BEIJING, Apr 24: Global luxury auto brands are piling in to tap China’s seemingly endless appetite for Audis and BMWs but, amid the ambitious sales forecasts, some signs point to trouble ahead for sleek high-priced vehicles.

Upscale brands from General Motor’s Cadillac to German brands such BMW and Mercedes-Benz, are trying to make up for less robust growth in the United States and sagging sales in Europe and grow – or survive in some cases – as luxury brands.

Optimism abounds at the Beijing auto show, which opened in the Chinese capital on Monday.

‘Successful global automotive companies must have a luxury brand that competes around the world and wins around the world and in China,’ said GM CEO Dan Akerson.

Toyota Motor Corp. Said it was trying to pump more vigour into its Lexus luxury brand. It unveiled a ‘more China-focused’ entry luxury sedan called the ES250, which had been designed to be more fuel-efficient with a smaller engine than its comparable ES350 model.

The car’s rear seat also has been designed bigger and plusher to cater to the specific tastes of Chinese consumers. Lexus executives said the brand was aiming to boost the number of its retail stores to 100 from the current 86 this year.

General Motors expects Cadillac sales in China to match U.S. Levels by 2015 or 2016, while BMW expects sales growth in China to climb by a double-digit percentage in 2012.

GM’s Akerson told reporters on Monday that the company would expand its dealer network in China to 3,500 stores by the end of this year from 2,900 now. He added that Cadillac sales rose 73 percent in China last year.

Still, high-flying sales growth rates in the premium segment have slowed markedly as the overall market lost momentum since last year. Daimler AG’s chief executive Dieter Zetsche said China’s premium car market should grow 15-20 percent this year. That represented a significant slowdown from 2011 when luxury sales grew nearly 40 percent to 959,980 vehicles, according to LMC Automotive.

SALES INCENTIVES

Beijing-based CLSA Ltd analyst Scott Laprise, who downgraded China’s luxury auto sector last August, remains pessimistic about the segment in China and warns that some premium brands might have to resort to sales incentives to sustain sales – a move that would eat into the brands’ profitability.

‘My argument is pretty simple, as the total market slowed all year last year,’ Laprise said. ‘It was rich people slow, too. That’s it. Rich people just take longer (to feel the impact), but when the regular auto market falls eventually the rich market falls. It was a matter of time.’ Global luxury brand executives, however, are hoping the stretch of slower sales growth is short-lived.

Auto dealer group Zhongsheng Group Holdings Ltd, believes China’s luxury vehicle segment has room for faster growth partly thanks to a relatively low penetration of high-end brands in the country, Zhongsheng chairman Huang Yi told Reuters in an interview in New York last week.

Luxury car sales represented just 7.5 percent of overall sales in China last year, compared to nearly 12 percent in the United States, according to data compiled by the company.

When it comes to brand image in China, some industry players say European luxury marques have a lead over U.S. rivals.

Jim Press, CEO of dealer group Yanjun Auto, which owns BMW, Jaguar Land Rover, Volvo and Porsche dealerships in China, told Reuters on Tuesday that German brands remained ‘synonymous’ with luxury in China, and that others needed to design products with the Chinese market in mind.

Ford Asia chief Joe Hinrichs acknowledged that the likes of Audi and BMW had a headstart in the luxury market, but said rivals could compete with the right product and did not dismiss the idea of taking the Lincoln brand to China at some stage.

‘There’s plenty of Tiffany stores running around this place,’ he told Reuters last week. ‘It all comes back to the product and what you offer. Clearly, there’s some image associated with some of the German luxury manufacturers, but I think the best product always wins ultimately.’ (agencies)

SHANGHAI, Apr 24: China’s rigid capital rules ban its citizens from investing directly in Apple Inc but that’s not keeping them from seeking a piece of the iPhone maker’s success by buying shares in its suppliers – and even companies rumoured to be suppliers.

Investors have flocked to the only two China-listed firms that Apple has confirmed as suppliers, sending their valuations to lofty levels, while speculation has become rife in firms thought to be indirectly doing business with the technology giant.

Suzhou Anjie Technology Co Ltd has jumped more than 30 percent and Warren Buffett-backed carmaker BYD Co Ltd has gained more than 15 percent since mid-January, when they were cited on Apple’s first-ever suppliers’ list. China’s benchmark Shanghai Composite Index is up 5.6 percent for the same period.

‘Investors want to share in Apple’s growth as they believe sales of iPhones and iPads will remain strong,’ said Zhou Feng, analyst at Donghai Securities Co.

‘Investing in Apple suppliers is not a bad idea, since they’re the girls hanging out with the rich guy.’

Shares of Apple, which is listed on the Nasdaq, hit a record high of $644.00 this month. They have since fallen 11 percent, closing at $571.70 on Monday, but are still up 41 percent in 2012.

The closest that Chinese individuals can get to owning Apple shares, given the ban on the direct purchase of overseas stocks, is to buy into one of the overseas investment funds permitted under China’s Qualified Domestic Institutional Investor (QDII) scheme that have invested in Apple.

QDII is China’s main channel for outbound investment by individuals in foreign capital markets.

The biggest exposure to Apple in a QDII fund is around 20 percent, via the Guotai Nasdaq-100 Index Fund which tracks the Nasdaq-100 Index. The fund has gained 7.3 percent during the past 12 months, compared with a 21 percent drop in China’s benchmark Shanghai Composite Index.

Given their limited access, many local investors have turned to China-listed firms that directly or indirectly do business with Apple as proxies for the world’s most valuable company.

Such a trading strategy is not uncommon in China’s strictly controlled capital markets.

Investors use overseas REIT funds to speculate on the property market, for example, even though the performance of these products is based on the commercial rental market.

SUPPLIERS OF SUPPLIERS

The hunt for exposure to Apple has at times taken Chinese investors to the far periphery of Apple’s supply chain or deep into the realm of rumour and speculation.

Shares of Success Electronics Ltd, which makes touch screens and has been cited by domestic media and analyst reports as an Apple supplier, nearly doubled in February on expectations of the imminent launch of the iPad 3.

Nanjing Yunhai Special Metals Co, which domestic media and analysts have said provides raw materials to suppliers of iPad and iPhone components, surged 35 percent in the fourth quarter of 2010, following the launch of the iPhone 4 earlier in the year. Its shares have since fallen back, however, and the company barely made a profit in 2011.

But analysts believe that Anjie, with its proven and direct relationship with Apple, can continue to perform well, even with its high valuations.

The company last week forecast that first-half profit this year may grow as much as 70 percent, after surging 82 percent last year to 101 million yuan ($16 million).

‘You can hold on to Anjie as long as you have faith in Apple,’ said Wu Binhua, analyst at Hwabao Securities. ‘But too much reliance on one single customer is also a potential risk.’

Asset managers including China Asset management Co and Yinhua Fund Management Co boosted their holdings in Anjie during the first three months of this year, the company’s first-quarter earnings report showed.

‘It’s possible that the Apple suppliers list has generated more investor interest in us,’ said Ma Yuyan, an investor relations official at Anjie, which makes components used in iPhones and generates about half its revenue from Apple.

Sixteen potential investors, including Haitong Securities Co , Bank of China Investment Management Co and HFT Fund Management Co, a fund venture of BNP Paribas, visited Anjie in January and February, its quarterly report showed.

BYD, which makes cars and batteries, declined to detail its business with Apple, citing a confidentiality agreement. The company has yet to publish its quarterly results.

Anjie now fetches 35 times its 2012 earnings and BYD trades at 46 times, far above the average of 29 times for firms listed on Shenzhen’s SME board, which lists small- and mid-cap companies. (agencies)

JODHPUR, Apr 24: To help boost private investment in renewable energy, multilateral lending agency ADB today announced USD 103 million loan to Reliance Power for setting up a 100-MW solar plant in Jaisalmer district of Rajasthan.

“I would like to to inform you that ADB has just agreed to extend financing for Reliance Power’s 100-MW concentrated solar thermal plant which will be one of the largest solar power generation facilities in India and Asia as well,” ADB Director General (Regional and Sustainable Development Department) S Chander said.

He was addressing the inaugural session of the fourth Asia Solar Energy Forum here, which is being attended by several public and private sector experts, investors, and companies.

The plant, which is expected to be completed in May, 2013, will cost around USD 415 million.

Besides ADB, other bilateral agencies and local lenders will provide funds for the project. It will be the first solar energy plant built by Reliance Power, which is a listed company of the Reliance ADA Group.

Under the government’s ambitious Jawaharlal Nehru National Solar Mission (NSM) that started in January, 2010, the country aims to have 2,000 MW of installed solar power generation capacity by 2013, which would be further increased to 10,000 MW by 2017 and to 20,000 MW by 2022.

Reliance Power was one of the successful bidders to develop 470 MW of concentrating solar power capacity under the first phase of the NSM.

The plant will be located near the village of Dhursar in the Jaisalmer district of Rajasthan, which is about 180 km from Jodhpur. The site has one of the highest levels of direct sunlight in the country.

The plant is estimated to avoid more than 2.5 lakh tonnes of carbon dioxide emissions every year, compared to the energy produced by a conventional fossil fuel plant.

The project will share a transmission line with the Reliance Power’s existing 40 MW Dahanu solar power plant which is also partly financed by the ADB.

“This 100-megawatt plant will help meet growing energy demand in India in a way that avoids emission of harmful greenhouse gases,” said Michael Barrow, Director, ADB’s Private Sector Operations Department.

He further said, “We hope that the success of this project will spur others to invest in the solar energy sector, which has massive potential in India.” (PTI)

NEW DELHI, Apr 24: Drug maker Wockhardt today said it has launched a generic version of Orion Corporation’s Parkinson’s treatment drug Stalevo in the US, with 180 days of marketing exclusivity.

The company said its generic copy is of four strengths (50mg, 75mg, 125mg and 200mg) of the triple-drug combination product containing levodopa, carbidopa and entacapone.

“Wockhardt was the first-to-file with paragraph-IV certification on four out of six strengths of this product,” Wockhardt Chairman Habil Khorakiwala said in a statement.

Pursuant to a settlement of the litigation between Wockhardt and Orion Corporation, Finland, the two parties came to an arrangement to launch an authorised generic version with 180-days of exclusivity, he added.

“Wockhardt launched the product on April 23, 2012 and is entitled to 180-days of exclusivity,” the company said.

The combination of levodopa, carbidopa and entacapone tablet is the generic name for the brand Stalevo, owned by Orion Corporation and marketed in the US by Novartis.

Citing IMS Health, Wockhardt said the total market for this product in the US is about USD 55 million for the above four strengths and even after the 180-days exclusivity the number of competitors to enter the market is expected to be very limited.(PTI)

HYDERABAD, Apr 24: Tech Mahindra and Mahindra Satyam today announced that they have signed a Global Frame Work Agreement (GFA) with CA Technologies, a gloal IT managemnt and security software and solutions company, aimed at building a business model

where shared and managed services can be provided to new and existing customers through a joint and strategic approach.

The Centre, which was inaugurated by CA Technologies CEO Bill Mccracken at Mahindra Satyam office here today, will enable co-innovation and delivery of joint offerings between the two companies.

In this unique arrangement, Mahindra Satyam, Tech Mahindra and CA Technologies will offer application performance management,test automation, content aware security and MSP offerings. Through the agreement, the companies will develop innovative and differentiated joint offering for Telco, Manufacturing, BFSI and Healthcare Verticals. (UNI)

NEW DELHI, Apr 24: Finance Minister Pranab Mukherjee today called upon the global sugar industry to initiate steps for curbing price volatility of the sweetener.

“Much more needs to be done to improve the world sugar economy as we are still at a time when the world sugar market continues to experience considerable price volatility,” he said, while addressing the 41st session of International Sugar Council (ISC) here.

Mukherjee asked the ISC to take further steps for development and stabalisation of the global sugar sector.

ISC is a global body responsible for development of sugar industry in the entire world. It is the governing body of International Sugar Organisation (ISO), in which India is a member since 1993.

Noting that better information is a powerful tool for price stability, Mukherjee said, “I would like the ISC to examine and analyse the information system on demand and supply, international policies and the trade competitiveness for realistic estimation of sugar production.”

He also emphasised the importance of global cooperation in research and development of sugar technologies to unlock the full potential in developing countries.

Highlighting the growth of Indian sugar industry, Mukherjee said, the government has been seeking to stabilise the domestic sugar prices by moderating the volatility during scarce and surplus domestic sugar seasons.

He, however, said that more attention is required to improve quality of sugar, recovery level, reduction in water intensity of crops, energy and environment consideration in the production of sugar.

The minister further stressed the need to develop by-products like bio fuels for improving the financial health of the sugar sector in the country.

He also said that the domestic sugar industry should tap the benefits from flexible market-based mechanisms under the Kyoto Protocol.

Expressing concern about cyclic nature of domestic sugar production, Food Minister K V Thomas said, “It has been our concerted endeavour to break this cyclicality with multi- pronged policy interventions.”

On by-products of sugar industry like ethanol, he said that exchange of information on technological innovations of participating countries will help India grasp the full potential of sugarcane crops.

India, the world’s second biggest sugar producer but the largest consumer, is estimated to produce 25.2 million tonne of sugar in 2011-12 marketing year (October-September), as against the annual consumption of 22 million tonne.

In view of higher domestic production, the government has permitted export of 3 million tonne. (PTI)

NEW DELHI, Apr 24: PepsiCo India and multiplex chain PVR Ltd today said they have extended their partnership by another five years for retailing of the products of the food and beverages major.

“As part of this five year partnership, PepsiCo India will be the official ‘Pouring Partner’ for carbonated soft drinks, health drinks and juice based drinks, beverages, packaged juices and water at all 166 PVR screens spread over 22 cities across India,” the two companies said in a statement.

PVR Ltd Chairman and Managing Director Ajay Bijli said: “The 15 years of association with PepsiCo have been truly fruitful and we aim to take it to the next level by announcing PepsiCo as official ‘pouring partner’ for carbonated beverages, packaged juices and water at all our outlets across India.”

The two companies said their partnership has evolved from a traditional supplier relationship over the years, acquiring new scale and dimension with the launch of integrated marketing programmes around the likes of the 2011 Cricket World Cup.

“Our association with PVR has only grown manifold over the last 15 years. With more than 25 million footfalls in 2011-12 and an increasing pan India presence, this association further consolidates our presence across the organised multiplex category,” PepsiCo India, CEO (India Beverages) Praveen Someshwar said.

He said the partnership with PVR will help garner an increasing revenue share of the category over the next five years. (PTI)

NEW DELHI, Apr 24: Competition watchdog CCI has imposed Rs 317 crore in penalties on three companies, including agro-chemicals major United Phosphorus, for collusive bidding to supply ALP tablets to Food Corporation of India (FCI).

The aluminium phosphide (ALP) tablet manufacturers—United Phosphorus, Excel Crop Care, and Sandhya Organics—have been fined 9 per cent of the their three years’ average profits.

ALP tablets are used by the FCI for preserving its central pool of foodgrains.

United Phosphorus has been asked to pay up Rs 252.44 crore, Excel Crop – Rs 63.90 crore and Sandhya Organics Chemicals – Rs 1.57 crore.

In its order, the Competition Commission of India (CCI) said it has found companies entering into anti- competitive agreement and that their “acting together and quoting identical prices has deprived FCI of competitive bid rates in manner of procuring ALP tablets”.

The Commission also directed the companies to ‘cease and desist’ from engaging in practices of manipulating process of bidding in any manner.

CCI had investigated the matter after receiving reference from FCI which alleged that such cartel among manufacturers was leading to rise in cost of procurement.

FCI had also alleged that since the companies were “quoting identical rates under an anti-competitive agreement or understanding, the very purpose of floating tenders was defeated.”

It also said that as a result of the anti-competitive agreement of the ALP manufacturers, the price of the tablets has nearly doubled during 2007 to 2009. (PTI)

DEHRADUN, Apr 24: HDFC Bank and Wells Fargo, a diversified financial firm, have joined hands to enable NRIs in the United States to quickly remit money to beneficiary’s HDFC Bank savings account in India.

The new service will significantly enhance remittance opportunities to India given that Wells Fargo has one of the largest number of banking locations among US banks and HDFC Bank has over 2500 branches in India, a country that has a large and growing number of NRIs based in the US.

HDFC Bank is already one of the most preferred remittance channels for NRIs residing in The Gulf.

According to a World Bank report, the officially recorded remittance flows to developing countries are estimated to have reached 351 billion dollars in 2011, up 8 per cent over 2010 and is slated to touch 441 billion dollars by 2014.

Worldwide remittance flows, including those to high-income countries, are expected to exceed 590 billion dollars by 2014.

‘India has one of the highest remittance volumes in the

World according to the World Bank,’ said Daniel Ayala, executive vice president and head of Wells Fargo’s Global Remittance Services.

Remittances to HDFC Bank are denominated in Indian Rupees.

Once a customer has set up their ExpressSend agreement and the beneficiary account information is verified with HDFC Bank, the customer needs to conduct his first transaction at a Wells Fargo branch. Subsequent transactions can be conducted through Wells Fargo.Com, or via Wells Fargo Phone Bank.

Funds are sent to HDFC Bank quickly for credit during HDFC Bank’s local processing hours from Monday to Saturday excluding India holidays, Harish Engineer, executive director, HDFC Bank informed.(UNI)

NEW DELHI, Apr 24: Rolls-Royce, the global power systems company, today announced the appointment of Mr Kishore Jayaraman as president of Rolls-Royce India and South Asia.

Mr Jayaraman joins Rolls-Royce after a 23 year career at General Electric, latterly as CEO, GE Energy- India region, the London-based company said in a statement.

Mr Jayaraman takes over from Anil Shrikhande.

Rolls-Royce has been active in India for 80 years and this appointment reinforces the group’s strategic commitment to the country, it said.

‘Kishore is an experienced industry professional with valuable knowledge and expertise. India is an important market for Rolls-Royce, with great potential built on a long and distinguished history across all of our business sectors,’ Rolls-Royce Director (International) said Michael Shipster.

In India, Rolls-Royce has 1,350 engines in service, across four market sectors civil and defence aerospace, marine and energy. (UNI)