04/08/2017 Asia Business Report


04/08/2017

Live from Singapore, the essential business news as it breaks and a look ahead to the news that will shape the business day.


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Transcript


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that uncertainty over Brexit has hit high-street spending and business

:00:00.:00:00.

Now, all the latest business in Singapore.

:00:00.:00:16.

Tour to reverse its earnings. Will profits be next to roll off the

:00:17.:00:25.

assembly line? And we size up the petition as Amazon dies into the

:00:26.:00:31.

already crowded Southeast Asian e-commerce market. Good morning,

:00:32.:00:39.

welcome to Asian business report live from Singapore with me, Marika

:00:40.:00:45.

Oi. Our top story, Toyota is due to release its earnings this afternoon.

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The focus is also on media reports that Toyota and Mazda will announce

:00:53.:00:57.

a $1.6 billion assembly plant in the US later today according to The Wall

:00:58.:01:03.

Street Journal. Toyota was the only Japanese carmaker which saw its

:01:04.:01:07.

sales rise in the most important market, the United States, in the

:01:08.:01:11.

month of July. Its smaller rivals struggled in the US but Honda posted

:01:12.:01:17.

strong results next with cheap Japanese yen and solid demand in

:01:18.:01:26.

Asia. Not as good for Nissan which reported a sharp drop in profit. One

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analyst told me why Honda is doing much better than the others. There

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are some earnings in the United States which have been very weak

:01:40.:01:44.

across-the-board soap Honda as well is Nissan did seek a very weak

:01:45.:01:48.

market sales in the United States. The things which Honda did well is

:01:49.:01:55.

the motorcycle business and earnings and profitability from motorcycles

:01:56.:01:58.

did improve quite a bit in this first quarter, partly because they

:01:59.:02:03.

had serious damage in the first quarter last year as a result of the

:02:04.:02:09.

earthquake. In the case of Nissan, they do not have any motorcycle

:02:10.:02:13.

business and their US sales have been so, so. In terms of

:02:14.:02:18.

profitability, we did see a big dip in the United States in this first

:02:19.:02:23.

quarter so as far as automobiles are concerned, not so much of a

:02:24.:02:29.

difference between Honda and Nissan. I want to ask you about Takata which

:02:30.:02:35.

provides seatbelts and airbags. Takata recently filed for bankruptcy

:02:36.:02:40.

and it's been making headlines for all the wrong reasons and Japanese

:02:41.:02:43.

carmakers have been affected by it. Will that continue affecting those

:02:44.:02:53.

automakers? The worst is over. As far as the losses associated with

:02:54.:03:00.

this recall, it's was almost reported last you buy this Japanese

:03:01.:03:04.

car makers so we're not really expecting so much of a continuous

:03:05.:03:09.

damage from this deal, even though having said that, there still seems

:03:10.:03:15.

to be class-action cases in the United States going on and there

:03:16.:03:20.

might be some legal impact out of this class action case. Especially

:03:21.:03:34.

Honda, Toyota, Nissan. Ridesharing service Uber has apologised to be

:03:35.:03:37.

using recall Honda vessels in Singapore that had not been

:03:38.:03:41.

repaired. The Wall Street Journal says Uber was aware of the fact --

:03:42.:03:46.

the defects and rented them to drivers. Our report has been

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monitoring the story. Uber has acknowledged in a statement to the

:03:53.:03:57.

BBC that it could have done more to avoid this problem and they have

:03:58.:04:00.

since introduced much more robust protocols. Essentially they bought

:04:01.:04:11.

more than 1000 defective cars. Some of these had been recalled last year

:04:12.:04:21.

over a faulty electrical component. And catch fire, the Vezel did. One

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driver had his dashboard and interior burst into flame and crack

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a big hole in his windshield. This was first reported by The Wall

:04:31.:04:34.

Street Journal and thankfully the driver is unhurt. This is just the

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latest in a long line of scandals that Uber has been facing this year

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so it may be a case of Uber expanding too fast, too quickly

:04:48.:04:51.

without putting proper systems in place. Amazon's entry into

:04:52.:04:58.

Singapore's tiny market last week has shone a spotlight on the island

:04:59.:05:06.

nation's driving e-commerce sector. We have been finding out more about

:05:07.:05:14.

this market. We just found out the location of the first Australian

:05:15.:05:17.

warehouse. Amazon seems to be investing a lot of money in the

:05:18.:05:21.

region, putting a lot of pressure on local competitors. This is a

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potential market in Southeast Asia of 600 million customers across the

:05:27.:05:35.

ASEAN area and even though these countries are a different economic

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stages, the prize is getting into these big markets, Indonesia,

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Thailand, millions of people who are getting on to their mobile phones

:05:44.:05:47.

and shopping away not nobody's business. I went on a bit of a

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shopping trip to find out for myself.

:05:52.:06:01.

Traditionally this is how most Singaporeans have shopped, adding to

:06:02.:06:06.

the supermarket to pick up their weekly supplies of fruit, vegetables

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and other groceries but the statistics show that this is

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changing and it's not just in Singapore. It is a pattern being

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observed across the Asia-Pacific region. Increasingly, people are

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stepping out of the shops and doing their shopping on line. By some

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estimates, e-commerce in Southeast Asia is currently thought to be

:06:28.:06:33.

worth some $55 billion. By 2025, that will shoot up to more than $80

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billion. And these are just conservative figures. Which is why

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US on line retail giant Amazon decided to make its Singapore debut

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last month with this 100,000 square feet facility. We know that

:06:50.:06:53.

Singapore consumers are busy, they love convenience and really,

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consumers would love the idea of having a range of products available

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and make don't want to or can't make a trip, this is where they come. But

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Singapore is just an entry point and it's a crowded market. Meet

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Rosalita, who was a housewife and get paid to do it for others. She

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works for a Singapore e-commerce firm. The reason why South East Asia

:07:21.:07:26.

is attractive today is because everywhere else is slowing down. The

:07:27.:07:31.

collection of different Southeast Asian states are accelerating the

:07:32.:07:35.

growth, be it Indonesia or Thailand or the Philippines. There is a lot

:07:36.:07:40.

of competition. The biggest player is China's Alibaba, which owns

:07:41.:07:52.

Lazada. There are dozens of other players vying for space across the

:07:53.:07:55.

region but they will not all survived. We will expect

:07:56.:08:01.

consolidation of next year, to compete with a lot of the bigger

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players. But for those employed in the Southeast Asian e-commerce

:08:09.:08:12.

space, time are good, for now at least and for customers, well, a

:08:13.:08:15.

little competition can be a good thing.

:08:16.:08:21.

Do you like to go fast because Elon Musk's last transportation system

:08:22.:08:36.

could be sent a reality. Hyperloop One what in the Nevada desert reach

:08:37.:08:41.

speeds of up to 650 kilometres an hour. This is the beginning and the

:08:42.:09:26.

dawn of a new era of transportation, the first new major former trust the

:09:27.:09:30.

patient in 100 years and it sounds incredible, it's the future, it is

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the sound of the future and it's going to basically change the way we

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live, where we work and make the world a much smaller place and turn

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cities into Metro stops. Let's show you the markets before we

:09:43.:10:02.

go because all markets you are trading lower. Japan is down under

:10:03.:10:08.

0.5%, mainly the case of the Japanese yen which has been quite

:10:09.:10:12.

strong against the US dollar. Overnight in the US, will be -- Wall

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Street fell slightly after the blue-chip index hit a new all-time

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high on Thursday. That's if this of Asia Business Report. We will be

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back next hour. Thank you for watching.

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