Wednesday, October 5, 2011
Hong Leong Asia
There was a better write-up in "The Edge"....
Reducing reliance on China?
The implicit takeaway from this article seems to be that the China mkt is not sustainable?
This is definitely not correct !! China is too important a market, in fact diesel engine sales are still growing at healthy rates (pricing and product positioning aside) and that is where HLA's crown jewels, CYL & Xinfei does almost all of of its biz, presently. The correct message should be to diversify CYL's & Xinfei's markets by exporting to rapidly developing mkts like Indonesia & Vietnam; from China.
Thinking outside China does not equate to getting out of China or not doing biz from/in China!
In fact, producing from China to export to new emerging mkts, give HLA a huge competitive advantage as it allows product segmentation and re-positioning opportunities!!
High quantity low margins now....
Towards higher quality , higher margins, sharper focus.