Day: November 10, 2010

GM rejoices over a net profit of $2bn (£1.2bn) in the three months to 30 September, which beats its rival Ford, compared to a loss a year earlier. With a positive report of three consecutive months of profitable gains, GM aims to maintain its growth and to renovate its product with higher quality and more fuel-efficient. GM seems to identify the critical points it needs to focus more to make a rebound after being filed for bankruptcy protection a year and a half ago. GM plans to raise capital expenditures to improve its automobiles’ quality, and urges further increase in the future, attempting to instill more positive image to consumers.

GM also looks into Indian market by participating in designing cheap car models, however not necessarily competing directing with TATA’s Nano. In order to make a successful rebound as well as maintain that position, GM emphasizes its aim on costs reduction, improve quality and fuel-efficient level; not to forget the importance of re-evaluate the corporate culture. GM is also working on its public relation with customers, government officials, workers and dealers, ect. GM might have a long way to go, but I think they are putting their attention on right focuses.

Source: http://www.bbc.co.uk/news/business-11725357

In 2009, Tata’s $2000 Nano, the world’s cheapest car, officially set the new revolution for the carmakers in the low-priced cars market. This posed a great challenge to all other brands, forced them to innovate ways to introduce equally or more competitive products to stay in the game.

Tata is comfortable resting on tremendous rise in profit from all over the world. Tata saw its sales jump 84%
at the end of 2009 relative to same period in 2008. The Indian carmaker was also fast to catch the eco-trend, announcing its plan to produce hybrid versions of its Nano– seems like nothing could stop the Tata storm. But its competitors are not resting to watch Tata’s happy invasion of the market, French carmaker Renault declared a war in car production costs with Tata in Indian market, which is predicted to be triple in 10 years.

The firm would not confirm the price, but says it will be for the entry level market and “priced competitively”.

Renault also said that its car model would be fuel-efficient, emphasizing on all the market trends that customers’ interests lay. Cheers cheaper hybrid, fuel-efficient cars soon coming to consumers!

Source: http://news.bbc.co.uk/2/hi/business/8352991.stm

Watching the disappointing slow economic recovery, the FED decided to fire another stimulus package of $600 Billion to purchase the government bonds in the next eight months. By doing this, the FED hopes to drives own the interest rate that will probably encourage more investments and consumptions during this financial crisis. But is this a wise move or just another selfish act of the States?

The interest rate is already nearly zero, and the earlier stimulus shot did show some positive result, even though its speed is rather disappointing. And the Fed believes that it cannot sit back and watch but must engage in another movement in order to strengthen the slow growth it is having at the moment. Despite Ben Bernanke’s risky but hopeful bet on this package to improve the economic condition, the Fed receives several criticismson this decision. By pumping money into the economy, the US likely to depreciate its currency against many countries that heavily rely on exports, creating inflation and bubble asset-price, ect. Personally I think this movement is only based on the States’ interest of recovering its own inadequate rate of growth, regarding the consequences it might bring to the world economy as a whole. And the result is not even guaranteed!

Source: http://online.wsj.com/article/SB10001424052748703506904575592471354774194.html?mod=WSJ_article_MoreIn_US