Financial Assessment of the Global Automotive Components Industry - a new market research report on companiesandmarkets.com
PR-Inside.com: 2014-04-21 23:31:01
The ongoing debt crisis in the Eurozone is having an impact on all major global economies. In this current global scenario, companies are increasingly being cautious and risk-averse about their strategies. This, coupled with high inflation in developing economies/BRIC nations, is forcing the central banks of those countries to increase borrowing costs. BRIC nations contribute considerably toward revenue of the automotive original equipment manufacturers (OEMs). The demand for automotive components is directly related to the OEM industry.With China´s growth decreasing, companies are finding it difficult to manage operations in the emerging economies. While inflation versus growth is a key balancing factor driving the slowdown in these economies, a part of this can be attributed to the Eurozone crisis. The European Union is one of the biggest foreign markets for emerging countries.Expansions into emerging economies is now a greater challenge for established Western companies. In addition, owing to a slowdown of growth rates in the Eurozone, interest rates are at very low levels to encourage capital expenditures/investments. If any major economy in the EU (say Italy, Portugal, Greece, or Spain) defaults, foreign institutional investors who have borrowed and invested in emerging markets are likely to withdraw their investments. This is anticipated to hit the domestic markets of the emerging countries.Government regulations with respect to exhaust emission, noise, safety, and pollution for plants are extremely high within the industry. It helps if the company has an in-house components division. The companies need to be pro-active to guess future regulations and if a product development strategy is in place, it helps them in adopting faster to new regulations.
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