Ford to Sell Lincoln Cars in China for First Time

Ford Motor Co. said on Thursday, 17th April that it will sell high-end Lincoln cars in China for the first time later this year when it opens eight dealerships in seven cities. Lincoln is a late comer to China's luxury car market, but Robert Parker, president of Lincoln China, said the brand is being introduced here after much deliberation and research. Parker said Lincoln will differentiate itself from other premium cars, offering customers an experience inspired by boutique hotels such as Mandarin Oriental that emphasize sensual luxury. 

 

Chinese customers will be greeted with a waterfall, considered auspicious, when they enter a Lincoln dealership, and their new Lincoln car will have a custom fragrance pleasing to Chinese noses, Parker said. "The Chinese do not like the new car smell, so we change the smell," he added. According to him, Lincoln cars sold in China also will have padded backseats because of China's higher expectations for backseat comfort. Parker said he believes there is strong interest in Lincoln among Chinese luxury car consumers and that the company aims to open 60 dealerships in 50 Chinese cities and offer five models by 2016. 

 

John Zeng, an analyst at LMC Automotive, said Lincoln will face an uphill battle in a crowded Chinese luxury car market dominated by European brands. "Compared with German brands, they have a long way to catch up," Zeng said. "So for a brand like Lincoln, they need very competitive models to succeed in this market." (AP)

 

Crisis-Hit UK Co-Operative Reveals 2013 Loss of £ 4.2 billion

Britain's Co-operative Group made a loss of 2.5 billion pounds in 2013, a year it described as disastrous and the worst in its 150-year history. Co-op, which was hit by a 1.9 billion pound funding gap at its bank, a drugs scandal and an exodus of top executives, said on Thursday, 17th April that the results served as a wake-up call to the serious challenges that it faces. The group said most of the losses stemmed from the Co-operative Bank, which amounted to 2.1bn pounds. That included a trading loss of £1.44bn for the year to December, when the group lost control of Co-op Bank to US hedge funds.

 

"2013 was a disastrous year for The Co-operative Group, the worst in our 150-year history," Interim Chief Executive Richard Pennycook said in a statement. "Today's results demonstrate that but they also highlight fundamental failings in management and governance at the group over many years." He also criticised the lack of transparency within the bank, which he said he believed had failed to communicate effectively with the group board. 

 

Pennycook added that had the Co-op Bank not been rescued by its bondholders in December, the taxpayer would have been left with a bill for 5bn pounds. He also said he believed it would take 10 years for the Co-op Group to fully recover from the events of 2013.The group has already announced 100m pounds of cost cuts this year but Pennycook said he expected cost cuts would eventually amount to 300m pounds.He also said he could not guarantee there would not be job cuts within the group. (Agency)

 

Man City Players are Best Paid in Global Sport: Survey

Manchester City are the best paid team in sport, according to a new study. Research conducted by ESPN The Magazine and Sportingintelligence found City pay an average annual wage of £ 5.3m to its first-team players, which works out as £102,653 per week. Six of the top 10 in the list are football clubs, with baseball (two) and basketball (two) also represented.

 

Premier League clubs Manchester United (8), Chelsea (10), Arsenal (11) and Liverpool (20) are all in the top 20.

Manchester City, purchased by the Abu Dhabi United Group in 2008, are reported to pay their players more than Major League Baseball teams New York Yankees and LA Dodgers, who are second and third in the survey.

 

Spanish giants Real Madrid and Barcelona take the next two spots. The La Liga clubs pay their first-team players an average of more than £4.9m a year.

 

Premier League champions United have an average wage of £4.3m, while current league leaders Liverpool award £3.4m per man. (Agency)

 

Slump in Indian Automobile Market Claims 2 Lakh Jobs

The longest period of slump in India's automobile market, with sales declining for a second straight year, has taken its toll with production cuts leading to the loss of about 2,00,000 jobs, according to the Society of Indian Automobile Manufacturers (SIAM). "Last year was one of the most difficult periods for the auto industry," said Vikram Kirloskar, the president of SIAM, who is also the vice-chairman of Bangalore based automaker, Toyota Kirloskar Motors. "I personally feel that across the entire value chain in the auto industry, right from raw materials to the dealerships there could be around 1.5-2 lakh job losses."

 

The Indian auto industry employs around 19 million direct and indirect workers. The industry is already falling behind its target on the job front as it was estimated to employ more than 25 million workers by 2016 under the 10-year Auto Mission Plan of the government. A consistent fall in demand and sales for the past two years is likely to create a huge employment gap.Car sales in India fell for the second consecutive fiscal ended March 2014 with a 4.65 per cent drop as the auto industry continued to struggle in a sluggish economy. Besides the decade's steepest decline in car sales, heavy trucks and buses continued its negative sales streak for the past 25 months. The industry is not expecting an immediate turnaround, even with a cut in excise duty. According to industry sources, the biggest job losses would have occurred at the retail levels, 

mainly dealerships that sell all class of vehicles - from bikes to trucks. It also hit the component manufacturers hard. (Agency)

 

Diageo Bids to Control India's United Spirits

Global drinks giant Diageo has said it will launch a $1.9bn tender offer to complete its plan to acquire a majority stake in India's United Spirits Ltd (USL). Already the largest shareholder in USL with 28.8 per cent, Diageo is now seeking to purchase an additional 26 per cent stake. The increased stake in USL could give Diageo an influential position in the world's largest whisky market. The company continues to expand in emerging economies.

 

Diageo has offered 3,030 rupees a share, or 114 billion rupees ($1.9 billion) for the stake in the Bangalore-based business - 18 per cent more than United Spirits' closing price on 11 April. The offer will be launched in June. United Spirits surged 11 per cent to 2,840.05 rupees in Mumbai trading following the offer. If the deal goes ahead, Diageo plans to keep USL listed on the Indian market.

 

An earlier tender offer from Diageo in 2012 failed, as the offer price was lower than the market price of USL at that time. UK-based Diageo is the world's largest producer of spirits. It is currently expanding in emerging markets, where economic growth is creating a broader middle class with more disposable income. In terms of volume, United Spirits is the second-largest spirits company in the world.

 

Diageo began its tie-up with USL in 2012, when it bought its initial stake in the firm. But in November 2013, the UK's Office of Fair Trading (OFT) said Diageo's control of USL was against competition and could lead to higher whisky prices in the UK. As the deal increased Diageo's share of the blended whisky market to about 40 per cent, the OFT was concerned this could reduce competition and raise prices for consumers. In response, Diageo offered to sell most of its Whyte and Mackay business to appease the competition authorities. (Agency)

 

Global Trade to Gain Speed, Says WTO

The growth of global commerce will pick up speed this year and next, says the World Trade Organization. Trade will grow by a "modest" 4.7 per cent this year and by 5.3 per cent in 2015, says the WTO. Next year's figure, if correct, would be in line with the average growth rate in world trade over the last 20 years.These forecasts are consistent with other figures that show the world economy is gradually recovering from the financial crisis.

 

There have been some sharp swings in global commerce since the onset of the crisis. In 2009, trade in goods declined by 12 per cent and bounced back by 14 per cent the following year. The year 2011 was in line with the long term average, then came what the WTO calls a two-year slump - annual growth of around 2 per cent. 

 

The overall impact is that global trade is above its pre-crisis level, but well below where it would have been, had it grown in line with the earlier pre-crisis trend. In fact, that gap is still getting wider and by next year will, on the new forecasts, be 19 per cent. So the analysis by the WTO does suggest progress. But if world trade and its growth before 2008 was in some sense normal, we are still not back there. But perhaps that isn't normal any more. "In addition to creating a permanent shift downward in the level of trade,"said the WTO in a press release. "The global recession of 2008-09 may have reduced its average growth rate as well." (Agency)