GM in Toyota’s rear view!

In 1937, Sakichi Toyoda would have never thought that one day his local car company would be amidst the fiercest battle in the history of the industrial world. Toyota Motor company, as it is known today, has come a long way since it started the production of ‘model SA’ back in 1947. The company has raided Detroit with such an intense ferocity that there has been a scramble for cover among the big three. Seemingly, immortal Ford Motor company has gone in an un-recovered depression, as its sales and market share are on a continuous downslide, and a recovery looks bleak. There has been resistance but to no avail, it appears that Toyota is just cruising along and it has already overtaken Ford and DaimlerChrysler on the way.

However, the real tremors from this reckoning were felt by the mother goose, General Motor (GM). The erstwhile number one car-maker has just been overtaken by Toyota in terms of global sales, selling 2.38 million cars as compared to 2.26 million units sold by the former in the first three months of 2007. Toyota has finally annexed the throne of the world’s automotive industry as the Americans are reeling under mounting losses. Just to show Toyota’s lead over it’s American counterpart, in 2006, the Nippon star had profits over $11 billion while the ailing GM was busy figuring out reasons behind it’s massive $10.5 billion losses of 2005. One thing Toyota knows well is that there is no way the competition can induce some fear in it.

Goldman strikes gold at casinos!!!
Billionaire financer Carl Icahn has agreed to sell his four Nevada casinos – including Stratosphere – to Goldman Sachs Real Estate fund for $1.3 billion. The deal also includes 17 acres stretch on the Las Vegas strip. Surprising is the fact that Icahn has decided to sell-off the strip an year after it fetched a record revenue of $6.69 billion, which is an 11% increase on the revenues clocked in 2005. However, the final nod for the deal might come in another eight months as it still needs to be approved by the Nevada Gaming Commission and the Nevada State Gaming Control Board.

Moto readies to gobble Terayon
Motorola is all set to get its hands on all the outstanding shares of Terayon’s Communication Systems, a digital video equipment-maker. For this purpose, Motorola will be shelling out a cash of $140 million. This move would help Motorola in strengthening their offering as Terayon soft ware-driven applications will assist them in digital ad insertion, motion and graphical overlays, channel branding and channel line-up and ad insertion delivery technologies. Motorola is still waiting for the regulatory sanctions and the nod of Terayon’s shareholders. It is expected that the deal would be finalised by the second quarter of 2007.

Accor goes single, sheds away Red Roof!
French hospitality group, Accor has done away with its Red Roof Inn motel chain for $1.32 billion. At the receiving end is a consortium, comprising Citi’s Global Special Situations Group and Westbridge Hospitality Fund. Following the divestment, Accor owns a single brand, Motel 6, the leading economy hotel chain in the States, which operates 928 hotels across North America, especially on the West Coast. With an illustrious history of 30 years, the chain enjoys very high brand recognition and a unique positioning which says, “the best price of any national chain.”

It’s all thanda for Coca-Cola!!!
Home soil is not proving to be fertile enough for the cola behemoth. Coca-Cola has been browbeaten by the step motherly treatment from Americans and CEO Neville Isdell is expecting sluggish sales in 2007. A report unleashed by ‘Beverage Digest’ in the USA, evinces that the market of carbonated drinks moved towards south by 0.6% in 2006 and, excluding energy drinks, this decline could be as much as 1.5%. Well, it’s no surprise that Coke is now eying on the energy drink-maker Glaceau. Also, the report highlighted the fact that Coke’s domestic market share reached 42.9% as compared to 43.1% in the year 2005, explaining the fact that Coke’s executives are losing their sleep.

AT&T’s Whitacre hangs his boots!!!
After spending more than four decades at AT&T, the company’s Chairman and Chief Executive Ed Whitacre has decided to retire in June, 2007. Whitacre joined the company as a Facilities Engineer in 1963 and slowly climbed the corporate ladder of AT&T, making it the world’s largest telephone company. He is also credited to be the longest serving CEO in the global telecom industry. Well, according to the analysts, the departure of Whitacre will make AT&T less acquisitive as it has already grown into a humongous company under Whitacre’s agressive leadership. Noticeably, Whitacre’s leadership was capped last year, when the company completed one of the largest mergers in the global telecom industry as it acquired BellSouth for $86 billion.

Seagram heir dives into trouble...
Seagram liquor got into controversy when Edgar M. Bronfman Jr, heir to the Seagram liquor fortune, was sued for $100 million by Richard E. Snyder, former Chief Executive of the publisher Simon & Schuster. Snyder claims that Bronfman failed to pay him his dues for advising him on a $2.6 billion takeover of Warner Music group. Though the agreement was not a written one, Snyder was hoping for Bronfman to honour it with the venture being a success. Bronfman’s lawyer Orin Snyder, however, was confident that the truth would only prevail in court.

Iberia to go Europe(an)!
As the open-sky agreement was reached between the European Union and the United States last month, the restrictions on North Atlantic travel were eradicated to a great extent. To cash in on the opportunity, the Spanish airlines Iberia L?neas Aéreas de Espa?a – holding 20% air travel market between Europe and Latin America – is keen on striking a deal with a European airline. Taking cue from this, British Airways (BA), on April 23, announced its intentions to increase its stake – as it already holds 10% stake – in Iberia, for which the discussions are ongoing with private equity firms. BA was also in talks with a US buyout firm, TPG, last month, for a $4.6 billion deal.

Ouch! Microsoft does it yet again!
Microsoft has filed its response to the European Commission’s charge (made in March 2004) that the company is violating European Union antitrust laws by not sharing its server soft ware protocols with the competitors. Microsoft has argued that as per the antitrust policy, it can charge royalties for sharing this information, but the EU is pressurising it to give away the information for free. The commission has already imposed a fine of 497.2 million euros on Microsoft in 2004 and of 280.5 million euros in 2006, for the violation of its antitrust law.

LaSalle sparks and the tussle begins!
The acquisition of LaSalle Bank doesn’t seem to be a smooth ride for the Bank of America. The latter, which had announced to buy LaSalle Bank Corp. and its subsidiaries from ABN AMRO Holding NV for $21 billion, is all set to face a bumpy way ahead. And the credit for all goes to a Dutch shareholders’ group VEB. Th e group is planning to file a suite to hold up the planned buyout to give other banks a fair bidding prospect for ABN AMRO Holding NV. Recently, a consortium of banks had placed a higher counter-bid for the same against the Barclays Plc’s offer of $88.5 billion. However, the acquisition, if completed, will make the Bank of America as Chicago’s largest bank and the third largest in the United States. Well, good bargains are not the easy ones!

Google: The new Brand champion
After a thorough evaluation based on financial data, interviews and other research material, market research firm Millward Brown has declared Google the winner of the ‘World’s Best Brand’ rankings. The ranking sees Google make a transitional jump from its previous seventh to the current first position, and triumph over many popular brand giants like IBM, Microsoft , General Electric and Coca-Cola. Experts attribute this win to Google’s brilliant customer service and its word-of-mouth promotion. With many consumers around the globe swearing by Google – including India – other renowned brands, including last year's winner Microsoft , are left with no choice but to ogle!

Lightstone strikes a lightening deal!
Lightstone Group has made their first hotelbuy a big deal. In one of the American history’s biggest hotel deals, Lightstone, country’s largest real-estate firm, will buy Extended Stay Hotels from the Blackstone private equity group for $8 billion. Lightstone will finance the deal with $1 billion in cash and $7 billion in debt. It won the deal over competing bids from Fortress Investment and Goldman Sachs. Extended Stay Hotels – the biggest player in the American mid priced extended stay segment – owns 683 properties with 76,000 rooms in the US and in Canada. Apart from its namesake, it operates under four other brand-names: Extended Stay America, Homestead Studio Suites, Studio- Plus and Cross land.

Euro blues for the Greenback!
Subsequent to weak economic figures, the dollar plummeted to a record low against the euro. The euro traded at $1.3680 (April 27, 2007), a level that it never achieved since its inception in the year 1999. According to the recent figures released by the Commerce department of United States, the Gross Domestic Product of US expanded at an annual rate of 1.3 % as compared to a growth rate of 2.5% during the previous quarter, a pace that was the slowest in the past four years. During April 2007, the consumer sentiments in US also plunged to a 7-months low.

A Southern and 'Star'ry marriage
Star India and Jeetendra-promoted Balaji Tele films' partnership has come a long way. After acquiring a 26% stake in India's leading production house, Star has struck another deal with the 'K' clan to launch channels in Southern languages. While Star will command 51% stake in the JV, Balaji will own the rest. The deal will give wings to Star's long cherished dream of having a strong footprint in the South. On priority is to infuse Star's Tamil channel, Vijay with Balaji content and launch a Telugu channel by the end of this year. On the cards is also to launch Kannada, Malayalam and other key regional language channels in the next two to three years. However, the going may be tough for Star-Balaji as Kalanidhi Maran's Sun Network dominates the small screen in the South.

ITC to lodge in the mofussil now
After enticing the rural populace with its e-choupal and Choupal Saagar initiatives, Tobacco major ITC is now all set to unleash its ‘Fortune’ chain of hotels in these areas. The company would test thewaters by opening lodges attached to its e-choupals and Choupal Saagars. Fortune Lodge, as it will be called, will be targeted at the budget travelers and each lodge will have 16-25 rooms along with eateries. As per the plan, year 2007 will see the opening of 15 such lodges or more. ITC is also planning to roll out 700 Choupal Saagars by 2010 and Fortune Lodges are expected to follow this expansion.

'General'ly 'Spark'ling motors
Being overridden by Toyota in the quarterly sales globally, General Motors has everything but given up. Entering the small-car segment, GM offloaded its small car Chevrolet Spark in India. Spark comes in four models and its base model is tagged at Rs.3,09,000 (ex-showroom Delhi), which is quite attractively priced for this segment. The car will be pitched against Maruti’s Wagon R, the newly launched Zen Estilo and Hyundai’s Santro, and might get sales figures soaring for GM as it aims for a 10% market share by 2010 in the country from the current 2.8% share.

Switching on 'Anchor' in time
Anchor Electricals has changed parents. Matsushita – popular for its Panasonic and National brands – has picked up 80% stake in Anchor Electricals for Rs.20 billion. The Shah family, which is the current shareholder of the company will retain the remaining 20% stake. This merger is an attempt by Matsushita to capitalize on the growing volumes in the Indian market (owing to the realty boom in the country). The deal will give the Japanese electrical major a robust distribution network for their new products in the country.

Downtown deposits deluge
Scheduled commercial banks have mopped up a staggering Rs.12,950 billion from Tier I and Tier II cities during the Q3 of 2006-07. These cities contributed a heft y 54.7% of the total mobilisation deposits of Rs.23, 670 billion. High income base due to the emergence of new industries in these towns has led to this rise. This development seems to be quite encouraging for the Indian banking sector, which is amidst a severe liquidity crunch.

Genuinely not interested!
Telecom Regulatory Authority of India's (TRAI) proposed 'Do not call' directory, which will put an end to unwanted tele-marketing calls is fast becoming a reality. As per the new regulation, National Informatics Center (NIC) will maintain a list of all those who do not wished to be disturbed by such calls. And if the telemarketers don't stop calling those who are not interested, the consequences can range from first warnings to a fine of Rs.500- 1,000 per call to the discontinuation of service. However, the regulation still has to get a green signal from the Department of Telecommunications.

Reddy, steady, stop!

After hiking the repo rate five times since June 2006 and Cash Reserve Ratio (CRR) three times since December, the wisdom of supply side inflation finally dawned on the RBI Governor Y. V. Reddy. The monetary policy announced by RBI on April 24, 2007 was met by sighs of relief from consumers along with rejoices from the bankers. This time around, Reddy refrained from hiking repo, reverse repo rates and CRR; throwing the ball in P. Chidambaram’s court, as Inflation is still above the 6% mark. Apart from tackling the issue of inflation, RBI also expressed concern over rupee appreciation which is stronger by almost 6% since March and is a serious issue for India’s exports, especially for the IT companies.

Aimed at restricting further appreciation of rupee, RBI announced a number of measures to lower the inflow deluge, encouraging money to flow out of India. Some of them are: Overseas investment limit (total financial commitments) for Indian companies has been enhanced to 300% of their net worth, listed Indian companies' limit for portfolio investment abroad in listed overseas companies has been enhanced to 35% of their net worth. Also, the present limit for individuals for any permitted current or capital account transaction was increased from $50,000 to $100,000 per financial year in the liberalised remittance scheme.

However, the question is: What about the consumers who bore the brunt of overnight hike in interest rates and paid more for their loans? Will they get some relief if rates stabilise?