Day: October 3, 2017

Toyota, Honda, Ford, General Motors, Nissan and Volkswagen all posted strong monthly U.S. sales numbers, confirming expectations that a boost in sales from hurricane-ravaged Texas would push the industry to a September rebound.

GM reported on Tuesday that sales rose 11.9 percent, while Ford sales rose 8.7 percent. Toyota posted a 14.9 percent increase, while Nissan sales were up 9.5 percent and Honda sales rose 6.8 percent. Volkswagen said its sales rose 33.2 percent over numbers that were depressed a year ago by its diesel emissions cheating scandal.

Of companies reporting early Tuesday, only Fiat Chrysler reported a sales decline. The Italian-American automaker posted a 10 percent drop on what it said was a planned reduction of sales to rental car companies.

While industry analysts had predicted a decent month due to Labor Day weekend deals and a boost from owners replacing hurricane-damaged vehicles, the strong increases are likely to surpass their forecasts when all the numbers are totaled later Tuesday. For instance, the auto website Edmunds.com expected overall sales to rise 0.4 percent from a year ago.

Overall industry sales fell 2.7 percent through the first eight months of the year and were off 1.9 percent in August as Hurricane Harvey battered Texas. Then in September, Irma hit Florida, where many dealerships were forced to close for a week or longer due to lack of electric power.

Ford gained 5,000 to 6,000 sales from replacement of flooded cars in the Houston area, where it offered employee pricing. But it lost about 1,000 in Florida due to closed dealerships, Vice President of Sales and Marketing Mark LaNeve said on a conference call. He expects industry sales to get a boost through the rest of the year from cars being replaced due to hurricane damage.

Christopher Hopson, manager of light vehicle forecasting for IHS Markit, said September had a perfect mix of hurricane replacement demand, high incentives, rising fleet sales and strong sales of outgoing 2017 models.

“While this strong level of demand isn’t expected to be sustained throughout the fourth quarter, these short-term supports are not likely to drop off in a meaningful way, setting the stage of for strong Q4 results,” Hopson said in a statement.

Strong pickup truck and SUV sales once again propelled the September increase.

Ford’s F-Series pickup sales rose 21 percent from a year ago, while SUV sales were up 8.8 percent. Inventory levels dropped to a 72-day supply, and LaNeve said Ford may even increase production to raise that a little. Automakers have been trimming production, especially of cars, for much of the year.

Even car sales, which have been battered during the past few years as buyers switched to SUVs and trucks, showed a bit of life. For instance, Toyota’s midsize Camry, once the top-selling car in the U.S., posted a 13 percent sales gain as all-new 2018 models reached showrooms. Honda’s Accord, once the No. 2-selling car, posted a 9.5 percent increase.

Still, Edmunds predicted that midsize cars would drop to the fifth-largest segment so far this year with just 10.7 percent of the market, the lowest share recorded since Edmunds began tracking numbers in 1991. Midsize cars were the top-selling segment in the U.S. just three years ago, but have been passed by compact SUVs, large trucks, midsize SUVs and even compact cars, Edmunds said.

The positive sales results, though, drove auto shares up, pushing the Standard & Poor’s consumer sector higher. Shares of all automakers rose in trading Tuesday.
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The European Union insisted Tuesday that Brexit negotiations with Britain will not move on to the question of future relations until enough progress has been made on divorce issues, such as how much the country’s exit bill should be.

Britain desperately wants talks to move on to future trade and security arrangements but EU Commission President Jean-Claude Juncker said that more needs to be done on the withdrawal issues first.

Juncker told the European Parliament that “we have not made the sufficient progress needed” and the legislators backed him, approving a resolution underscoring the same point with a vote of 557 to 92 with 29 abstentions. It further underscored the unity of the 27 EU nations as they face off with Britain in the talks.

The EU wants London to commit to guaranteeing the rights of EU citizens already in Britain, making sure border posts do not reappear between the U.K.’s Northern Ireland and Ireland itself and pay up for everything it had agreed to while it was a member.

Juncker said “the taxpayers in the EU 27 should not pay for the British decision” to leave, while the bloc’s chief negotiator, Michel Barnier, said “serious differences remain” on how many bills the U.K. still has to settle. Estimates vary widely from 20 billion euros ($27 billion) to over three times that amount.

“Serious rifts remain, especially on the financial settlement,” Barnier said. “We will not pay at 27 what has been decided at 28, it is simple as that.”

The parliamentary resolution called for postponing any move to widen the talks with Britain unless “a major breakthrough” takes place during the fifth round of negotiations in Brussels next week.

Observers said decisive progress was highly unlikely. Tuesday’s moves further dampened hopes that the EU leaders might give the green light to an expansion in the talks at a summit on Oct 19-20.

Many lawmakers were also dismissive of Britain’s Conservative government, which is widely seen as insecure and bumbling.

The head of the biggest party group in the European Parliament called for the sacking of British Foreign Secretary Boris Johnson for stoking confusion over the Brexit talks.

The European People’s Party chairman, Manfred Weber, appealed to Prime Minister Theresa May: “Please sack Johnson, because we need a clear answer who is responsible for the British position.”

Weber turned Henry Kissinger’s famous observation about the many leaders in the EU onto Britain: “Who shall I call in London? Who speaks for the government? Theresa May, Boris Johnson, or even (Brexit negotiator) David Davis?”

Others are speculating that Britain might actually be stalling to make sure that the member states that trade heavily with the U.K. would buckle and concede at the last moment, sowing discord among the 27.

EPP member Tom Vandenkendelaere said the strong backing of the resolution proved differently. “If the Brits they can play their old divide-and-rule game, they’d better think again,” he said.
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After several years of struggling to make a living doing odd jobs in and around his village, 26-year-old Pushkar Singh came to New Delhi from the northern Uttarakhand state three months ago to hunt for a job.

The high school dropout is willing to do anything — cook, work as a security guard, a peon in an office. But not only has he failed to secure a job, he has not even got an interview so far.

“It’s a huge worry, not having work,” said a despondent Singh as he wondered how long he can continue staying with his relatives.

The hopes of young people like Singh had been fueled by Prime Minister Narendra Modi’s promise of creating millions of jobs for the country’s huge young population when he took power in 2014. Optimism rose after India won the tag of the world’s fastest growing economy. 

But the Indian economy has hit a sharp slowdown, leaving tens of thousands of people struggling to find work in mega cities like New Delhi, which are magnets for migrant labor.

The economy clocked a growth rate of 5.7 percent in the April to June quarter, its most sluggish pace in three years.

The bleak number has set alarm bells ringing and raised fears that India could struggle to return to a high growth path.

“It is a cause for concern, the economy has slowed down much more than most had expected,” said D.K. Joshi, Chief Economist at rating agency Crisil in Mumbai.

Reasons for the slowdown

The slowdown has prompted critics to accuse Modi’s government of economic mismanagement.

Most attention has turned to two major measures that have disrupted the economy in the last year. Critics have slammed the government for imposing a currency change last November to flush out illegal cash, saying it slowed down businesses amid massive currency shortages and gave an unnecessary shock to a cash dependent economy.

In July, India implemented a long overdue and widely welcomed tax reform — a goods and services tax (GST) meant to clean up a complex tax regime and make it easier to do business.

But many worry that faulty implementation and multiple tax rates have created confusion for businesses struggling with the new system.

Economists point out that the currency change and GST, coming within months of each other, have made the slowdown sharper and deeper for virtually all sectors of the economy, which had already started losing pace last year.

The impact is evident in the markets of the Indian capital, which are usually the most crowded at this time of the year. It is India’s main festive season, when consumer spending hits a high. But shop owners are disappointed because customers are not opening their wallets easily.

A usually buzzing upmarket area in New Delhi wears a deserted look. Manu Talwar, the owner of a shop selling high-end mobile phones, has been struggling to make a sale in a country counted as the world’s fastest growing smart phone market, where a new device is coveted by an aspirational generation. 

“You can see the market, it does not look like Diwali, the market is so down. Mobiles, accessories, people were crazy about it. As of now, iPhone 8 has launched, but there is no market,” said Talwar.

The government says it is looking for ways to rev up the economy — according to reports, it is considering spending billions of dollars to give investment a push.

Prime Minister Modi, seen as a business-friendly, reformist leader, recently announced the formation of a five-member panel to advise him on economic issues.

At the heart of the challenge is the need for jobs in a country where about 10 million enter the workforce every year. Modi had hoped to give manufacturing a push to create jobs for low-skill labor, but a flagship “Make in India’ program he launched to woo foreign investors has yet to show significant results. And a slowing economy means that jobs are even being lost in several sectors.

“To think of an overall manufacturing push of the kind China gave, or many East Asian economies that we observed in those economies, that does not seem to be a reality in India. There is a lot of ground to cover to reach that level,” said economist Joshi.

Officials are striking an optimistic note, calling the slowdown transitory, but economists warn recovery will be gradual.

That means Pushkar Singh’s hunt for a job and shop owner Manu Talwar’s hopes of the market picking up may not happen anytime soon.
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With more and more consumers shopping online, do brick-and-mortar stores stand a chance?

At least for one pop-up shop in New York City, the future of retail is about embracing digital trends rather than resisting them.

Mastercard and Marie Claire magazine have teamed up to create “The Next Big Thing” concept shop, a pop-up store in SoHo that brings the convenience of online shopping to a physical storefront.

Industry insiders aren’t discounting physical stores just yet.

“I’m a big believer in the physical store and I think when you look at just pure volume of sales, you still see a majority of that happening in a physical environment,” said Stephane Wyper, senior vice president of Internet of Things partnerships and commercialization at Mastercard.

For its part, Mastercard is taking cues from the online world and making transacting as seamless as possible.

“We look at solving for one very key point of friction, which is how do I reduce the amount of time that somebody has to wait and actually go through the checkout process,” Wyper said.

Window-shopping is interpreted literally here, with a touchscreen display built into the store window which lets users get their retail therapy fix any time of day. Passersby can browse, select and pay for clothes without stepping foot inside. Payment is made via an accompanying store app that’s powered by Mastercard.

Inside, fitting rooms also allow for cashless check out and payment via touchscreen mirrors created by Oak Labs.

Technology is allowing brick-and-mortar stores to respond swiftly to ever-changing consumer tastes.

“In the online world where you can track page views, click-throughs, we can track impressions, discoveries, dwell time, and provide that real-time data analytics,” said Phillip Raub, co-founder of b8ta. The retail tech startup was part of the concept shop and had several consumer electronics on display.

Tech startup b8ta uses cameras to measure foot traffic and time spent looking at products. Tabletop tablets display product information and marketing that vendors can change on the fly.

“Physical retail is probably the #1 biggest area of opportunity for brand product and awareness . . . the future really is looking at how do you start monetizing the space and the services that you provide, in addition to the fact that you can purchase products,” said Raub.

Not to be left out is the social experience of shopping.

“This is a playground for women,” said Nancy Berger, publisher of Marie Claire, “It really brings together, in a social way, interesting women so that they can experience this all together. And I think that sense of community is really going to be an important part of this experience.”

The pop-up store runs until Oct. 12 and has hosted several events such as makeovers, food samplings and talks on health and wellness.

By bringing digital convenience and know-how into a physical store, organizers are showcasing a 2.0 version of brick-and-mortar retail.

“It’s really an opportunity, when you look at the Internet of Things and these connected devices, to really leverage those, to really redefine what the physical store could be,” Wyper said.
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