Category — Automobile
The environment for foreign investments in India started improving a short time before Narendra Modi was elected prime minister on a business-friendly reform agenda in May 2014. United Arab Emirates’ Etihad Airwas acquired a stake in India’s largest corporate carrier, Jet Airways. As a result of this deal, the U.A.E. ranks in the top five of India’s leading foreign investment sources.
A survey conducted by Ernst & Young found that 53% of more than 500 business leaders around the world planned to enter or expand their operations in India within the following 12 months. The list of multinationals that are making long-term investments in India includes U.K. liquor company Diageo, which acquired majority ownership of United Breweries, once run by Indian billionaire Vijay Mallya; French energy company GDF SUEZ; pharmaceutical giant GlaxoSmithKline; Sweden’s IKEA; Singapore Airlines; Starbucks, which partnered with the Tata Beverages; Unilever, Vodafone and Volkswagen all upped the ante upon Modi’s eelection.
Over the last year, 67% of foreign direct investment in India has gone go the services sector, with 18% going to the manufacturing sector. The remaining 15% has gone to agribusiness investments, according to the Reserve Bank of India.
FDI in India is capped in a number of key sectors. Foreign ownership cannot exceed 49% in Indian defense contractors, or 74% in private banking. Nandan Nelivigi, head of India’s practice at White & Case said, “Competition for the best opportunities [in India] is already fierce and will only intensify as the business climate improves. Fortunately, investing in India today is no longer a step into the dark.”
November 17, 2014 No Comments
Top Indian industry executives who spoke at an Economic Summit held in New Delhi from November 4 – 6, 2014, welcomed the Modi government’s initiatives in land and labor reforms. Quicker approvals for business would boost manufacturing and creation of jobs they said.
The government, which came to power promising to revive the economy, has raised foreign direct investment (FDI) limits in defense, real estate and railways, and freed diesel prices. Modi is aiming to replicate at the national level his success in bringing investments to Gujarat as the state’s chief minister by easing the country’s cumbersome labor laws and cutting red tape.
“I am extremely confident. A country in general needs leadership and there is a leadership; it needs direction and there is a direction; it needs confidence and there is confidence here in India,” said Etienne Benet, head of Nestlé South Asia Region and Nestlé India.
Inflation measured in terms of wholesale price index touched a five-year low of 2.4% in September. Retail inflation has also dropped to 6.5%, the lowest since the new series was released in January 2012.
“This is a large flywheel. It is not a jump-start, it takes a while to gain momentum. I see signs that the flywheel is beginning to move,” said Anand Mahindra, chairman and managing director of Mahindra & Mahindra the Indian multinational automobile manufacturing corporation headquartered in Mumbai.
November 11, 2014 No Comments
Only about 5 percent of the population owns a car in India, and car-riding services are becoming a popular option to the existing autorickshaws.
The services that are offered differ amongst the various rental companies around the world. In India, OlaCabs’ sedans and hatchbacks can be accessed via mobile phone apps as well as by calling a call center for service. Cash payments, as also payments made through pre-loaded money wallet mobile apps are accepted.
OlaCabs’ CEO Mr. Bhavish Aggarwal disclosed that his three-year-old company’s revenues are growing by 40 percent to 50 percent every month, and that he has expanded to 20 cities in India already.
Even though the company has yet to register profit, it has already had four rounds of financing, with the most recent being to the tune of $210 million from SoftBank, Tiger Global, Matrix India and others.
In contrast, North American car rental companies add differentiators to attract customers in a fiercely competitive business. Car2Go recently launched a Brooklyn-only, per-minute ride to supplement several cities, and uses Smart Cars with built-in eco-friendly tracking services to monitor fuel efficiency.
November 11, 2014 No Comments
Indian vehicle-rental startups focused on urban transportation needs are getting funding by US venture capitalists. With one of the world’s lowest car-ownership rates–18 out of 1,000 people, according to the World Bank — India has a large pent-up demand for vehicles.
Sequoia Capital has invested $8 million in Zoomcar, an Indian vehicle-rental startup, along with Empire Angels, FundersClub, Basset Investment Group, and funds advised by Triangle Growth Partners, who have increased their stake in the company. Zoomcar counts Larry Summers, the former U.S. Treasury Secretary, as well as Professor Ed George, chairman of the Statistics Department at the University of Pennsylvania’s Wharton School, as its early investors. It had previously raised about $3 million. The Bangalore-based firm says it has grown to 250 cars at more than 40 locations, from seven cars when it launched. The company says it plans to use the funds to expand operations to other cities including New Delhi, Mumbai, Chennai, Hyderabad and Goa.
San-Francisco-based Uber Technologies Inc., which counts Google Ventures and Goldman Sachs among its investors, has made a big bet on India since launching there in September 2013, operating in 10 Indian cities, more than in any country except the United States.
SoftBank Corp. this week said it will invest $210 million into ANI Technologies Pvt. Ltd.’s Ola Cabs, which operates a digital taxi-hailing service in 19 Indian cities, and competes with Uber Technologies.
November 3, 2014 No Comments
German automotive components producer Bosch expects India to be a key growth driver in its bid to double business in the Asia Pacific region by 2020. The 46 billion euro Stuttgart-based firm had 24 percent of the revenue coming from the Asia Pacific region. The Bosch group manufactures power tools, industrial machinery and home appliances, apart from auto components in India.
It sees the country becoming the world’s 5th largest vehicle manufacturer by the end of this decade. “This makes the country one of the global engines of growth alongside China,” Bosch Board of Management Chairman Volkmar Denner said.
The German firm, which reported a turnover of $2.6 billion in India last year, sees India as a key pillar of its growth strategy in the Asia Pacific. “Over the past ten years, Bosch has doubled its sales in Asia Pacific. By 2020, we are aiming to double our sales in the region again,” he added. Highlighting the significance of the Indian market in the process, Denner said: “The economic indicators give us much cause of optimism – especially after the recent elections. We believe that the new government is poised to accelerate economic growth and introduce strategic reforms.”
Bosch, which has ten manufacturing facilities in the country and seven R&D centers, has been active in the Indian subcontinent since 1922. Since 2010, the Bosch Group has invested $1.2 billion in the expansion of manufacturing and research facilities in the country. “This money has been used to establish new production plants and to expand research and development centers,” Denner said, adding that the company currently employs more than 27,000 associates in India.
“The number has doubled within five years and is expected to grow further. This also reflects our firm belief in the country’s growth potential and our commitment to this region,” Denner said.
October 30, 2014 No Comments