Mumbai: General Motors Corp., the world’s largest car maker, will fall short of its sales target for India this year as higher loan rates and slower economic growth damp demand.
The auto maker now expects to sell as many as 78,000 vehicles in India compared with a target of 90,000, P. Balendran, a vice president in the Indian unit, said in a phone interview today. The company sold 60,032 vehicles in the country last year.
“The auto industry continues to be sluggish,” Balendran said. “It’s going to be a bad time.”
Volkswagen reiterates India investment plans
New Delhi: Europe’s largest car maker, Volkswagen AG, reiterated it will invest €580 million (Rs3,360.8 crore) in India as the company expects demand for cars to recover.
The Wolfsburg, Germany-based Volkswagen will also start selling vans in India in the first half of next year and the Polo compact car in 2010, Joerg Mueller, president of the Volkswagen Group in India, said at the India Economic Summit in New Delhi on Tuesday.
“We are quite optimistic about India. We see opportunities,” Mueller said. “We don’t have a liquidity crisis at Volkswagen.”
Volkswagen is building a new factory in Pune with a capacity to manufacture 110,000 cars annually. The car maker sells the Jetta and Passat sedans and the Touareg sports utility vehicle in the country. It aims to set up 15 dealerships in India this year and 100 by the end of 2011.
Panel seeks declared goods status for ATF
New Delhi: A high-level committee setup by Prime Minister Manmohan SIngh set up to look into grievances of a loss-making airline industry has asked the finance ministry to look into the possibility of giving jet fuel a declared good status, thereby, reducing a sales tax burden on airlines, after meeting in New Delhi on Tuesday.
A senior government official, however, said the onus was on airlines to pass on to consumers the benefits of aviation fuel prices that are lower by 30% than two months ago, a reduction in customs duty on jet fuel and an eased repayment schedule on overdues to state-owned oil firms.
“I mean what more can you give,” said the official, who was present at Tuesday’s meeting, said when asked if there were any more sops being allowed. This official, who asked not to be named, said “situation has eased” at the airlines considerably after the fuel price fall.
ICICI Bank cuts loan growth target
New Delhi: The country’s second largest bank, ICICI Bank Ltd, has halved its target for growth in lending to 15% as global financial market turmoil spills into Asia’s third largest economy.
High borrowing costs and a slowing economy are denting demand for loans in India, ICICI Bank CEO K.V. Kamath said in a ‘Bloomberg Television’ interview. Instead of growing at 30%, the target rate we had set two to three years back, we will now probably grow domestically and globally at probably around 15%,” Kamath said.
“The domestic growth cycle has slowed down and interest rates are high domestically.” ICICI Bank shares tumbled 6.79% to Rs360.75 in Mumbai trading on Tuesday.
Credit expansion in India is stalling even after the central bank cut borrowing costs twice in the past month to shield the economy from a global recession. ICICI Bank’s loan growth slumped to 16% from a peak of 55% in the year that ended March 2006.
Lending rates must fall by another 3 percentage points to ignite a rebound in loan demand, said Kamath, 61.
Nestle: India growth to remain intact
New Delhi: Nestle India Ltd, a unit of the world’s biggest food company, doesn’t expect the economic slowdown in Asia’s third biggest economy to have a significant impact on growth.
“There will be some effect but we are very much part of the fast-moving consumer goods (FMCG) industry,” Martial Rolland, chairman and managing director of Nestle’s Indian unit, said in an interview with ‘Bloomberg Television’. “This is one industry which doesn’t benefit from a huge upturn but there’s a certain level of protection when there’s a downturn.”
Demand for consumer goods may slow in India. “Some reports suggest FMCG growth will continue to be fairly good,” Rolland said. “We aren’t in a downturn but probably a slowdown.” The liquidity squeeze hasn’t affected demand for consumer goods in the price range that Nestle sells, Rolland said.
ONGC Videsh wins two exploration blocks
New Delhi: The country’s biggest exploration company, Oil and Natural Gas Corp. Ltd (ONGC), said its overseas unit won bids for two fields in Colombia.
ONGC Videsh Ltd was awarded 100% interest in the field in Llanos Basin and 50% interest in the Sinu San Jacinto Basin field, ONGC said in an emailed statement on Tuesday.
Bhel wins Rs1,325 crore order for thermal plant
Mumbai: The country’s biggest power equipment maker, Bharat Heavy Electricals Ltd (Bhel), won a Rs1,325 crore order to supply and install a thermal power plant.
The plant, being built for the Andhra Pradesh Power Generation Corp. Ltd, will have a capacity of 600MW, Bharat Heavy said on Tuesday in an emailed statement.
IEA chief says China, India may join agency
Beijing: China and India, which will account for more than half the increase in the world’s primary energy demand by 2030, are considering joining the International Energy Agency (IEA), executive director Nobuo Tanaka said.
“IEA is not a rich man’s club, we are an energy security forum,” Tanaka said in an interview in Beijing on Tuesday. “If China and India wish to contribute to and benefit from energy emergency measures, it is quite natural.”
Wockhardt Hospitals in US insurance scheme
Mumbai: US-based healthcare travel and documentation provider Companion Global Healthcare Inc has included Wockhardt Hospitals Ltd in Bangalore and Mumbai to its overseas hospital network giving US insured patients a choice of travelling to India for medical treatment.
With this, a Wockhardt hospital release claimed on Tuesday, people insured with US heath insurance firms Bluecross Blueshield and Bluechoice Healthplan will have access to Wockhardt Hospitals.
Infosys to gain from increased outsourcing
New Delhi: The country’s second largest computer services provider, Infosys Technologies Ltd, will gain from an increase in outsourcing at large companies trying to reduce costs, chief executive officer Kris Gopalakrishnan said.
Offshore services, or work done at overseas locations such as the Bangalore-based company’s offices in India, will go up because they are “faster, cheaper and better,” Gopalakrishnan said in a ‘Bloomberg Television’ interview in New Delhi on Tuesday.
Gopalakrishnan is betting the slowdown will prompt some clients to cut costs by sending more work to India.
Unitech to sell hotel biz stake to raise funds
New Delhi: Unitech Ltd said it is looking at raising funds for its hotel business by divesting stake in one or two of its hotel projects, a company spokesperson said. Unitech has six hotels under construction in Gurgaon near Delhi and Kolkata. ‘The Economic Times’ on Tuesday said Unitech has put on the block all of its six hotel projects under construction and that the company is in talks with a few private equity investors to sell all its six properties, under construction in Gurgaon and Kolkata. ‘Business Standard’ reported the realty firm is selling a budget hotel project in Gurgaon.
“We are in talks with some private equity funds to raise money for our hotel projects,” the spokesperson said. “Depending on the deal we will decide on the percentage of stake we will dilute.” Shares of Unitech fell 7.72% to Rs39.45 each on the Bombay Stock Exchange on a day the bourse’s benchmark index, Sensex, shrunk 3.81% and 14-stock realty index 3.59%.
RPG expects retail biz to grow 60% annually
New Delhi: RPG Group expects its retail business to grow at 60% annually, said Sanjiv Goenka, vice-chairman of RPG Enterprises. The group, which closed 56 non-performing stores in the past three months, plans to open 325 stores in the next 15 months, Goenka said in New Delhi on Tuesday at the World Economic Forum’s India Economic Summit.
The group’s store chains include Spencer’s Retail, Music World and Books and Beyond.
Bharti Airtel seeks bids for 3G network
Hong Kong/Bangalore: Bharti Airtel Ltd has sought bids for building its third-generation (3G) network from suppliers such as Ericsson AB and Nokia Siemens Networks, chief executive officer Manoj Kohli said.
The wireless-services provider sent requests for proposals to network equipment makers including Huawei Technologies Co. as part of its preparations for starting the high-speed services possibly in the fourth quarter of 2009, Kohli said in an interview at the Mobile Asia Congress conference in Macau on Tuesday.
Bharti has almost one-fourth of the 315 million user wireless market in India that’s adding 9 million customers a month, making it the world’s fastest growing.
The subscriber gains are helping New Delhi-based Bharti generate the funds needed to complete its network and fund 3G services as the global credit crunch raises borrowing costs for rivals.