09/01/2017 World Business Report


09/01/2017

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Fiat Chrysler says it will invest $1 billion in the United States

:00:00.:00:20.

as the Detroit Motor Show gets under way.

:00:21.:00:23.

Iron ore prices are set to plunge - that's the message from

:00:24.:00:27.

the Australian government, sending mining stocks down.

:00:28.:00:36.

The boss of Rolls Royce is here to tell us

:00:37.:00:44.

That is his view. We will talk to him in a moment.

:00:45.:00:56.

Over the next few days, the world's car makers will be

:00:57.:01:00.

taking the wraps off their latest products at the Detroit Motor show.

:01:01.:01:03.

The car seems more popular than ever - an estimated 75 million were sold

:01:04.:01:07.

last year, but 2017 is already beginning to look like a big year

:01:08.:01:10.

Not least because more of them are looking

:01:11.:01:14.

In the last few hours, Fiat Chrysler has said it will put

:01:15.:01:19.

$1 billion into two US factories, which will create 2000 new jobs.

:01:20.:01:22.

The incoming president Donald Trump has been piling pressure

:01:23.:01:25.

on carmakers to make the vehicles they sell in the US in the US.

:01:26.:01:28.

Meanwhile, the traditional business model

:01:29.:01:30.

of the industry is changing with the disruption coming

:01:31.:01:32.

Google, Apple and Uber are pushing innovations like driverless

:01:33.:01:37.

And that will also mean more electric cars.

:01:38.:01:47.

Global warming and pollution are just two of the reasons

:01:48.:01:50.

many of the established players are focusing their investments

:01:51.:01:52.

In particular, concerns regarding diesel engines

:01:53.:01:55.

with cities including Paris, Mexico City, Madrid and Athens

:01:56.:01:57.

all planning to introduce some kind of ban over the next decade

:01:58.:02:00.

And then there is the prospect of a free

:02:01.:02:07.

trade era slowing down - that's why Fiat Chrysler

:02:08.:02:09.

is investing in the US, with Donald Trump threatening

:02:10.:02:12.

several leading manufacturers with tariffs for building

:02:13.:02:14.

Karl Brauer is an analyst with the US car website Autotrader,

:02:15.:02:21.

and says Donald Trump's plans might come back to haunt him.

:02:22.:02:31.

What I think will happen is Donald Trump will come into office and told

:02:32.:02:38.

for smart ways to keep jobs in America, but at the same time, you

:02:39.:02:42.

have to be careful for unintended consequences. Go buy the role of

:02:43.:02:47.

government agencies. If you keep the jobs here and force prices up and

:02:48.:02:51.

make them uncompetitive with cars coming in from somewhere else or

:02:52.:02:55.

companies building the cars in a different way, you could end up

:02:56.:02:58.

hurting companies because they simply can't make the cars

:02:59.:03:01.

affordable for Americans. Then you will have company is laying people

:03:02.:03:05.

off, not because the cars are built somewhere else, but because they

:03:06.:03:08.

can't sell enough cars to employ people. Economics is interesting.

:03:09.:03:13.

Usually there is a cause and effect a new car just do one thing at issue

:03:14.:03:17.

it is always an upside. There are always repercussions somewhere else.

:03:18.:03:21.

-- and issuing it is always an upside.

:03:22.:03:22.

With me is Torsten Muller-Otvos, the chief executive of Rolls-Royce.

:03:23.:03:25.

Let's talk about your results. Another fairly good year, quite

:03:26.:03:33.

interesting, where you have been selling cars more than usual last

:03:34.:03:38.

year. I would call it a tremendously good year for us, plus 6% worldwide

:03:39.:03:42.

what we have achieved in light of some considerable headwinds we have

:03:43.:03:46.

seen in some of our markets worldwide. Plus 6% is great, over

:03:47.:03:53.

four dozen cars. Over 250,000 euros, a great achievement -- 4000 cars.

:03:54.:03:58.

Fair enough. You sell most of your cars in USA. Yes, that is the

:03:59.:04:04.

biggest market. After that, you saw a 25% rise in sales in the UK. The

:04:05.:04:13.

UK has been a very good market for us last year. Plus 25%. The overall

:04:14.:04:17.

market was quite strong for us. Why? We should not forget we have

:04:18.:04:21.

introduced last year our new convertible into the market, and

:04:22.:04:25.

that has played particularly well in the UK. It had tremendous market

:04:26.:04:30.

success and is part of the success story of plus 25%. Why was the UK so

:04:31.:04:35.

strong for you last year? You will see a lot of individual target

:04:36.:04:43.

groups in the UK, and the economic climate is not bad in its way, and

:04:44.:04:48.

for that reason we have seen you business for us. When it comes to

:04:49.:04:52.

the industry and all of the changes we have seen already, the Donald

:04:53.:04:56.

Trump effect, technology, the likes of Google and Apple getting

:04:57.:05:00.

involved, where do you see yourselves in the future? Some argue

:05:01.:05:04.

that you have not necessarily moved with the times as quickly, for

:05:05.:05:08.

example when it comes to electric. You were very slow to get ahead on

:05:09.:05:13.

that. We are in a very different segment. We are not a traditional

:05:14.:05:17.

automotive business. This is more luxury. Our clients don't need a car

:05:18.:05:24.

or a Rolls-Royce to go from A to B. They have several cars in a grudge.

:05:25.:05:29.

They are not prepared to accept compromises, such as compromises on

:05:30.:05:34.

charging transfer batteries and things like that -- in Bay barrage.

:05:35.:05:39.

But more people want an environmentally friendly vehicle

:05:40.:05:42.

double get them from A to B, maybe by plugging in as opposed to using

:05:43.:05:48.

Oldfield. We are committed in that direction. -- old fuel. You may be

:05:49.:05:54.

aware of our vision, a full autonomous driving full electronic

:05:55.:05:58.

car. That is how we see the future of luxury transportation and

:05:59.:06:02.

Rolls-Royce. When can we drive one of those? In the next ten years,

:06:03.:06:07.

definitely. We are clearly committed to entered the field of electric. He

:06:08.:06:16.

must accept our customers love and enjoy our business. Look at the

:06:17.:06:20.

numbers. We have been highly successful last year. We would not

:06:21.:06:23.

be success are full if we did anything wrong when it comes to

:06:24.:06:27.

drive rates. For that reason I think we are in good shape. We might see

:06:28.:06:31.

more in London today because of the tube strike. You never know. Thank

:06:32.:06:36.

you for coming in and telling us how you are doing. Great to be around.

:06:37.:06:41.

Of course we are at the Detroit motor show. You can watch our

:06:42.:06:44.

website for the very latest from there as the week progresses. Let's

:06:45.:06:48.

talk about what is going on in Australia.

:06:49.:06:50.

Shares in Australian mining companies have been falling sharply

:06:51.:06:53.

today in Sydney after the government warned of a dramatic decline

:06:54.:06:56.

Iron ore is a key ingredient in steel, and one of the country's

:06:57.:07:00.

Let's go to Sharanjit Leyl, who's in our Asia Business Hub

:07:01.:07:04.

Talk us through this warning any immediate impact for financial

:07:05.:07:12.

markets. The impact on financial markets is that we are seeing those

:07:13.:07:17.

Australian mining company shares falling, like fortis kiss you --

:07:18.:07:29.

Fortescue falling nearly 4%. The Department of innovation and science

:07:30.:07:32.

said they would be a dramatic decline in iron ore prices. It

:07:33.:07:36.

projected that iron ore prices in two dozen 18 would be almost half

:07:37.:07:42.

the current level of 80 US dollars a ton. The current price, bear in

:07:43.:07:46.

mind, is being supported by resurgent demand from China. The

:07:47.:07:51.

Department goes on to say to mind is unlikely to continue over the coming

:07:52.:07:54.

years, and also lowered its forecast for iron ore exports by 2% to just

:07:55.:08:00.

over 832 million tons for this fiscal year. All of this takes a

:08:01.:08:06.

huge toll on Australia. It is the world's biggest supplier of iron

:08:07.:08:11.

ore, and shares it has been following -- has been falling,

:08:12.:08:15.

although they were against the trend. We have seen the ASX gaining

:08:16.:08:22.

today to 18 month highs. Again, in this forecast, I should add, the

:08:23.:08:26.

same department made a forecast early last year, and predicted a

:08:27.:08:30.

similarly dire forecast for iron ore prices, but in fact, there was an

:08:31.:08:34.

increase in Chinese demand that spoke the price above $80. --

:08:35.:08:41.

spared. Thank you very much. Let's squeeze in a few other stories.

:08:42.:08:45.

London faces a day of disruption with many Underground stations

:08:46.:08:48.

closed, especially in the centre of the city, because staff

:08:49.:08:50.

They've walked out in a row with management over station ticket

:08:51.:08:54.

One estimated suggests that the 24-hour strike will cost

:08:55.:08:58.

the city's economy as much as ?300 million,

:08:59.:09:00.

Two senior Samsung executives have been questioned as part

:09:01.:09:06.

of the corruption probe surrounding South Korea's impeached president,

:09:07.:09:09.

It's reported that they're being treated as witnesses.

:09:10.:09:13.

The electronics giant is accused of giving large donations

:09:14.:09:16.

to non-profit foundations operated by a close confidante of Ms Park,

:09:17.:09:19.

allegedly in exchange for political support

:09:20.:09:20.

Venezuela's president, Nicolas Maduro,

:09:21.:09:30.

has announced a 50% increase in the minimum wage.

:09:31.:09:35.

It's the fifth increase in the last year and is supposed to help

:09:36.:09:38.

Venezuelans who are struggling to cope with hyper-inflation,

:09:39.:09:40.

which is estimated to be around the 500% mark.

:09:41.:09:45.

The opposition says Mr Maduro is responsible for the economic

:09:46.:09:47.

crisis which has been engulfing the oil-rich country

:09:48.:09:49.

A very brief look at the markets today in Asia. They are trading at

:09:50.:10:03.

the moment. Japan is shut today for a public holiday. Also you can see a

:10:04.:10:06.

mixed picture. I will see you soon. Plans aimed at cutting suicide rates

:10:07.:10:18.

and improving support for people suffering

:10:19.:10:21.

with mental illness in England will be set out

:10:22.:10:23.

by Theresa May later. It's her first major

:10:24.:10:25.

speech on health She's expected to announce plans

:10:26.:10:27.

to reduce the waiting times

:10:28.:10:33.

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