African car sales head towards the 2 million mark: GM

JOHANNESBURG | Thu Apr 11, 2013 5:22am EDT

JOHANNESBURG (Reuters) – Annual vehicle sales in Africa will rise nearly 20 percent in the next two years to hit the 2 million mark as the continent’s burgeoning middle class trades up from motorbikes and jalopies to new cars, the regional head of General Motors (GM.N) said.

The U.S. car giant sold 180,000 vehicles on the continent last year, giving it a 10 percent market share and putting it narrowly behind rival Toyota (7203.T), which recorded African sales of 237,000.

However, of GM’s total sales, 100,000 went to North Africa and 70,000 to South Africa, leaving only 10,000 to the impoverished but fast-growing countries in between.

“That’s where we see the huge opportunity for growth,” GM Africa managing director Mario Spangenberg told the Reuters Africa Investment Summit in Johannesburg.

Although Africa offers enticing growth, sales volumes remain a drop in the ocean for GM, which sold 6 million vehicles last year outside its traditional U.S. market.

As well as benefiting from the expanding overall market in one of the world’s fastest-growing regions, Spangenberg hopes to increase GM’s market share with models such as the Isuzu pick-up, which has proved resilient to Africa’s rugged conditions.

“We want to defend our 10 percent and maybe grow it a little bit,” he said.

Of Africa’s 40-odd sub-Saharan frontier markets, Nigeria – the continent’s most populous nation and its biggest oil producer – is the most attractive prospect, Spangenberg said.

“The next big market growth will be in Nigeria, where we have no presence. It will take a while,” he said. “We need to do a better job there.”

He also dismissed concerns that the arrival of Indian manufacturers such as Tata Motors (TAMO.NS), with its experience of making and selling cars in relatively low-income markets, threatened GM’s African expansion plans.

“The international competition is going to get tougher no matter where you are,” he said.

(Follow Reuters Summits on Twitter @Reuters_Summits)

(Reporting by Ed Cropley; editing by David Dolan)

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Reuters: Business News

African car sales head towards the 2 million mark: GM

97% of Spain"s Social Security Pensions are Invested in Spanish Government Debt

Looking for a disaster waiting to blow sky high? I have one right at hand. El Economista reports 97% of pensions are invested in Spanish government debt in 2012.

The Reserve Fund of Social Security in 2012 increased their holdings of Spanish debt to 97% of total assets, up from 90% who had in late 2011.

Over 70% of purchases are recorded in the second half of 2012, according to Bloomberg points, after the critical moment when ECB President Mario Draghi, undertook to do “whatever it takes” to defend the euro. A message that helped ease the constraints and helped drive Spanish debt.

In 2007, the money invested in financial assets were divided fairly (50%) between Spanish debt and foreign debt, but this proportion began to change in 2008.

In September 2012, for the first time in history the government had to dip into the reserve fund to pay the payroll to pensioners. A total of 3,063 million euros were drawn from this instrument, to which were added to the 3,530 million in November Moncloa needed to fund the pension increases.

Comparison to GM

This exactly reminds me of the stupidity of GM investing its assets in GM bonds. Expect similar results in Spain.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Mish’s Global Economic Trend Analysis

97% of Spain"s Social Security Pensions are Invested in Spanish Government Debt