Category Archives: Markets

Markets

Real estate developers look for new ways to reduce construction costs

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With the increase in input costs across markets, real estate builders across the country are looking for new technologies to control construction costs. Real estate sales are seeing reduced sales as costs rise across the country.

It has been noticed that many real estate developers are investing in plants, which manufacture pre-fabricated walls and ceilings; while the others are bringing in methods which double the pace of construction, and reduce the requirement of steel. These new innovations are required, as there has been a sharp slide in profit margins for developers in the past few quarters.

According to our sources, Sanjay Dutt, the executive managing director of South Asia property advisory firm Cushman and Wakefield said that developers are finding various ways to reduce  cost. The cost input involving cement and steel has gone up by more than 35-40 percent over the past two years and labor rates have also more than doubled.

RK Arora, the managing director of a Noida based builder said, “Margins are down by 50 per cent for us, because of higher commodity prices and slower home sales”. In order to speed up construction, builders have invested in a new shuttering technology which helps in completing a construction slab in seven to eight days.

Markets

Car companies Maruti and Honda to hike vehicles prices

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As the festive season fast approaches the season of discounts also begins. But while many of the car companies are offering attractive discounts, Indian auto giant Maruti Suzuki has announced that it will increase the prices across its range.

Maruti said that it will increase the prices of its vehicles within a week due to the foreign exchange fluctuation and rising input costs. The company is also facing a slowdown in the sales of its petrol vehicles.

An official from the company said, “There is a lot of pressure on our margins. We will increase prices within a week but the details are being worked out”. Even Honda said that it will raise prices from October 1, 2012 due to input cost pressures.

Honda will be hiking the prices of the Brio and Jazz hatchbacks and the City sedans. The company said that the hike will be between 0.2-0.6 % and added, “The prices have been revised due to inflationary pressures and increase in freight as a result of the increase in diesel prices”. But the talks of price hike is surprising considering that the companies are already offering massive discounts . The vehicles like Alto, Wagon R, Estillo and A-Star already carry discounts between Rs. 30,000 and Rs. 35,000.

Markets

Car makers hopeful of upcoming festive season despite diesel price hike

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The recent price hike on the diesel prices has given a blow to the already slowing down of the passenger vehicle space. But the industry players are hopeful that the upcoming festive season will help to soften that knock.

Some of the top industry officials from Maruti Suzuki, GM India and Mahindra and Mahindra said that the diesel price hike may defer the demand slightly but the upcoming festive season is definitely going to be better than last year. RC Bhargava, the chairman of Maruti Suzuki while talking to the reporters said, “I don’t think the hike will have a big impact on demand; there may be a temporary reduction in demand, but off take should pick up by the time the big festivals set in.”

But it is also said that the companies which have a predominantly diesel portfolio like Mahindra and Mahindra and Tata Motors are likely to feel the pinch. However, M&M might be places at a better space as it is a large producer of utility vehicles, which is the industry’s fastest growing segment.

On the other hand Pawan Goenka, the president, automotive at M& M has welcomed the move as it will reduce the differential between petrol and diesel vehicles.

Markets

Venkatesh Kini appointed as Coca-Cola India’s vice president

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Former marketing head of Coca-Cola India, Venkatesh Kini will be returning to India as the senior vice president of the Indian operations of the beverage company. Kini has been position number two in the company under the chairman Atul Singh.

All the Coca-Cola verticals will be reporting to Kini who will be moving in from Coca-Cola ‘s head quarters in Atlanta where he was the global VP for juices. One of the officials said, “This move is a strategic reorganisation of India operations and indicates the company is keen to rapidly scale up its business here”.

The official also said that Kini was handpicked for the role but the spokesperson from Coca-Cola declined to comment. Kini had relocated in Atlanta in the year 2009 and headed the Coca-Cola India’s marketing operations for three years.

He had joined the company in the year 1998 and was promoted as the marketing head at a time when the pesticide-in-cola controversy had impacted the sales of the beverages. Kini was also among the top officials instrumental in turning around the company. Coca-cola just like its rival PepsiCo has been depending on the Indian market for its steady growth in the country. In the year 2011 the company said that it had a global growth of 5%.

Markets

Indigo, Jet Airways charge highest fares, Kingfisher charges lowest in July

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Low cost Indian airline Indigo charged the highest fares on several sectors, while the Kingfisher Airline which was once considered as the ‘first class’, charged the cheapest. The latest figures from the month of July had shown some of the strange ironies from the Indian aviation business.

Some of the data from the aviation regulator, the Directorate General of Civil Aviation revealed that the Indigo Airlines offered the most expensive tickets on the sectors they operated last month. However, despite the high prices, the customers did not mind spending that much on the air tickets due to the promptness of the service and punctuality.

Kapil Arora the partner at global consultancy firm Ernst and Young said, “Though India is a price-sensitive market, passengers have shown a clear preference for assured quality of service”.So now Kingfisher has become the new low cost airline in terms of pricing as the analysis by the aviation regulator has pointed out that how Kingfisher of offering “lower average fare than the industry average”.

Moreover, Kingfisher has also pulled out from many of the routes in the North East which enabled pricing power or the other operators. One of the senior airline executives on the condition of anonymity said that one of the main reasons for the phenomenon is the fact that when one has a large network, the corporate prefer them and also pay them higher.