Wednesday, March 27, 2013

“We are Serious about The Cost-Centric Car Segment in India”

Buoyed by Micra’s market Performance, Nissan India is now Buckling up its seat belts to launch 8 new Models and is Confident that these Models will Set Industry Benchmarks in terms of Technology, Design and a Certain thing that The Indian Mass loves – value for Money. B&E’s Sanchit Verma talks to Kiminobu Tokuyama, CEO & MD, Nissan India to find out The Ground Reality.

After spending half a decade in the Indian market, Nissan Motor India Private Ltd. (NMIPL) finally entered into the mass market last year by launching Micra. But as the company says, it’s just the beginning. Aiming at a total of nine models by 2013, Kiminobu Tokuyama, explains how he is planning to boost the company’s presence in Indian auto market.

B&E: 2011 is Nissan’s sixth year in India. But it’s still to create a serious impact. How are you planning to move forward from here?
Kiminobu Tokuyama (KT): Although we entered India in 2005, it’s only in July last year that Nissan entered the mass market with Micra. Nevertheless, we have aggressive plans for the Indian market with an exciting line up of products. As planned, we will have a total of nine models by 2013. Once launched these vehicles will set industry benchmarks with respect to technology, design and value for money increasing Nissan’s brand visibility in India. At the same time, we also see India to be an important export hub for Nissan’s global market.

B&E: Your current plant at Oragadam has an installed capacity of about 200,000 units. But your capacity utilisation has been on the lower side. What are your expectations for the next fiscal?
KT: Our production plan for FY’11 is about 80,000 units. And we are planning to increase this capacity in the next financial year.

B&E: You still import models like 370Z, Xtrail and Teana. How has been the overall response for these luxury and sports cars in India? Any plans to start their production in India?
KT: Nissan India realises that there is tremendous potential for our existing CBU models like the Teana and X-Trail. We are studying all alternative options to make attractive propositions to the discerning Indian customers. About the luxury segment, yes, the response from our existing customers has been very good so far. As for the sports segment, the 370Z is an iconic sports car that embodies stunning design, class leading power and sheer performance. There is an excitement for 370Z in India. However, the sports car segment here is still at its nascent stage and one has to wait and watch for its market size to expand.

B&E: Entering into a small car segment, which is being ruled by Maruti and Hyundai in India is a big strategic shift that you have made. How are you planning to move ahead with this?
KT: The Indian automobile industry is known for its frugal engineering and the discerning Indian customer is known for “more value for money” attitude. Keeping both these key characteristics in mind, Nissan intends to offer products across various segments that signify and enhance these characteristics. We aim to build brand Nissan as one of the most formidable players in the Indian automobile industry. We are studying all possible opportunities and we will make our plans known at an appropriate time.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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Monday, March 18, 2013

Matching Up to The F1 Way...

While Stepping on The Gas to fulfil their Dream of Building India’s first f1 track, Jaypee Group is driving on The Fast Lane as a Whole. Is the party here for keeps?

A few months ago, in an interview to Business & Economy, Manoj Gaur, Executive Chairman, Jaiprakash Associates, had said, “Currently, we are on ahigh growth path.” True to his words, Jaiprakash Associates Ltd. (JAL), not only stands as the country’s 9th fastest growing company in terms of absolute growth in revenue, but also stands as the 17th fastest growing company in terms of year-on-year growth. In fact, it’s the only company other than Prism Cement, which has managed to pave its way into both the lists in this year. However, the most delighting factor for the Jaypee Group as a whole is that it is the only business house in the country, which has two of its group companies (JAL and Jaiprakash Power Venture Ltd.) among the country’s ‘fastest 20’.

Since its IPO in the year 2005, JAL has been one of the fastest growing companies in the country. But, with 75% year-on-year (y-o-y) growth in revenue from Rs.57.64 billion to Rs.100.88 billion, FY 2010 certainly has been a tremendous year for the company. But it’s not only the top line where the company has proven its mettle; JAL’s post tax profit from ordinary activities has also surged by a whopping 114% from Rs.8.97 billion to Rs.19.2 billion during the year. The key for the company’s success was certainly its good show as a truly diversified company, because almost all of its businesses have played a key role during the year in elevating the company’s total revenues past the Rs.100 billion mark.

Keeping up the good work going, as analysts from Motilal Oswal Securities estimate, JAL is well set to post a total income of around Rs.125 billion in the current fiscal. However, going by the results published by the company for the first two quarters of the year (53.6% y-o-y growth in Q1 and 64.1% y-o-y growth in Q2; both higher than market expectations), the company may again surprise everybody by posting some amazing figures, and the key contributors for the company will certainly be its real estate and cement ventures.

Talking about its real estate business, as in June 2010, the group’s cumulative real estate booking (pre-sales) had already crossed Rs.126 billion. This is commendable and most important to note, given that a large part of the sales took place over the past two years, and this makes Jaypee group an out-and-out winner in the real estate sector in NCR, which is one of the fastest growing regions in terms of real estate. And considering the fact that cumulative advances received during the period were Rs.52.5 billion (42% of bookings), Jaypee Group is certainly poised to make analysts re-estimate their forecasts.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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Tuesday, March 12, 2013

SARKOZY’S INDIA VISIT: EYEING DEFENCE DEALS

While Sarkozy and his Aides may claim that The Much Awaited India Visit is more of a Leisure Trip than the Usual Strategic Trip of Premiers, One cannot refute France’s Hawk-Like Attempt to do an Obamanomics as far as Business is Concerned. And India Should Support That, Anyway!

As India does a reality check and is ready to upgrade its defence, it is worthwhile to ponder over what the Indo-French business summit during Sarkozy’s December 2010 is likely to be and what India is likely to gain out of it. Speaking strictly from the perspective of France, the French manufacturers are hopeful that their President’s visit would encourage India to upgrade its Mirage-2000 fighters at an expected cost of $2.1 billion. The European Aeronautic Defence and Space company (EADS) intends to sell its helicopters, in a deal valued at approximately $600 million. The President and his contingent will in all probability seek to promote the French built Rafale aircraft too and will make a strong case to sell it to India for a whopping $12 billion. The two nations are also all set to finalise the contract with nuclear group Areva (which has already signed a MoU for the construction of two reactors at Jaitapur in Maharashtra). Other than the defence sector, the automobile industry is the other one wherein there is a strong probability that announcement of investment to the tune of Rs.30-35 billion could be made. As a matter of fact, after a decade or so, the French automaker Citroen (part of PSA Peugeot Citroen group) is all set to embark upon its Indian sojourn.

So much so for France, but what does India stand to gain by shelling out billions of dollars of defence contracts? A lot more than what India has from mollycoddling up with US. France, for that matter has been a far more reliable friend – be its vocal support of India’s bid for a permanent membership of the UNSC or for that matter the maturity with which it handled its geo-political relation with India post the Pokhran test in 1998, or even its decision to provide fuel for the Tarapur nuclear plant when the Canadians decided to cancel the supplies. For the uninitiated, France was the first country which took the lead to put an end to India’s three decades of nuclear isolation and inked a civil nuclear agreement way back in September 2008. Sarkozy considers Indo-French partnership not only essential but strategic for global and regional affairs and this presents India an opportune time to hard sell its concerns and transforms the existing buyer-seller relationship in the defence sector to that of joint production and one which enables transfer of cutting-edge technology. A give and take relationship amidst geo-political realms is what India must aim for.

As France evinces a growing political and strategic interest, India should use the visit of Sarkozy to reciprocate the same with equal fervour. India by now should have realised that France is a key player in formulating EU’s policies and strategies and hence it should use the strategic co-operative ties with France to ensure that India’s concerns are appreciated and understood in the right spirit. And if all reason fails, then of course there’s Sarkozy’s wife Carla who is apparently planning to spend a full moon night at the Taj. How can one refuse that for anything?


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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“People Are Well Aware of Problems So There’s No Backlash”

Irish Economy was on a High Growth Trajectory for more than a Decade now. But the Property Burst in the Wake of the 2008 Financial Crisis sent Ireland into its Worst Sovereign Debt Crisis. Kenneth Thompson, The Irish Ambassador to India, In an Exclusive Interview, Shares the Larger Picture of the Ireland Economy

Ireland recently became the second European nation post Greece to ask for a bailout with the European Central Bank and the IMF estimated at around $100 billion. Just days before the official declaration of asking for bailout, the Irish Ambassador to India, Kenneth Thompson, shared with Anchal Gupta his insights into the root causes of the sovereign debt crisis and what the Irish government is doing to tackle it. Excerpts:

B&E: Ireland’s name has been in global media next only to Greece as a nation looking for a bailout from the EU in the wake of the sovereign debt crisis. What is your take on that and what has the Irish government done domestically to handle this crisis?
Kenneth Thompson (KT): What the Irish government has done is trying to correct the public finances. The root cause of the problem was that we had a major boom in the property sector and a disproportionate part of our economy revolved around construction. The banks went into an over-lending spree for construction projects which resulted in the current scenario. Two years ago, the government set up a system to bail out the banks. However, we believe that we are well funded till the middle of next year. Also, there are larger interests like in the international money markets who are interested in the bonds issued. The government is working to cut public expenditure and it will soon declare a four year plan that targets cutting our public account deficit below 3% of GDP which is what EU guidelines say. Since 2008, we have made savings of up to $14 billion. We are working upfront to reduce a major portion of that deficit next year while we have aimed to save $6 billion this year.

B&E: What is the kind of external help that you are looking forward to from EU as well as non-Eurozone economies?
KT: Well, we intend to solve it on our own. We have something called the Financial Pension Fund which is a kind of sovereign wealth fund which is in a healthy state. We are also in a position to ask for support from the European Central Bank but then, in that, the international money market works with very different laws so we are focussed on improving our public expenditure which is the best we can do.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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Thursday, March 7, 2013

Enrique likes it Casual!

Enrique Iglesias shocked the guests at the Melbourne Cup, by reaching the venue sporting a laid-back look, wearing jeans, an open-necked shirt and an army cap. Later, realising that his casual look had done more damage than good, the Spanish heartthrob went on-air on a popular show in Australia and apologised for his casual attire! Enrique was in Australia to promote his album Euphoria.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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Tuesday, March 5, 2013

Its full carbon reductions and energy efficiency potential

India stands 2nd in the global carbon trading regime under Kyoto Protocol, a spot which it ceded to China in 2006 and is pacing quite slowly to realize its full carbon reductions and energy efficiency potential

Experts highlight the biggest hurdles in establishing a domestic carbon trading scheme in India. As per Nimisha Pandey, Senior Scientist at the Climate Change Division of The Energy and Resources Institute (TERI), “We have to balance our growth requirements along with our commitments to reduce carbon emissions. Hence, it is not easy to commit the kind of targets or capital investment in developing technologies for reduced carbon emissions and energy efficiency. The biggest challenge in India for a carbon emissions trading scheme to flourish is how to ensure proper accounting of the projects and calculation of actual reductions made. It must not happen that the same project gets accounted twice for a domestic carbon credits as well as for generating emissions reductions under CDM.” Even for the apparently fast paced growth of CDM projects, the reality is sobering. “Large projects have limitation in terms of CDM eligibility, for example a coal power generator doesn’t qualify as a CDM project until it uses latest technology such as super critical, and when it’s used, then only they qualify as CDM projects.” says Ashutosh Pandey, CEO, Advisory Services, Emergent Ventures India (EVI), one of India’s leading carbon advisory and energy consultancy firm. Though, on the domestic front, something is stirring albeit a bit slowly which is customary of India’s democracy (read lethargy).

India at present does not have any carbon emissions reductions trading mechanism but under the National Mission for Enhanced Energy Efficiency (NMEEE) which comes under the aegis of the National Action Plan on Climate Change (NAPCC) (Indian government’s ambitious climate change combat plan launched in 2008), there exists a trading mechanism called Perform, Achieve and Trade (PAT) which envisages certificates of energy savings done by entities to be traded on an exchange which will be applicable to 9 sectors like power, steel, coal mining etc. The targets will be set on a unit (plant, mine, refinery etc.) wise basis for producers in each sector. As a result of the implementation of this Mission over the next five years, 23 million tons oil-equivalent of fuel savings in coal, gas, and petroleum products have been estimated by 2015 every year along with an expected avoidance in capacity addition of over 19,000 MW. The consequential carbon dioxide emission reduction is estimated to be 98.55 million tons annually. Compare it to the 246 million CERs or 246 million tonnes of carbon equivalent emissions achieved by Indian CDM projects by 2012 end in 6-7 years, the differences in revenues earned amounts to over $2 billion with the CERs being traded in the international markets at $15 - $25 in recent months while an energy saving unit (in terms of kilo watt hour) will certainly cost lower than the $15 for a CER.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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Sunday, March 3, 2013

G. Nagamal Reddy

Managing Director and CEO of Tamilnad Mercantile Bank in conversation with B&E’s Avneesh Singh

One quarter into his appointment in June 2009 as MD and CEO of Tamilnad Mercantile Bank (TMB), Nagamal Reddy ran into heavy weather, what with a shareholder group fighting tooth and nail over board appointments and a High Court order looming up ahead. Things became tougher in October 2009 with RBI Regional director, K R Ananda mentioning, “The bank is having managerial problems.” But a positive November 2009 High Court order, upholding elections of new board directors, saw a new beginning for Reddy. In July 2010, Tamilnad Mercantile Bank was ranked second among all traditional private sector banks in India in the FE-E&Y awards. With the target to take the number of branches from 217 to 500 in the next few years, and the bank’s business to `50,000 crore by 2013, Nagamal Reddy seems unstoppable. Here, he chats up with Avneesh Singh of B&E giving his insights:

B&E: In the new monetary policy, the repo rate has been increased by 0.25% and the reverse repo rate has been increased by 0.50% whereas the CRR has been kept unchanged. What are your views on the same?
G. Nagamal Reddy (GNR): This was expected, but of course the only thing is that the reverse repo rate has been increased by 0.50%, which is a little more than what we expected. We knew that the RBI will take some steps towards containing inflation. I think the main aim is that they want to contain inflation and they are looking at bringing it down to 6%.

B&E: Your bank has been in the private banking space since the last nine decades. How’s competition from the new age private banks compared to that from the old age private banks?
GNR: There is no direct competition between us. Every one has got his own segment of customers. We do not have any competition from the new age private banks because our presence is not much in the metros; while new age banks are present in a big way in these centres. We are present in rural, semi-urban and urban centres.

B&E: How is your bank catering to the sunrise sectors like micro, small and medium enterprises ?
GNR: Actually SMEs have been our focus because this is one sector which contributes the maximum to the GDP of the country and also to the employment. Since we are present mostly in the semi urban and rural areas, it automatically allows us better access to SMEs. Our growth in this segment has been very good in the last two years.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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