IS THE CENTRE OF WORLD’S ECONOMY MOVING TO ASIA?

Monday, June 1, 2009 in Washington DC, US Government approves bankruptcy for General Motors Corp. (GM). General Motor is the humbled auto giant that has been part of American life for more than 100 years. Magna International Inc., a company from Germany, has been deal with GM for buying Opel. Germany’s company also dealt to give fund stimulus to Opel.

Before 2008, GM is noted as the first rank global car market shares and Toyota is in the runner up. New phenomenon happens in 2008; GM lost its position as the best global car market shares.  Because of bankruptcy, GM’s market share will be fought over others car manufacturer. In this case, Toyota as the global leader car manufacturer and Ford as the second US car manufacturer have the biggest chance to get it. These data are supported by BBC for 2008 Global Car Sales below.

  • Toyota: 8.97m
  • GM: 8.35m
  • VW: 6.3m
  • Ford: 5.5m
  • Nissan: 3.2m
  • Renault: 2.4m
  • Fiat: 2.15m
  • Chrysler: 1.5m

For illustrated the US market share by Manufacturer, GM is always in the first rank, Toyota in the second rank, and Ford in the third rank. In May 2007 the market share of GM is 23.8%, Toyota with 17.2%, and Ford with 16.5%. But, in May 2008, the market share of GM and Toyota is slightly different. GM’s market share is 19.3%; Toyota with 18.4% keeps away from Ford with 15.4%. In the middle level, Honda can win against Chrysler. If in May 2007 Chrysler with 12.8% is in above Honda with 9.3%, in May 2008 Honda with 12% successes grabbing Chrysler position in the forth rank. More complete, the table is showed below.

U.S. Market Share by Manufacturer

Car Manufacturer

May 2007

May 2008

GM

23.8%

19.3%

Toyota

17.2%

18.4%

Ford

16.5%

15.4%

Chrysler

12.8%

10.7%

Honda

9.3%

12.0%

Nissan

6.0%

7.2%

Hyundai

4.6%

5.6%

BMW (includes Mini)

2.0%

2.3%

Volkswagen (includes Audi)

2.0%

2.2%

Mercedes (includes Smart)

1.4%

1.8%

Source: US News 2008

This phenomenon does not only happen in car market, but also in the world’s economic growth. Data from IMF show that the economic growth of Asia and Africa countries rises significantly from 2007, 2008, and also the projection in 2009 and 2010. Most of Asia and Africa countries’ economic growth is always positive. On the other hand; most of America and European counties are sloping down, even will be projected minus in 2009 and 2010.

IMF PROJECTION

IMF Projection 2009Source: IMF, World Economic Outlook, 2009

Europe became the central power of world’s economy in 18th and 19th century. It is signed with Industrial Revolution in England and some development in Germany and France. In 20th century the central power moves from Europe to America, specially the United States. In 21st century, global economic crisis with the epicentre in the US makes the economics of that country and European country unstable. Moreover, Asia and Africa in the fact are able to exist in global economic crisis. But, Asia has more benefit than Africa because many countries in Asia are developed like Japan, Singapore, and Taiwan. Then, the developing countries in Asia like China, India, Indonesia, and Middle East countries are going to growth. Will the centre of world’s economy moving to Asia?

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