NEW YORK, June 27: Japanese automakers who had so long resisted the lure of such a massive and expanding market have now shed their shyness and planning big investments in India. Nissan Motors in collaboration with giant French automaker Renault will be investing $1.1 billion. The project is expected to be completed in two years with an annual turn over of 400,000 cars.
Japan's three big automakers Toyota, Honda and Nissan have ventured out but have been cautious about investing in India. These companies have investments in North America, China, Thailand, former Soviet Union and even in Saharan Africa. These companies still regret the delay they made into going to China. Volkswagen and General Motors have reaped rich harvest by going to China earlier than others.
India with its growing middle class is seen as a megamarket after China. The aggressive moves by traditionally cautious automakers are the latest signpost that the epicenter of global auto industry is shifting increasingly from California/Detroit to areas between Canton in China and Calcutta in West Bengal, India. India, Brazil, China and Russia are becoming attractive markets.
The US auto industry is in bad shape.. The developing markets like India and Brazil were an after thought now they are the emerging markets.
In the past seven years, in stark contrast to US automakers, Japan's Nissan have nearly tripled its sales in developing countries. It sold 1.0 million units out of company's total production of 3.7 in emerging markets.. Honda which relied too much on the US markets are now spreading globally. The auto sales are expected to expand by 10 million units over the next six years, New York Times (NYT) said.
Japanese investments in Russia, Morocco, China, Middle East, South Asia and Latin America will be significant in coming days. Japanese are not alone. Ford, BMW and Hyundai have made huge investments in India.
Meanwhile, American Express is set to win a payment of $18 billion as a settlement of claims related to ani-trust law suit filed by American Express in 2004 against credit card rival MasterCard. American Express received $2.1 billion from another reputed credit card company, Visa.
American Express's gain amounted to $4.0 billion said to be the largest settlement in corporate history. It has come as a boon for American Express at a time when the country is passing through a recession.
The US Supreme Court in 2004 had ruled that Visa and MasterCard had violated anti-trust by barring their member banks from offering credit cards that could be used on rival payment networks.
In another development, it was sheer coincidence that Bill Gates the richest man on the planet with a personal wealth of $100 billion announced his decision to quit the chairmanship of Microsoft last Thursday, the day Dow Jones took its steepest plunge sending shivers through the spines of economic policy planners across the world.
The Dow Jones Industrial average tumbled 358 points. The blue chips index closed at 11,453, lowest since September 2006. The financial analysts are predicting another round of steep losses at big companies like citigroup.
A day after Nissan, the Japanese automaker and its French counter part Renault announced an investment worth $1.0 billion in India, American giant General Motors suffered the most, its shares plunging to the lowest since 1974.
Bill Gates, only 52, who meticulously built his personal empire the Microsoft , will remain the largest shareholder of the company but devote more time to the Gates Foundation, which provides medicare to fight malaria and AIDS in various parts of the globe. Gates will attend office at Microsoft , once a week.
And in Dow Jones the downgrade in the financial industry and fear over the declining health of the auto sector in US were attributed as the major causes for the steep slide.
There have been some major developments in airline industry. The European Union (EU) in a strong bid to reduce the pernicious impact of the Global Greenhouse gases has decided to apply pollution credits beginning in 2012. Non-EU airlines like American Airlines and Singapore Airlines will be required to buy pollution credit. It was seen as the boldest move to stamp its environmental policies on the rest of the world.
The US mission chief to EU reacted sharply saying ' the mandatory application of the European Emissions Trading System to American airlines and airlines of other non-European countries is we think both contrary to international law and ultimately unworkable'.
In the meantime, four international airlines namely Air-France-KLM, Cathay Pacific, Martinair Holland and SAS cargo group will together pay a penalty of $504 million to settle the charges that they unduly hiked cargo shipping cost. Air France-KLM alone will pay $350 million leaving the rest to be paid by three other airlines. Other airlines which took course of paying penalties were British Airways, Korean Airlines, Qantas and JAL. The total penalty amount now stands at $ 1.2 billion.
