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End Of The Road
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It’s the end of a three-decade-old not-so-happy affair. Suzuki Motors is exiting the United States market this year. It is no longer possible to maintain profitability in its auto business in the US due to currency rate issues and its product lineup that mainly includes small cars, says the automaker. It’s not a total pullback, though. Suzuki will continue selling its motorcycles, all-terrain vehicles and boat motors there. Suzuki Motor Corp is Japan’s No. 4 automaker. It was in 1985 that the Japanese automaker entered the US and it has never made a mark the way country cousins Toyota and Honda Motor did. For instance, in the first 10 months of 2012, it sold just 21,000 vehicles. Last week, the company’s US distributor filed for bankruptcy protection in California and won a court ruling to borrow around $45 million from its parent to pay dealers who are scrapping franchisees. Suzuki says its exit from the US car market will help it focus more on emerging markets, where it enjoys a strong footprint.
Maggi Noodles is Nestle’s cash cow in India. Not surprisingly, it has chosen its new India research and development (R&D) centre — inaugurated on 8 November — at Manesar, Haryana, as the facility to drive global product developments in Asian noodles. “It will be the only R&D centre in the world working on Asian noodles,” said Nestle CEO Paul Bulcke. The Swiss food giant has invested 50 million Swiss francs in the Manesar.
|JUST OPENED: Nestle’s R&D centre for noodles in Manesar|
(BW Pic by Bivash Bannerjee)
R&D centre, which is Nestle’s 32nd in the world and its first in India. Significantly, in China, Nestle already has two R&D facilities and will be increasing this to four by 2013. According to Bulcke, the Manesar R&D centre would also translate into products that are affordable and local, based on local nutritional needs. “We will be working with Indian herbs and spices,” said Johannes Baensch, Nestle’s global head of R&D. About 40 per cent of Nestle’s
business comes from emerging markets.
Cognizant Technology Solutions is continuing its march forward. The US-based IT services firm posted a strong 18 per cent growth in revenues to $1.89 billion in the September quarter. It reported higher revenues than Infosys for the second straight quarter. Infosys had reported $1.79 billion in sales in the
Issuing new liquidity guidelines, the RBI has urged banks to fix a lower limit for their inter-bank liability. According to the central bank, the limit should not exceed 200 per cent of a bank’s net worth as on March 31 of the previous year. The move, say experts, will force banks to revisit their exposure limits.
About one in every five directors (both executive and independent) or 19 per cent of the directors in top Indian firms attends less than 75 per cent of board meetings, says a study by advisory firm InGovern Research. The companies include Maruti Suzuki, Ashok Leyland, Exide Industries, Shriram Transport and United Phosphorus. The top 100 companies listed on the NSE have an average board size of 11 directors, and 30 per cent of them have less than 10 directors on the board and 10 per cent have more than 15 directors, says the study.
|AIR TURBULENCE: Kingfisher’s losses widen to Rs 750 crore|
Ailing Kingfisher Airlines saw its losses widen to over Rs 750 crore in the September quarter, against Rs 467 crore a year ago, owing to high finance costs, redelivery of planes and costs associated with fleet grounding. Revenues fell to Rs 200 crore from more than Rs 1,550 crore a year ago. Meanwhile, raising concerns over the financials of Kingfisher, its auditors reportedly said the carrier’s second-quarter net loss would have been much higher, at about Rs 1,032 crore, had it followed “generally accepted accounting standards” for some income and expenses.
Research firm Gartner says about 821 million smart devices will be bought worldwide this year, accounting for 70 per cent of total devices sold in 2012, and the number of smart devices (tablets, etc.) sold in 2013 will exceed the 1 billion mark.
(This story was published in Businessworld Issue Dated 19-11-2012)