Even More Bad News for Japanese Economy

It is expected that Japanese government will announce another stimulus package later today. It will be the third such package during the time of economic recession. The main goal will be to fight against the growing unemployment that is causing havoc among the ordinary people. It should be noted here that job security is much more important to Japanese people compared to the European or American workers.

The main problem is that Japanese exports have fallen sharply in the last few months. Each month, new figures come and more bad news can be heard. So, it is now a big challenge for Japanese government and they are helpless because export can only increase when consumers in Europe and America are interested to buy more. Even in Japan, people are worried for the future and consumer confidence is very low.

Japan: From Inflation to Deflation

Perhaps, because the language of Japan is not English that is why, we often forget that it is the second most important economy in the world just after the United states of America. The Japanese consumers buy a lot of goods and they also export a lot to the rest of the world. Now, because of the economic recession, the consumers in the country are very frustrated and they’re worried for their future. They’re also worried about their job security and they can clearly see now that the exports are falling for the country and that means that more and more jobs will be at stake in the country.

But as a result, people are now buying less amount of commodities and this is causing a lot of money is among the traders. So, Japan is heading for deflation because the demand is decreasing among consumers.

Maruti Ritz to Hit the Market in May?

Reports out in the media suggest that Maruti would release its next passenger car model Ritz in the second week of May. In fact, the launching date could be May 13 or 14. However, Maruti sources claim the hatchback car would go on sale in next fiscal year. Nothing about the tentative date of Maruti Ritz launch has been announced officially by Maruti.

Maruti Ritz will allow the car enthusiasts to choose between a 1.2 litre petrol engine and a 1.3 litre diesel engine. It is expected to go on sale for a price about Rs 4 to 5.5 lakhs. Its petrol version would not feature a KB series engine; rather Maruti is going to offer a new engine with the petrol version of Ritz. The engine for the diesel version is already available in Maruti Swift. Featuring a 1.2 litre petrol and 1.3 litre diesel engine, Maruti is looking to gain advantage on excise benefit for small car. Honda Jazz, which is expected to come in the market in the middle of June, could be a competitor for Maruti Ritz.

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Moneycontrol

Honda Insight: A threat for Toyota Prius?

Two Japanese automaker Toyota and Honda seem to be involved in a race in the hybrid car market in the aftermath of Honda’s new hybrid model Insight being hit the market. Toyota Prius has been a very successful hybrid model for the company in America, the largest hybrid market in the world. Honda Insight, providing same kind of performance and going on sale for a same price range, seems to have an instant impact on American hybrid market when it will be launched in America on Tuesday.

Honda Insight has already showed excellent prospect in domestic market (Japan) since its launch in February, outperforming Prius in terms of sales in Japan. Toyota did not have a very good year in 2008 in American market as recession hanged over USA. US car market has been struggling now and the demand for Prius has also been lowered over the last one year because of fall in oil price. Now that Honda Insight is emerging as a new threat for Prius, it is pretty much sure that Toyota would have to decrease the price tag of Prius in America.

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NY Times

Tata Nano vs Motorcycles

Tata Nano is going to be in the market from tomorrow. Mehdi Hassan has written about it in South Asia Blog: Will Tata Nano turn around Tata Motors’ luck? Well, I have to say that the car has got a lot of media publicity in the last few years. At one stage, some people might have thought that it was impossible to sell a car for $2,000. Tata Motors is making it possible and they deserve all the credit in the world for this. One of the things that many people are now saying is that whether the Nano will be an alternative to motorcycles? The price of this car is very close to the price of a motorcycle. So, there is no doubt that many people would think that whether they should buy a motorcycle or a Tata Nano.

As for me, I can neither drive a motorcycle nor a car. So, they look same to me. However, many people I know who own a motorcycle always dream of having a car someday. So, there is a possibility that many families would from now in India would go for Tata Nanos instead of motorcycles.

Tata Motors Prepared for Tata Nano Rs 1 lakh Car Launch

Tata Motors has taken extensive preparations for the much-awaited launching ceremony of Tata Nano which is known as People’s Car that costs Rs 1 lakh. This is reported to be the world’s cheapest car and that is why, curiosity about the car is high among the car enthusiasts. In the presence of more than 1000 guests and more than 100 media companies, the attractive car will be launched and thus, it would be the first passenger car in the world hitting the Rs. 1 lakh mark.

The estimated cost for the total event would be Rs 1.5 -2 crore in which a staggering amount of Rs. 1 crore will be paid to Showdiff, the event manager. Rs 30 lakh will be spent for the rental cost of the venue with the facility of 1000 car parking. As you can see that there will be a large number of people gathered together for the event, security has become a big issue to be addressed and Tata Motors has already hired a private security agency for ensuring the safety of the guests and it is expected that more than 150 security personnel will be deployed in the venue along with more than 200 local policemen and 30 bouncers will also be there to prevent any kind of chaos.

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NDTV

Toyota vs Honda: Battle for Hybrid Cars

At last, there is something as a new item that is not related to economic recession. These days, people are less interested about cars simply because they are worried about their purse more than everything else. As for Japan, the economy is suffering a lot and that is why people are not that much interested about buying new cars. However, life must go on for everyone including the giant companies like Toyota and Honda. Honda has caught attention of many people in Japan with hybrid car that is below 2 million yen. This car is called Insight and it has become popular. It can run on both gasoline and electricity.

Now, Toyota is thinking of developing a hybrid car below 2 million yen ($20,000) and Toyota officials are hoping that it would come within the 2 years. Well, you know that it has already some hybrid cars but they are not that cheap. In fact, the Honda hybrid is becoming attractive for many consumers in this time of tough economic condition. That is perhaps why Toyota is taking this market segment very seriously.

Car Sales in China Increased Significantly upon Government Stimulus

Domestic car sales in China have been increased significantly in February 2009 as the China Association of Automobile Manufacturers (CAAM) recorded 12.4 percent month-on-month increase and 24.7 percent year-on-year increase. In February, 827,600 units were sold in China. Government’s stimulus policy was instrumental behind the surging car sales in Chinese domestic market. China government declared in January that people would need to pay only half the purchase tax for the passenger cars with less than 1.6 liters engines. Passenger vehicles with engines of less than 1.6 liters contributed 70 percent of the total sales of passenger car market. Domestic car production in China has also increased by about 23 percent last month compared to the previous month of this year and the same period of the last month.

It is really very surprising to see such an increase in sales of Chinese car market, while the global auto market is struggling with slowed economy and the recession across the world now seems to be aggravated day by day. I think, this kind of government help is needed for those auto markets which have been badly hit by the economic slowdown across the world.

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Xinhua net

Japan: Record Deficit amidst Economic Recession

Everything in Japan is down today. There is less export, less import, falling share market, falling consumer confidence. The only thing perhaps is increasing is deficit. The real estate sector is suffering and there is no good news for the insurance sector too. Japan is a power house of car, consumer electronic products and machineries. The global economic slowdown means that there is less demand for these products. That is why, the country experienced  current account deficit for the first time in 13 years.

 

Reuters wrote:

The first deficit in 13 years came as the global financial crisis dried up demand for Japanese exports and, combined with a strong yen at the time, shrank the profits from overseas investments, including subsidiaries of its major manufacturers.

"The supply-demand dynamics have changed, and the current account balance indicates further yen weakness," said Kimihiko Tomita, head of foreign exchange at State Street Bank & Trust Co.

 

There is no hope for early recovery as it is a global problem not just limited to Japan. 

Toyota Financial Services: Bailout or Loan?

Just the other day, I wrote that Toyota Financial Services was in trouble and its officials sought government support amidst tough economic recession. George Borst President & CEO Toyota Financial Services has stated that too much was made about it in the media and in the blogs. In Toyota’s blog, he said:

So, let’s just set the record straight.

Unlike other companies that have sought government loans to keep their manufacturing and operations afloat, we are not seeking any funds for operational expenses. A role of the JBIC is to respond to financial disorder in the international economy. TFSC’s discussion with the JBIC is to explore additional sources of funding so that we can continue to provide consumers access to the credit they need.

Tata Motors Planning to Roll out Diesel Variant of Nano in 2010

Tata Motors, India’s no. 1 car maker, is now planning to launch the diesel variant of Nano by the middle of next year. You already know that Tata Motors will launch Tata Nano, which runs on petrol, on 23 March 2009. According to some company vendors, Tata has already asked them to supply parts for the diesel variants of Tata Nano and it is expected that vendors will start supplying by August or September this year.

Reports have it in the media that Tata Nano’s diesel variant would cost Rs 2 lakh. The petrol variant of Nano without AC goes on sale for Rs 1 lakh, while its deluxe version is priced at 1.4-1.6 lakh. Though Tata Motors has not said anything officially about the launch of Nano’s diesel variant, it is highly expected that the diesel version of Tata Nano will hit the market sometime next year.

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Economic Times

Economic Recession in Japan: What about the Jobs?

The economic condition in Japan is going from bad to worse. All the indicators of economy just indicate one thing: things are very bad and there is no hope of coming of good time soon. We hear bad news about companies almost on a daily basis. For most people living outside of job done, this bad news are just some more headlines about the ongoing global economic recession but for people of Japan, this is indeed a matter of being employed are unemployed.

There is perhaps one thing that we should not forget and that is most people in the upon considered a matter of job security much more importantly than people of the United States. Many of them have the tradition of doing just one job for their whole life that means They enter into a company in a young age and continue to work there until they retire in old age. This is not uncommon and many people do it. So, it has caused a lot of anxiety and tension among the people and I feel that the companies and the government are not addressing the issue adequately.

 

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AFP

Toyota in USA: Does it Need Financial Assistance?

You know that because of the economic crisis, the car industry of USA is under a lot of pressure and it can really cause a lot of damage to the overall economy of the country. Toyota is a Japanese company but in the last few years, it could become a very strong player in the U.S. auto market. Now, like other companies, it is also suffering and we have already seen that it is suffering a lot in Japan. So, you may wonder whether the Japanese company should seek financial assistance from the American government or not?

Until now, we have not seen any significant sign of this matter that Toyota may request for financial assistance from the U.S. government. But however, if they really do so then I think that the current administration in Washington should become generous and provide some financial assistance because these are really very tough time for every one. 

End of the Road for General Motors!

It’s a very sad news and just pray that it does not come true because if General Motors gets close down then surely it will become a shock not only just for the U.S. economy but for economies of many countries. Auditors if the company has raised serious doubt whether the company can survive in the long run and they’re not hopeful that the company can continue to operate for a long time.

 

CNN wrote:

General Motors Corp.'s (GM) auditors cast doubt Thursday on the auto maker's ability to survive without more U.S. government loans in a foreboding confirmation of its financial plight.

GM's continuing losses, negative net worth and an inability to generate cash for continued operations across its global operations led auditors to determine there is substantial doubt that it can remain a going concern.

The warning was contained in GM's delayed 10K filing with the Securities and Exchange Commission, and the statement forced GM to seek waivers from lenders.

 

If you think that the fish use of a rival companies like Toyota are now in a celebratory mood then you are wrong because Toyota is also suffering a lot. 

Toyota Facing First Operational Loss in 59 Years

Japanese carmaker Toyota Motor Corp. is facing a serious problem as it is losing its share in the US car market, the largest car market in the world. The economic recession is getting aggravated day by day and the global auto market is having its impact at this moment. Toyota recorded 40% drop in the US market as the demand fell in the US car market significantly. Toyota is now going to see its first operational loss in 59 years due to economic slowdown world wide. The situation has been intense for the Japanese automaker due to surging Japanese currency against foreign currencies.

Well, other automakers are also facing the same problem as overall car demand fell in the US car market. Japan’s second largest automaker, Honda, has seen 38 percent fall in its US sales. Nissan Motor’s sales drop by 37 percent, while General Motors experienced 53 percent drop in its sales. GM and Chrysle are surviving on government bailout at this moment.

Well, I think, Japanese government should also provide similar help to Toyota because if the company drops its domestic production, many people in Japan will be unemployed and that would be an added pressure for Japanese government. Moreover, Toyota should also focus on low-cost car models which will have huge demand in this time of economic recession. Toyota should also give more importance on the fast-growing markets like India, China and Russia. Toyota has recently announced that it would set up its second manufacturing plant in India, looking to gain more advantage of India’s cheap labor and low production cost. By reducing operational cost, Toyota can offer more competitive price for its products in the US and European markets.

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Bloomberg

Toyota Financial Services in Trouble

Just one year ago this time, I can remember that the officials of Toyota were in celebratory mood as they are saw that their company was the number one car maker in the world. Well, I don’t blame them because hardly anyone can predict that the economic recession would become such a big deal just one year later. Now, the company is seeking government help to finance some of its projects and I guess that Japanese government will listen to them because Toyota is a very important company for Japanese economy. The company not only is a big Export earner for the country but also the same time many people do  jobs in this company and you have to agree with me that Toyota symbolizes the power and a strand of a job and in world economy. Toyota Financial Services gives loans to consumers and this may help them to buy cars. The funny thing is that this company now needs some loan and assistance from the government so that they can survive.

 

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Bloomberg

Will Global Economic Recession Continue in 2010 Too?

In the last few weeks, I have covered a lot about global economic recession in my blog South Asia Blog. It is clear that economic recession fast started in USA and if you want to have an end to this problem than the end to must start from the same country. Well, I do not see any hope of the economic recession ending in 2009. I feel that we will need to wait at least one year.

What I am worried is that there is no clear vision from any country about coming out of the bad time. It seems that most of them just want to find a way to tackle the bad condition but they are not working on bringing the recession to an end.

What do you think about it?