Automotive Consolidation – Asian Influence
Ashvin Chotai of Intelligence Automotive Asia and I have just given a seminar at Chatham House in London on the outlook for automotive M&A activity in Asia and outbound from Asia. Although activity has dropped (90 deals in 2007, 30 in 2008), companies are still picking up some of the opportunities thrown up by the global turbulence. In the first quarter we saw purchases by Motherson Sumi – Visiocorp of Europe, Geely -DSI of Australia and BeijingWest – Delphi Brakes and Suspension business. Geely is now rumoured to be looking at SAAB. We expect to see more activity from Chinese and Indian companies although they face serious challenges in managing […]
Recession in Japan
As with the last recession, it’s hard to tell there’s actually one on. The restaurants and izakaya are still full and the shoppers are as indefatigable as ever. Nevertheless, politicians are talking about extending the social safety net. One reason for this is the move away from full employees to contract and part-time workers over the past two decades. This flexible workforce acts as a useful safety valve for companies as they can easily be fired in downturns, but exposes those people “downsized” to life without medical insurance or unemployment benefit. People have now started questioning the morality of this arrangement. In a recent Sunday morning TV political debate a […]
Well, we saw his arrival as a return to grey nothingness so his departure is hardly grieved. The “all-star” line-up on the LDP side presages a return to power for a non-LDP coalition – a rare event to be treasured, but, unfortunately not inspiring much hope. The chances of such a coalition ramming through sweeping reforms are not high. The best hope would be for the LDP to stay out of power for a couple of terms forcing them to seek a Koizumi-style radical to win back power. This might put a serious shake-up of the political, bureaucratic and legal structures back on the table.
Domestic Challenges for Japan's Automotive Industry
The blog name “Tsurezuregusa” is the title of a Japanese book written in the form of jottings and notes of the thoughts of a retired courtier in the 14th century. Donald Keene translated this as “Essays in Idleness”. From my long absence you may deduce either an excess or a lack of idleness. This month I’d like to share a few mental jottings and notes on some of challenges to the Japanese automotive industry which are less-visible from outside Japan. Whilst many of us are aware of the global-scale challenges such as maintaining technical competitiveness, managing global expansion and creating strategies for diverse markets, there are some interesting challenges on […]
Here’s an interesting demonstration of how things in Japan often follow a different logic from elsewhere. In the oil shock years of the 70’s, Japan imposed a temporary petrol tax to discourage excess consumption. Subsequently, throughout the (almost) uninterrupted rule of the LDP, the ruling governments forgot to repeal the “temporary” tax despite the fall in oil prices. Not such a serious problem as not many people use their cars for work here. The daily commute is usually by train or bicycle for most people. Suddenly, though, this month, the government, facing a situation similar to the oil shock- oil $100 a barrel, has decided to repeal the “temporary” tax. […]
Will the Rat bring Wealth?
The Year of the Rat might sound negative to Western ears, but actually these furry charmers are supposed to bring wealth. They are admired for their industriousness among other traits. There are mixed predictions for the Japanese economy this year, but “not bright” seems to be the consensus. Having noted all the reasons for the gloomy predictions, let’s focus on a couple of more optimistic points: There is the feeling of a New Deal in the air, with even the Keidanren saying higher wages would be good for re-kindling domestic demand. There appears to be a desire to re-enter the economy among those Freeters who chose not to join it […]
As the baby-boomers start to retire, receiving their retirement bonuses from their grateful employers, the opportunities in the financial sector in the next year or two are great for the well-prepared. There are also widespread predictions of greater leisure spending, but a counter-trend is emerging of companies re-hiring the retirees for a number of reasons: To cover the skills gap To prevent know-how being transferred to competitors in other N E Asian countries To utilise a low-cost resource For some time now, retired Japanese managers have been working in Korea and China, passing on the know-how gained in thirty years of working life. Japanese companies’ strict retirement rules forced them […]
The hot weather has continued, but the world of politics is looking distinctly chilly. No sooner had we started to celebrate Abe’s resolve than it crumbled. The messy appointment of Fukuda indicates a return to the old system. He talks a good reforming game, but is unlikely to be able to deliver much. If Abe san lacked charisma, Fukuda’s score must be negative. His ability to work outside the LDP machine is nil. This is a sad situation for Japan. Continuing with reform might have unleashed the country’s entrepreneurial power. Now we look set for two years of status quo.
It has been a sweltering summer with record temperature highs, especially around Nagoya and Tokyo. Measures to reduce electricity use are in place to try to ensure supply at peak demand times. It’s not only the weather that’s been challenging though. The elections sent a strong message of dissatisfaction to the majority Liberal-Democtratic Party (LDP) – returning a significant number of Democratic Party representatives. Unfortunately, the LDP, having suffered through the Koizumi period, during which the members were unable to rein in the charismatic prime-minister, is now trying to re-assert the old backroom boys power system. Consequently, their reaction to the falling popularity of the government is not to call […]
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