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Tag: Sales

  • Tourism slump hits Burberry Hong Kong sales

    Tourism slump hits Burberry Hong Kong sales

    British luxury brand Burberry Hong Kong has seen its sales slide by more than 20 per cent for the third quarter in a row.

    The result reflects the continuing fall-off in tourist numbers to Hong Kong from China, including a 26 per cent drop in February.

    Burberry’s second-half sales results, just released, show a “challenging” environment for luxury, says CEO Christopher Bailey. Global comparable sales declined by 2 per cent, dragged down by Hong Kong and Macau. Global comparable sales excluding these regions actually edged up 1 per cent for the half.

    Burberry’s bright spots were Mainland China, Japan and Korea, which all saw positive growth. Japan, which has become a luxury shopping hotspot for Chinese tourists, had double-digit growth in total retail revenue.

    Sales also slowed down in Europe, as luxury shoppers from China avoided the region following the Paris terror attacks in November. Demand for Burberry goods fell in France, Germany, Italy and Spain amid a general sense of unease about security and fears of further terrorist attacks in Europe.

    However, it is not all doom and gloom for Burberry, says Verdict Retail analyst Andrew Hall, citing growth in online sales and the launch of the Mr Burberry fragrance. The success of Burberry’s fragrances has seen the brand’s beauty division achieve underlying growth of 10 per cent in the second half.

    “Furthermore, Burberry continues to be at the forefront of luxury fashion retail, making headlines with high-profile collaborations – for example, Steve McQueen – and sending waves across the industry as it shakes up the traditional fashion show timetable,” says Hall.

    “Burberry can certainly be proud of the hard-won successes, but long-term strategic leadership is needed to overcome the blows dealt by performance in some Asian markets. Until this is achieved, the good work will continue to be overshadowed by falling demand in Hong Kong and Macau.”

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  • Bata Indonesia sales stagnate

    Bata Indonesia sales stagnate

    Bata Indonesia says it has missed meeting its sales targets despite the nation’s improving retail sales.

    Sepatu Bata, the local arm of the European shoe giant, owns and operates stores across Indonesia and manufactures sandals and shoes under brands Northstar, Power, Bubblegummers, Marie Claire and Weinbrenner.

    The company reported sales of Rp 1 trillion in 2015, 10 per cent short of the Rp 1.1 trillion target it set when it announced expansion into the middle and upper income market segments.

    However the company still posted a profit of Rp 129 billion (US$9.7 million), up 81 per cent, on the back of an unspecified one-off asset sale which raised Rp 121 billion.

    Bata Sepatu’s cost of goods rose 19 per cent and overheads by 8 per cent.

  • GM Korea Posts Worst-ever Net Loss of 986.8 Billion Won in 2015

    GM Korea Posts Worst-ever Net Loss of 986.8 Billion Won in 2015

    According to industry sources on April 10, GM Korea reported 594.4 billion won (US$515.30 million) in operating losses and 986.8 billion won (US$855.48 million) in net losses last year. It is the worst-ever performance since its establishment in 2002.

    Industry watchers think that it is largely due to 186.9 billion won (US$162.03 million) of the equity method loss caused by its decision to shut its local factory following the withdrawal of the Chevrolet brand from Russia. GM Korea halted sales of the Chevrolet products in Russia last year.

    Last year’s poor performance is also attributed to the fact that the automaker had sold its mid-size sedan Cruze with a 1.8-liter engine for exaggerated fuel economy claims in the domestic market for five years. As GM Korea decided to pay Cruze owners up to 430,000 won (US$373) per person to cover the difference between the stated fuel economy and the actual one, the total amount of compensation reached as high as 37 billion won (US$32.08 million) last year.

    Moreover, higher labor costs despite the decrease in car sales also added to its worst-ever performance. The automaker shipped a total of 621,872 units at home and abroad last year, down 1.4 percent from the previous year. However, its labor union has strongly protested the company’s decision to continue importing all units of its full-size sedan Impala from the United States for sales in Korea despite strong sales at home.

    GM Korea is looking for various ways to improve its financial state. The automaker has decided to organize a special task force team with staffs across the company, including labor union and management, in a bid to prepare measures to revitalize sales in the local market. Starting in January, it has introduced a direct sales system that guides individual dealerships to sign direct contracts with the automaker unlike in the past when they were in touch with regional dealers. This change has simplified the overall retail structure of GM Korea and is expected to cut tens of billions of won of annual costs.

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  • Philippine 7-Eleven profits surpass 1 billion pesos

    Philippine 7-Eleven profits surpass 1 billion pesos

    The Philippine 7-Eleven network of convenience stores recorded record profits in  2015, fuelled by new store openings.

    Parent, listed company Philippine Seven, says it surpassed 1 billion pesos (US$22 million) in profits for 2015.

    The 15.4 per cent year-over-year profit rise came on the back of an increase in stores from 1282 in 2014 to 1602 stores in 2015.

    Philippine Seven said retail sales of all stores rose by 25.3 per cent  to P25.8 billion from P20.6 billion compared with prior year.

    The company has been expanding its logistics infrastructure to support its

    unprecedented expansion in Visayas and Mindanao.

    “The rest of the country is relatively uncontested in comparison. We are virtually the only competitor with the critical mass to build out proper supply chains in areas logistically unreachable from GMA,” said Jose Victor Paterno, president and CEO.

    The expansion is  expected to support profitability in the medium term, through cashing in on underutilized warehouses and achieving dominant position in new markets.

    For 2016, the company plans to increase  capital expenditures budget to P3.5 billion to support its accelerated store expansion strategy. The bulk of this amount will fund new store openings, store renovations and equipment acquisition.

    Philippine Seven Corporation operates the largest convenience store network in the country. It acquired the master franchise licence from Southland Corporation (now Seven Eleven) of Dallas, Texas, in December 1982 and was listed in the Philippine Stock Exchange in February, 1998.

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  • Robinsons Philippines income jumps 21.9 per cent

    Robinsons Philippines income jumps 21.9 per cent

    Robinsons Philippines has reported a 21.9 per cent increase in net income in 2015 to P4.3 billion ($90 million) on the back of same-store sales growth and sales from newly opened stores.

    Same-store sales growth for Robinsons Retail Holdings grew 4.1 per cent in 2015, exceeding the 2-3 per cent consolidated same-stores sales target for the year.

    The company’s consolidated net sales reached P90.9 billion last year, up 13 per cent from P80.4 billion in 2014.

    The retail holding firm of the Gokongwei group reported opening 2015 with 179 new stores and ended the year with a total of 1506 stores.

    “I am heartened by the strong same-store sales growth performance of all our retail formats in 2015, despite the intensifying competition,” Robinsons Retail President and CEO Robina Gokongwei-Pe said.

    “We have also gotten into a good start this 2016 with solid same-store sales growth for the first two months of the year as we benefited from increased consumer spending from a still robust domestic economy. We will continue with our footprint expansion, with focus on areas outside Metro Manila,” Gokongwei-Pe said.

    The opening of new stores expanded the company’s gross floor area by 9.7 per cent year-on-year, the company said.

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  • PGI: Platinum Jewellery Weathers Difficult Conditions Favorably in Key Markets

    PGI: Platinum Jewellery Weathers Difficult Conditions Favorably in Key Markets

    Platinum Guild International (“PGI”) today published the findings of its third annual Retail Barometer. The Barometer, conducted by independent platinum market experts and industry analysts, reveals the consumer retail sales data of platinum jewellery in 2015 and projections for 2016. It is the only research in the industry that measures sell-out, i.e. platinum ounces sold from retailers to consumers.

    The Retail Barometer gives a unique view of platinum demand from retail sales. Platinum jewellery is the second largest consumer of platinum in the world after the autocatalyst market.

    The research survey covered over 400 jewellery retail companies with approximately 23,000 retail outlets in the four main international markets of China, India, Japan and the USA. The research was conducted between January and February 2016.

    Huw Daniel, Chief Executive Officer of PGI, commented, “Despite manifold challenges in the luxury category and a difficult year for jewellery in general, jewellery retailers vested in platinum have weathered the storm ahead of their peers. The historically low platinum metal price has benefitted consumers and retailers alike, presenting a unique opportunity to acquire the most aspirational fine jewellery. Even China, the biggest market for platinum jewellery, shrank to a much lesser extent than other jewellery sectors. Both China and India remain key development markets for platinum jewellery which we will further grow ahead of the market average, leveraging successful programs and new launches.”

    Tim Schlick, Chief Strategy Officer of PGI, commented, “The jewellery industry is at a point where future growth comes from either conquest of market share or unlocking untapped consumer segments. PGI and our partners feel confident that having initiatives that provide both will continue to give us a competitive edge, as consumers increasingly seek quality and differentiation.”

    China
     China’s economic growth in 2015 was slowest in 25 years at 6.9%. The slow-down reflects an adjustment towards a consumption-based economy, which bodes well for future growth in platinum jewellery. Retail witnessed a year of fluctuation, however the growth in the H2 didn’t counter the decline in H1, resulting in a modest platinum jewellery volume decline of -4% for the whole year

    • The bridal segment continued to grow moderately despite the overall decline in jewellery consumption — in addition to pair rings and engagement rings, bridal platinum jewellery saw growth in other jewellery products, such as necklace and bracelet, which were typically purchased as a set along with the wedding rings.

    Based on initial retailer outlook, PGI expects to see a flat year of virtually no growth, or even a modest decline of 0% to -3%.

    India
     The Indian economy was also impacted by the global slow down, although consumer spending at a macro level increased slightly. Platinum Jewellery volume grew 24% in 2015, driven by increasing acceptance of platinum as the choice of the young aspiring urban consumer. Platinum saw increases across the board from Platinum Love Bands, Men’s Jewellery, and the new Evara Platinum Blessings, which marked platinum’s entry to the key wedding category in 2015.

    For 2016, PGI and retail partners expect continued growth of +23% — retailers expect platinum to continue outperforming the category average.

    Japan
     Japan’s economy is working to maintain modest recovery leading up to the 2020 Olympics with a GDP growth of 0.6%. The exceptionally warm winter benefitted jewellery and record numbers of inbound tourists benefitted metropolitan retailers and service providers, especially department stores and non-bridal. Platinum jewellery sales outperformed total jewellery, and platinum jewellery volume increase 2.7% in 2015.

    For 2016, retailers are nervous about economic outlook, but expect growth rate of +1% to +2% in platinum jewellery volume.

    USA
     The US economy has been further recovering and growing moderately at 1.9% in 2015 with overall retail growing in line with the GDP growth rate. Platinum jewelry imports experienced sharp increases in 2015, while retail demand increased +10%.

    For 2016, PGI expects platinum to continue to benefit from the positive 2015 momentum, in particular if the ounce price remains low, resulting in an expected volume growth rate of +5% to +7%.

     

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  • Asia gives Jimmy Choo an unlikely boost

    Asia gives Jimmy Choo an unlikely boost

    While a majority of luxury fashion retailers are blaming Asia for declining sales and failing to meet profit projections, Jimmy Choo has confounded the market by praising the continent.

    Jimmy Choo has reported sustained growth in far eastern markets to deliver 6.1 per cent revenue growth for 2015, to £317.9 million.

    “Whereas other players such as Burberry have faltered with declining Chinese demand, Jimmy Choo has been able to deliver impressive revenue growth across Asia,” notes Andrew Hall, an analyst atVerdict Retail.

    “The brand’s relative immaturity in these markets has helped to shield it from the decreasing demand and a stuttering economic slowdown in the region. Investment in new store openings and plans for new flagship stores across Asia sets Jimmy Choo apart from its rivals and will continue to reap rewards for the brand.”

    Jimmy Choo’s Asian sales rose a staggering 21.2 per cent, more than enough to offset a 2 per cent decline in sales in Europe, Middle East and Africa.

    The company reported a pre-tax profit of £22.1million, a significant turnaround on the 2014 loss of £8.2 million. It opened 13 new stores.

    In an earnings statement, Jimmy Choo said its Asian business in Asia and Japan is growing well.

    “We see significant opportunities to maintain this outperformance in the years ahead. Despite challenging market conditions, we expect continuous operating efficiencies and the dynamism and flexibility of our teams to enable us to drive margin expansion and continue the reduction in leverage and financing costs.”

    Said chairman Peter Harf: “Jimmy Choo continues to outpace the sector despite the challenging competitive environment. The company successfully reversed the first half decline in wholesale revenues and remains on track with growth forecasts in Asia and Japan where brand awareness continues to grow strongly.”

    However, Hall warns that Jimmy Choo is far from immune to the geopolitical situation: the decline of Russian luxury consumers in Europe, attacks in Paris deterring European consumers, and the weakening of the euro have contributed to disappointing performance in EMEA.

    “While the brand has achieved an operating margin of 9.4 per cent, compared to 8 per cent last year, the shoe specialist must be wary of creeping costs as it not only pursues store expansion but invests in omnichannel capabilities and continues to develop a strong social media presence,” said Hall.

    “Creative Director Sandra Choi has led a strong year of product design, building upon Jimmy Choo’s British identity to produce seasonal ranges which continue to resonate with consumers across the globe. While attempts to embrace the male market remains a difficult nut to crack, the development of stores aimed at both genders and the strength of new fragrances has seen the brand make headway into capturing a male demographic.”

    Hall said Verdict expects Jimmy Choo to continue to outperform the luxury sector in Asia giving it another year of solid total revenue growth.

    “However the Chinese market remains volatile and Jimmy Choo should be wary of putting all of its eggs in one far-eastern basket as its grip on European markets loosens.”

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  • Disappointing year for Matahari Putra Prima

    Disappointing year for Matahari Putra Prima

    While the net income of Indonesian grocery retailer Matahari Putra Prima (MPPA) was below expectations, it recorded slightly improved revenue and sales for the year ended December 31.

    Its revenue was Rp13.9 trillion ($US2 billion), with sales up 2.5 per cent from Rp13.6 trillion in 2014. Its net income came in at Rp183 billion, giving it an operating profit of Rp268.8 billion, or 1.9 per cent of sales.

    CEO Noel Trinder says that despite the economic difficulties, the group continued its strategic direction of expanding business through new or enhanced formats.

    As well as continuing its Hypermarket G7 rollout, Matahari PP also revamped its Foodmart and Bostonformats, and launched the SmartHub and FMX concept debuts formats on the wholesale side.

    MPPA opened 33 outlets during the year, and now has 293 multi-format stores. Four G7 stores opened, and eight stores were remodelled to the concept.

    One of Indonesia’s largest retailers, Matahari PP has more than 30,000 employees in 112 hypermarkets, 23 supermarkets (Foodmart and Primo/Fresh), 49 minimarket/convenience stores (FMX), 108 health and beauty stores (Boston) and its wholesale outlet (SmartClub).

    In total, it has 293 stores in 68 cities throughout Indonesia.

  • Hong Kong’s retail sales plunge most in 17 years

    Hong Kong’s retail sales plunge most in 17 years

    Hong Kong’s retail sales in February plunged the most since 1999 as fewer Chinese tourists visited the territory during the Lunar New Year holiday.

    Retail sales dropped 21 percent in February to HK$37 billion (US$4.8 billion) year-on-year, according to a statement from the Hong Kong’s Department of Statistics.

    Combining January and February, sales fell 14 percent. The monthly decline is the worst since January 1999 when sales were also down 21 percent.

    “Apart from the severe drag from the protracted slowdown in inbound tourism, the asset market consolidation might also have weighed on local consumption sentiment,” the Hong Kong government said in a statement yesterday. “The near-term outlook for retail sales will still be constrained by the weak inbound tourism performance and uncertain economic prospects.”

    The government will monitor closely its repercussions on the wider economy and job market, it said.

    Chow Tai Fook Jewellery Group, the world’s largest listed jewelry chain, and Sa Sa International Holdings reported slumping sales over the holiday from Feb. 7 to Feb. 13 when Chinese tourists to the territory dropped 12 percent.

    The stock market rout and a slowing Chinese economy have affected consumer sentiment for luxury goods, Chow Tai Fook has said.

    Mainland China tourists “are unlikely to come back in the short term,” CCB International Securities analyst Forrest Chan said.

    Hong Kong residents are also consuming less due to stagnant property values and the weak stock market, he said.

    “Hong Kong’s retail market will continue to fall for the rest of 2016 as all the negative factors won’t be solved in the near term,” Chan said in a telephone interview.

    Chinese visitors are projected to fall 3.2 percent for the year, according to the Hong Kong Tourism Board, with average spending dropping 4 percent to HK$6,948.

    Sales of jewelry, watches and clocks, and valuable gifts dropped 24 percent, while those of electrical goods and photographic equipment plunged 27 percent, according to yesterday’s statement.

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  • Will Hong Kong retail market, like Jesus, rise from the dead?

    Will Hong Kong retail market, like Jesus, rise from the dead?

    Spring is here, but our struggling retailers have yet to notice its arrival.

    Last week Li Ka-shing said the economy this year is the worst in 20 years, especially in the case of the retail market, which is facing a situation that is worse than SARS in 2003.

    It’s nice to know, though, that while Cheung Kong is grumbling, rival Sun Hung Kai Properties has come up with a way to cope with the situation.

    At its trendy shopping mall APM in Kwun Tong, Hong Kong’s No. 1 landlord is introducing short-term tenancy.

    Six shops of between 100 square feet and 300 square feet will be coming on stream for tenancy of no more than six months, says Maureen Fung Sau-yim, general manager (leasing) of Sun Hung Kai Real Estate Agency.

    Fung says the tenancy will involve a new profit-sharing system, in which 10 to 12 percent of the sales will be taken as rental.

    This new deal is breaking away from the traditional three-year lease where retailers have to pay 20 percent of their sales to the landlord.

    Landlords are adjusting their leasing strategies in the wake of the poor retail sentiment brought about by slowing tourist arrivals.

    Swire Properties, for example, is terminating the leases of underperforming tenants such as Dan Ryan and Grappa’s (and before that, the beloved of the middle class Marks & Spencer) as part of efforts to transform Pacific Place in Admiralty.

    From the tenants’ side, gold, jewelry and luxury watch shops, along with pharmacies or cosmetics outlets, are giving their spaces back to food stalls and other small operators who previously could not afford the high rent.

    Kowloon Watch, for example, has just closed its store at a shopping mall near my residence, its fifth closure in the past 12 months, leaving only seven shops in operation.

    The short-term tenancy seems the most logical strategy in the new business climate. Some trendy retailers, such as Bathing Ape, which used to draw long queues for its limited edition products, will be perfectly suited for this flexible scheme.

    In the first three months, visitors to APM surged over 10 percent to 27 million with sales topping HK$900 million, according to Fung.

    This coming Easter, the mall will be spending an advertising budget of HK$2.3 million, up 10 percent from the previous year, in anticipation of a huge wave of visitors, especially those coming from the Kai Tak Cruise Terminal.

    Hopes are high that the local retail market, like Jesus Christ, can rise from the dead after its extended crucifixion.

  • Samsung won’t like it, but Xiaomi is coming to South Korea

    Samsung won’t like it, but Xiaomi is coming to South Korea

    China’s Xiaomi is now expanding in a country where the competition is particularly tough: South Korea.

    The land of Samsung and LG isn’t an easy proposition, but Xiaomi isn’t doing it alone. The company has this month inked a number of deals with Korean suppliers and distributors to ensure that it will have a presence on the ground in the country.

    Xiaomi has reached an agreement with Youmi and Koma Trade, making the two Korean companies the only official dealers of Xiaomi products in the country.

    The two partners will sell a variety of Xiaomi products, including battery packs, headphones, the Mi Band fitness tracker, and the Ninebot “hoverboard.” Neither company will sell Xiaomi phones, but they will be able to repair the devices and provide support.

    The land of Samsung and LG isn’t an easy proposition, but Xiaomi isn’t doing it alone.

    The paper says the partners are “small companies whose core business has become providing services for Xiaomi. Xiaomi selected the two companies since they can devote all their energy to the Chinese tech giant.”

    In addition to building up its network in the land of Samsung, Xiaomi has also been working on ecommerce and online payments.

    On March 8, news broke that Xiaomi’s smart TVs would be sold in Korea by ecommerce giants Gmarket and Auction.

    Xiaomi has also inked agreements with a number of other Korean ecommerce marketplaces, including E-Mart, ZMI, and 11st. This isn’t exactly a surprise – Xiaomi has always emphasized ecommerce sales beyond its own website, with deals on Alibaba’s Tmall and Taobao in China. But in South Korea, where the ecommerce market is a bit more fractured, the company is spreading its resources around.

    The smartphone conundrum

    None of those stores, however, are selling Xiaomi phones – yet. Aside from the occasional short-lived sale online, it’s rare to see Xiaomi’s smartphones for sale in the country, other than second-hand or from random Chinese importers. Ecommerce market KT briefly sold Xiaomi phones in January, but had to close the sale after just two days citing “legal issues.” It’s not clear if Xiaomi officially backed those sales.

    But those “issues” haven’t scared Xiaomi away from the Korean market. Just today, the Korea Herald reported that Xiaomi has filed for a patent in South Korea for its Mi Pay epayments service – a phone-based service that can’t exactly be used with its battery packs or TVs.

    Xiaomi certainly has smartphone sales in Korea on its roadmap.

    The Mi Pay patent shows that Xiaomi certainly has smartphone sales in Korea on its roadmap. The Herald speculates what many have long expected – that Samsung and LG have put pressure on Korean retail companies and mobile carriers to keep Xiaomi out.

    But their embargo doesn’t look like it will last forever. Xiaomi has managed to find enough local partners to gain a solid foothold in the country, and it looks like it will only expand from here. Samsung and LG might not like it, but it looks like their Chinese competition will be hawking smartphones in their backyards any day now.

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  • Esprit sales flat, as expected

    Esprit sales flat, as expected

    Largely in line with expectations, Esprit sales were flat, the fashion brand says in its interim report for the six months to December 31.

    While its overall turnover was down 0.4 per cent overall, retail turnover grew 6 per cent while wholesale turnover fell 11.4 per cent.

    The gross profit margin for Esprit Holdings was stable at 50.5 per cent, while the net loss of HK$238 million was in line with expectations. The group had a healthy net cash position of HK$4.2 billion with zero debt.

    Unfortunately, positive retail sales growth in Europe was offset by continued weakness in the wholesale channel, and negative development in the Asia Pacific region. Asia Pacific turnover declined 6 per cent year-on-year, mainly dragged down by China with its 11.6 per cent drop. China represents 46 per cent of the region’s turnover.

    In its breakdown of turnover in Asia Pacific, China led with HK$655 million, 7 per cent of group turnover. Then came Hong Kong (HK$185 million, 2 per cent, down 0.4 per cent), Australia and New Zealand (HK$162 million, 1.7 per cent, up 0.3 per cent), Singapore (HK$129 million, 1.4 per cent, down 4.7 per cent), Taiwan (HK$98 million, 1.1 per cent, up 6.5 per cent), Malaysia (HK$97 million, 1 per cent, down 2.7 per cent), Macau (HK$56 million, 0.6 per cent, down 12.7 per cent) and others (HK$43 million, 0.5 per cent, up 6.2 per cent).

    In the previous financial year, the group moved towards vertical integration which resulted in more cost-efficient product development and supply chain processes, allowing product improvements in terms of design, quality and value-for-money.

    To maximise the selling potential of its improved products, this past year the group started pursuing an Omnichannel business model. In its early stages, this has led to improvements in growing its loyal customer base “Esprit Friends” and fully integrating the commercial activities of all sales channels.

    In September, the group launched an intensive brand-marketing campaign to strengthen and rejuvenate its image.

    Performance during the first six months of this financial year (between July and December) indicated that the vertical and omnichannel model was an effective basis to turn around its business, the company said.

    In its report, the company paid tribute to its co-founder, Doug Tompkins, who died in December, describing him as a “conservationist, outdoorsman, philanthropist, agriculturist and businessman”. He and his then wife, Susie Buell, formed the company in 1968. Esprit’s collections are available in 40 countries, in about 870 directly managed retail stores and through more than 7500 wholesale sales points including franchise stores and department-store outlets. The Group markets its products under two brands, Esprit and EDC.

    Listed on the Hong Kong Stock Exchange since 1993, Esprit has headquarters in Germany and Hong Kong.

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  • Hyundai restyles 2017 Elantra to look like a luxury vehicle

    Hyundai restyles 2017 Elantra to look like a luxury vehicle

    Hyundai’s top-selling car in the United States, the Elantra, has been nicely restyled and upgraded to the point that its 2017 model could pass for a higher-priced luxury car.

    The new Elantra, which is already at dealerships, has a surprisingly refined ride and can be stocked with features like heated rear seats, driver-seat memory settings, automatic emergency braking with pedestrian detection and headlights that swivel to the side to illuminate roads during turns. The 2017 Elantra even has a hands-free trunk that opens on its own when a driver, perhaps laden with grocery bags, has the car’s proximity key fob in his or her pocket or purse and stands within 3 feet of the back of the vehicle for at least 3 seconds.

    It also comes with something that no luxury car has: Hyundai’s 10 years/100,000-mile warranty of coverage on the car’s powertrain and five years/unlimited miles of free roadside assistance.

    Starting manufacturer’s suggested retail price, including destination charge, is $17,985 for the base 2017 Elantra SE with six-speed manual and $18,985 with six-speed automatic — some $100 less than the starting retail prices for the base 2016 Elantras. The top 2017 Elantra — the Limited— has a starting retail price of $23,185, and prices can approach $28,000 when all luxury features are added.

    The Elantras have a new 147-horsepower, four-cylinder engine that generates 132 foot-pounds of torque at 4,500 rpm. It’s also lighter than its predecssors, even a loaded Elantra Limited weighs less than 3,000 pounds, according to Hyundai. As a result, the Elantra Limited test vehicle performed capably.

    The test vehicle impressed with its virtually vibration-free ride. The driver didn’t detect powertrain vibrations or any roughness, even when resting a hand on the Elantra’s gearshift lever when the car was idling. When the Elantra accelerated, some engine noise could be heard, but it was strong, not a buzzing sound.

    The restyled Elantra maximizes aerodynamics, which eliminate drag and help fuel economy. The test vehicle averaged nearly 29 miles per gallon in mostly city driving that was done primarily in Normal, not Eco, mode; with 14-gallon fuel tank, it could travel a noteworthy 400 miles in mostly city driving.

    The U.S. government rates the 2017 Elantra Limited at 28 mpg in the city and 37 mpg on highways for a combined 32-mpg average that makes the Elantra second best among gasoline-powered, non-hybrid sedans of its size.

    Inside, the Elantra is comfortable, particularly for front-seat passengers, who have up to 42.2 inches of legroom and nearly 39 inches of headroom. Back-seat passengers have 35.7 inches of legroom and 37.3 inches of headroom, which allows two adults to travel well. A nice touch is the pull-down rear-seat armrest with cupholders, which doesn’t flop loosely or rest at a downward angle.

    Rear seatbacks split 60/40 and fold down so that the Elantra’s 14.4-cubic-foot trunk can accommodate long items.

    Fit and finish of the Alabama-built Elantra tester was excellent, and the tactile feel of the car’s buttons and knobs was akin to a luxury car’s.

    However, the base Elantra SE doesn’t include a standard rearview camera nor does it have the hood-insulator material that comes on the Limited, meaning its interior isn’t as quiet as the Limited.

    A second Elantra engine — a turbo with 158 foot-pounds of torque — is due this spring, when the 2017 Elantra Eco debuts.

  • Online wine sales in China rising fast

    Online wine sales in China rising fast

    JD.com‘s head of wine business, Zhao Dabin, told in an exclusive interview that the retailer sold 400m yuan (US$61.5m) of wine direct to consumers in 2015. That figure is expected to triple in 2016, he said.

    JD also hosts pages for individual merchants, acting as a gateway to a new generation of mainstream wine consumers in China – beyond the gift-giving between government officials that has been significantly curtailed by the present regime.

    Wine sales through these JD.com-hosted, online ‘shopping malls’ for merchants are expected to hit 1.5bn yuan this year.

    His comments tally with those from several wine importers and merchants in China, which are freeing up investment for e-commerce.

    Total online retail sales of physical, consumer goods in China rose by 32% in 2015, to reach 3.2tn yuan, or US$492bn, according to Chinese government figures. Online sales of tobacco and liquor products increased by nearly 13% versus 2014, to 196bn yuan.

    JD is seeking to compete with larger players in the market, such as Alibaba‘s Tmall and Taobao platforms.

    In wine, JD’s Zhao sees a lot of potential. ‘Most of our wine consumers are still at entry level,’ he said. ‘Only 3% to 4% of our registered users buy wines at the moment. There’s still plenty of room to grow.’

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  • Indonesia can become ASEAN`s automotive production hub

    Indonesia can become ASEAN`s automotive production hub

    Indonesia has the opportunity to become an automotive production hub for the ASEAN and gradually replace Thailand as a car production base, according to the Ipsos Business Consulting Firm.

    “This is evident from the output trend of vehicle production, policies, and infrastructure, which continue to undergo improvements followed by increasing production capacity, domestic consumption, and export volumes,” Marcus Scherer, head of the Global Automotive Sector of Ipsos Business Consulting, stated here on Wednesday.

    Marcus hoped that the policy makers and stakeholders as well as automotive producers would consider this aspect as it will have a major impact on the supplies of automotive spare parts in the future.

    So far, Thailand has been the largest automotive producer in Southeast Asia, with an annual production of some two million cars as compared to Indonesia, which produced only some 1.1 million units in 2015.

    Indonesia has not yet been able to be at par with Thailand in developing its export market. It exported only some 23 percent of its domestic production in 2015, while Thailand was able to export some 55 percent of its domestic production.

    In 2015, the production gap between the two countries was some 810 thousand units, but in 2020, the gap is expected to narrow to 464 thousand units only.

    In order to take over Thailands position as the number one car production center in the ASEAN, Indonesia should be able to overcome the production gap through various combinations of solutions, Marcus stressed.

    The solutions should encompass increasing the production capacity of factories. In 2015, Indonesia had a production capacity of two million units of which only some 62 percent was utilized. Therefore, Indonesia should increase its follow-up investment to nearly US$2.6 billion for constructing new factories or for increasing the production capacity of the existing factories based on the assumption that utilization would remain unchanged.

    The latest Ipsos report highlighted the fact that although the export performance this time had not been significant, yet Indonesia had high domestic growth potential. This could encourage investors to harbor expectations for solid sales growth once they are able to gain access to the right markets.

    Douglas Cassidy, the Ipsos Business Consulting Indonesia director, stated that the global automotive players who had not yet had significant production bases in Indonesia would question whether they have been placed in the correct position to obtain a market share in the ASEAN whose total population reaches 600 million.

    Moreover, these players would also question whether they could maintain the market segment they already owned as other companies will surely also expand their operations in Indonesia and Asia, in general.

    Chukiat Wongtaveerat, a senior consultant manager at Ipsos Bangkok, concurred with the analysis of Cassidy on the current market situation but opined that Thailand was still able to safeguard its automotive industries.

    Wongtaveerat noted that several leading automotive producers had announced strategic steps to pull out of the Indonesian market, particularly Ford Motor Company and General Motors.

    He remarked that other leading players such as Volkswagen, Hyundai, and Mazda were not yet able to communicate their clear strategies to safeguard their strong and profitable market shares in the two countries, particularly in Indonesia, which needed consistent regulations and sustainable and supporting automotive infrastructure development in the face of the current downward sales trend.

    He pointed out that the business climate in Indonesia had not yet yielded significant benefits to the automotive industries. Based on the World Banks ease of doing business index, Indonesia is ranked 109 among 198 countries, while Thailand comes 49th on the list.

    However, the Indonesian government has set a target to rise in the ranking to reach the 40th position in 2018. Such an improvement, if it has to be achieved, clearly needs constant focus of the policy makers.

    Scherer noted that the current conditions in Indonesia were showing a positive trend, such as the easing of regulations on foreign ownership through its revised negative investment list and simplified licensing procedures.

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