Month: February 2012

East-West Car Markets

 

Since the Indonesian economy is currently growing in leaps and bounds, it seems to be the place to sell cars.  Of course, once one has some extra money to play with, a great way of showing it off is via his or her new flashy cars.  Auto manufactures around Asia are honing in on this newfound wealth as well.  Indeed, in 2011, Indonesians purchased 890,400 cars – a figure – according to Frost and Sullivan, that is set to increase to close to 940,000 this year.  As well – perhaps somewhat surprisingly – it seems that now Thailand is lagging behind Indonesia in the region. 

Foreign Eastern Automakers

In addition, automakers from out of Indonesia in 2011 promised to put close to $2bn into the country over the next few years, but time will tell if this is actualized.  Currently, Japanese manufacturers hold 90 percent of the market with Toyota boasting a second production plant about to launch.  As well, Suzuki is planning a third and Nissan is hoping to spend $250m to expand its current facilities.  Toyota also aims to boost its production by 70,000 by next year.  Both Nissan and Suzuki enjoyed huge increases in sales last year (Nissan by 50 percent and Suzuki by a third).

Foreign Western Automakers

It is not just companies in the east who are trying to make big profits in Indonesia in the car market.  Ford and General Motors are also trying to get in on the act.  For example, in 2011, Ford sold double the amount of cars it did in 2010; it hopes to repeat this success this year too.

American Airlines Outsourcing East?

Historically, American Airlines has not followed the regular trend of outsourcing its maintenance works east. But now it seems it will be following suit as aircrafts like the Boeing 767 and 777 that require work could be on their way out.  Southwest Airlines for example, already sends its aircrafts to Canada and El Salvador for maintenance.  As one expert pointed out, since the aircrafts anyway fly everywhere, they can thus be maintained anywhere. So what airline companies are seeking is competitive pricing. And ultimately, with that on the table, American companies just can’t compete.

Safety First

This issue has been discussed previously; whether jobs should stay at home or be sent away. But now the question being asked is whether it is really as safe to send aircrafts away for maintenance since the feeling is the US do a better, more thorough (and thus safer) job.  As well, the Transport Workers Union is concerned that government inspectors are not able to properly oversee “third-party maintenance facilities.” Since third-party companies are generally not FAA-certified and lack the necessary quality controls, this raises the risk factor.

This is probably why American Airlines has stated its intention to use its own mechanics to do the bulk of its maintenance work and just outsource 40 percent of it; safety first, being a priority.

IT in India Escalates

A recent economic forum held in India concluded that India should be looking towards the possible creation of local jobs outside of the confines of its country.  It seems that vis-à-vis keeping jobs at home or away in Asia, there are various schools of thought currently abounding. HCL Technologies for example, believes jobs should be sent out of India, but other companies (like those in the auto and furniture industries), disagree.

At the World Economic Forum Annual Meeting, it was discovered that HCL Tech will be setting up 10,000 jobs within the next five years.  But these won’t be in India; the jobs will be located in the West – throughout the United States and Europe.  One expert at the Forum pointed out that since globally there are various different economic/business problems, India should look at this conference and see how it can help it out, not hinder it.

Recently, Angela Merkel, the German Chancellor, pointed out that companies should invest in Europe but to do so, jobs need to be created.  Thus the HCL initiative will change the view that Indian companies are taking away jobs from people living in the West.

And of course we already know that trends within the Indian IT market are changing significantly, especially vis-à-vis pricing escalation.  Thus India’s IT market needs to look at “new growth models” and other available options if it wants to keep up with global movement in the IT market.