Ford Motor has decided to park its struggling India business into a joint venture with Mahindra & Mahindra. Ford, which ventured in India in 1995, will cede control of its local operations as it believes “partnerships will become the norm in the industry”. The American company, which will transfer most of its India assets to the JV, will hold 49% in the new company valued at £192.5 million, while Mahindra will own the remaining 51%. The JV, which will house Ford’s two assembly plants in Chennai and Sanand, and employees, will be managed by Mahindra while the governance board will have equal representation by both the parties. While the Michigan-based automaker will continue to own the Ford brand, the JV will develop, market and distribute the Ford-badged cars in India as well as in emerging markets around the world.
Services sector contracts in Sept on weak demand
The month of September witnessed India’s dominant services sector slipping into contraction as new business orders fell for the first time since early 2018. The IHS Markit Services Purchasing Managers’ Index fell to a 19-month low of 48.7 in September from 52.4 in August. It also found business optimism at its lowest in 2-1/2 years. The survey adds to the deepening gloom around businesses and consumers, underlining the broadening cracks in the economy as growth slipped to six-year low in the April-June quarter. “The bad news of a cooling manufacturing sector was compounded by an outright services downturn in September,” Pollyanna De Lima, principal economist at IHS Markit, said in a release. It was the second month this year the index had fallen below the 50-mark separating growth from contraction - the last one being in June.
Nike reduces no of stores in India
The world’s largest sportswear maker has slashed the number of stores to around 150 and may further bring it down to around 100, sources said. Nike has withdrawn from most of its franchise agreements in India and has decided to go along with only one strategic partner New Delhi-based SSIPL (Sports Station). The US-headquartered company started consolidating its business in India in 2016 when it shuttered 35% of its stores to cut its losses. Subsequently, the company downsized its workforce in India. The move was part of a global-restructuring process that saw the company focusing on 12 key global cities including New York, Shanghai, London, Tokyo, Paris and Mexico City to achieve 80% of its projected growth by 2020. Not even one Indian city featured on that list.
Stage set for BPCL selloff
Ahead of a proposed move to fully privatise state-owned fuel retailer Bharat Petroleum Corp (BPCL), the government had quietly repealed the legislation that had nationalised the company, doing away with the need to seek Parliament nod before selling it off to private and foreign firms.
The Repealing and Amending Act of 2016 had annulled “187 obsolete and redundant laws lying unnecessarily on the statue book”, including the Act of 1976 that had nationalised erstwhile Burmah Shell. “The Act has been repealed and there is no need for a Parliament approval for strategic sale of BPCL,” a senior official said. The privatisation of BPCL will not just shake up the fuel-retailing sector long dominated by PSUs, but also help meet at least a third of the government’s Rs 10.5 billion disinvestment target.