CARS IN EMERGING MARKETS
A global love affair
Nov 13th 2008From The Economist print edition
Emerging markets are the car industry’s big hope. But it won’t be an easy ride, says Matthew Symonds
The latest car suveys show that the American makes of cars have been declining while that of India, Brazil, china and Russia are increasing. The makes in the US that seem to be decling lately because of the recession have started merging with other car brands inorder to save their company. While this sales have been declining, the car sales in India and Africa are going high despite the recession in the US. This is because the people in the US take up loans to pay for their cars but the car dealer in the India and Africa only allow very small car loans. So the people have to save up and pay for the car before they get it. The big number of loans taken by US companies are too high now and some are thinking about bailling out. The only way they can save their brand and companies is by merging with other companies.
The Car Market
The fact that the US's recession has caused a big fall on the market showed that the car industry was likely to hit rock bottom for cars are grouped a as part luxury goods. The decline in the US care market seems to be providing new market for car companies such as the BRIC to sell more. The recent research shows that the Bric will be selling more that 30% its normal sales because to the decline in the US makes. The Brics who had the worst care sales in 1992 seems to proving otherwise because of where it is located. Being located in India and parts of Africa, it does not does not give big car debts like the makes in America do. Many of its customers do not have debts from them and the ones who do are very little. The joining of the car companies joining will create a monopoly in the market. This may effect car prizes, since they wont have any competititors in the market after the merging. The government may have to come in and regulate the car prizes since the car companies will be trying to make up for the loses that they are making now that the recession is taking place. The government should watch the car companies as they are going through this period to protect the pockets of the people who need cars.
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Do to the fact that the U.S market is slowing down,it makes sense that companies such as U.S branded cars are due to take the effects from it. it will take a while for U.S car companies who are facing of an economic crisis to regain it's financial support to continue the manufacture of their own brand.In my opinion the idea of U.S car companies merging with other countries car companies is a way to increase demand, since the merging with other countries will lower price because no competetors comes with more endorsments to new cars with lower cars, which helps regain loses of the U.S car companies.
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