AMERICAS: Market liberalisation drives Latin American premium growth
Total insurance premium income is growing at a faster rate than the economy as a whole in Latin America. One of the reasons suggested for this dynamism is market liberalisation and consequent growth in competition from subsidiaries of overseas companies. For example the market share by premium of foreign controlled insurance companies in Mexico grew from 0% to over 50% between 1993 and early 2005.
ASIA: Asia Pacific demand set to dominate aircraft market
Boeing have predicted that whilst global GDP growth will average 3.9% over the next 20 years, demand for air passenger and freight traffic will rise by 4.9% and 6.1% respectively. Passenger traffic within the Asia-Pacific region (excluding the domestic market in China) is estimated to rise by 5.4% and the figure for China itself is 8.8%. The region is forecast to represent 36% of the implied demand for 27,200 new passenger aircraft by the year 2025.
EUROPE: Traditional eating habits aid the French in war against obesity
French eating habits, which have changed far less than is the case in the UK or USA, are still very closely linked to their national heritage of eating good food for pleasure. About 75% still eat meals prepared at home, virtually the same percentage of families eat their meals together around the table. Portion sizes are smaller and snacking is far less prevalent. The resultant balanced diet may help explain why obesity is less of a problem than in the Anglo-Saxon nations.
The French and Germans are also consuming less alcohol whereas the figure for the UK continues to rise.
AMERICAS: US COSMETICS FOR BABY BOOMERS?
The baby-boomers, those born between 1946 and 1964 (although definitions vary), are an economically powerful force in the US. The nearly 80 million Americans in this demographic are forecast to spend $3 trillion in 2007. Their impact can be demonstrated by the fact that the market for anti-aging skin-care products, which on average cost 2.5 times more than other premier brands, is growing at 33% per annum in comparison with 4% growth in the market for regular skin-care products. Revlon have created a distinct new brand to cater to this market. This growth is being sustained by celebrity endorsement - L'Oreal has recently hired Jane Fonda and Diane Keaton, both in their 60s, to advertise their products in this sector.
EUROPE: UK MEDIA TARGETING LOCAL MARKETS
In a speech to the UK Newspaper Society's Home Truths conference Sir Martin Sorrell, CEO of WPP, highlighted the importance of local media to individual decision making. He stated that most decisions that individuals make that are relevant to their lives are made within a radius of 15 to 30 miles of the home. He argued that ITV's acquisition of Friends Reunited and the creation of Local Google were examples of the recognition by national and international media companies of the importance of the need of advertisers to target consumers at the local level. In a speech to the same conference Tim Bowdler, CEO of Johnston Press, argued that the growing diversity of media delivery channels increases the difficulty for advertisers in targeting specific groups at a national level. He stated that the local media sector had enhanced their reach by investing in digital outlets. Over 600 websites, the vast majority associated with print media, had been developed to enhance the ability of advertisers to target specific communities.
GLOBAL ICT: Developing markets encouraged to work with Private Sector
It took 113 years from the invention of the telephone for it to achieve 10% global penetration, the comparative figure for mobile telephony is 15 years whilst internet usage achieved the 10% figure only 12 years after the invention of the WWW. These bald figures can disguise great disparity across the digital divide even within continents. The World Bank has noted that worldwide internet use quadrupled between 2000 and 2005. But while developed nations have more than 300 secure internet servers per one million people, developing nations have fewer than two. Canada has more secure servers than all the developing countries combined.
The Bank urges developing countries to work in partnership with the private sector to extend the reach and use of ICT there is also a need to break down existing monopolies in developing countries.
ASIA: Politics and New Designs alter the face of the Asia Pacific Automotive markets.
The long term impact of the arrest and indictment of Hyundai Chairman Chung Mong Koo is yet to be determined. He has been accused of creating slush funds to pay politicians and officials for business favours. The groundbreaking for two new overseas plants subsidiary Kia's in the US and Hyundai' in the Czech Republic have already been postponed. However, work on the joint venture engine factory in China, Beijing Hyundai, started as scheduled on May 16.
Mahindra & Mahindra, a leading Indian vehicle manufacturer, reported a 23% rise in net sales to Rs83.26bn for the year ended 31 March 2006. The company will launch the Logan, in association with Renault, in the first half of 2007.
Honda have announced that they are developing an entirely new compact car to be targeted primarily at the Indian market. Tata, General Motors, Fiat and Toyota are also developing new models for this sector which accounts for 75% of the Indian market.
The Chinese government, concerned about over capacity in the automotive industry, is reported to now require companies to prove that consumer demand justifies additional investment before giving approvalMarkets for life, disability and health insurance products are growing quickly in Central and Eastern Europe, as more responsibility for social welfare is transferred into private hands.
Accession to the EU of eight eastern and central European countries has contributed to the removal of the political, regulatory and cultural obstacles to cross border mergers in the financial services industry. Additionally conversion to IFRS reporting will help to introduce a level of transparency that has not historically existed. Consequently it is safe to suggest that central and eastern European financial services companies will continue to be affected by the growth in consolidation, driven by cross border mergers, in the sector. Between 1996 and 2004 the share of financial assets in central and eastern Europe owned by foreign banks tripled to 66%.
In Russia there is considerable un met demand for retail banking services. Until 2003, for example, there was no legal framework governing the securing of loans against property. There is now considerable scope for large and rapid growth in the provision of mortgage lending. There are endemic problems in operating in the Russian market but overseas institutions may have one advantage by virtue of their foreignness, there is a saying in Moscow that ''only foreigners will trust a Russian, other Russians don't.''
AMERICAS: Positive News for Latin America Automotive Markets
Positive news from the region as both Argentina and Brazil report strong growth in vehicle manufacturing. Adefa, the Argentinian National Automakers' Federation, reported that Q1 production grew 23.8% to 77,203 units compared with the same period last year. In Brazil production in March was boosted by strong domestic demand fuelled by falling interest rates and grew 12.3% compared with February 2006. Mexico's exports of trucks and buses rose almost 50% in March; 86% of the 4,188 vehicles were exported to the USA.Ford plans to restructure its executive ranks in Latin America and Canada.
Continental AG have officially opened their new plant in Brazil whilst General Motors have announced that they will invest almost $650m in a new plant in Mexico and Daimler Chrysler will spend approximately $1bn upgrading their assembly site in Toluca, Mexico.
Prime-Tass reports that Russian automaker Gaz is considering assembling its mid-sized Gazel trucks and vans in Brazil and General Motors do Brazil is negotiating the export of the Brazilian made Chevrolet Vectra to central Europe.
EUROPE: Aid money supports growth of Telecoms markets in EU accession countries.
Growth in both revenue and customer numbers in the Central and Eastern Europe telecoms sector remain consistently higher than in Western Europe. The recent accession into the EU of eight of the region's countries, as well as preparations for accession of a further three, are important drivers of this growth as aid money from EU structural funds is tied to market liberalisation. In the Czech Republic, Poland and Hungary this process is virtually completed while in others it is being initiated.The majority of growth is in the mobile sector whilst growth for fixed-line operators may be restricted to satisfying the demand for high-speed data services.
