Investing in China
To the editor:
I read your article 'ASEAN region is safe haven for investors' (May issue, Page 33) with interest. However, in my opinion, you are slightly biased about investment in China. The sliding sales of Buick can be attributed to the inappropriate product, while Guangzhou Peugeot's failure was caused by the French company's inexperience in handling local government. Honda has been exceptionally successful after learning its lessons in China's market.
China's relatively stable political and economic situation does give a boost to investors' confidence, which some of the ASEAN countries could not match. However, I am not writing to argue, and I did appreciate Mr. Dunne's insight into the Chinese ways of doing business.
Standard and Poor's DRI
Global Automotive Group
Don't forget about India
To the editor:
An article in your May issue ('Where does the money go?' Page 22), rightly carries the headline, 'Mexico, Brazil and China lead the race for investment in emerging markets. But don't forget about India.'
With a population of one billion people, rising income levels and gradual economic liberalization, the Indian economy is poised to be one of the fastest growing markets in the world. There is a lot happening in India's automotive market. Import of new and second-hand cars has just been allowed. Car companies and their suppliers are setting up engineering and software centers in India to support their global operations.
Ford and Hyundai already are using their Indian plants as an export base, while other automakers also are considering such plans. One of the largest automotive exhibitions in Asia is to be held in New Delhi next January. I am sure you will want to publish articles on these developments in the Indian automotive sector.
To the editor,
This is in reference to your comment about India ('Where does the money go?' May issue, Page 22). It is correct that India is a tempting market. But it has not grown according to the more optimistic projections by international consultants four or five years ago. Your article claims this is due to the 'weak efforts to privatize its economy.'
But India's economic reforms are driven by deep-rooted and fundamental social and economic forces. These forces are shaping our chaotic politics and hence our economic liberalization as well. This process deserves far closer study and understanding from foreign investors. For those who take the trouble to understand these forces correctly, benefits will be enormous. For those who don't, the downside will be costly.
This is best illustrated by the example of India's largest car company, which set up operations when the total market was about 43,000 cars a year. It quickly established an 85 percent market share and grew at 35 percent to 40 percent annually over the first 12 years of existence. In this same period, another joint venture collapsed.
Chairman and Managing Director
New Delhi, India