Ho Chi Minh City, VIETNAM -- In the booming city of Saigon, the motorbike market is exploding. There are currently 1.1 million on the streets of HCM City. By the end of '96, Vietnam expects there will be nearly 4 million motorbikes in use, versus 3.5 million last year. The demand for motorbikes in HCM City alone has increased, on average, by 20% per year for the last six years.
With growing demand, one company continues to dominate -- Japan's automotive giant, Honda, whose market share is at 80%, according to a recent market survey. Taiwan's VMEP holds 7% of the market, while other international manufacturers comprise the remaining 13%. The increasing demand for motorbikes, and Honda's in particular, can be attributed to the growing number of higher-income families as a result of the Doi Moi economic policy. [Related Consumer Trends]
The approximately 80 domestic manufacturing companies assemble over 100,000 units each year, primarily the popular brands, such as the Honda Dream II, Astrea, Win, City 100 and Kawasaki.
With demand for new bikes continuing to soar, there is also marked demand for second-hand imports throughout Vietnam.
Tokyo, JAPAN -- Japanese consumers bought more imported vehicles during the first 11 months of this year (389,466 vehicles) than in all of 1995 (388,162 vehicles). Although the sale of imports in 1996 is expected to reach 430,000 units, this is still below the target of 450,000 units which were expected to be sold this year in Japan. Imports represent about 8% of Japan's total 1996 vehicle sales -- which are estimated to reach between 5.3 to 5.4 million units by the end of the year. Overall, the Japan Automobile Importers' Association (JAIA) said that foreign car sales rose 4.1% this November (compared with last November) to 35,933 units, of which nearly half are German-made cars. US automakers, General Motors Corp. (GM) and Chrysler Corp., reported strong sales in November. GM sold 2,075 cars in Japan last month, soaring 173% vs. the previous year. Sales of Chrysler cars rose 46% to 1,298. Ford sales declined 1/3 vs. the previous year to 954 units sold last month. German car sales rose 7.8% last month to 15,796 units, led by Volkswagen. British car sales increased by 27.6% (to 2,646 units in November), Swedish cars rose 6.4% (to 1,705 units) and French cars rose 13.6% (to 743 units). The reason that total 1996 sales will likely miss the 450,000 unit target is attributed to poor sales of American-made Toyota and Honda cars in Japan, according to the JAIA.
USA and EUROPE -- For many consumers in the USA and Europe, the opulence of the post-war (WWII) recovery has come to an end. While baby boom generation consumers strive to maintain the status-quo, the truth is that they cannot afford the same luxuries their parents did 20 years ago. Two income households are commonplace in most developed markets; incomes have not kept pace with the cost of living; labor costs have sky-rocketed; and the cost of goods continues to rise despite greater efficiencies in manufacturing from modernization, technology and distribution. For many of these consumers, the dream of owning a high-end car is simply out of reach. Moreover, for the 'upscale' younger generation -- those who have recently graduated from college and are working at their first jobs -- buying a BMW, a Porsche or Range Rover is far beyond their means. The cost of a new, luxury, sports or sports utility vehicle today exceeds the average college graduates' first annual salary. And consumer values have evolved to meet the changing economic climate. Consumers today are more practical and seek value. But consumers still feel they deserve to treat themselves to affordable luxuries and have fun when they can.
There is a notably strong demand for sports utility vehicles and affordable luxury models among the relatively affluent consumer market. In the US, Toyota introduced its lower-end RAV4 sports utility in 1995 (which sells for under US$25,000), while Honda came to market with its rival vehicle this year. The Jeep Wrangler continues its popularity at under US$20,000 in the US market. Despite the apparent shift away from sports cars in the US market, German car makers have re-entered the US market with a vengeance, introducing moderate-priced luxury/sports automobiles. BMW introduced the Z3 roadster while Mercedes brought out its US$40,000 SLK roadster. Porsche came out with the Boxster, also priced around US$40,000. These lower-end models are more affordable than their higher-end cousins, yet they live up to the brands' high-performance, quality image.
These moderately-priced, high-end vehicles appeal to first-time car-buyers, women and householders who aspire to own a "really great" car. They appeal to the quasi-practical nature of today's upscale, younger adult market, who despite all efforts to thwart off overt symbols of materialism, are simply more cautiously making high-end, self-pampering purchases. Afterall, a "family man" can rationalize the purchase of a four-wheel drive sports utility vehicle because of the extra storage space and safety features. And the mid-life desire to own a sports car can be met with some grace if the consumer feels s/he is getting a good value -- priced at 'only' US$40,000 for a much higher-priced line.
For Porsche, the introduction of the Boxster model is noteworthy. Its flagship 911 model has been around for 33 years. Porsche hasn't introduced a completely new car since 1978.
(Source: YOUR LINK HERE)
Rio de Janeiro, BRAZIL --
Jewelry sales in his Brazil stores have doubled since 1994, according to Brazil's most famous jeweler, H. Stern -- one of the top 10 jewelers in the world. With shops in 14 countries, including the United States, the Caribbean, most South American countries, Europe, Israel, Japan and, of course, Brazil, H. Stern controls 15 - 20% of the domestic jewelry market which is estimated to be worth US$1.1 billion. Moreover, this privately-held company controls 60% of the Brazilian gem production, making it the country's largest jeweler.
Stern attributes this growth in sales to Brazil's 1994 anti-inflation Real Plan, the government's economic program designed to reduce inflation. And now Brazilians have more money to spend on luxury goods such as jewelry. In particular, the growing middle class comprises the majority of his clientele, purchasing jewelry in the US$200-US$1,500 price range. Stern predicts this trend to continue as he anticipates the fashion in jewelry will continue toward simple straight lines using smaller stones, jewelry made of gold and diamonds.
While 80% of domestic sales are to Brazilians; 20% of sales are to tourists. Russians have displaced Arabs as the biggest spenders, arriving with suitcases full of cash.
No country in the world has as many different types of precious stones as Brazil. Brazil produces about 90% of the world's aquamarines, 75% of amethysts, tourmalines, citrines and other colored
gems and has displaced Colombia as the No. 1 producer of emeralds. Brazil also produces 5% of the world's quality diamonds.
H. Stern started off in a small office with only one assistant and $200 and has been profitable since he began operations in 1945.
(Source: YOUR LINK HERE)
Cincinnati, USA -- Procter & Gamble Co. (P&G) is suing Colgate-Palmolive Co. and its ad agency, Young and Rubicam for copyright infringement and unfair competition. Filed in U.S. District Court in New York, the lawsuit accuses Colgate of deliberately copying advertising visuals and claims used by P&G's Crest brand -- which has been running on TV worldwide since 1989. The accusation further claims that Colgate imitated P&G's advertising in an attempt to pre-empt their market launch in China. Crest has been running these commercials in China since March of this year. Similar visuals/commercials have also been run by Colgate in Australia, Uruguay and the Philippines, despite P&G's request to stop. Specifically, the lawsuit focuses on the use of a sequence of events involving an eggshell demonstration that shows the effectiveness of using fluoride.
(Source: YOUR LINK HERE)
New Delhi, INDIA -- During the 3rd Quarter of '96, McDonald's opened its first restaurant in India. What is particularly noteworthy for this chain of more than 20,000 outlets in over 95 countries is that this is McDonald's first "hamburger" outlet that does not serve beef. This culturally sensitive strategic decision is consistent with their menu adaptations in other markets around the world. [ Related News/Israel] [ Search Site] use keyword McDonald for other mentions.
Understanding India's strongly religious culture is of paramount importance, since it impacts daily decisions, values and lifestyles. The majority of Indians do not eat beef. Cows are considered sacred according to the Hindu belief -- and 80% of Indians are Hindu. Instead of a Big Mac, the local restaurant features a Maharaja Mac, with mutton instead of beef. And since the strictest Hindus are vegetarian, the local outlet also serves fried rice-based patties, that appear similar to falafels. For the more than 110 million Muslims in India, the restaurant also bans pork.
Beijing, PR CHINA -- In Beijing, despite a 20-year lease for the property, McDonald's will close its flagship restaurant located near Tiananmen Square. The restaurant will be demolished and re-opened 150 yards away to make room for a new shopping center. The Beijing authorities have agreed to compensate them for the move and have given them permission to open two more outlets on the same street, Wangfujing Street, which is centrally located in Beijing. Both sides are, reportedly, satisfied with the outcome. There are currently 26 McDonald's restaurants in Beijing, alone, with 3 more on the way this year. Altogether, they maintain over 100 outlets in 15 cities throughout China. (Source: YOUR LINK HERE)
Copenhagen, DENMARK -- A small-town Danish hot dog seller, Allan Pedersen, of Silkeborg, Denmark, won a year-long trademark dispute against McDonald's, the US quick service food chain giant, and won the right to continue using the brand name McAllan. This is the first case McDonald's has lost over the use of the "Mc" prefix, which they feel distinguishes their franchise from others. McDonald's
was ordered to pay 40,000 crowns (US$6,689) to Pedersen to cover court costs. In October of last year, McDonald's lost a similar battle in South Africa.
(Source: YOUR LINK HERE)
London, UK -- According to a recent survey conducted this summer by KPMG Consulting,
most of Europe's biggest companies are not prepared for the 1999 planned change to the single
European currency, the euro. Although the majority (80%) of (the 301 major European)
companies surveyed could not estimate the cost of this conversion to their companies, 93%
expected that their countries would join the European Monetary Union. Interestingly, when
asked which issues it faced in the area of international business on trade, none of those
surveyed mentioned Europe's planned single currency. When prompted, nearly half said they
would put this issue near the top of their list of important issues, 22% would put it toward
the bottom. Of the 8% of surveyed companies that did complete a review of this transition,
projected costs to their companies ranged from US$32 million to over US$106 million.
Tokyo, JAPAN -- While the timing of this decision has not been revealed, Japan announced that it's telephone giant, NTT (Nippon Telephone and Telegraph), plans to enter the global telecommunications market for the first time. The largely government-owned NTT will form three separate divisions -- two regional companies and one long-distance company which will provide international telephone and communications services.
(Source: YOUR LINK HERE)
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