Skoda to enter pre-owned car business

New Delhi: In a bid to shed its premium tag and shore up volumes, Czech car maker Skoda is working at entering the pre-owned car business by the end of the financial year. The move comes on the back of automobile companies increasingly attempting to expand volumes in a sluggish market by initiating new customers into their brands through pre-owned vehicles and retaining older ones through loyalty programmes.

“We are working on putting in place a comprehensive growth strategy to penetrate deeper into the country with our range of products. We will not trigger discount wars to boost numbers but we are working on entering the pre-owned cars business to introduce more customers to our brand by the end of the year,” said Sudhir Rao, managing director, Skoda India.

While the specifics of the used-car business are still being worked out, Skoda is ramping up efforts to expand overall reach by setting up 150 dealerships by 2014-15. The company has 102 outlets at present.

Though the Indian subsidiary at present contributes a little over three per cent to Skoda’s sales globally, Rao said the company was infusing Rs 300 crore to improve localisation content in its products and reduce cost of ownership to raise volumes “substantially” in the country and to achieve sales tally of 1.5 million units worldwide by 2018.

Automobile manufacturers are increasingly focusing on sales of pre-owned vehicles to expand volumes in a market where offtake of new vehicles have waned due to high interest rates, fuel prices and uncertain economic conditions. An industry expert informed, “The pre-owned car business units not only provide dealers with opportunities to improve margin by selling used cars, the company additionally registers sales of new vehicles through exchange programmes.”

For the quarter ended June 30, Maruti Suzuki expanded volumes by 18 per cent to 60,467 units in sales made under exchange programmes despite the sluggish sentiments in the domestic market.

“In urban areas where demand has fallen sharply, we are trying to push sales through our loyalty programmes. Around 1.5 million customers service their vehicles every month, 10 per cent of whom own vehicles which are more than 10 years old. We identify these consumers and offer them loyalty bonus to exchange their cars for new ones,” said a senior executive at Maruti Suzuki.

Additionally, the company registers sales of pre-owned cars. The used car market in India stands at 2.7 million units, however, over 85 per cent of it is currently controlled by players in the unorganised sector. But the convenience and warranty being offered by companies like Maruti Suzuki, Hyundai Motor India, Mahindra and Mahindra and Ford India are increasingly making consumers opt for purchase and sale of pre-owned vehicles through the organised route.

The Maruti Suzuki executive added: “Around 30 per cent of car buyers exchange old vehicles for new ones. At Maruti True Value, we not only help customers in completing documentation work for transferring old vehicles, we repair and offer warranty on pre-owned vehicles. It helps in retaining as well as introducing new customers to our brand.” The company currently has over 420 outlets through which it sells pre-owned cars.

In the last financial year, Maruti Suzuki sold as many as 240,000 pre-owned cars which is nearly a quarter of its overall sales of new vehicles. Hyundai Motor retailed pre-owned vehicles amounting to 15-16 per cent of its sales in the domestic market through Hyundai Advantage outlets last year. The Korean car major sold 84,000 pre-owned vehicles last fiscal. Mahindra First Choice which has 171 outlets is looking at selling 45,000 pre-owned cars this year, an increase of 33 per cent over the 34,000 units sold last year.

ONGC discovers more oil reserves in D1 oilfield, off the West Coast

New Delhi: Oil and Natural Gas Corporation (ONGC) has made a big oil discovery in the D1 oilfield off the West Coast, which will help the firm to step up its oil production.

The currently producing oilfield D1 is situated about 200 km west of Mumbai city in Deep Continental Shelf at a water depth of 85 to 90 metres. The field has a production of 12,500 barrels per day (bpd), with an approved peak output of 36,000 bpd. After the discovery of the new pool, the peak output is expected to reach 60,000 bpd or three million tonnes a year.

The latest discovery "will catapult D1 to become the third largest field in western offshore after prolific Mumbai High and Heera," as per an ONGC statement.

ONGC is implementing an integrated development plan for the entire D1 field, which would help raise the output to 36,000 bpd by February 2013.

"Earlier, the D1 was known to have initial oil in-place (or in place reserves) to the order of 600 million barrels (82.20 million tonnes of oil equivalent). After the discovery of the new pool, its total in-place reserves are expected to be in excess of one billion barrels," according to the ONGC statement.

The first well in D1-4 block was drilled in 1976 but the low gas to oil ratio led to a slow pace of exploration and appraisal of the field. After completion of Phase-II, the field achieved a peak oil production of 17,500 bpd in 2009.

Ranbaxy Laboratories shifts production of Lipitor generic to Mohali

New Delhi: Ranbaxy Laboratories has started shifting production of its generic version of the world's bestselling drug Lipitor from the US to its new manufacturing facility in Mohali, besides filing applications to launch generic versions of blockbuster drugs from its local plant.

"There are more approvals coming through and will come through from Mohali facility because quite a bit of our regulatory submissions in the recent times have gone from Mohali," the company's CEO and MD Arun Sawhney said in a post-results briefing.

The company has largely shifted production of atorvastatin, its generic version of Lipitor, to Mohali in Punjab, Sawhney said. The company raked in about $600 million from sale of atorvastatin in the US during a six-month exclusivity, a period when no other generic company can sell their low-cost version of the drug in the country.

According to an industry executive familiar with the development, India's biggest drug maker has also sought US Food and Drug Administration's (FDA) approval to market its generic version of Novartis' $6 billion hypertension drug Diovan from the Mohali plant.

Just as in the case of atorvastatin, Ranbaxy enjoys a 180-day marketing exclusivity for the drug by virtue of being the first to successfully challenge Novartis' patent for Diovan. The company is confident of launching the drug in September.

"We have augmented our abbreviated new drug application submissions in the US and going forward we will be filing more products from the Mohali facility, in addition to Ohm," a company spokesperson said, while declining to comment on whether the company had filed the application from its India facility.

Ranbaxy has about eight key similar opportunities, known as first-to-file applications, due for launch over the next year or two. It is crucial for Ranbaxy to monetise these opportunities to drive its growth, particularly since growth of its core business has stagnated in several markets.

During the April-June quarter, its US sales of $255 million, boosted by revenues from atorvastatin, accounted for more than half of its global sales of $588 million.

Similarly, generic Diovan has the potential to generate $100-$150 million in revenues during the six-month exclusivity period, according to the estimate of a Mumbai-based brokerage house. "Manufacturing in India will also mean about 10% higher profitability," said the pharma analyst of the firm, adding that Ranbaxy has so far filed marketing applications for about 10 drugs from Mohali plant, which is being gradually ramped up.

Though Ranbaxy signed a consent decree earlier this year with the US authorities, it could be few years before it can resume supplying medicines to the US from its two FDA-approved Indian plants. In 2009, Sun Pharmaceuticals signed a similar decree with the US authorities for one of its plants in the US but is yet to get the FDA's nod to resume supplying drugs from that plant to the US market.

Ranbaxy's other FDA-approved plant in Ohm facility in New Jersey is also fully utilised, leaving the company to depend on its new plant for expansion. Ranbaxy said it will manufacture tablets, capsules and dry syrups in Mohali to mainly cater to regulated markets such as the US, EU and Japan.

Seafood exports touch $3.5 billion in 2011-12

Kochi: The marine products exports touched 8,62,021 tonnes valued at Rs 16597.23 crore ( $3508.45 million)in 2011-12. This translates to $3.5 billion.

The quantity has gone up by 6.02 %, while the value in rupee terms jumped by 28.65 % over the previous year. In US dollars, the value showed a growth of 22.81 %. The unit value increased to $4.07 from $3.51 in the previous year. In 2010-11 seafood exports stood at 8,13,091 tonnes valued at Rs 12,901.47 crore.

Marine Products Export Development Authority (MPEDA) chairman Leena Nair said the figures must be viewed in the light of continuing recession in international markets, debt crisis in EU economies, continuing anti-dumping duty in the US, sluggish growth in the US economy and the political instability in the Arab world.

Frozen shrimp was the major export value item accounting for 49.63% of the total dollar earnings. In quantity terms shrimp exports increased by nearly 25 %. The share of vannamei shrimp in the total shrimp exports has shot up from 14% to 35% while the share of black tiger shrimp has declined from 82% to 61%.

South East Asia has become the largest buyer of Indian marine products with a share of 40 % in volume and 25 % in value in dollars. European Union came second with a share of 23% followed by the US with 18% in volumes. Exports to China recorded a fall of 47 % in quantity and 40% in value in dollar terms.

Leena Nair said MPEDA has targeted $4.5 billion worth exports in the current fiscal. Rising production of vannamei shrimp and better infrastructure facilities for production of value added items will help achieve this target, she said.

SMEs in Japan keen on tie-ups

Hyderabad: The bilateral trade between India and Japan is expected to reach the target of $25 billion by 2014. At the end of 2011, it stood at $13 billion.

Japanese companies, especially Small and Medium Enterprises (SMEs), are looking for potential buyers for their products and partners for technological collaboration, including licensing of their technology.

The areas of opportunity include sectors like automotive, agro-machinery, pharmaceuticals, foundry and construction.

Satoru Mitani, Deputy Director, Japan External Trade Organisation, said Japan wants to be an invaluable and strategic partner in the process of India’s development. India and Japan are playing a major role in the globally changing economic landscape, he said, while speaking at an interactive meeting at the Federation of Andhra Pradesh Chambers of Commerce and Industry .

The focus of the Japanese organisation that works to promote mutual trade and investment between Japan and the rest of the world, has shifted towards promoting foreign direct investment into Japan and helping small and medium size firms maximise their global export potential.

Japanese delegation
In India it has offices in Bangalore, Chennai, Mumbai and New Delhi. The organisation has also brought a delegation of around a dozen Japanese automotive component firms to explore business potential in the country, Satoru Mitani said.

In his welcome address, Devendra Surana, President, Fapcci, said the dynamic growth of this relationship is reflected in the number of high-level Ministerial and Parliamentary exchanges that have been taking place at regular intervals.

There is a parallel process of business and industry in both countries taking note of the opportunities that recent economic developments in India have created for them.

This has led to a very sharp increase in exchange of business delegations as well, he pointed out.

Toyota's hospitality biz makes India debut

Bangalore: Toyota Enterprises, the non-automotive arm of Toyota Group, has entered into a joint venture with the Bangalore-based Hyagreev Hotels, which runs The Chancery Hotel in Bangalore. Toyota Enterprises operates a chain of hotels in Japan, and this is its first project away from home.

The Japanese company has entered the deal through its India subsidiary Toyota Enterprises India Pvt Ltd. The new company, TEP India, aims to cater to Japanese businesses based in Bangalore. As part of the JV, TEP India will take over 52 rooms out of the existing 120 at The Chancery Hotel for a period of seven years for management, marketing and maintenance through a minimum guarantee agreement. The JV is set to come into force from January 2013 once the guest rooms are done.

Commenting on the company’s entry into the Indian market, Kazuyuki Kawai, president of Toyota Enterprise, said: “Bangalore has a large presence of Japanese companies and there is an increasing demand for accommodation facilities where the Japanese can stay. The Chancery Hotel will be responsible for the implementation of optimal hotel operation based on TEP India’s planning and marketing to create an ideal hospitality environment.”

Said Changama Raju, chairman of The Chancery Hotel, Bangalore: “A portion of the hotel will incorporate the Japanese guest room standards by meeting their cultural requirements.”

An industry analyst said the tie-up should help Japanese firms like Toyota cut the cost of boarding and lodging as now they are forced to stay at places charging much higher rates when the Japanese firms are looking for places with Japanese ambience and cuisine for their senior executives. It is understood that there is a market potential for around 1,800 rooms on a annual basis in Bangalore catering to the Japanese audience.

If the Bangalore foray succeeds, Hyagreev may go in for such an agreement with Toyota Enterprises for a hotel that may come up on the Bangalore-Chennai highway as there are many Japanese companies that have set up shop in and around Chennai. In addition to that, the group may also set up a hotel in the Nellore-Chittoor district where it may have a tie-up with Toyota Enterprises, said a director of Hyagreev.

Toyota Enterprises, during fiscal 2011, had revenues of 27 billion yen ($345 million).

Yamuna Expressway now open; toll-free ride till August 15

New Delhi/ Lucknow: The Yamuna Expressway opened to traffic on Thursday, slashing travel time between Delhi and Agra by almost half and offering a toll-free ride on India's longest elevated highway till August 15.

The 165-km, six-lane expressway, which links Greater Noida to the city of the Taj Mahal, was inaugurated by UP Chief Minister Akhilesh Yadav in Lucknow via video link to the actual event held at its starting point near Delhi.

Toll on the 13,300-crore road will come into effect from August 16, said Manoj Gaur, executive chairman of the Jaypee Group, the infrastructure major that executed the project. A round trip by car will attract a toll of 510 ( 320 for one way) at 2.10 per km.

The toll is set at 6.60 a km for buses and trucks, 3.23 for minis and 10.10 for heavy vehicles. Commuters using two-wheelers will have to pay 240 for a round trip and 150 one way. Round-trip charges would be 1.6 times that of a one-way ride if the return journey is done within 24 hours. Commuters using the expressway for at least 20 visits a month will be eligible for a 20% discount.

Gaur told ET that he expects toll revenues to be about 200-250 crore in the first year of operation. The speed limit on the road has been fixed at 100 km an hour for cars and 60 km an hour for heavy vehicles.

The expressway project was announced by former chief minister Mayawati in 2001 to help reduce congestion on a 200-km stretch of national highway 2 that took close to five hours to cover.

Although the project was ready a few months ago, the UP government had decided to give its nod only after pending work on the support infrastructure around the expressway was completed.

The existing highway, which cuts through two states, has several bottlenecks, which extend travel time between Delhi and Agra to up to five hours.

Yadav told reporters that Jaypee Infratech will not be allowed to charge toll on the Noida-Greater Noida expressway that the company had built earlier.

He also said he was opposed to the construction of the Ganga Expressway project awarded by the previous Mayawati government to the Jaypee group. The proposed expressway between Noida and Ballia could not take off, as necessary clearances did not come through.

Infosys selected for Rs 700 cr India Post project

Bangalore: Infosys has bagged a Rs 700-crore deal from India Post for implementing and managing its banking and insurance products.

This is one of the biggest deals for the company that gets the bulk of its revenues from the US and Europe. Infosys will install 1,000 ATMs and implement an electronic content management system to manage financial documents generated by India Post.

India Post covers about 200 million customers across the country and offers small savings schemes, postal life insurance, rural postal life insurance, pension payments and wage disbursements amongst other services.

Modernisation drive
The Postal Department is looking at these solutions as a part of its modernisation drive to increase operational effectiveness. The deal also involves Infosys designing, building, supplying, installing and commissioning both hardware and software for India Post.

The duration of the deal was not given but, according to Infosys officials, it is a multi-year engagement. Infosys will also be involved in training 35,000 India Post employees in using these solutions.

Commenting on the deal, A.S. Prasad, Deputy Director-General, Financial Services, India Post, said: “This transformational programme is expected to enhance our offerings and bring us on par with the best banking companies.”

Govt plans to set up Rs 100 cr innovation fund for MSMEs

New Delhi: The Ministry of Micro, Small and Medium Enterprises (MSMEs) in consultation with the National Innovation Council plans to set up a dedicated fund, India Inclusive Innovation Fund, with initial contribution of Rs 100 crore (US$ 18.07 million), said Mr Vayalar Ravi, Union Minister for Overseas Indian Affairs, with additional charge of Ministry of MSME.

The fund would aim to promote innovation and improve the competitiveness and efficiency of small and medium enterprises (SMEs), added Mr Ravi.

Meanwhile, replying to another query, the Minister stated that under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), 870,000 proposals have been approved for guarantee cover for total sanctioned loan amount of Rs 41,794 crore (US$ 7.55 billion), as on July 31, 2012.

The scheme provides guarantee cover for the credit facility that is extended to new and existing micro and small units, both in manufacturing and services sectors.

India has been the favoured investment destination in Asia: Mecklai Financial

Mumbai: India has been the favoured investment destination in Asia, according to Mecklai Financial.

"The Indian financial markets have witnessed favouritism among the investing Diaspora compared to its Asian counterparts such as South Korea, Taiwan, Thailand and Indonesia" said the Mecklai Financial report.

On a year to date basis, India received flows worth $11 billion in equities and $4.7 billion in debt investments.

The second highest flows were received by South Korea to the tune of $6.2 billion.

"In the Jan-March period when the inflows were registered the USD/INR which was trading at 53.298 levels at the start of the year gained strength up to 48.56 levels by the beginning of March. That was a close to 7% appreciation in the Indian rupee," said the Mecklai Financial report, "The USD/ INR pair could be helped to 52.50 levels with the twin deficits, stunted GDP growth rate and the economic quandary of Europe refraining the rupee from such levels.