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Japan’s Suzuki Motor sees 9.1 per cent profit slide

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Tokyo: Suzuki Motor Corp forecast a 9.1 per cent slide in operating profit for the current financial year as it expects a stronger yen and higher R&D costs to offset rising car sales mainly in India, its biggest market.

Japan’s fourth-biggest automaker expects profit of 340.0 billion yen ($3.10 billion) in the year to March 2019, versus a 374.6 billion yen median of 21 analyst estimates compiled by Thomson Reuters.

The forecast is based on an assumption that Japan’s currency will average around 105 yen to the US dollar – appreciating from 111 yen in the just-ended year – and 1.65 yen to India’s rupee, versus 1.73 yen.

 

That will result in a 22.0 billion yen hit to profit from currency swings, while increased research-and-development (R&D) expenses will have a negative impact of 20.0 billion yen.

With most of Japan’s seven major automakers having reported full-year profit forecasts, Suzuki and bigger rivals including Toyota Motor Corp and Honda Motor Co Ltd see a slide due to a stronger yen.

A firmer yen eats into profit repatriated from abroad and raises costs of exported vehicles and parts, making Japanese products less competitive overseas and denting profit margins.

Suzuki reported operating profit of 374.2 billion yen in the year ended March, outperforming analyst estimates.

It anticipates a 2.3 per cent rise in global vehicle sales to a record 3.3 million units, led by a 6 percent rise in India. It expects to sell 1.65 million scooters and motorcycles globally, up 4.2 per cent from last year.

Suzuki’s bet on growing in emerging markets continues to pay off after the automaker for decades focused on expansion in India over other markets including the United States – the world’s second-largest auto market and a key country for most Japanese automakers but where Suzuki no longer sells cars.

Its Alto and Baleno compact hatchbacks and Vitra Brezza compact sport utility vehicle are among the best-selling cars in India, the world’s fifth-biggest passenger car market. Suzuki dominates that market through its majority stake in Maruti Suzuki India Ltd, India’s largest automaker.

Suzuki plans to spend 160 billion yen on R&D this year, from 139.4 billion yen last year, as it focuses on automated driving functions and electric vehicles (EV) to keep up with competition.
To establish a presence in the local EV market, Suzuki and Toyota have been dee

pening a wide-ranging partnership which will enable Suzuki to leverage Toyota’s massive R&D firepower to help it make EVs, while Toyota taps Suzuki’s expertise in compact cars.


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India can’t achieve 9-10 per cent GDP growth without agri-revolution: Kant

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New Delhi: India cannot achieve 9-10 per cent GDP growth without revolution in the farm sector, Niti Aayog CEO Amitabh Kant said.


Addressing Mahindra Samriddhi Agri awards, he said there is a need to boost investment in the agriculture sector as well as to introduce new technology and market reforms.


Kant also stressed on scrapping Agriculture Produce Marketing Committee and some old laws like Essential Commodites Act, which restrict movement of farm produces.

 


However, he said agriculture is a state subject and the central government has limited role in it.


“In India 50 per cent of our population is dependent on agriculture. If India’s GDP has to grow at 9-10 per cent for the next 30 years, then it cannot be without bringing revolution in the agri sector,” Kant said.


He also emphasised on eliminating middlemen in marketing of farm produces to boost farmers’ income.


Kant expressed confidence that farmer income will be doubled by 2022.
He said there is a need to spread good agriculture practice and success stories of farmers across the country.


“The second revolution in agriculture will come from technology and marketing,” Kant said.


Pawan Goenka, Managing Director, Mahindra & Mahindra Ltd,, said: “The contribution made by our farming community is a manifestation of this new age of farming which we celebrate through our annual awards”.


As part of Mahindra Agri Village (MAV) programme, he said the company has worked closely with more than 50 villages.


“Our Prerna initative has empowered nearly 2,000 women farmers over 40 villages, through the introduction of gender-neutral farm tools for reducing farm drudgery, and dissemination of knowledge and essential capabilities,” Goenka said.


Mahindra Samriddhi Krishi Shiromani Samman (Lifetime Achievement Award) 2019 was conferred upon E A Siddiq for his immense contribution to Indian agriculture. The award was handed over to recognise his contribution of enhancing productivity of paddy (Both Basmati & Non Basmati).


The group gave awards in total 11 categories.

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Mukesh Ambani bails out Anil in Ericsson payout case day before SC deadline

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Mumbai: Billionaire Mukesh Ambani stepped in to bail out younger brother Anil Ambani by helping him repay Reliance Communications’ (RCom’s) dues to Ericsson. The last-minute rescue spares the younger Ambani a three-month jail term for contempt of court.


RCom cleared the entire dues to Ericsson India to purge the contempt of a Supreme Court order. The debt-ridden company had already paid Rs 118 crore of the Rs 550-crore dues. In addition, the company had paid around Rs 3 crore in penalties to Ericsson.


“My sincere and heartfelt thanks to my respected elder brother, Mukesh, and Nita for standing by me during these trying times and demonstrating the importance of staying true to our strong family values by extending this timely support,” said Anil Ambani in a media statement. RCom had time until Tuesday to make the payment, failing which Anil Ambani, its chairman, would have had to serve a three-month jail term, according to the court’s order.

 
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Probing Amazon, Flipkart for alleged violation of foreign exchange law: ED

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New Delhi : Investigation has been initiated against e-commerce giants Amazon and Flipkart for alleged violation of foreign exchange law, the Enforcement Directorate (ED) Monday informed the Delhi High Court.


A bench of Chief Justice Rajendra Menon and Justice A J Bhambhani noted the submissions of the ED that a case has been registered under provisions of the Foreign Exchange Management Act (FEMA) against the two companies and disposed of a PIL which has alleged that the e-commerce giants were violating foreign direct investment (FDI) norms.


The court had earlier sought response of the central government, Amazon and Flipkart to the plea which has sought a probe into the alleged FDI violations.

 


The ED, in its reply filed through central government standing counsel Amit Mahajan, has said the “department has already registered and initiated investigation under the provisions of FEMA against the two companies to ascertain whether they have been contravening any provisions of FEMA or contravening any rule, regulations, notification, direction or order issued in exercise of the powers under FEMA….”
The agency also sought dismissal of the petition.


The petition by an NGO, Telecom Watchdog, also asked for initiation of legal proceedings against the two e-commerce companies under the FEMA for alleged violation and circumvention of FDI norms.


The plea, filed through advocate Pranav Sachdeva, has claimed that Amazon and Flipkart have created multiple entities to circumvent the FDI norms and route the hot-selling stock at cheaper rates.


The petition has contended that according to Press Note 3 of 2016, which regulates FDI in e-commerce, entities like Amazon and Flipkart are not to exercise ownership over stock, nor directly or indirectly influence price of goods and services sold on their marketplace.


It claimed that by creating name lending companies, Amazon and Flipkart buy branded goods in bulk at discounts from manufacturers and render small sellers uncompetitive by a wide margin, thus influencing the prices in violation of the FDI norms.


“As a consequence of this FDI norms violation, smaller sellers are unable to participate in the fast growing e-commerce sector,” the plea has contended, adding that due to subsidised prices on such platforms, small sellers are unable to sell in the brick-n-mortar world too.


Besides, the plea has also claimed that the two e-commerce firms have created several other group companies in the chain to divide discounts and losses.


“Exchange offers, EMI costs and bank offers are funded completely or substantially by Amazon and Flipkart and constitute a clear influence on price in violation of FDI norms,” it has alleged.

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