Direct selling FMCG company Amway India will increase the prices of all its products by 3-5 per cent in early 2009 even as commodity and crude prices are witnessing a sharp decline.
A day after leading car makers Maruti Suzuki and Hyundai Motor decided to cut vehicle prices in the wake of a reduction in taxes, Mahindra Renault on Tuesday said its Logan sedan will be offered at a discount of Rs 60,000.
FMCG firm Marico's success lies in its ability to pick its fights, exiting areas where MNC competition is high and concentrating on creating niche segments instead.
Forget about the Tata Nano for Rs 100,000. Or buying a sleek Yamaha R15 for over Rs 97,000. An array of car models is now available at prices under Rs 100,000, thanks to an expected 20 to 25 per cent fall in used-car prices on certain models, in response to the government's decision to reduce Central value added tax (Cenvat) four percentage points for new cars.
Slowdown in vehicle demand also behind decision.
This is one New Year when most citizens will not be comfortable partying following the terrorist attacks that left hundreds dead.
The current slump in the automobile sector has delivered a hard knock to component makers -- classified as small and tiny enterprises -- as about 600 manufacturing units in Jamshedpur have shut down operations, while more than 2,000 other units spread across the country are on the verge of closure.
Donatella may attend Feb 2009 launch of Versace store in Delhi.
Nissan Motor Company, Japan's third-largest auto maker, has decided to cut its small car sourcing target from India's biggest car company Maruti Suzuki by 80 per cent in view of the severe downturn in Europe's automobile market.
Bookings in five-star hotels and inflow of foreign tourists into the country were already running low due to the global economic meltdown. With Wednesday's terror attack, the hotel industry is expected to see a rise in the number of cancellations and also a substantial reduction in tourist numbers since the terrorists have struck at the peak of the tourist season.
Restoration of colonial woodwork could take almost an year.
The attack comes at a time when the hotel industry is already suffering from weak demand. Thanks to the credit crunch, companies have decided to curb overseas travels and move to low-cost alternative accommodation. Even though the terror attacks occurred in south Mumbai-based Trident and Taj hotels, tourists in Delhi's Le Meridean , Shangri La and Taj Mahal were seen cancelling scheduled events.
The firms record robust 10-15% growth till September. However, despite the enhanced outlays for A&B, companies are looking at adopting cost -cutting measures.
The models will carry a price tag of Rs 1.25 crore to Rs 3 crore, the most expensive in the company's line-up, and will be custom ordered and delivered directly from Germany. Delivery time may take two or three months depending on what the customer chooses.
The worries for the industry include defaulting payments, slowdown in industry growth rate and budget cuts. "While we are bracing ourselves for budget cuts in the near future, we can't give our customers longer credit cycles as we operate on wafer-thin operating margins," says Mudhukar Kamath, MD and CEO, Mudra Group, while admitting that they have experienced a few cases where payments are getting stretched.
The price difference between branded tea and loose tea has narrowed to a mere 5 per cent, helping the consumer to opt for branded labels. According to Bloomberg, the wholesale price index for tea in India gained 74 basis points from 128.30 in January to 222.50 at end of October this year. As a consequence, tea manufacturers in the wholesale and loose tea business, besides branded tea players, have increased prices.
The industry experienced new pressures on its operating margins and sales in the wake of increasing input costs and new excise regime. For the domestic spirits manufacturing industry, the cost of raw materials such as molasses doubled since March. Packaging costs rose by 15-20 per cent. The widening of services tax resulted in 50 per cent new services to be taxed at 12.36 per cent. Besides an increase in labour costs, inflation also played havoc with the operating margins.
Car companies are hoping to buck the slowdown by launching new models to push sales from January. Industry majors like Maruti Suzuki, Mahindra & Mahindra, Hyundai India have all lined up launches in the next few weeks and months hoping to generate reasonable volumes.
"The 33 per cent extra scheme by Frito-Lay's on Lay's and Kurkure got good trader and consumer response. In the next four-six weeks, a similar scheme will be offered by ITC," market sources said. ITC has been able to capture 7 per cent of the chips and snacks sector in 2007 within a year of its launch. "It has already made a dent in Frito-Lay India's share," according to a Euromonitor International study on sweet and savoury snacks in India.
The move comes close on the heels of growth in developed auto markets such as the US and Europe dipping in the red. Analysts say that global auto companies are now focusing on developing new models for emerging markets like India, their with main focus on containing costs. The cost of development in India is considered to be the lowest in the world.
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