By contrast, vehicle sales in China rose by 20% in the year to February 2013. Inchcape, the global automotive distributor and retailer, painted a similar picture in their figures today. The UK – bizarrely the one hot spot in the European car market – and North Asia performed above expectations while Russia and emerging markets were below forecasts. Unsurprisingly, their Greek operations fell by 40% year-on-year.
So is it “Game over” for emerging markets? Far from it! Diageo reiterated their target of achieving 50% of their sales from emerging markets by February 2016 and is already at 43%. This is true of many of the large multinationals – General Electric, for example, has announced it intends to double its sales in sub-Saharan Africa over the next few years. Investors and companies, however, ignore the developed world at their peril. It has been interesting to note the statements from many companies recently that point to the strength of the US economy, a point that my colleagues, Guy and Ben, have made recently. The secret, as ever in life, is one of finding the right balance between risk and reward!
Divisional Director - Investment Management