Why the festival season may not bring much cheer despite tax cuts by govt

International News
Poor demand from Indian consumers could dampen the mood during festivals next month, especially for automobile makers and retailers that count on the season for a sales boost, analysts predict.
Indians typically buy everything from new cars to shoes for themselves and as gifts during celebrations steeped in religion and tradition. Yet the slowest economic growth in six years, unemployment at a 45-year high and tepid private consumption may see sales fall short of recent years, even after the government’s $20 billion tax break to companies earlier this month.
“You can make the product 50% cheaper, but there has to be income to spend,” said Nitin Gupta, an analyst at SBICAP Securities Ltd. in Mumbai. “In the short-term, I don’t see any kind of an income boost. Rather than giving cash to individuals, they have given it to companies.”
Car sales in August fell the most on record and Maruti Suzuki India Ltd. Friday reduced the price on its Baleno RS model by 100,000 rupees ($1,420) to pass on the benefit from the tax cut. Market researcher Nielsen has lowered its 2019 growth estimate for fast-moving goods to 9%-10% from 11%-12%, while a stock gauge of consumer discretionary firms is set for its first annual back-to-back losses since at least 2005.
Even so, the industry’s fortunes beyond the approaching festival season are poised to improve, according to BNP Paribas SA. Plentiful rainfall seen this monsoon season and cash handouts to farmers will help lift rural incomes, helping sales of staples recover in the second half of the year that began April 1, the brokerage said in a recent report.

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Ford investing $1 billion, adding 500 jobs in Chicago factories

Companies News:

Ford Motor Co said it is investing more than $1 billion in its Chicago operations and adding 500 jobs as it prepares to launch three new SUVs this year and end production of the Taurus.
Ford said it is building a new body shop and paint shop at its Chicago Assembly plant, and making major modifications to the final assembly area. At Chicago Stamping, Ford is adding stamping lines, the company added.

The investment comes as Americans continue to shift away from cars in favour of SUVs, pickup trucks and other larger vehicles. Last year, US industry car sales fell 13 percent, while light trucks rose 8 percent to 10.9 million, accounting for about 63 percent of vehicle sales.
Ford announced last year it was largely exiting the sedan market in the United States with the exception of the Ford Mustang. The company's US car sales fell 18 percent last year, while SUV sales rose 0.5 percent.

The Chicago assembly plant will stop building the Ford Taurus at this end of this month as it boosts SUV production. Ford said last year it was ending North American production of cars like the Focus, Fusion, Fiesta and C-Max.

The full-size Taurus, when introduced in 1985, was credited with reviving profits at Ford. It redefined US car design with its jelly bean shape and was the top-selling model in the United States five times between 1992 and 1997. US Taurus sales, which peaked at 409,000 in 1992, fell to 28,706 last year.

 The Dearborn, Michigan, automaker is eager to highlight that it is building more vehicles than its rivals do in the United States. Ford built nearly 2.4 million vehicles in the United States in 2018.