The global mobile phone industry has been growing at a rapid pace due to rising demand for advanced cell phone. In 2008, the mobile penetration rate is expected to cross 50% mark.
The International Telecommunication Union (ITU), a UN organization, revealed that the penetration of mobile phones worldwide would rise to 50% in early 2008 against 12% in 2000, as per reported by Economictimes.
However, till the end of 2007, the mobile penetration reached 48% while at the end of 2006, it was at 41%. Moreover, ITU also highlighted that the figure of mobile subscribers worldwide will cross 3.3 Billion in 2008. This sustainable growth in the global mobile industry is attributed to fast acceptance of cell phones in developing countries including India, Brazil, Russia and China.
The mobile technology has become blood veins for economic development in developing countries because it has emerged as the cheapest and fastest way of communication for small businesses and enterprises. In addition, it has become an inevitable component for economic progress of population as whole.
Another reason for significant growth in the mobile phone industry is rapid economic growth in developing countries like India, China, Pakistan and Russia due to which the disposable income of people have increased and they are purchasing cell phones. Besides, growing competition among mobile companies of these countries have substantially reduced tariff rates and prices of handsets, thus making mobile phones affordable to people and contributed to the boom in the industry worldwide.
Not only this, introduction of new and more advance technologies like Mobile TV, 3G, 4G, Mobile WiMAX, and other services have caught the attention of consumers both in developing and developed countries. Mobile companies have targeted the young generation because cell phones are not mere a device for communication but an extremely advanced device with effective business applications. Moreover, integration of relatively new technologies like GPS, mobile e-mail service, and video camera too has created demand for cell phones around the world.
According to a Senior Research Analyst at RNCOS, "Increasing demand for mobile entertainment and technically advanced applications for business have infused growth in the mobile industry worldwide. Alternately, excessive use of mobile phones will help in improving the conditions of people as more and more businesses are relying on cell phones for carrying out their daily operations and activities."
posted by RNCOS @ 2:44 PM,
The US automotive industry is under the grip of indifference of people because people's disposable income is declining and unemployment rate is rising.
The US auto industry will see tough time in the first five months (February to June) of 2008 but Paul Taylor, Chief Economist, the National Automobile Dealers Association (NADA), anticipated that the situation will get better in the second half, as reported by AssociatedPress.
Besides, NADA also highlighted that the sales of cars and light trucks fell 6.7% with 15.2 Million annual, a significant down as compared to December 2007. Not only this, the NADA also predicted downturn in the industry for whole year with sales drop to 15.7 Million, a 2.5% decline from previous year's 16.1 Million-vehicle sale.
There are multiple reasons for the low sales prediction in the industry like slow economic growth, credit problems, decline in sales, and rising unemployment in the country. Taylor also predicted that unemployment rate will rise 5.3% from 4.9% in January 2008.
According to NADA, the overall economy is predicted to be less than 2% increase in GDP for 2008. Consequently, the wages of people will come down and they will avoid buying new vehicles.
Including these reasons, rising petrol prices and increasing cost of home heating and cooling are putting extra burden on the budgets of people. As a result, people are not spending on automobiles in the US. Moreover, people are avoiding trips and using less fuel, affecting the demand for new vehicles negatively in the country.
Experts have also attributed low housing market for slowdown in the automobile sales. People are more inclined to buy new homes in place of buying new vehicles due to fall in mortgage rate.
In order to bring the automobile industry back on the track, NADA has ventured with AutoTrader.com, the leading online classified marketplace, to launch new online seminar series. The seminar, "Automotive Internet Marketing: A Traditional Approach to Non Traditional Media", will start from spring 2008 and provide auto dealers a platform for using Internet for auto marketing.
As per a Research Analyst at RNCOS, "Rising petrol and energy prices, slowdown in housing industry, and increasing unemployment is taking away US consumers from automobile market. Therefore, auto dealers review their current policies and devise new ones that encourage people to buy vehicles without burning hole in their pocket."
posted by RNCOS @ 10:04 AM,
Sales reported by the Indian automobile industry dropped by 10.34% in February 2008 due to bad performance by two-wheeler segment and poor credit system in the country.
According to the Society of Indian Automobile Manufacturers (SIAM), the total sales of automobile industry slumped by 10.34% in February 2008. The main cause of decline was the falling sale of motorcycles that plunged by 17.68% in the country, as reported by Hindu.
As per the data released by SIAM for February 2008, 742,027 vehicles were sold in the domestic market in February 2008 whereas 827,594 vehicles were sold in the corresponding month last year. Industry experts held the two-wheeler sector responsible for the fall as its sales slipped down by 14.25% to 542,578 vehicles in February this year against 632,712 vehicles in February 2007. Passenger car segment marginally improved with 94,756 cars in February 2008 against 92,618 cars in February 2007, though the fear of high interest rates is still threatening the industry.
According to the industry experts, poor credit system for automobiles is the main cause for decline of automobile sale in the country. Some particular markets are devoid from credit financing and the markets where credit is available, interest rates are maintained high. Tight credit policies are adversely affecting the growth of the Indian automobile industry. Moreover, spiraling fuel prices are also keeping customers away from buying vehicles.
Apart from this, customers deliberately postponed their plans of buying vehicle in view of some relaxation in excise duties in this year's budget. Even the prices of automobiles increased significantly creating pressure on consumers. Now the automobile dealers are pressurizing the government for reduction in excise duty over new automobiles to fuel the demand.
Hence, Indian Finance Minister, Palaniappan Chidambaram, curtailed excise duty from earlier 16% to 12% on all vehicles including buses, small cars and two wheelers in the current budget. This initiative will certainly help in boosting the demand for automobiles in the country.
A Senior Research Analyst at RNCOS said, "Poor credit system in India is capping the sales growth in the automobile industry though the country has been continuously growing at a rapid pace on the economic front. In such circumstances, auto dealers and manufacturers should come up with new lucrative policies like easy availability of loans and flexible repayment schemes so that consumers are encouraged to buy new vehicles."
posted by RNCOS @ 5:02 PM,
The South African automobile industry is facing tough time and the same trend will continue in coming month because of global economic slowdown and rising oil prices.
The National Association of Automobile Manufacturers of South Africa (Naamsa) reported that the sale of new vehicles declined by around 10% in the first month of 2008 as compared to the corresponding month last year, as reported by Wheel24.
Naamsa also revealed that the sale of new vehicles for January 2008 witnessed a plunge of 4,916 Units against during the corresponding month last year. The total number of passenger cars sold in January 2008 was 30,483, a decline of 14.6%, equal to 5,204 Units as compared to 35,687 Units in January 2007.
According to the officials at Naamsa, economic slowdown is severely hampering the South African automotive industry. Moreover, the Reserve Bank's announcement of hike in interest rate by 4% in June 2006 to control the inflation is also stopping consumers from buying new vehicles. Besides, people's domestic demand is keeping the credit demand high and pushing down the household debts and consequently, affecting the disposable income of people negatively.
Experts have also credited the rising personal debts for poor performance of the South African automotive industry. Moreover, the country is witnessing a sharp increase in the unemployment rate and fall in the earning of people and as a result, people are less inclined towards buying new cars. Another big reason for slowdown in the automotive industry is spiraling global oil prices.
Additionally, in coming months, the unstable exchange rates and vulnerable global financial markets will test the market sentiment and trading conditions of the automobile industry. Besides, growing uncertainties about the South African economic growth due to power crisis and deficit in current accounts are also the main reasons for underperformance of the industry.
As per a Research Analyst at RNCOS, "The South African automobile industry is striving hard to overcome the problems arising due to global economic slowdown and rising gasoline prices. Even banks are maintaining high interest rates. Therefore, auto dealers should device policies pertaining to loan and payment of loans so that people come forward and buy new vehicles. Moreover, auto dealers should also come up with innovative designs that generate curiosity among customers for buying."
posted by RNCOS @ 12:02 PM,
The Japanese automobile industry grew modestly by 0.1% in the last month against the corresponding month last year as the personal incomes of people are mounting.
According to the Japan Automobile Dealers Association (JADA), sales of new vehicles, including cars, buses and trucks, increased 0.1% in February 2008 as compared to corresponding month last year, raising the figure to 322,613 vehicles, due to release of new models by leading manufacturers, as reported by Forbes on March 3, 2008.
Japan Automobile Association disclosed that the automobile industry grew significantly in February 2008 from 3.7% rise in January 2008. The biggest reason for growth in the automobile sector is increasing sale of Japanese cars which increased 1.6% to 286,278 in February this year.
Yoichi Amano, Chairman, JADA, said that introduction of new credit system and Tokyo Motor Show in October 2007 collectively contributed in increasing demand for new cars in the country. Beside, more fuel efficient cars' demand is also rising to replace the older cars as crude oil prices are spiraling, as reported by Forbes.
Another reason for high growth in automobile industry is changing social status of Japanese people. They consider car as a symbol of social status and individual freedom. Apart from this, Japanese auto dealers, along with manufacturers, are widely promoting their products through advertisements to create curiosity among youth for buying new cars.
The changing transportation structure has also given rise to usage of more trucks in the country. Moreover, high employment rate and increasing wages of Japanese is jointly spurting the overall automobile sales in Japan.
JADA officials also forecasted moderate growth in the automobile sector this year and its recovery from last year's plunge when the industry fell to the lowest point in last 35 years and fourth time in a row. However, the sales still greatly depend upon the volatile crude oil prices and economic trends to be seen in the country in future.
As per a Research Analyst at RNCOS, "Good time lies ahead for the Japanese automobile industry and it is still performing quite well though the global automobile industry is facing tough time due to escalating gasoline prices. It is a result of combined efforts of automobile dealers and manufacturers who are boosting sales by their strategic marketing plans and launch of new models."
posted by RNCOS @ 1:03 PM,
As the economy in Australia is growing impressively, its effect can be seen on the car industry as Australians are increasingly buying new cars, ensuring growth in the industry.
Federal Chamber of Automotive Industries (FCAI), Australia, revealed that sales of new cars and trucks touched a record level in January 2008, as reported by daily telegraph.
The FCAI sales bulletin, VFACTS (Vendor Field Analytical and Characterization Technologies System), noted a 6.9% hike in retail sales of new cars and trucks in January 2008 compared to the corresponding month last year. The total number of cars and trucks sold in January 2008 was 82,270 Units.
The figures mark a continued record growth in the industry. Moreover, more than one million cars were sold last year, an achievement of touching seven-figure milestone in the calendar year.
Andrew McKellar, FCAI Chief, said, "One Million new motor vehicles sales in a country of 21 Million people is an impressive achievement by the Australian automotive industry - and ranks as one of the highest rates of new car purchase in the developed world", as reported by Brisbane Times.
Profits and sales are rising on account of rising sale of small cars, SUVs, and Light Commercial Vehicles (LCVs) like utes. Besides, car manufacturers are putting their time, effort and money to lure new customers.
The growing economy of Australia has increased the disposable income of its citizens greatly. Increased income and easy availability of car loans at affordable interest rates are encouraging consumers to purchase cars. In fact, these reasons boosted new car sales last year as well as in January this year.
Additionally, incentives, like free insurance, free petrol and free tickets to events, have succeeded in enticing buyers to go for brands other than the known ones.
A growing labor market and rising asset value in the country have also played their part in the growth of the industry. Consumers are turning away from high priced assets and using their money to buy new cars.
According to a Research Analyst at RNCOS, "Australian car industry is experiencing high growth, reflecting the economic prosperity of the country. But the large car segment of the industry is under tough situation because of their declining sale. Thus, the car industry needs to put greater effort into selling large cars to ensure a balanced growth in automobile sales."
posted by RNCOS @ 3:37 PM,
2008 started with a solid start for the Philippine auto industry as sales of cars shot up significantly with the availability of a greater variety of new models of cars.
The Chamber of Automotive Manufacturers of the Philippines Incorporation (CAMPI) reported a great beginning for the Philippine auto industry this year as car sales, in January, shot up 17% year on year, as reported by pacificnewscentre.com.
The CAMPI also revealed sale of 8,808 Units in January 2008 by the industry. The period saw phenomenal growth in the passenger car segment with sales growth of around 29%. But the market supremacy of Commercial Vehicles (CV) remained intact as the segment captured 69% of the market share and registered sales growth of 12%.
CAMPI President, Elizabeth Lee, said, "It is a good showing for the industry to jump start the year 2008 with a strong growth", as reported by pacificnewscentre.com on February 11, 2008.
Much of the credit for the solid growth in the industry goes to the first Philippine International Motorshow held in the country. A vast array of new models was launched by most manufacturers last year that led to a spurt in passenger car segment sales in January 2008. Around 5,844 Units of passenger cars were sold in January. New consumers are also opting for new models due to international style and easy affordability.
The hike in sales was also stimulated by the final decision of Supreme Court on putting an end to imports of second-hand vehicles, forcing consumers to opt for new cars.
In case of both passenger cars and CVs, demand shot up tremendously in 2007. As a result, overall vehicle sales in January 2008 went up as well. Apart from these reasons, financing promos too contributed. Introduction of a greater number of diesel vehicles by the auto industry boosted the sales because petrol prices are rising faster than diesel.
As per a Research Analyst at RNCOS, "The automobile industry of Philippines is in midst of a boom with increasing sales and new models flocking the market. The growing demand for passenger cars and CVs is forcing the industry to provide desired cars along with easy finance facilities to consumers. With fuel prices continuing to shoot up, manufacturers also need to come out with fuel-efficient vehicles on a regular basis to ensure new vehicle sales."
posted by RNCOS @ 3:23 PM,
Car exports from Indonesia, including CBU, CKD, and automobile components, have been growing. The total export value touched $2.1 Billion in the country last year.
According to the data given by Industrial Ministry of Indonesia, the export of finished cars, car kits and car components reached $2.1 Billion previous year. This year, the industry is aiming to further raise the export of car and auto components to US$ 2.9 Billion, as reported by news.xinhuanet.com.
The industry has projected the export of Completely Built-up (CBU), auto parts, and Completely Knocked Down (CKD) cars to go up by around 40% in terms of value in 2008. It is expected that export of CBU cars will reach to 75,000 to 80,000 Units against 55,000 Units last year.
Budi Darmadi, Director General, Transportation Vehicle Industry & Telematic, Industry Ministry, said, "Indonesia is optimistic the value and volume of car and automotive component exports would increase in 2008 as car making principles were increasingly allowing the automotive industry in Indonesia to export", as reported by antaranews on February 6, 2008.
There are many factors supporting the forecast for increasing export from Indonesian automotive industry this year. Tanjung Priok, a newly built carport in Jakarta Special Province, is one of them. It is expected that this port will boost the production and provide a platform to producers to export their cars and automobile components in different countries worldwide. Moreover, this port facilitated producers to export their cars conveniently, which earlier was a very difficult task.
Besides, Indonesia is rapidly transforming itself by building new infrastructure facilities and modernizing the existing ones. Improvement in transportation facilities will draw investors who earlier steered clear of investing in the country or making it their production base. The Indonesian automotive industry has the potential of producing 900,000 Units annually, however, the domestic market is expected to consume over 500,000 Units this year. Hence, it becomes inevitable for car producers to increase export so that surplus production could be disposed in the international market.
According to a Research Analyst at RNCOS, "Indonesian automotive industry grew phenomenally last year and export of cars and car components touched a new high. This high growth reflects that coming years will be very fruitful for the industry but to maintain this growth rate, the industry should keep introducing new models of cars."
posted by RNCOS @ 3:48 PM,
Chinese imported automobile industry is consistently growing and CTCAI has predicted that it will grow by 20% this year, an alarming situation for native car manufacturers.
China Trading Center for Automobile Import (CTCAI) has predicted that import of cars will exceed 360,000 Units in 2008, a YOY increase of 20%, as reported by chinatradeinformation.net.
As per the findings of CTCAI, Sports Utility Vehicles, or SUVs, formed the bulk of imported cars and they will remain the most popular imported cars in Chinese market. Official figures released for first eleven months of 2007 (January - November) showed that an annual growth of 65% was recoded in the volume of imported SUVs, which was equal to 126,659 Units.
The US, Japan, Republic of Korea, and Germany are the main countries from where China imports maximum number of cars. Out of these, Germany contributes 42% of sedans while 48% SUVs are bought from Japan. High economic growth of China is attributed for these magnificent figures.
Healthy economic growth and rise in personal disposable income has improved the affordability of imported vehicles for Chinese people. Consequently, there is an outburst in the demand for imported vehicles in the domestic market and this is leading the industry on the right track.
Moreover, new models are catching the eyeballs of Chinese who are unable to suppress the temptations of buying them. Banks are also supporting the Chinese by offering easy car loans at reasonable rate of interest. The government is also taking necessary measures and has significantly declined taxes by enabling private car duties to be decided through open public tenders. These factors are collectively playing crucial role in increasing Chinese auto import.
Considering China will host the 2008 Beijing Olympics, auto dealers of the country are placing orders for more imported cars as foreigners prefer to travel and drive imported cars.
A Research Analyst at RNCOS said, "China's automobile import is rising, indicating good economic growth in the country. But it has become a cause of worry for native auto manufacturers because import has devaluated domestic cars. So domestic auto manufacturers are required to draw strategic plans and launch new models featuring imported cars traits and revise their pricing system. If consumers get cars parallel with imported cars in features at low price, then they will definitely opt for those cars."
posted by RNCOS @ 3:43 PM,
Brazilian auto industry experienced slump in new vehicles sale in January 2008 but expecting improvement in sales figures in coming months due to rising disposable income.
Anfavea, Automobile Manufacturers Association of Brazil, reported a decline in the sale of vehicles in the very first month of 2008 owing to seasonal trends, as reported by reuters.com.
There was a decline of 11.3% in sales of new cars in January 2008 as compared to December 2007 and sales reached 215,000 Units. However, it was up by 40.6% as compared to corresponding month in 2007. In January, Flex cars, that run on combination of gasoline and ethanol prepared from sugar cane, posted a drop in sale to 179, 731 Units from 200,686 Units sold in December last year. Nevertheless, the sale of flex cars went up significantly from last year January in which 120,199 Units were sold.
Industry experts attributed this decline in January 2008 to exodus of large number of Brazilians for vacations and this kept them away from buying automobiles. Although the sale of vehicles in January 2008 was less, Anfavea is anticipating the situation to get better in coming months and the sale is expected to grow by 17%, making up for 2.88 Million Units. On the back of rising domestic demand for vehicles, Anfavea also expected that output of automobile industry would grow up to 3.24 Million vehicles in current year.
Decline in interest rates and extension of repayment period of loans empowered Brazilians to expend on automobiles which, in turn, is boosting the automobile industry of the country. Both these factors will draw attention of Brazilians toward new automobiles in remaining months of the year.
Moreover, Brazil's economy is maintaining high growth pace and consequently, disposable income of middle and lower sections of its society is also rising. So people can now afford to buy new vehicles. Besides, industry experts recognize that increasing expenditure capability of Brazilians and introduction of fuel-efficient cars will continue to attract people in 2008.
According to a Research Analyst at RNCOS, "Brazilian automobile industry will keep breaking its past records in terms of selling new vehicles as people have easy access of credits at lower interest rates. January's sales of new vehicles in 2008 might have disappointed the automobile industry but in coming months, sales will increase as many factors are favoring growth in the industry."
posted by RNCOS @ 5:25 PM,
Slow growth in domestic market of South Africa is troubling the automotive industry and tough time will continue in coming months too. However, export can offset losses.
The South African automotive industry will face tough time this year as the sale of vehicles is slipping down, but export programs will help in minimizing the losses, as reported by allAfrica.
According to the data released by the National Association of Automobile Manufacturers of South Africa, the sale of new vehicles declined moderately to 47,296 Units in January 2008 against 52,212 Units in January 2007. It was a fall of 9.4%, however, the association is hopeful that export programs would help in recovering the losses.
Rising interest rates on financial credits seem to be the biggest cause for this decline as the demand for vehicle loan has slumped. In addition, housing debts reached 77.5% of the disposable income due to increase in domestic spending and ultimately, reining the growth in the automotive industry.
Export programs of many renowned motor-manufacturing companies, including Volkswagen and Ford, will prevent the automotive industry of South Africa from bleeding. These companies are all set to reap benefits from low production cost and trade agreement, which South Africa has signed with European Union. This will also give them access to new EU countries and opens 15 EU countries to goods from South Africa. This is expected to fuel the auto export.
These companies do not want to leave any loophole and will utilize the African Growth and Opportunity Act (AGOA) signed between the US and African continent in 2000. The Act provided access of the US market to 38 African countries. They can sell their products in the US without duty charges by complying with certain criteria such as market-based economy and obeying set rules. Now this Act has been extended for another 8 years (2008-2015). In fact, the automotive industry of South Africa has emerged as the largest exporter under this law. In 2001, when this Act was implemented, South African exports to the US were measured at $359 Million, up by 38.7%.
As per a Research Analyst at RNCOS, "Export program may help South African automotive industry to recover loss due to low domestic demand for vehicles, but to promote growth in this industry, the government has to come up with plans that increase demand and control inflation simultaneously."
posted by RNCOS @ 5:20 PM,
