Carrefour Invests 160 cr in Cash & Carry French retailer said to be in talks with local group for possible retail foray

CarrefourSA,the world'ssecond largest retailer, infused . 160 crore into its wholly owned cash and carry business in India last month, just a day before British rival Tesco filed its proposal to invest $110 million, or about . 677 crore, in a supermarket JV with the Tata Group. 
Some people familiar with Carrefour’s India plans said the French retailer has also initiated talks with an Indian retail group for a possible entry into the multibrand retail sector where it can sell directly to customers. 
Carrefour WC&C India, which runs five wholesale stores in the country, has already invested . 300 crore in opening stores and creating allied back-end infrastructure, according to its latest filing to the Registrar of Companies. 
In a recent board resolution, Carrefour decided to increase its authorized capital to . 450 crore through fresh equity to fund India operations,which will go into expanding its business. 
Carrefour WC&C has allotted 16 crore equity shares of . 10 each to Dutch units Carrefour Netherlands BV and Intercross BV, bringing in an additional . 160 crore, the company said in its filing submitted on December 16. 
Franck Kenner, regional director for Carrefour in India,declined to comment on the latest investment or retail plans. An industry veteran with experience in setting up cash-and-carry stores for Walmart in India said it generally costs . 25-35 crore to open a wholesale store. “So, technically, . 160 crore could get you five to six such stores,” he said, requesting not to be named. 
Another person of a rival retail firm said the newly infused money could be to fund operational cost of Carrefour outlets currently bleeding. 
Two days after the new trench of India investments, Carrefour opened its first store in south India—a 64,000 sq ft outlet in Bangalore. Its first four outlets were all in north India, in Delhi, Jaipur, Meerut and Agra. 
Over the last seven years or so, Carrefour has held talks with various Indian firms including Bharti Enterprises, retail estate group DLF and Future Group among others to forge a partnership in India without much luck. 
If its fresh talks with an Indian retail group lead to a supermarket retail joint venture, Carrefour will be able to hold up to 51% stake in it.

Source: The Economics Times
By:    SAGAR MALVIYA & RASUL BAILAY 

Luxury segment managed to remain positive, but with just 6% growth in ’13, the lowest in past 5 years

It was just over a year ago that India gave BMW the luxury car sales crown. But the German carmaker’s local sales have sputtered, forcing it to the third spot behind Audi and Mercedes-Benz with a 22% drop in sales from a year ago. BMW sold 7,327 vehicles in 2013, the company told ET, revealing a yawning gap with Audi and Mercedes-Benz, the two other German carmakers that notched 11% and 32% growth in sales, respectively, in a market that grew 6%. Last year, Mercedes sold 9,003 units while market leader Audi sold a thousand more. 
TherumbleandtumbleinIndia’sluxury car market has also seen the emergenceof Tata-ownedBritishbrandJLR, which sold 2,913 sedans and SUVs last year, up 22% from a year ago. 
The slip in sales for BMW came even as the it entered the sub-. 25-lakh local market to gain volumes. In September, BMW had launched its 1Series at an all-India ex-showroom price of . 20.9 lakh. BMW says it is trying to focus on sustainable growth. “We want to be the leading luxury car company with delighted customers, strong partners and most important, sustainable leadership,” said Philipp Von Sahr, president of BMW Group India. He did not comment on the company’s 2013 sales. Some analysts attribute BMW India’s dismal performance to its inability to shift gears at the right pace and its older product portfolio. 
“BMW suffered in 2013 due to the ageing X1 and a lack of interest in its otherSUVs, like X3 and the X5,” said Deepesh Rathore, director, EMMAAA, an automotive research & advisory firm specialising in emerging markets. 
According to Rathore, Audi emerged the winner due to its strong SUV lineup, especially its new compact SUV — Q3, and an aggressive sales push for its high-end sports cars. “Mercedes benefited by lowering prices of key models as it moved them from fully-imported cars to going for a local assembly at its Pune plant,” Rathore said. 
ThedepressionintheIndiancarmarket spilled over to the luxury segment with sales tapering off towards the end of 2013. While the car market posted a 10% decline to 18,07,000 units, the luxury segment managed to remain positive with 6%growth—lowestinthepastfiveyears. Segment leader Audi grew just 3% in the second half of 2013 from the 21% posted in the first half of the year. Similarly, BMW’s sales tapered off for the full year, registering a 22% drop. 
chanchal.chauhan@timesgroup.com 

Source: The Economics Times

By: CHANCHAL PAL CHAUHAN