Daily Excelsior...Business

Partners tiff delays LML bike launch by 5 months

NEW DELHI, Nov 5: The ongoing bitter spat with partner Piaggio has forced LML Limited to delay the motorcycles by over five months.

Besides, the company has also decided to roll out just one model from Piaggio’s Gilera range of bikes. The rest of the three bikes would be rolled out in collaboration with Daelim of South Korea, senior company officials said.

The company had earlier planned to roll out four models from the Gilera range, including the Eaglet, between January 1999 to June 1999. However, with the partners now engaged in a bitter battle, the launch has been delayed and LML is announcing its foray into bikes with the Daelim motorcycles.

While company sources pointed out that the delay was on account of the tiff between the two partners, company officials attributed it to the technical corrections and modifications that had to be incorporated on the models.

"There has been a slight delay in the foray but that was on account of some technical problems and has nothing to do with the tiff," LML Executive Director (Marketing) R K Caprihan told UNI here.

The first of the bikes would be a 100cc four-stroke model from the Daelim stables. It would hit the roads in may next year and will be followed up with two more models immediately afterwards, he added. The fourth model would be the only Piaggio bike to rolled on to the Indian roads. All the bikes would be in the 100cc to 125cc range and would be priced between Rs 37,000 to Rs 42,000.

The bikes would be unveiled at the forthcoming India International Trade Fair (IITF).

"We have no plans as yet to address the higher-end segment, which has a very niche market. We want to address the mass market which is in the 100cc range," the sources added.

As per the company’s original plans, the Gilera bikes were to be introduced with a local content level of around 85 per cent, to be raised to 100 per cent within a few months.

The partners had even stated that they will be investing Rs 450 crore in the venture to Churn out new models. Of this, Rs 225 crore has already been invested and the rest was to come this year.

But now with a legal battle on between the two partners, the fate of the project hangs in a balance.

"This battle would affect the cordial relations between piaggio and LML and if the stand-off is not resolved, it might have serious repercussions on the future of the joint venture," Piaggio sources said.

Piaggio India’s resident manager Mario Emprin Gilardini has already stated that the company would oppose any move by the Singhanias to buy out the Italian two-wheeler.

Mr Gilardini, in a statement issued here, had said, "Piaggio will oppose such interpretation of the joint venture agreement in all the necessary forums in order to safeguard its position, as India continues to represent a strategically important country in the ambit of Piaggio’s international presence."

Presently, the Singhanias and Piaggio hold 23.6 per cent each in the company while financial institutions control around nine per cent equity and foreign institutional investors about seven per cent. The rest is with the public. (UNI)

American Express launches credit card in India

NEW DELHI, Nov 5: American Express today launched its first credit card in India with a monthly interest rate of 1.99 per cent.

The card also offers a balance transfer service that enables cardmembers to transfer their outstanding balances from other credit cards to the American Express Credit Card.

"The service not only offers the best value and savings on interest charges among all other credit cards but also a range of privileges, services and rewards," said Mr Sanjay Rishi, vice-president and country manager for India and area countries of American Express travel related services.

Most credit cards in the country are charging 2.95 per cent interest per month. There are 30 lakh credit cardholders and their combined billing are estimated at Rs 5,000 crore. Nearly 90 per cent of the card business is in top eight cities.

Mr Rishi said nearly 50 lakh Indians are estimated to be in the upper middle class segment according to the National Council of Applied Economic Research (NCAER). The number is likely to reach one crore mark in the next three to four years.

"These people have high disposable incomes but are prudent about spending. Their increasing aspirations are fuelled by availability of world class products. The increasing avenues of information are also fuelling demand for real value of a product." Still, less than two per cent of the country’s total private consumption spending is done through cards and their usage remains an urban phenomenon. However, Mr Rishi said, credit cards are one of the most rapidly growing product categories in India.

While the number of credit card holders and card usage has grown significantly over the years, he said, there has been limited innovation to meet the rapidly changing needs of customers in India.

Mr Rishi said the American Express Credit Card will alert customers in two areas: One, make them conscious of the high interest charges they are currently paying and two, make them appreciate the savings that they can get through smart selection of a credit card.

The card also offers free air travel accident insurance of upto Rs 10 lakh, purchase protection, limited loss liability, emergency card replacement and membership travel services. It will complement American Exress green and gold charge card and the corporate card.

American Express is the world’s largest travel related services company with over 4.2 crore cardholders worldwide and more than 17 billion dollars (Rs 70,000 crore) in annualised travel sales. (UNI)

Indian-EU partnership vital for mutually
beneficial enterprises

Excelsior Correspondent

JAMMU, Nov 5: The Chamber of Commerce and Industry (CCI), Jammu organised an interaction on European Union- India cross cultural programme at which two experts from EU and the leading members of business and industry community participated here today.

The European Union’s first major multi-dimensional joint programme "EU-India Economic Cross Cultural Programme focuses on three sectors: Universities, Media and Enterprise. The overall aim of this 5-year programme is to raise awareness of the European Union in India and of India in the EU in order to strengthen the economic and cultural links between the two regions. It is proposed to identify areas for co-operations and co-financing for mutual benefit.

Prof R R Sharma, Vice Chancellor, Jammu University in his speech stated that the world is shrinking now into a "global village" due to means of mass communications and also there is emgergence of multi-polar system. The European Union, Japan and India are emerging as important economic powers.

He welcomed the healthy partnerships between Indian and EU businessmen for enterprises beneficial to both sides. Prof Sharma underlined the need for better understanding of India as a fast advancing nation and also present a true picture of emerging European Union for better co-operation.

Mr Romesh Sharma, president, CCI stated that efforts are on for economic resurgence in this part of the country on one hand and also foster industrial culture which is in line with cross culture dimensions of liberalised economy. The interaction with the representatives of European Union will help create mutually beneficial relationship, thereby strengthening the global economy as a whole, he opined.

The CCI chief expressed the view that the interaction will result in developing the new era of bi-lateralism in trade, commerce, industry and academica and identifying areas of possible co-operation as well as open up new vistas of progress.

Mr Heino Marius, First Secretary, Economic and Commercial, European Union in his speech gave detailed account of EU-India Economic Cross Cultural programme. Call for proposals was given in September, 1997 which evoked good response with 400 proposals, he indicated. The second call for the proposals will be in March, 1999 which will be notified in due course of time, he added. The cross cultural programme envisages institutional links through FICCI, ASSOCHAM, and other leading trade and commerce organisations and get the businessmen together for mutual co-operation and partnership with European Union nations.

The projects in the University sector address a variety of issues such as business management, good governance, foreign language teachers’ training. Some projects are already in operation now.In the media sector exchange of information and ideas is proposed. While enterprise dimension focuses on helping Indian and European enterpreneurs and managers to acquire knowledge about each other’s business culture.

Mr Domnico Nicoletti, Enterprise Officer, European Commission, Brussels briefed about the cross cultural programme.

There was lively interaction in which Messrs YV Sharma, Kuldip Dogra, Devender S Rana, Prof A N Sadhu and Chander Gulati took part by asking questions and making observations.

Mr Satish Gupta, general secretary, CCI while presenting the vote of thanks

underscored that in view of world emerging as a global village, it is imperative to have better inaction and co-operation for mutual benefit.

Hegde releases CD-ROM of overseas importers

NEW DELHI, Nov 5: Commerce Minister, Ramakrishna Hegde today released here the first CD-ROM of overseas importers which also contains the directory of HS (Harmonised System) classification of codes for export and import products.

The CD-ROM has been brought out by the National Centre for Trade Information (NCTI), under the Ministry of Commerce. The CD-ROM is the first step taken by the NCTI in developing a data base of overseas importers of this size and it proposes to release the next series of CD-ROMs which would over country profiles.

The CD-ROM, containing 35,000 overseas importers besides the directory of harmonised upto December 31. A similar introductory price FR subscribers abroad is 100 dollars.

NCTI is also engaged in enhancing the information base on its website www.nctiindia.com for which steps are being taken to and abroad in times to come.

As one of its major activities, NCTI performs an active role as the trade point India under the trade efficiency programme of UNCTAD. Under this programme, trade opportunities are exchanged daily from across 173 trade points located in over 150 countries all around the globe through the Global Trade Point Network (GTPNET).

These trade leads are termed as Electronic Trading Opportunities (ETOS) which along with trade and business enquiries received from Indian Embassies and missions abroad are structured and classified under various HS chapter heads.

After value addition, the trade enquiries are disseminated through a weekly publication Trade Point India. Trade Point India contains over 500 demands and offers every week.

The idea of CD-ROM of overseas importers was conceived quite early and has been compiled painstakingly over the past year and a half by selecting ETOS from the archieval database of ETOS developed over a period of time. ETOS appearing on the GTPNET are uploaded by individuals across the world in various structured and unstructured formats.

In many cases only E-mail addressed are found to appear as the contact since this is the most economical and efficient trade practice for pursuing fresh trade leads. In many cases the interested party prefers even not to divulge a name or the organisation. An attempt has been made to shift out only valid trade leads from a huge database which consists of several late entries.

Nevertheless, there are bound to be entries which are not 100 per cent valid in terms of accuracy of the E-mail addresses etc.

At the same time, it is ensured that the details which have been incorporated are exactly as per those uploaded on the GTPNET. NCTI plans to validate and update the entries selected in this first CD-ROM on a monthly basis. It is hoped that updated versions would be provided to subscribers periodically.(UNI)

Telco puts Rs 2.5 lakh price tag for Indica

NEW DELHI, Nov 5: Telco has finalised a Rs 2.5 lakh price tag for the standard petrol model of its much-awaited 1400cc small car ‘Indica’.

The standard diesel model would be Rs 40,000 dearer and cost Rs 2.9 lakh while the deluxe petrol and diesel versions would be priced at Rs 2.9 lakh and Rs 3.4 lakh respectively, company sources told UNI here today.

These prices were communicated to the company’s suppliers today.

Meanwhile, company officials, when contacted in Mumbai, told UNI that the prices would be finalised and announced only around December, the time the car is slated for a commercial launch.

"Prices would be finalised only around December and would be announced around the same time," Mr Rajiv Dubey, a senior official in Telco said.

Though he stated that the car would be launched commercially in December, Mr Dubey refused to give any specific dates for the launch and the start of commercial production saying, "a lot of schedules have to fixed up for the same. The dates are being worked out presently."

Meanwhile, the sources pointed out that Telco was all set to commence commercial production of the ‘Indica’ around November 29 and launch the car around December 9.

It intends to produce close to 10,000 units of the vehicle per month between January to March and gradually ramp up production. It has also decided to follow the direct marketing route and not take any bookings for the car.

This price tag has put Telco on a firm footing against the other new entrants in the segment — Hyundai Motor India Limited and Daewoo Motor India Limited. While Hyundai has priced its Santro in the range of Rs 2.99 lakh and Rs 3.69 lakh, Daewoo has decided to roll out just one fully loaded version of the Matiz with a price tag of Rs 3.55 lakh.

Telco is now also all set to skid Maruti 800 off the roads with its fully indigenised car. Maruti 800, which the Indica is pitched against, presently carries a price tag of Rs 2.09 for the standard version and Rs 2.45 for the deluxe version. Company chairman Ratan Tata, while unveiling the car earlier this year, had stated that would it carry a price tag similar to the Maruti 800.

The 5 door hatchback will be available in standard and luxury versions with both petrol and diesel options.

As per plans announced at the Auto Expo earlier this year, the company was looking at producing 50,000 cars in the first year from its Pune plant which would later be raised to 1.5 lakh to two lakh units. The break-even limit for the venture was stated to be 60,000 cars.

Telco was planning to invest Rs 1,700 crore in the project.

The car, a semi-mono-volume, was claimed to have a fuel efficiency of 16 km to a litre of petrol under gruelling test conditions.

The standard version will boast of features such as radial tyres, tinted glasses, injected moulded glass pads, parcel shelf and a digital clock. Some of the features that will be provided in the luxury version include airconditioning, power steering, power windows, central locking and rear windshield wiper.

The company also intends to export the car from India within a couple of months after the launch.

Meanwhile, the mid-size car, which will be the second offering from the Tata’s passenger car stables, is expected to hit the roads in the later half of 1999.

Telco had recently finalised Tata Finance Limited and ANZ Grindlays as official financiers for the Indica.

The Tata group has also set up a Rs 100 crore car retailing joint venture — Concorde Motors Limited. Jardine company of Hong Kong and the Tata Group hold 50 per cent equity each in the venture. The Tata group controls the equity through Telco, Tata Finance and Tata Industries.

The company would establish a retail network for the sales and service of the Telco range of passenger vehicles in the country. Initially, Concorde will set up centres in 7 cities — Delhi, Mumbai, Bangalore, Chennai, Hyderabad, Ludhiana and Lucknow. Within these 7 cities, the company will have 19 operational dealerships by November. However, it intends to spread its network to 12 cities in 24 months.

Though the initial investment in the joint venture company has been envisaged to be Rs 100 crore, the company has earmarked that over the years it would be raising another Rs 50 crore.(UNI)