Asia leads consumer confidence levels
Updated
India and Indonesia are experiencing the highest levels of consumer confidence in the world, according to new figures.
Asian companies like Tata Motors are capitalising, as consumers in these countries show signs of optimism, while their American and European counterparts suffer the Global Financial Crisis. Analysts say aggressive government fiscal stimulus measures are largely responsible for the rise in spending in India and Indonesia. Although, they warn the good times could be short lived as Asia's exports have sunk to record lows.
Presenter: Stephanie March
Speaker:Head of corporate communications for Tata Motors Debasis Ray; associate director with Neilsen Mumbai, Vatsala Pant; managing director of International Market Assessment Asia, Richard Martin
MARTIN: Governments in Asia moved fast - and so did the central banks -and in that they were in line with best governments in West in moving fast. They got thier fiscal stimulus out the door fast, they slashed interest rates down to record low levels.
MARTIN: When you look around at the markets that could produce good demand for exporters well you have to go to the big ones - Japan the US and the EU, thats about 65 percent of global demand in those three blocks, and no one is expecting strong demand for imports out of those three until the second half of next year.
MARCH: Debasis Ray from Tata Motors says the Indian automaker is also sceptical of any signs pointing to an end to the global financial crisis.
AY: We are being cautiously optimistic, we do believe the secular growth that
MARCH: Even if exports don't pick up, the Neilsen poll shows Tata's domestic consumer base is the second most confident in the world.
This places India in a good spot to ride through the economic recession - which consumers suggest will come to an end in that country within the next 12 months .
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MARCH: Earlier this year, the US government intervened with a 50-billion-US-dollar package to save its biggest automaker - General Motors - from bankruptcy.
Across the Atlantic Ocean, the story couldn't be more different.
Tata Motors, the Indian company behind the little car made for India's rising middle class, is recording substantial profits.
The company that invtented the Nano, the so-called 'People's Car', reports an 18 per cent increase in year on year sales of passenger vehicles.
The head of corporate communications for Tata Motors, Debasis Ray, says Indians are packing in to the tiny Nano, but it's not only passenger vehicle sales fuelling Tata's success.
RAY: Light commercial vehicles saw the first pick up once finance began to become more available. With a gradual pick up in different sectors of the economy we are now noticing a pick up in heavy commercial vehicles also, in heavy trucks too.
MARCH: Tata Motors' success, and that of many of Asia's other big auto companies, tells the story of the region's economic standing - in contrast to the continued doom-and gloom-financial reports emerging from the 'West'.
Recent figures from a Neilsen poll show India, Indonesia, and China are enjoying some of the highest consumer confidence rates in the world.
Vatsala Pant is an associate director with Neilsen in Mumbai.
PANT: India has shown the maximum increase, I think India has gone from what was 99 to about 112 (index points). Similarly the other ones, the big ones that are doing well are Indonesia and China. China has gone up about 5 percent. You know as an average I think Asia Pacific is probably leading the way.
MARCH: But Richard Martin, managing director of International Market Assessment Asia, is surprised by the figures.
MARTIN: It was not expected. Go back to where we were in the first quarter of this year and the outlook was fear about what was going on in the region.
MARCH: Asian Economies weren't hit by the financial crisis as severely as those in the US, UK and Europe, but reverberations were felt as demand for exports plummeted.
China, India, and Indonesia responded with huge financial stimulus packages to bolster domestic spending.
MARCH: Since the beginning of the global economic crisis India's government has pumped in more than 60-billion US dollars into financial stimulus measures while China has injected 600-billion-US-dollars into similar contingency plans.
But while increased domestic spending is keeping these economies afloat for now, Richard Martin says exports for the region are still down by around 35 per cent, and he warns the stimulus measures could backfire.
