Archive for ‘Nissan’

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14/04/2020

Renault quits its main China venture after weak sales

PARIS/BEIJING (Reuters) – French automaker Renault SA (RENA.PA) is ditching its main passenger car business in China following poor sales at the loss-making venture with Dongfeng Motor Group (0489.HK).

A slowdown in Chinese automotive sales, which is expected to worsen this year due to the coronavirus crisis, has heaped pressure on carmakers that were already struggling to establish a big presence in China, the world’s biggest vehicle market.

Renault, which entered the Dongfeng joint venture in 2013 and began producing gas-powered cars under the tie-up in Wuhan three years later, is one of the few global carmakers to exit a major project in China in recent years, however.

The carmaker, which will retain a presence in China with other ventures, including in electric vehicles, is trying more broadly to find cost savings and pull out of businesses where it is struggling to make its mark and turn a profit.

This is part of Renault’s efforts to make the most of its alliance with Japanese partner Nissan (7201.T), and the two are due provide a strategy update by mid-May.

Dongfeng had been anticipating Renault’s potential exit from the Chinese joint venture as long as a year ago, a banking source familiar with the matter said. Sales were under pressure long before the coronavirus crisis walloped demand further, another source with knowledge of the situation said.

The venture sold only 18,607 cars in 2019, far below its annual capacity of 110,000 and reported an operating loss of more than 1.5 billion yuan ($212 million).

Dongfeng, which will take on Renault’s 50% stake in their venture, plans to revamp and upgrade the business’s existing car plants, which will no longer make Renault-branded cars, a spokeswoman for the Chinese automaker said on Tuesday.

Dongfeng will arrange positions for staff at the venture within its wider group operations, she added.

Financial terms of the transaction were not disclosed.

‘NEW CHAPTER’

Renault said it would focus on its light commercial vehicle business with Brilliance China Automotive Holdings (1114.HK). That venture plans to roll out five new models before 2023 and is planning export cars to other markets.

Another focus is electric vehicles, which will be built by its venture with Jiangling Motors Corporation Group.

Renault and Dongfeng also said they would continue to cooperate on “connected vehicles” and work with common partner Nissan Motor Co Ltd (7201.T) on new generation engines.

“We are opening a new chapter in China. We will concentrate on electric vehicles and light commercial vehicles, the two main drivers for future clean mobility and more efficiently leverage our relationship with Nissan,” Francois Provost, chairman of the China region for Renault, said in a statement.

That could include relying on Nissan dealers rather than Renault ones in the longer term, a source familiar with the matter said.

Renault and Nissan, which both reported losses for 2019 even before the global pandemic hit, are looking to rebalance a relationship strained by the 2018 arrest and subsequent flight of former alliance supremo Carlos Ghosn.

The ex-boss-turned-fugitive, accused of financial misconduct, denies any wrongdoing.

Other international carmakers have struggled in China too.

In 2018, Japanese automaker Suzuki Motor Corp (7269.T) sold its stake in a venture with Changan Automobile (000625.SZ).

Renault’s French rival PSA (PEUP.PA), meanwhile, is exiting a small joint venture with China’s Chongqing Changan Automobile (000625.SZ) and said in February it had suffered 700 million euros in losses last year in the country.

Source: Reuters

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13/10/2019

Japan, Thailand and Singapore benefit as Chinese tourists skip Hong Kong over golden week

  • The likes of Saudi Arabia also saw an upswing in travellers from the mainland after the release of its new visa programme
  • But fewer Chinese tourists went abroad this year, with a 15 per cent drop from 2018 attributed to more opting to visit local historical sites
Chinese tourists take photos in front of the Imperial Palace in Tokyo, Japan. Photo: Reuters
Chinese tourists take photos in front of the Imperial Palace in Tokyo, Japan. Photo: Reuters
Fewer Chinese travellers went overseas during “golden week” this year – but for those who did, Japan, Thailand and Singapore were the top-ranked destinations as tourists from the mainland gave Hong Kong a miss, according to China’s largest travel company Ctrip.
Chinese government data showed only 6.07 million people travelled during the national holiday between October 1-6, a 15.1 per cent drop from the corresponding period last year. Analysts attributed this to Chinese tourists opting for a “staycation”, as 782 million people – a 7 per cent increase from last year – chose to celebrate the 70th anniversary of the People’s Republic of China by visiting local historical sites.
How a new wave of Indian travellers are transforming tourism in Southeast Asia
For those who did venture abroad, Japan, Thailand and Singapore ranked as the top three most-booked countries in Asia during the week, according to Chinese travel firm Ctrip, as tourists from the mainland skipped protest-hit Hong Kong for other destinations.
The city, now in its 19th week of anti-government protests, over the week saw a 50 per cent overall drop in tourism from last year, as well as a 47.8 per cent reduction in border crossings at the Luohu border checkpoint, according to government figures.

Japan remained the most popular destination for Chinese tourists. In the first half of 2019, the nation saw 4.5 million visitors from China, up 11.7 per cent from the same period in 2018. In order of popularity, the top-visited cities were Osaka, Tokyo, Kyoto, Sapporo and Nagoya, according to Japanese media.

Over the same week, Japan increased its sales tax from 8 to 10 per cent, but Chinese shoppers – who accounted for 37 per cent, or US$15.4 billion, of the spending by international visitors to the nation last year – were undeterred.

Japan saw the highest volume of overseas transactions over the week, according Alipay Mobile, the world’s largest mobile payment platform. The firm declined to share the exact amount Chinese tourists had spent in Japan, but reported average spending per international traveller during golden week had increased by 15 per cent to 2,500 yuan (US$350).

From Nissan sales to Tsushima tourism, trade spat with Korea hits Japan in the pocket

Alipay is operated by Ant Financial, an affiliate of Alibaba Group Holding, which owns the Post.

Japanese department stores such as Sogo and Seibu celebrated the Chinese national holiday by holding golden week events and sales at 15 different branches across the nation, with food and arts promotions targeting Chinese shoppers.

Chinese travellers to Japan want cultural experiences involving local customs such as temple tours, heritage sites and cultural events, according to Emily Guo, a researcher at Hong Kong-based marketing research firm Cherry Blossoms.

Chinese tourists visit Tiananmen Square in Beijing. Analysts say 782 million people opted for “staycations” at local historical sites over golden week this year. Photo: EPA
Chinese tourists visit Tiananmen Square in Beijing. Analysts say 782 million people opted for “staycations” at local historical sites over golden week this year. Photo: EPA

Experts say Thailand – the second-most booked country during golden week, according to Ctrip – saw many repeat travellers return to the country. The nation saw 1.03 million arrivals from China in August, up 19 per cent from 2018.

Guo said these travellers were more budget-conscious than those who travelled to Japan, and enjoyed the good value and picturesque scenery for sharing on social media.

“They have already travelled to Southeast Asia before, and are therefore looking for personalised and local experiences like interacting with Thai residents, jungle treks and food tours,” she said, adding that many are willing to spend extra on immersive experiences such as a hotel in the countryside, or on a room with a forest view.

Thailand’s tourism industry gets jitters after currency surges, visitor numbers from China fall

According to Alipay Mobile, the sale of “durian experience” packages for Chinese tourists looking to taste the spiky, pungent fruit at local farms increased by 60 per cent in Thailand and Malaysia from last year.

Shopping remained on the agenda, too. Thailand ranked second for the highest volume of overseas transactions during the week, according to data from Alipay Mobile. Most Chinese shoppers frequented duty-free shops, convenience stores and local malls, according to local press.

Singapore remained a destination of choice for tourists from the mainland. The city was among the most popular “traditional destinations” for them, according to China’s culture and tourism ministry, with others including Malaysia, Thailand, Japan, Australia, France, Italy, and Russia.

Chinese tourists visiting Singapore over golden week also seized the opportunity to check out property in the Lion City. Photo: AFP
Chinese tourists visiting Singapore over golden week also seized the opportunity to check out property in the Lion City. Photo: AFP

July saw the Lion City break its record for the number of Chinese arrivals, at close to 390,000, an unprecedented 46 per cent jump from the previous month.

Analysts have attributed this to a diversion of tourists from Hong Kong, but property agents such as Clarence Foo, associate deputy group director at OrangeTee & Tie, said some of these Chinese tourists were using the golden week as a chance to eye Singaporean real estate.

“Compared to a normal week, there were probably 15 to 20 per cent more Chinese visitors who viewed property,” said Foo, who counts Singaporean and international buyers among his clients.” They are certainly more keen on Singapore [property] now as there isn’t another comparable investment destination in Asia.”

Meanwhile, the Middle East is emerging as a popular shopping destination for Chinese tourists. According to Ctrip, Dubai saw 501,000 travellers from the mainland in the first half of 2019, an 11 per cent increase from last year.

Saudi Arabia has also experienced a surge in Chinese tourists, with 7,931 heading to the country since it launched its new instant tourist visa programme on September 27. With the new visa, which can be obtained online or upon arrival, tourists can stay in the country for up to 90 days, and unwed foreign men and women can for the first time share hotel rooms.

“Saudi Arabia has the potential to become very popular with Chinese tourists,” said Guo from Cherry Blossoms, adding that travellers from the mainland are increasingly looking for exciting new adventures. “It’s a status symbol for them to visit a country others haven’t visited before.”

Source: SCMP

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18/08/2019

Japan seeks to counter China in Africa with alternative ‘high-quality’ development

  • Beijing will be watching as leaders of African nations and international organisations gather for development summit in Yokohama later this month
  • Tokyo is expected to use the conference to articulate how its approach to aid and infrastructure is different from Chinese projects
The Mombasa-Nairobi Standard Guage Railway, funded by China, opened in 2017. Japan has criticised Chinese lending practices in Africa. Photo: Xinhua
The Mombasa-Nairobi Standard Gauge Railway, funded by China, opened in 2017. Japan has criticised Chinese lending practices in Africa. Photo: Xinhua
The long rivalry between China and Japan is again playing out in Africa, with Tokyo planning to pour more aid into the continent and invest in infrastructure projects there.
Beijing – which has for decades funnelled money into the continent – will be watching as the leaders of 54 African countries and international organisations descend on Yokohama later this month for the seventh Tokyo International Conference on African Development (TICAD).

Japan reportedly plans to pledge more than 300 billion yen (US$2.83 billion) in aid to Africa during the conference. While that might not be enough to alarm China – which in recent years has been on a spending spree in the continent – it will be paying close attention.

Japan has in the past used the meetings to criticise Chinese lending practices in Africa, saying it was worried about the “unrealistic” level of debt incurred by African countries – concerns that China has dismissed.
This year, analysts expect Tokyo will use the conference to articulate how its approach to African development is substantively different from that of the Chinese.

“So, look for the words ‘quality’, ‘transparency’ and ‘sustainability’ to be used a lot throughout the event,” said Eric Olander, managing editor of the non-partisan China Africa Project.

Japanese Foreign Minister Taro Kono gives a speech at the TICAD in Tokyo in October. Japan will reportedly pledge US$2.83 billion in aid to Africa this year. Photo: The Yomiuri Shimbun
Japanese Foreign Minister Taro Kono gives a speech at the TICAD in Tokyo in October. Japan will reportedly pledge US$2.83 billion in aid to Africa this year. Photo: The Yomiuri Shimbun

Olander said Japan often sought to position its aid and development programmes as an alternative to China’s by emphasising more transparency in loan deals, higher-quality infrastructure projects and avoiding saddling countries with too much debt.

“In some ways, the Japanese position is very similar to that of the US where they express many of the same criticisms of China’s engagement strategy in Africa,” Olander said.

But the rivalry between China and Japan had little to do with Africa, according to Seifudein Adem, a professor at Doshisha University in Kyoto, Japan.

“It is a spillover effect of their contest for supremacy in East Asia,” said Adem, who is from Ethiopia.

“Japan’s trade with Africa, compared to China’s trade with Africa, is not only relatively small but it is even shrinking. It is a result of the acceleration of China’s engagement with Africa.”

Chinese President Xi Jinping attends a group photo session with African leaders during the Forum on China-Africa Cooperation in Beijing last year. Photo: AP
Chinese President Xi Jinping attends a group photo session with African leaders during the Forum on China-Africa Cooperation in Beijing last year. Photo: AP

Japan launched the TICAD in 1993, to revive interest in the continent and find raw materials for its industries and markets for products. About a decade later, China began holding a rival event, the Forum on China-Africa Cooperation.

It is at heart an ideological rivalry unfolding on the continent, according to Martin Rupiya, head of innovation and training at the African Centre for the Constructive Resolution of Disputes in Durban, South Africa.

“China cast Japan as its former colonial interloper – and not necessarily master – until about 1949. Thereafter, China’s Mao [Zedong] developed close relations, mostly liberation linkages with several African nationalist movements,” Rupiya said.

Beijing had continued to invoke those traditional and historical ties, which Japan did not have, he said.

“Furthermore, Japan does not command the type of resources – call it largesse – that China has and occasionally makes available to Africa,” Rupiya said.

Although both Asian giants have made inroads in Africa, the scale is vastly different.

While Japan turned inward as it sought to rebuild its struggling economy amid a slowdown, China was ramping up trade with African countries at a time of rapid growth on the continent.

That saw trade between China and Africa growing twentyfold in the last two decades. The value of their trade reached US$204.2 billion last year, up 20 per cent from 2017, according to Chinese customs data. Exports from Africa to China stood at US$99 billion last year, the highest level since the 1990s. Meanwhile, through its Belt and Road Initiative that aims to revive the Silk Road to connect Asia with Europe and Africa, China is funding and building Kenya’s Standard Gauge Railway and the Addis Ababa-Djibouti Railway. Beijing is also building major infrastructure projects in Zambia, Angola and Nigeria.

Japan’s trade with Africa is just a small fraction of Africa’s trade with China. In 2017, Japan’s exports to the continent totalled US$7.8 billion, while imports were US$8.7 billion, according to trade data compiled by the Massachusetts Institute of Technology.

How speaking with one voice could help Africa get a better deal from China

But Japan now appears eager to get back in the game and expand its presence in Africa, and analysts say this year’s TICAD will be critical – both in terms of the amount of money Tokyo commits to African development and how it positions itself as an alternative to the Chinese model.

Ryo Hinata-Yamaguchi, a visiting professor at Pusan National University in South Korea, said the continent was “economically vital to Japan, both in trade and investments”.

“Moreover, Japan has established some strong links with African states through foreign aid,” Hinata-Yamaguchi said.

“Japan’s move is driven by both economic and political interests. Economically, Japan needs to secure and maintain its presence in, and linkages with, the African states while opening new markets and opportunities,” he said.

To counter China’s belt and road strategy, Japan has launched the Asia-Africa Growth Corridor project, an economic cooperation deal, with India and African countries.

Tokyo meanwhile pledged about US$30 billion in public-private development assistance to Africa over three years at the 2016 TICAD, in Nairobi. But China offered to double that amount last year, during its Forum on China-Africa Cooperation in Beijing.

Still, Japan continues to push forward infrastructure projects on the continent. It is building the Mombasa Port on the Kenyan coast, while Ngong Road, a major artery in Nairobi, is being converted into a dual carriageway with a grant from Tokyo.

Japan is also funding the construction of the Kampala Metropolitan transmission line, which draws power from Karuma dam in Uganda. In Tanzania, it provided funding for the Tanzania-Zambia Railway Authority (Tazara) flyover. And through the Japan International Cooperation Agency, Tokyo also helps African countries improve their rice yields using Japanese technology.

There are nearly 1,000 Japanese companies – including carmakers like Nissan and Toyota – operating in Africa, but that is just one-tenth the number of Chinese businesses on the continent.

Are Chinese loans putting Africa on the debt-trap express?

Olander said Japan’s construction companies were among the best in the world, albeit not necessarily the cheapest, and that Tokyo was pushing its message about “high-quality” construction.

XN Iraki, an associate professor at the University of Nairobi School of Business, said Japan wanted to change its approach to Africa on trade, which had long been dominated by cars and electronics.

“[It has] no big deals like China’s Standard Gauge Railway. But after China’s entry with a bang – including teaching Mandarin through Confucius Institutes – Japan has realised its market was under threat and hence the importance of the TICAD, which should remind us that Japan is also there.”

Source: SCMP

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