04/08/2017 World Business Report


04/08/2017

The latest business news with informed analysis from the world's financial centres.


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Transcript


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Now it's time for all the business news.

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World Business Report - Ben is standing by.

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Toyota may reveal a fall in profits as it slips from the world's number

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one carmaker - to the world's number three.

:00:27.:00:28.

One year on from the Games, how Rio's property boom

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we start in Japan where car giant Toyota is set

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to report its latest results in the next few hours.

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For years Toyota was the world's top carmaker.

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Its Corolla model is still the best selling car the world has ever seen

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but recently Toyota has lost its crown Let's show you some

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Toyota's expected to reveal a sharp fall

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in profits for the three months to June.

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Bloomberg News estimates it made just under $5 billion

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that would be a drop of 15% on last year.

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That's partly because of a big increase in research

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Last year - despite Dieselgate - Volkswagen sold more cars -

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And in the first half of this year they were both overtaken

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by Renault-Nissan after it added Mitsubishi

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So Toyota is spending big to attract new customers.

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Last month it committed another $100 million

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That is on top of the $1 billion it's already spending to develop

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self-driving cars and other tech at a new research centre in the US.

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Toyota's US boss Jim Lentz spoke to this programme at the time.

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He told us it's all about winning over 20 and 30somethings -

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There was a belief just a few years ago but Gen Y was not interested in

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cars, they were interested in ridesharing and car sharing. If you

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look at small luxury SUV is, a lot of that has been driven by Gen Y,

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especially in the US, where they were saddled with large college

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debts, they came out of college and had jobs but not necessarily

:03:01.:03:03.

careers, they have now advanced beyond that and their desire to

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purchase cars is now coming back. That was the boss of US Toyota.

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Annamarie from BMR research joins me. We heard him talking about the

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importance of capturing the new generation of car buyers. A lot of

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the wisdom suggests that generation does not want to buy cars but now,

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Jim's Bjorn that is maybe they do but it's got to be the right type of

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car. Absolutely. A lot of it comes to do, attracting them. Part of the

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reason companies were worried people didn't want to buy cars, especially

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younger people, they had more interest in technology so maybe if

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you can take cars down that route, you can win them over. In that

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sense, although a lot of the analysts are expecting Toyota is

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probably going to report a fall in profits, but that is down to them

:04:05.:04:08.

spending more on research and developing the tax side of things,

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it sounds like that is no bad thing. Absolutely, and if you look at the

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sales side and the revenue, is expected to be better, volume

:04:19.:04:24.

sellers are doing quite well. A lot of it is on expenditure. An electric

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vehicles, going straight to hydrogen. Autonomy, AI, they are

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looking into a lot of technologies. They seem to be in a bit of that

:04:40.:04:43.

niche position with self driving cars. You think that was a

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misjudgement? I think it was because there was a lot of support from the

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Japanese covenant, so the carmakers got support to get into hydrogen and

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it is very niche, as you say, there is a lot of infrastructure. It is a

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cautionary tale. Toyota seemed to be ahead of the pack in terms of

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developing tack. Everyone knows hybrids, they associated with the

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Prius and suddenly, they find themselves overtaken. They are one

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of the few companies that does not have a strategy for. They could have

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something big country with the solid-state battery, that could be a

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big development but in terms of actually having models to the

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market, they are behind from else. We will watch very closely for those

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results. A year ago - as host city

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of the Olympic Games With Olympic fever came

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a real estate boom. But with Brazil's economic problems

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mounting, it's turned to bust, As views from the office window go,

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it doesn't get much better than this. But for this office building,

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despite lavish decorations, marble and art deco, not a single unit has

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been sold or rented since it opened about a year ago. Predictions of a

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post- Olympics boost to business have failed to come to fruition.

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Leading up to last year 's Olympic Games, Rio de Janeiro had a real

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estate boom with dozens of new commercial buildings like this one

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cropping up but last year, after the Games were over, the city went into

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a severe economic crisis and investors are now facing a new

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reality. When we planned this building, rear's real estate market

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was on a high. Today, we are in the low sales cycle which will change in

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the coming years. So for now, we are offering lower prices, trying to get

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tenants and waiting for better times. The crisis is national but

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recession is biting hardest in Rio. More than 80% of new office space

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remains an rented. The local government is virtually bankrupt.

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Police officers, teachers and civil servants are not getting paid. This

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area of downtown Rio received over $2 billion in investments. It was

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supposed to be a new hub for tourists and businesses with a

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lavish Museum of tomorrow. Last month, the company responsible for

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cleaning and security abandoned its contract after months of not being

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paid. It's a very good moment to invest because the prices are very

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low so it's easy to find a good deal. If you want to bring up your

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company, to set up a brand here in Rio de Janeiro, is a good moment but

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the recovery will -- the recovery of -- the recovery will happen in the

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long-term. It depends on the recovery of Brazil. Rio did have one

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of the most expensive real estate markets in Brazil and now developers

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are having to sit and wait patiently for prices to go up again or risk

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selling at a loss. In Asia, more trouble for Uber. It

:08:27.:08:44.

says it has taken action to fix cars after one of them caught fire.

:08:45.:08:48.

According to The Wall Street Journal, Uber rented Vezel SUV 's.

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Marika Oi, just bring is up-to-date. Then, it feels like another scandal

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for Uber and when contacted by the BBC, it said as soon as we learned

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other Honda Vezel catching fire, we took swift action to fix the problem

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but we acknowledge we could have done more. Of course, the company

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has been involved in quite a lot of scandals. The resignation of the

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boss and founder getting a lot of attention. We still don't know who

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is going to replace him. There are sexual harassment allegations. The

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company is accused of stealing driverless technology from Google

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and it does feel like it might have been expanding to rapidly into

:09:51.:09:53.

Google markets like Singapore without doing all the due diligence.

:09:54.:10:01.

Sterling has fallen sharply against the dollar and the euro

:10:02.:10:04.

after the governor of the Bank of England warned that uncertainty

:10:05.:10:07.

over Brexit is already weighing on the economy.

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Mark Carney's comments came as the Bank voted to hold interest

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rates at a record low and cut UK growth forecasts.

:10:13.:10:15.

It edged this year's growth forecast down to 1.7% from its previous

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It also cut its forecast for 2018 from 1.7% to 1.6%.

:10:19.:10:25.

The Nikkei is lower - feeling a drag from the strong yen.

:10:26.:10:34.

The dollar fell even more against the Japanese currency

:10:35.:10:38.

after that report on the new moves in the investigation into alleged

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Russian interference in the US election.

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The weaker dollar against the yen makes Japan's

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Some currency analysts are warning the dollar could fall yet further -

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and they're not expecting US wages data out later to offer much relief.

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While the dollar fell, there was a mixed picture for stocks

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The Dow edged to a record high for the seventh straight day

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Thursday - staying above the 22,000 mark -

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although the tech-heavy Nasdaq retreated.

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