KIA MOTORS RACES PAST 1 LAKH SALES
Kia Motors, the world’s seventh largest South Korean car maker, has become the fastest automaker in India to drive past the 1,00,000 sales milestone in just 11 months since its debut car launch of the Seltos SUV last year.
It is a record number for any new entrant to achieve in such a short time in a fiercely competitive and world’s fourth auto market. The sales comprise 97,745 units of the Seltos and 3,614 units of the Carnival MPVs.
Kia is set to woo buyers a third product, Kia Sonet, a compact SUV, in the coming months, after the global reveal on August 7.
The market rally in July, leading to over 10 per cent gains at one point, took a break this week with three days of decline in a row.
The Sensex closed 129 points lower at 37,606 on Friday, still clocking a monthly gain of 7.70 per cent. The monthly gain was at 10.5 per cent on July 28, but was partly erased by the 2.35 per cent decline in the last three sessions due to profit taking.
Market participants anticipated growing risks as the market had rallied sharply over a short period
Lower sales of gold can be a blessing in disguise in terms of margins for gold jewellers this year. If jewellers go easy on replenishment of stocks, the profit margins can improve by the end of the year.
Subdued economic sentiments and high gold prices are expected to shrink gold jewellery consumption this year. This would bring down the topline of the jewellers considerably this year. However, there is a silver lining- higher gold prices will improve the margins.
Most of the jewellers have inventories stocked prior to the lockdown. As the sales got affected by the lockdown, jewellers have not replenished their stocks since lockdown. This has been evident from the fact that imports were 95 per cent down in the while GDP growth in several countries were coming down.
NSE’s Nifty-50 Index closed at 11,073.45, down 28.70 point or 0.26 per cent.
Foreign portfolio investors turned net sellers on Friday by Rs 958.64 crore on growing global sell off concerns with the US economy shrinking.
Sanjeev Zarbade, VP, PCG research, Kotak Securities said, “Market mood remained cautious due to insufficient progress on the next round of US fiscal stimulus, worries about credit risks in Indian banks and valuation related concerns.”
June quarter.
Gold prices have moved close to 35 per cent since the beginning of the year and the value of the inventory lying with the jewellers have already gone up by around 35 per cent.
“As the sales are low, we are not planning to replenish the stocks at higher prices. The stocks will be sufficient for the sales in the current year,” said Tom Jose, chief financial officer of Joyalukkas.
Jewellery chains have an added advantage. If they close down a few stores in order to cut the operational expenses, the stocks there can be moved to other stores of the group.
According to Bachhraj Bamalwa, partner of Nemichand Bamalwa and Sons, jewellers usually keep some additional inventory and if the inventory level goes down by around 15 per cent, usually they replenish the stocks.
“If we are not replenishing the stocks, the margins will improve on whatever sales happening in the year,’ he said. Unavoidable wedding purchases will still be happening later in the year. Festival season too might see some purchases happening, though lesser than last year.
Moreover, lesser overhead costs and capital expenses also would aid the margins. Jewellers have been cutting down advertisements, promotional activities and have halted new store openings. Many of the firms have already made salary cuts and retrenchments, thus bringing down costs.