26/01/2016 Asia Business Report

Now on BBC News, all the latest business news live from Singapore.

Ford is pulling out of Japan and Indonesia after failing to make

inroads in their two key markets. And the French President Francois

Hollande has arrived in India. We find out what major business deals

are on the table. Hello, and welcome to Asia Business Report. I am

Sharanjit Leyl. Ford is shutting down all its operations in Japan and

Indonesia. Just months after closing its factory in Australia. Nearly 350

employees will be affected the move, which comes after years of losing

money. The US car giant holds less than 2% market share in both of

those countries and has struggled to compete with local rivals. Ford

plans to focus on China, where sales hit a record in December. Earlier

Simon Littlewood was asked whether this indicates a broader pullback

from Australia. It is another step in the global defeat of the US car

industry. As you know the Japanese carmaker became the world's largest

carmaker a few years ago. It never really made sense for them to be in

either Indonesia or Japan, as you mentioned a marketshare of 1.4 or

1.6%, making or selling five or 6000 vehicles in each of those markets.

That is a tiny proportion of what you need to sell to have any kind of

sale. That is a drop in the ocean, isn't it? So in China, where they

are pinning their hopes next, it help offset where they are pulling

out? The thing about China is it is awash with car manufacturers.

Everybody and their dog is there and the Chinese themselves are also

investing significantly in making their own cars. The thing about

Japan is, Ford never made sense in Japan. There is a boom quality of

Ford cars. In Indonesia you have a strategy. You could argue it is a

substantial market, getting onto 300 million people. But problem is the

Indonesian government has a policy of insisting on Local Assembly

service favours companies like Toyota and Astra. Ford either had to

get in in a big way, or get out of the way which is what they have

done. You said earlier that this is the defeat of the US car industry

because we know it is not just Ford. It is General Motors pulling out of

markets including Australia. What does it say about the state of the

American auto industry? It is just the way human affairs evolve. The

way the US car industry acquired global dominance, first of all, came

from the fact that it had a massive domestic market so it was able to

achieve enormous scale and its operations in the US. Ford and

General Motors, Ford particularly. That position did in a very strong

way to exported. There was a Ford factory in Singapore where the

British surrendered. Let me go into something else. The lack of success

of US carmakers in markets is also cited as one of the mitigating

factors that stuck out from the transpacific partnership trade

deal, if you recall. So how much of a disadvantage, really, our

America's carmakers and manufacturers in This? Two things

are required to compete effectively. You need to be in the domestic

market which has scale. That is to say, if you are in China you have

1.4 billion people in China, you have a significant domestic market.

Secondly you have to be close enough to the markets to be able to export

to a significant extent. This is why heavy Manufacturing has pulled out

of Australia, both for cars and manufacturing itself. That was Simon

Littlewood speaking earlier. French President Francois Hollande is

currently on a visit to India where he will be the chief guest at the

country's National Day. It is an honour given to countries which

India considers key partners. Bilateral trade stood at $18 billion

last year and there are plans to increase it further. Our

correspondent in Delhi has more. French troops were much shoulder to

shoulder with Indian military down this road later and while India's

republic date is traditionally seen as a Show-Off might, in the past few

years India has used it to enhance its strategic and military ambition.

President Hollande said his visit was an adventure with real

opportunity for French firms and the Indian Prime Minister Narendra Modi

says India has the skills and the workforce do not just make French

products but also the market to buy them. A French firm has already won

a multi- billion-dollar contract to help modernise India's Railways. But

President Laurent Hopes trip will kickstart talks to build six

reactors in India. But there is more at stake in defence, in which France

has a stake -- President Francois Hollande. They signed an agreement

to build helicopters here. The biggest issuers and $9 billion deal

for India to build French built jets. 106 warplanes were reduced to

just 36 but even that agreement is still stuck over price and ironing

out those differences would really help business between the two

nations fly. In other business news, McDonald's's latest results are

making investors happy. Shares hit a record high after the fast food

giant reported fourth-quarter global sales rose by more than expected.

5%. A net income from three months to December was up 3% to $1.2

billion and demand recovered in China where the introduction of

all-day Breakfast has proved a huge hit. Deutsche bank South Korea unit

has been fined $1.3 million over its role in the 2010 stock market

plunge. The the court found the lender guilty of market manipulation

after its price fell nearly 3% in the final ten minutes of trade.

Deutscher Tank employees were also sentenced. -- Bank. South Korea's

economy saw growth of more than half in the final three months of last

year. Seasonally adjusted gross domestic product expanded by 6% in

the fourth quarter compared with 1.3% in the third -- one .6% in the

fourth quarter. It was mostly due to a drop in construction investment.

Now how competitive do you think we are as global talent? Well according

to the latest index by the business School, Singapore is the only Asian

nation to rank in the top ten. It came in second behind Switzerland,

New Zealand and Australia just missing the top ten while Japan was

in 19th place. Now, interestingly Malaysia actually ranked above South

Korea and China. Well, Thailand, Vietnam, Indonesia, they are all

placed much, much further down. Earlier I spoke to Paul Evans, the

co-author of the index and asked what led Singapore to place so high?

There are two be lessons from Singapore's success. One goes back

to the leader, his realisation that our only resources are our talent.

And taking that very seriously, that is the same for most of the other

leaders. Tell us what impact this has on businesses. Is it tough to

hire the right talent in the region? Well, the question of what is the

right talent? There are two types of talent that we measure. What is

vocational, technical. The other is the high end, the creative, the

leadership. In the lesson behind Singapore and Switzerland is you

need both. You look at Asian countries and you've got a lack of

balance. You've got some countries as you said which are quite strong,

Australia, New Zealand, in the top 20, but both of them are very weak

on the vocational skills. Right. What pushes a country like Malaysia

into the position of number 13 is, like Singapore, it has invested in

technical skills which are seen in manufacturing. You have a different

picture in South Korea. In South Korea ever body wants to go to

university. You've got a lot of the but you've got massive skill

shortages. That's right, they're not investing in the vocational areas.

The top talent, and I think there's a big message here, involves a

balance between different types of talent. Therefore you see the

Singapore government putting a lot more emphasis in the recent past on

vocational schools rather than everybody going to university and

wanting to be at the high-end. And that is also to some extent where

language plays a key role as well. What evidence have you seen that a

lot of these Asian nations are now trying to play catch up, to really

catch up with the rest of them at the top? I think they are catching

up. You are dead right when you say that language is important. That is

a big advantage for countries like Singapore. Again it goes back to the

early days, recognising that English will be a kind of international

language. Look at the young people across Asia today, everybody is much

more mobile, wants to move abroad, wants to study in the US, and they

are all learning English. That was wants to study in the US, and they

are all learning English. That was Paul Evans speaking to me earlier.

Let's look at these markets now. They are all falling amongst those

open in Asia. The Nikkei down well over 2%. The Hang Seng has opened 1%

lower. I should add the Australian market is shut today for Australia

Day so they are not trading. But the decline is because these Asian

markets are following the US and European counterparts. We saw a huge

decline in oil prices pretty much on Monday,

European counterparts. We saw a huge decline in oil prices pretty much on

Monday, reversing all those gains made on Friday and that led energy

stocks to be sold off and the US as well closing down. That is it for

this edition of Asia Business Report. Thank you for