Retailers, consumers and prices
Check out what retailers are thinking about China’s revaluation of the yuan.
Western retailers may pay more for goods they import from China as the yuan appreciates, but the flip side is that the move may create significant selling opportunities by putting more money in the pockets of consumers in the world’s biggest market.
Executives at the Reuters Consumer and Retail Summit took solace in the idea that any appreciation following China’s weekend statement it would let the yuan appreciate against the dollar would likely be gradual.
They also see room to move more manufacturing out of China and into other countries with lower labor and other costs.
“I don’t think that there is any sense that there is going to be any immediate impact … The open question is how quickly and how far they’ll actually let the currency revalue,” said Matthew Shay, president and CEO of the U.S. National Retail Federation, a retail trade group.
Some retailers will see margins hit because their goods manufactured in China will be more expensive in dollars or euros. Retail stocks dropped more than the broad market on Monday in the wake of the yuan announcement.
Beyond the retail industry, the yuan’s move is expected to help companies that supply commodities or heavy equipment to China’s fast-growing economy, like Caterpillar, and other foreign brands that source and sell goods locally, such as fast-food operator Yum Brands, the parent of KFC.
Also in China, a new strike at an auto supplier plant forced Toyota to suspend production at its Chinese assembly plant, the latest in a string of labor-related disruptions at foreign-owned manufacturers across the country.
The well-known consumer magazine said it was changing the rating for that SUV after recall work corrected the problem it displayed in one of its emergency handling tests.
Check out a different kind of tournament bracket still underway.
The Duke Blue Devils may have won yet another college basketball title Monday night, but consumers can still make their “Sweet 16″ picks in Consumerist.com’s annual “Worst Company in America” tournament, which runs through April 26.
In its fifth year, the website, owned by Consumers Union, the publisher of Consumer Reports, lets consumers vote for their least favorite companies in matchups much like the NCAA tournament. Starting with 32 “teams,” the tournament pairs companies in votes in which the “winner” (think about it, in a worst company vote you want to lose) advances to face the next competitor.
Consumer Reports magazine’s senior director for automotive testing, Dave Champion, sat down with correspondents Bernie Woodall and Ben Klayman at the Detroit auto show to discuss the U.S. auto industry, including Toyota’s future, the changing nature of the show, small cars and Chrysler.
“Toyota’s grown incredibly quickly; not only in the number of vehicles that they sell but also in the number of vehicles that they produce. They have a range of vehicles now that’s extremely wide. What Toyota used to have was a great attention to detail on every single part that went into the car and a real focus, very tightly, on the product. Now, with so many different variants and iterations and models, it was very difficult to keep that same focus and that same attention to detail on all the products.”
IHS Global Insight analyst Rebecca Lindland met with Reuters TV and text reporters at the Detroit auto show to discuss the industry, including electric and small cars, GM, Chrysler and Toyota, and auto shows past and future.
About electric cars:
“We will eventually see electric cars, mostly because fuel economy regulations are really being forced upon the manufacturers from Washington. It’s a policy and regulation issue. We are not seeing huge amounts of consumer demand out there. Whether it’s an education issue or whether they just say, ‘I’m getting a smaller vehicle anyway. I’m happy with the fuel economy I’m able to get.’ I was disappointed to see that hybrids were still less than 3 percent of the market in 2009, which means 97 percent of people are picking something else.”
Executives from two top U.S. automobile dealers sat down with Reuters’ Detroit bureau chief Kevin Krolicki and correspondent James Kelleher at the Detroit auto show and dished on the industry. Some thoughts on various automakers and the sector follow:
Earl Hesterberg, Group 1 Automotive CEO
Regarding GM and CEO Ed Whitacre:
“I am happy to see some sense of urgency and aggressiveness. We have not had nearly enough sales activity in our GM dealerships for the last year and we’ve been waiting for them to get aggressive and try to get back in the market and get it growing. … (Whitacre) seems to have that same urgency to step up their volumes.”