 from New Delhi, Mumbai, Bangalore and Chennai.

“For foreign retailers, it is a matter of time. I believe WalMart and Carrefour will start their ventures in the fourth quarter of this year. They are checking everything to ensure that business remains viable,” said Anand Raghuraman, partner and director, The Boston Consulting Group.

 

 
61. FMCG players bundle offers to shore up sales – April 3

Companies also adopt "buy more to save more" concept to boost sales during the current slowdown.

While price correction is clearly a focus area, fast moving consumer goods (FMCG) companies like ITC, Godrej Consumer Products Ltd (GCPL), Emami and Marico are also building on “tactical” promotions, bundled offers and “buy more to save more” concepts to beat the current recession.

GCPL’s promotional offers, for instance, include one free cake of soap on purchase of three, and discounts on purchase of linked packs.

“Discounts and promotional offers are temporary means to achieve strategic ends, which could include trial and competitive reaction. Reasons for promotional offers include rewarding loyal customers, passing on cost savings to consumers and inducing trial,” said HK Press, executive director and president of GCPL.

The current economic scenario, according to Press, is discouraging consumers from spending on things like housing and durables that depend on credit funding.

Aditya Agarwal, director of Emami, agrees. A few of Emami’s schemes include Emami Pure Skin worth Rs 22 free with Boroplus Advanced Moisturising Lotion worth Rs 98; five pieces of Sardija Cough drops worth Rs 5 free with 100 ml of Sardija Cough Syrup worth Rs 50, among others. “In many ways, discount is a starting point as it helps create buzz and excitement and ensures higher sales. Consumers might curtail consumption of high-end products but not ‘mass’ products. During trying times, ‘save more when you buy more’ strategy will always work,” said Agarwal.

ITC is offering Vivel Di Wills shampoo (200 ml) free with its 75 gm bathing soap for Rs 89. Sandeep Kaul, chief executive (personal care products business), ITC Ltd, said, “Our brands are new. Hence, our marketing efforts are geared towards enhancing consumer engagement and trial. The consumer response to our brands, Fiama Di Wills, Vivel and Superia, has so far been excellent. Multiple marketing strategies are being explored to achieve the objective.”

The Indian consumer, according to Saugata Gupta, CEO (consumer products) at Marico, faced tremendous inflationary pressure last year.

“We have made some price corrections and are doing some tactical promotions. We will invest in innovation and long-term brand building even during these times,” added Gupta

“Promotions help boost sales and as and when a price reduction is possible, we will pass on the benefit to the consumers,” said Soma Ghosh, head of marketing, Nivea India.

 

 

62. Vodafone, OnMobile Global enter into VAS agreement – April 20 

Vodafone will use the ringback tones, voice portal and speech-enabled value added services of OnMobile Global in emerging markets.


Both the players have signed an agreement to the effect. The agreement enables Vodafone operators and Partner Networks across the world to rapidly deploy OnMobile's products which have achieved remarkable success for Vodafone in the fast growing Indian VAS market, OnMobile said in a release.

"Speech recognition based VAS has been successful in the emerging and fast-growing markets across Asia where delivering services in the local language is critical for adoption and use," OnMobile Global CEO Arvind Rao said. OnMobile provides speech-enabled applications in 18 Indian and international languages.

 

 

63. Tata Tele draws up $2-bn capex plan for GSM mobile service – April 20

Tata group mobile service company Tata Teleservices Ltd, in which Japan's NTT DoCoMo has a 26 per cent stake, has drawn
up a capex plan
of USD two billion in 2009-10 for launching GSM-based mobile services.

"We have a capex (plan) of USD two billion for the current fiscal (2009-10) for launching GSM services. The service will be launched in a few weeks," TTSL MD Anil Sardana said today after the company's launch of a value-added service.

Tata Teleservices, India's fifth-largest mobile operator in terms of subscribers, operates on the CDMA technology, but is also expanding its services on GSM platform after the government's nod to telcos for using dual technology of GSM and CDMA on a single licence.

The company has 35 million subscribers. He said the company has received spectrum (for GSM) in all circles, except in Delhi, and would start launching GSM mobile services in southern states soon followed by eastern India.

Sardana said the company is waiting for statutory approval for the merger of its tower arm with Quippo Telecom.

TTSL, in January, merged its tower arm with Quippo Telecom, a pure play towers company, to create a Rs 13,000-crore entity with 18,000 towers -- making it the second largest firm in terms of number of towers.

 

64. DoT seeks legal opinion on additional spectrum allocation to GSM players – April 20

GSM players may face uncertainty over allotments of additional radio frequencies as they expand their services in the fastest growing mobile market in the world. Following last month’s ruling by the telecom tribunal, which said that GSM players were not entitled to more than 6.2 MHz of radio frequencies, the communications ministry has now sought legal opinion whether to go ahead with the allocations beyond this limit.

The communications ministry is faced with a catch-22 situation. As per the Department of Telecom’s (DoT) spectrum allocation policy, which is based on sector regulator Trai’s recommendations, GSM operators are entitled up to 15 MHz of radio frequencies subject to the operators’ meeting certain pre-defined subscriber targets. The DoT even issued a press release early last year sating so. But the telecom tribunal’s ruling is contrary to the DoT’s policy.

At present, spectrum or radio frequencies, the lifeline on which communication signals travel are allotted to telcos, based on their subscriber base. This implies, additional radio frequencies are dished out as operators’ customers numbers increase.

The controversy over additional spectrum allocation began in 2007 when telecom regulator Trai recommended the government continue with the existing upper limit where CDMA players can get a maximum of 7.5 MHz and GSM up to 15 MHz.

At the same time, the regulator also added that operators increase their subscriber base between 2-6 times (depending on the circle) before they are given additional spectrum. With GSM operators going to court on the issue, the DoT asked the Telecom
Engineering Centre (TEC), its technical arm, to come up with new norms. The TEC in turn suggested that GSM players increase their subscriber base up to 15 times before being given additional radio frequencies. With operators refusing to accept the TEC report, the DoT was forced to set up another official panel with industry representatives to pacify the GSM players. But this panel, in its final report shied away from its primary mandate of studying the Trai recommendations and TEC report, and specifying new subscriber-linked spectrum allocation norms. This forced the DoT to set up yet another committee consisting of representatives from the DoT’s wireless co-ordination and planning arm, regulator Trai, TEC, scientific community and other government agencies to come up with a new spectrum allocation formula. This committee is yet to submit its final report. In the interim period, the DoT decided to go by Trai’s recommendations when allotting additional radio frequencies to telcos.

But, telecom tribunal TDSAT last month had said that ‘Trai’s recommendations on subscriber-linked criteria for spectrum allocation were made in total violation of the principles of transparency’. This has put the communications ministry in a fix regarding continuing with its current policy. Since the current policy is based on Trai’s recommendations, the DoT, in a bid to avoid further controversy on this issue, has sought legal opinion on the way forward.

 

 

65. MTNL to launch 3G services in Mumbai next month – April 17
State-run telecom service provider MTNL today said it will launch its third generation (3G) services in Mumbai next month and is targeting a 1 lakh user base for 3G mobile service by year-end. MTNL has already launched its 3G services – ‘Jadoo’ in certain pockets of Delhi.

The state-owned telco, which operates in two cities Delhi and Mumbai, is expected to extend the service to remaining parts of Delhi in next 3 months.

"We will begin aggressive marketing our 3G services when we would have a good user base and cover major parts of Delhi," MTNL Director (Technical) Kuldeep Singh said on the sidelines of Managed Services India 2009 conference in Delhi. The telco currently has about 500 subscribers in its 3G network in Delhi.

 

 

 

66. Rural cell users hooked to network quality – April 15

Price wars may not be the right formula to woo mobile users in rural India. Contrary to common belief, subscribers in rural areas choose
their service provider on the basis of coverage and not competitive pricing, according to a recent report by Credit Suisse.

In this context, rural subscribers are more sensitive to network quality than prices. This has created a monopoly or duopoly in most villages with the best network taking maximum subscribers and low churn rates, adds the report.

According to it, the majority of users who have been using mobile phones for over two years have not changed their connection even once. This is in sharp contrast to the churn levels of 4% that is reported by GSM operators. These findings are not exactly in line with the thinking that operators need to indulge in tariff wars to expand their subscriber base.

Importantly, rural India has been relatively unaffected by the economic turmoil and in fact, accounts for a significant chunk of consumer demand. “We expect rural subscribers to account for 40% of mobile subscribers by FY12 compared to 25% now,” the Credit Suisse’s report predicts.

Today, India’s mobile subscriber base stands at over 375 million. Out of this, a quarter comes from the rural areas. State-owned Bharat Sanchar Nigam (BSNL) has the maximum reach in rural India followed by Bharti Airtel, Vodafone Essar and Aircel.

Since there is scarcity of telecom coverage in rural India, the first operator which covers an area gets not just the initial customers, but also builds the customer loyalty factor. Moreover, with the first mover having access to the best sites for their telecom towers, network coverage is bound to be better, the report adds.

According to KPMG director (telecom) Romal Shetty, the approach of operators towards rural markets has changed over a period of time. “It has shifted from one of just bringing more subscribers to now having quality subscribers on networks. For that, you have to give quality coverage and good networks,” he tells ET. “Rural users remain price sensitive, too.”

IDC India’s general manager (communications research) Deepak Kumar said the expansion to rural India is inevitable in view of saturation in urban areas. “Operators, however, have to be more careful in their offerings. There will have to be special schemes to drive consumption in rural areas, along with good quality networks,” he says.

Rural operations are known to be less profitable compared to their urban counterparts on account of lower usage levels. Credit Suisse’s study estimates that the break-even period per base transceiver station (BTS) could be around 1-2 years for urban India and around 2-3 years for rural India. “Our analysis indicates that rural margins could be around 250 basis points (2.5%) lower than urban margins for established players and 700 bps lower for new entrants or marginal players,” it adds.

Rural India could be less competitive than urban India because a longer break-even period should limit its attraction for new players and a lower population density implies that there can be only one or two profitable operators in each area. “However, for established players with an early focus on rural India, it could be a money spinner,” it states.

 

 

67. Hero Honda Expects Two-Wheeler Sales to Gain 7.5% This Year – April 17

Hero Honda Motors Ltd., India’s largest motorcycle maker, expects two-wheeler sales to climb 7.5 percent this fiscal year.

The company is targeting sales of more than 4 million motorcycles and scooters in the year ending March 31, 2010, compared with 3.72 million it sold a year earlier, Chief Financial Officer Ravi Sud said in a phone interview today.

 

 

68. TVS closes gap with Bajaj for No 2 slot – April 15 

It might have won two fiercely fought battles in court against TVS Motors on alleged model infringements. However, Bajaj Auto is steadily losing to Chennai-based TVS in the battle for the second spot in the two-wheeler (motorcycles and scooters) market place.

Hero Honda is still the leader with 49 per cent share of all sales. But the gap between Bajaj and TVS has come down to a mere 149,000 units for 2008-09, compared with a yawning gap of 527,000 units only a year ago.

Seen another way, 2008-09 ended with Bajaj having 17 per cent market share, compared with 15 per cent for TVS. In 2007-08, Bajaj had 23 per cent, while TVS had 16 per cent of the market. Both have lost to rivals like Hero Honda, but Bajaj has clearly lost much more than TVS. TVS has not seen sales surge, but Bajaj’s sales fell much more sharply in 2008-09, reducing the gap between the two. Bajaj’s two-wheeler sales slipped to 1.28 million in 2008-09, from 1.67 million a year earlier, a drop of more than 23 per cent. TVS Motors’ sales also fell in the same period, but by just 1.36 per cent. It sold 1.13 million (from 1.15 million earlier) two-wheelers in 2008-09, according to data from the Society of Indian Automobile Manufacturers (Siam).

The battle is expected to intensify this year with both Bajaj Auto and TVS Motors planning to launch a slew of products, which include new motorcycles and scooters as well as updated models.

TVS Motors will look to add more products based on completely new platforms, while Bajaj Auto will focus on sprucing its existing bikes through upgrades of engine technology.

S Sridhar, CEO (two-wheelers), Bajaj Auto, said: “We will launch five-six new products in the next few months that will consolidate our product line-up. New products by competitors had impacted our sales, which had gone down to the 50,000 level in December, but customers are flocking to the Bajaj brand once again.”

The company is banking on the launch of updated versions of all Pulsar models like 150, 180 (this month), 200 and 220 (next month), in addition to launching a completely new motorcycle before June.

TVS Motors is working on the launch of three new products, two motorcycles and one a scooter, before the end of the calendar year. Currently, the company sells four main products in the domestic market, as opposed to Bajaj’s 11 products.

H S Goindi, head, sales and marketing, TVS Motors, said: “The new products to be launched this year will improve sales significantly. We are working with our customers and dealers to enhance our serviceability. We will begin to see the positive effect in the next couple of months.”

Concurrently, Japan’s Honda Motorcycle and Scooters India (HMSI) is fast catching up with the Indian companies. It recorded sales of a million units last year, a growth of 16 per cent over the previous year’s 871,675 units. Only Hero Honda, Bajaj Auto and TVS Motors logged sales of more than a million units last year. HMSI is also revamping its products. Some of these will be launched later this year.

Analysts attribute Bajaj’s fall to Yamaha’s aggressive campaign for the FZ 16 model, which is reporting impressive demand. The bike is pegged directly against Bajaj’s Pulsar 150 in terms of engine size, but is priced at a premium.

Sanjay Tripathi, head, product, planning and strategy at Yamaha, said: “The demand has been consistent month after month for FZ 16 and the FZ-S. The response for the two bikes has been encouraging. We will continue to dominate the segment.”

 

 
 

69. Oriflame to launch wellness products in India this year - March 29

Swedish cosmetics major Oriflame is set to launch a range of wellness products like protein shakes in India this year to cater to high-income groups.

"We will be launching wellness products in India this year. We will import these products from China and Sweden initially," Oriflame Managing Director and Chief Executive Officer Magnus Brannstrom said.

Brannstorm did not rule out the possibility of manufacturing these products in India in the future. It would all depend upon the market response, he said.

"Wellness products have a huge potential in India. We have launched these products in Europe and will be surprised if India does not like these health products," Brannstrom added.

Typically, wellness products contribute to 5-10 per cent of total sales in a particular market and Brannstorm expects the Indian market to generate revenue in a similar range for Oriflame.

Oriflame's wellness products would be cheaper than others available in the market, he claimed, adding that the rising health awareness among Indians had prompted the company to bring these products to the country.

Since the beginning of its journey in 1996, Oriflame has invested around USD 50 million in India including for putting up a manufacturing plant in Noida.

 

 

 

70. What men want, they are getting – April 13
A few years ago, health and personal care consumer products company Emami Ltd conducted a study that revealed that almost 30 per cent users of skin care products were men. This egged the company on to launch Fair & Handsome fairness cream for men in 2005. In the first year of its launch, Fair & Handsome clocked impressive sales of more than Rs 50 crore, and opened up a new segment of male grooming products.

It is a market that is set to expand with the entry of new products and brands. MCPL India, Elder Healthcare, Vandana Luthra Curls & Curves (VLCC) and Marico, other than Emami, are launching products tailored for this market.

Emami has a whole range on the anvil — after-shave lotions and creams, soaps, deodorants and shampoos. “Our research and development team is working on new products in the men’s range. Fair & Handsome contributes 10-12 per cent of the total turnover. It grew 35-40 per cent in the last financial year. We expect it to maintain steady growth in the coming years,” says Mohan Goenka, director, Emami Group of Companies. At present, the company has, other than the fairness cream, Mr Black Kesh Kala hair dye for men.

MCPL India, the men’s toiletries company with brands like Old Spice, is eyeing 30 per cent growth this financial year, over Rs 50 crore last year, on the back of a new set of men’s toiletries and fragrances. “We will soon launch shaving preparations for men,” says G K Bhatt, managing director of MCPL India.

FMCG analysts say the male cosmetics category is still at a nascent stage. It is pegged at just about Rs 1,500 crore, but is registering rapid growth and may double this year.

Marico launched Parachute advanced After Shower Hair Cream in August 2005 after a three-month marketing stint in Mumbai. Within two months of its launch in Mumbai, it managed a 28 per cent market share. A Marico spokesperson says: “Marico’s Parachute after-shower creams and gels have grown by 12 per cent in volume over the previous year, though the growth in the third quarter of 2008-09 over the same quarter of 2007-08 was 6 per cent. Parachute Advanced intends to grow the hair creams and gels market in India. Its share in the category during the 12 months ended November 2008 was about 20 per cent.”

Likewise, Elder Healthcare is eyeing 7-8 per cent market share in the segment by 2010. “Our current market share is minimal, but with the launch of our Fuel for Men range of men’s grooming products, we expect it to be 7-8 per cent by 2009-10,” says Elder managing director Anuj Saxena. Elder Healthcare, part of the Rs 500 crore Elder Group, recently launched its deodourant under the brand-name Fuel for Men in alliance with VLCC. Elder would launch and market the product, whereas VLCC would manufacture and do the formulation for the product at its research and development centre in France and other parts of Europe. “With this launch we intend to corner a 5 per cent share of the deodorants market, estimated to be worth Rs 400 crore, by 2009-10,” says Saxena.

Not to be left behind, direct-selling company Oriflame, which has talcum powder, after-shaves, sprays and deodorants for men, says the sales of its male grooming products have been growing at 20 per cent. Fredrick Widell, managing director of Oriflame India, says: “We have more than 40 products for men. Our new range of products for men will include tailor-made products for men to enhance stomach muscles, anti-ageing products, and others.”

 

 

 

71. Dabur to expand kitty, focus on food, skincare – April 13

Home-grown fast moving consumer goods major Dabur India plans to invest Rs 1,000 crore to strengthen its product portfolio across domestic and international markets in 2009-10. Immediate on its agenda is the launch of a new fruit-based drink in the next seven days.
This will be followed by the launch of a range of ayurvedic products in the skincare segment in the first quarter of the present financial year. The company already has successful brands such as Dabur Honey, Hajmola, Vatika and Dabur Chyawanprash and will focus on the skincare segment that grew by about 20 per cent last year.
The company expects better growth as Fem Care Pharma, which it recently acquired, would also contribute in the segment’s growth. “In the segment, we expect growth also because of the new launches that we are planning, such as more products under the Gulabari brand introduced last year,” Amit Burman, vice chairman, Dabur, said.
Burman did not give out details of the new drink but confirmed that it was not lemon-based. When asked about other focus areas, he said that the company was also looking at expanding its over the counter (OTC) portfolio. Oral care with brands such as Babool and Meswak have given the company good growth that has translated into about 12 to 13 per cent year-on-year growth. Dabur enjoys about 5 per cent of the total dental cream market.
Pointing out that food was one sector that was not impacted by the economic slowdown, Burman said, “We are launching a new fruit-based drink within a week’s time”. Till now, it only had juices under Real brand.
On the prospects of acquisitions given the low valuations, he said that the company was considering acquisitions both within and outside India. “Dabur has a strong distribution network in North Africa and West Asia,” he added.

 

 

 

72. Makers of Old Spice products eye 15% share in aftershave mkt in 2009-10 – April 7
MCPL India Pvt Ltd, the licencee for P&G’s Old Spice range of products, is gearing up to grab a larger share in the deodorant and
aftershave foams, gels and shaving formulations space. Towards this, the company is looking to re-energise the brand and roll out marketing efforts targeted at making it attractive to the younger generation so that brand perpetuity is assured.

"We are planning to increase our market share in the Rs 450-500 crore deodorant market to 6-7%, up from around 2% at present," MCPL MD GK Bhatt told ET . "In the Rs 200-300 crore aftershave foams and gels market, we are looking to up our share from 10% to 15% in 2009-10,” he added. Bhatt was speaking on the sidelines of a press conference to launch Old Spice’s newest range of body deodorant sprays and after shave lotions in Ice Rock, Lagoon and Sport variants.

According to Bhatt, Old Spice is currently the market leader in the aftershave lotions markets which is estimated at approximately Rs 70 crore.

MCPL is planning to expand the Old Spice product range in aftershaves and deodorants. In West Bengal, it is planning to strengthen the marketing and distribution network for Old Spice, and support it with an aggressive advertising and sales promotional campaign.

"The current turnover of MCPL is around Rs 50 crore and the company is looking forward to reaching the Rs 100 crore mark in 2009-10," said MCPL India Pvt Ltd chairman Eric Menzes. "We also have plans to market EDTs, perfumes and skincare products from UK for women which are to be launched next year," he added.

Besides Old Spice, MCPL is the driving force behind the range of Xm deodorants. The company has also launched the Insignia brand of men’s personal care products. In addition, MCPL also markets a premium range of baby care products under the brand name Biolane, made in France by Laboratories Biopha.

 

 

 

73. Elder Healthcare to enter colour cosmetics segment – April 9

Elder Healthcare, Companies, Product- Pricing By Urvashi Jha Elder Healthcare, the fast moving consumer goods division of Elder Pharmaceuticals, is set to flood the personal care market next year. Known in the market for its Fair One brand, the company plans to launch new products under the hair care, skin care and fragrances range. It is also entering the colour cosmetics market through distribution arrangements with international brands.
The company plans to launch more products such as face wash, scrubs under Fair One in six months. Also, it will launch shaving balms, hair gel and other products under the recently launched Fuel For Men deodorant brand, in alliance with VLCC, and is exploring the prospects of hair dye.
Elder Healthcare is also in talks with several international brands for launching their Eau De Toilette, colour cosmetics in India through distribution arrangements. For instance, the company is test marketing Qarel in Mumbai and Bangalore. Qarel is a Dead Sea-based products made in Israel. It is also in talks with a German company for launching colour cosmetics. However, the company declined to divulge the name of the German brand.
Anuj Saxena, managing director of Elder Healthcare told Financial Chronicle, “We are now slowly expanding our portfolio in the personal care segment and since developing our own brands will take time we want to launch several international brands to cater to the market initially.”
Elder recently added a soap brand, Neem Tone and Elder Rose water to its portfolio. At present, the company’s portfolio comprises Fair One, Fair One Man, Rhyme Soap, AMPM mouthwash, Tiger balm and Blistex.
Saxena said, “To start with, we want to become market leaders in the grooming market for men and be the only company to offer complete personal care range for men.” According to him, the grooming market for men is estimated at Rs 1,500 crore and is growing at a compounded annual growth rate of 12 per cent.
Elder Healthcare aims to achieve a turnover of Rs 125 crore by end of financial year 2009-10, up from Rs 68 crore registered last year.

 

 

74. Nike stays outdoor to build image - March 11

For global sportswear giant Nike Inc, creating brand recall in India is not about having well-packaged, 30-second commercials or
million-dollar brand ambassadors.

Instead, the company is going all out for on-the-ground activities with nearly 70% of its marketing budget being deployed towards below-the-line advertising and experiential marketing.

The $18.6-billion company has associated itself with sports like athletics, football, cricket and tennis in India and the response, according to the company, has been tremendous.

“When we first started our ‘run’ clubs, we had 35 people. Within six weeks, the number grew to 200,” Nike India marketing director Sanjay Gangopadhyay said. As part of its association with the Mumbai School Sports Association (MSSA), Nike India sponsors 11 tournaments in various sports.

The company is also placing its bet on the growing popularity of football among sports enthusiasts. It has entered into a seven-year deal with the All India Football Federation to be the official kit sponsor to supply apparel, footwear and equipment to football teams. Its football website is the most-visited site for the sport in India.

“Football is a sport to watch out for, but there is a long way to go. Many players do not even use the right ball in India and hence, they are at a disadvantage in international matches. Our attempt is to make them globally competitive by providing the latest and correct gear,” Mr Gangopadhyay said.

Still a distant third behind competitors Reebok and Adidas in the sports apparel and footwear market in India, Nike says it is not after market share. “We are not in the business of increasing market share, but increasing the market,” managing director & general manager Tarun Puri said.

 

 

 

75. Myntra ties up with Reebok to launch personalised IPL jerseys- April 21

Myntra Designs, the on-demand consumer products personalisation company, has partnered with Reebok to launch personalised jerseys of four IPL teams - Chennai Super Kings, Kolkata Knight Riders, Kings XI Punjab and Bangalore Royal Challengers.

Says Mytnra Designs CEO Mukesh Bansal, “Cricket fans and enthusiasts now have the opportunity to see themselves in the jerseys of their favourite IPL teams by just adding their names and jersey numbers to the jerseys of their team.”

The jerseys are available in two categories - men and boys. In order to get personalised jerseys, consumers will have to choose a jersey of any of the four IPL teams and then submit their names and numbers online to get their personalised jerseys.

Post this, Myntra will process the orders and deliver the personalised jerseys to the respective consumers.

“This association with Myntra enables consumers to personalise jerseys of their favourite IPL teams and is another step towards allowing our consumers to express themselves and celebrate their individuality,” adds Reebok India executive director Sajid Shamim.
 

 

 

 

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