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American Car Sales, The Roads of India

American Car Sales, The Roads of India
American cars have populated roads from Texas to Vermont to Oregon for decades, yet domestic sales growth is not what it once was. India is the next emerging market with vast potential for American car sales, and companies are vying for dominance.

General Motors (G.M.) and Ford are two of the biggest auto companies that export American cars around the world. In recent years, this model made by the U.S. has shifted to opening new manufacturing and distribution systems across the world.

India is an emerging market in the global auto sales industry and G.M. and Ford have both invested early, resulting in competition for popularity, market share and profit. Based on the current circumstances, it appears that Ford has the advantage. Ford has made large investments in production plants, including the Sanand and Chennai Vehicle Assembly and Engine Plants, each with a price tag of $1 billion. Together, the combined production capacity of these plants is 440 thousand vehicles per year. Ford has seen steady increases in production from just over 14 thousand to 26.4 thousand cars sold in August of 2014, and 2016, respectively.

In contrast, G.M. has just halted a planned $1 billion investment which was aiming to double G.M.’s market share by 2020. Unpredictable consumer patterns and possible new environmental regulations may play a part in this development. Monthly sales are declining over time for G.M, with sales struggling to rise above 4,000 units in early 2015.

In India, only 18 per 1,000 individuals own a car, compared to the 800 per 1,000 in the U.S. India also saw the largest percentage increase in sales from January to November of 2015. The lack of saturation in the Indian market presents a huge potential for growth in American car sales, yet what remains to be seen is how American companies will re-invent themselves to be desirable in the eyes of the people of India.

In the past, U.S. companies brought models of the European theater to developing countries with reliable success, expanding American car sales into new markets. However, this tactic has proven ineffective in India where customers will not jump to a higher price bracket. These companies are attempting to figure out ways to follow the market much more closely than they have before, and it is proving more difficult than anticipated.

India is on the edge of an explosion in car sales as a result of the growing middle class that will disseminate out of the cities and into more rural areas. As this inevitable future approaches, the possibility of capitalizing on this growth becomes less and less certain for new companies that wish to enter this market. Will Ford and G.M. be flexible enough to attract the people of India to companies rooted in decades of American success?

– Patrick Tolosky

Photo: Flickr

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African Natural Resources Make the World Go Round

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Countless everyday appliances and gadgets would not exist if it were not for the minerals that come from Africa. From cars to cell phones, laptops, airplanes and batteries, much of what makes the world go round depends on resource-rich African nations that are being fueled by a global commodities boom.

Although much can be said of whether the rising demand for these minerals is actually benefiting those at the bottom of the pyramid, it is certain that emergent African economies are growing thanks to these raw materials. If well-managed, Africa’s mineral resources can lift the continent out of poverty and catapult it toward growth and prosperity for all.

Here are some of the everyday objects that are created with African natural resources.

1.       Cars

The catalytic converters in cars that are made to reduce pollution are made with platinum and rhodium. South Africa alone produces 72% of the world’s platinum and 83% of the world’s rhodium.

2.       Electronics

Devices such as cell phones, laptops, and other electronic gadgets are made from tantalum. Africa provides 71% of the world’s tantalum, with Mozambique leading the region as the source of 24% of the global production of the mineral, followed by Rwanda with 20% of the production.

3.       Jewelry

In 2011, more than 57% of the world’s diamonds, nearly 75% of the world’s platinum and 20% of the world’s gold was found in Africa. Botswana is the world’s second largest producer of gem diamonds, and in 2011, the diamond industry accounted for half of the government revenue.

4.       Batteries

The cobalt used in the electrodes of rechargeable batteries is growing rapidly in demand due to the use of portable electronic devices. In 2011, Africa accounted for 58% of the global production of cobalt, while the Democratic Republic of Congo alone represented 48% of this supply. Mineral mining, however, has been implicated in funding conflict in the country.

5.       Airplanes

Many aircraft parts are made with aluminum alloys, which can account for up to 80% of the jet’s weight. Jet engines also use superalloys that contain cobalt and chromium. South Africa represents 47% of the global production of chromite – used to produce chromium -, while Guinea represents 8% of the world’s production of bauxite, used to make aluminum. Guinea has almost half of the world’s bauxite reserves and is predicted to become a world-leading producer of iron ore in the next decade.

6.       Electricity

Besides coal and gas, Africa produces 16% of the world’s uranium, which is the source of the nuclear fuel that provides 14% of the world’s electricity.

7.       Oil

Last year, Africa produced 10% of all the world’s oil – nearly 9.4 million barrels per day. Leading this production is Nigeria, with 37 billion barrels of proven reserves of oil – enough to keep supplying oil at 2011 levels for the next 40 years.

– Nayomi Chibana
Feature Writer
Sources: African Minerals Development Centre, CNN
Photo: CSMonitor