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‘Expecting October to be even better; growth compared to last year a challenge’

MD Kenichi Ayukawa with Shashank Srivastava, executive director, Sales and Marketing, at the launch of S-Presso. pti

Country’s largest carmaker Maruti Suzuki is hopeful of an increase in demand this festive season on the back of some revival in consumer sentiment and the launch of its new entry-level car S-Presso on Monday. However, growth in comparison to last year would be a challenge, a top company executive said.

‘Trying to catch up’

“Growth compared to last year is quite difficult. We are trying to catch up the volumes that is very important because in the first five-six months [of the year] there was very low demand. We are expecting [growth] but it takes time... we have to encourage potential demand,” MD & CEO Kenichi Ayukawa said.

He added that the trends in previous months showed some revival in consumer sentiment.

“We are expecting people to buy during the festive season because compared to last month [August], September looks better. We are expecting October will be better than September,” Mr. Ayukawa said.

Maruti Suzuki India expects S-Presso, its ‘mini SUV’ launched on Monday, to bring buyers, particularly first-time buyers, back into the market. “S-Presso is our understanding of what an entry-level customer aspires for. We believe that the current turbulent times are a short-term challenge. We are also confident that S-Presso will change the sentiment of the market,” Mr. Ayukawa added.

Priced in the range of ₹3.69 lakh to ₹4.91 lakh, the S-Presso has been conceptualised and designed in India, for India and the world. Launched first in India, the car will be gradually made available in markets such as Colombo, Manila, Cape Town and Panama.

The new model is powered by BSVI compliant, 1-litre petrol engine. The vehicle will come with both manual and AGS (auto gear shift) options.

Five out of 8 sectors in negative zone

Growth in the eight core sectors in August slumped to the lowest in four years and four months. That is, the -0.5% registered in August 2019 was the lowest since April 2015.

Growth in five out of the eight sectors of the Index of Eight Core Industries fell into the negative zone in August. The index had registered a growth of 2.7% in July 2019 and a robust 4.72% in August 2018.

“The contraction is surprising because last month it was about 2.7% or so,” D.K. Srivastava, chief policy adviser at EY India, said.

“It is an indication of a continuing slowdown and weak demand in the system. The core sectors reflect demand from the power and infrastructure sectors, where the government’s own demand is important and public sector spending has been low in the last 3-4 months, so that could explain the contraction.”

Within the Index, the coal sector saw the sharpest contraction, with the sector contracting 8.6% in August 2019 compared with a contraction of 1.6% in the previous month. This is the sector’s worst performance in three years.

The crude oil sector contracted 5.4% in August, compared with a contraction of 4.4% in July. August marked the 21st consecutive month of contraction for the sector. Notably, the cement sector fell into negative territory in August, contracting 4.9%, compared with a growth of 7.9% in the previous month.

The natural gas sector contracted 3.9% in August, compared with a contraction of 0.5% in July. The sector has now contracted in four out of the last five months, with it having zero growth in the fifth. The electricity sector also saw a contraction in August, contracting 2.9%, compared with a growth of 4.7% in the previous month.

Mr. Srivastava said the contraction also suggests that the slowdown is continuing in the broader economy as well, adding that it is highly likely the RBI would cut interest rates again at its October 4 meeting.

“It does indicate on a broader basis also the economic slowdown is continuing and signs of a revival are not visible,” he said.

‘Expecting October to be even better; growth compared to last year a challenge’

MD Kenichi Ayukawa with Shashank Srivastava, executive director, Sales and Marketing, at the launch of S-Presso. pti

Country’s largest carmaker Maruti Suzuki is hopeful of an increase in demand this festive season on the back of some revival in consumer sentiment and the launch of its new entry-level car S-Presso on Monday. However, growth in comparison to last year would be a challenge, a top company executive said.

‘Trying to catch up’

“Growth compared to last year is quite difficult. We are trying to catch up the volumes that is very important because in the first five-six months [of the year] there was very low demand. We are expecting [growth] but it takes time... we have to encourage potential demand,” MD & CEO Kenichi Ayukawa said.

He added that the trends in previous months showed some revival in consumer sentiment.

“We are expecting people to buy during the festive season because compared to last month [August], September looks better. We are expecting October will be better than September,” Mr. Ayukawa said.

Maruti Suzuki India expects S-Presso, its ‘mini SUV’ launched on Monday, to bring buyers, particularly first-time buyers, back into the market. “S-Presso is our understanding of what an entry-level customer aspires for. We believe that the current turbulent times are a short-term challenge. We are also confident that S-Presso will change the sentiment of the market,” Mr. Ayukawa added.

Priced in the range of ₹3.69 lakh to ₹4.91 lakh, the S-Presso has been conceptualised and designed in India, for India and the world. Launched first in India, the car will be gradually made available in markets such as Colombo, Manila, Cape Town and Panama.

The new model is powered by BSVI compliant, 1-litre petrol engine. The vehicle will come with both manual and AGS (auto gear shift) options.

‘₹60,000 cr. receivables stuck in arbitration, proceedings’

Reliance Group has repaid more than ₹35,000 crore of debt over the last 14 months and is planning to repay another ₹15,000 crore in the next six months, said Anil Ambani, chairman of the group.

Assuring lenders of repayment through monetisation and cash flows, Mr. Ambani, during the company’s annual general meeting on Monday, said: “The government has increasingly focussed on the ease of doing business and India’s rank has consistently improved during last five years. The statement comes in the backdrop of the debt-laden Reliance Group having more than ₹60,000 crore receivables stuck in regulatory and arbitration matters.

“However reforms on the legal and regulatory front are still a matter of concern where timelines of awards and certainty of resolution and arbitration awards are a matter of great concern for investors, both domestic and global. Our group has over ₹60,000 crore receivables stuck in regulatory and arbitration matters which are pending for as much as 5-10 years.”

According to Mr. Ambani, resolving this gridlock should be the next focus of the government which will dramatically improve large scale investment and have multiplier effect on the investment and growth leading to Prime Minister Narendra Modi’s goal to take the Indian economy to $5 trillion.

In the last six months, Reliance Group firms have suffered collateral damage due to financial crisis, audit observations, ratings downgrade and slowdown of the Indian economy, he said.

‘Reckless selling’

“These events aided and abetted by reckless selling and rumour mongering by vested parties effected the general public psychology, especially share owners like you.

“Its unfortunate that during all this noise, the true value of our businesses has not been recognised [though it has] combined assets of over ₹2 lakh crore, net worth of over ₹30,000 crore and cash flow of ₹15,000 crore,” said Mr. Ambani.

Major categories surpass last year’s sale on Day 1: Flipkart

Kalyan Krishnamurthy

E-commerce giants Amazon and Flipkart kick-started the 2019 festive season with record transactions on their platforms during their respective annual sales which began on Sunday.

Amazon India, which opened the sale 12 hours early for its Prime customers, said it saw the “biggest opening” with more customers shopping on its platform than ever before, while Flipkart registered 2x growth on the opening day compared to first day of the sale last year.

Kalyan Krishnamurthy, CEO, Flipkart, said: “... By all indications, this is going to be the biggest festive season that India has witnessed. There is no doubt that e-commerce has not only lifted consumer sentiment but has also driven the industry to set new benchmarks.”

Amazon India claimed it sold premium smartphones worth ₹750 crore across brands like OnePlus, Samsung and Apple in 36 hours, while large appliances and TVs saw nearly 10X growth over an average business day. The growth for beauty products grew 7x, while for fashion products it grew 4.6X. “Customers showed keen interest in smart-home products, and the number of customers who bought smart lights with Echo was 10X more than last year.”

For Flipkart all major categories, including beauty, kids wear, sports, FMCG, surpassed the total business of previous year’s sale on day 1. Both the brands saw good traction from beyond tier 1 cities. Amazon India said there were more new shoppers online than ever, of which more than 91% came from tier 2 and tier 3 towns. For Flipkart, the number of transacting customers from tier 2 and beyond doubled over the previous festive sale.

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