Hi all,
Seeing as one of the key global/regional indicators limiting VMT's success atm is inflation/interest rates/consumer confidence, I thought I'd start a thread designated to this info.
Personally, I know I'd appreciate any news or further information if people manage to find it. Specifically regional information not contained in this post. I can't do it all, I'm sorry.
Our key markets at the time of writing are Europe & United Kingdom, China, Indonesia, Malaysia, Thailand (talk of manufacturing facility opening there), Sri Lanka, South America/LATAM and then markets we also want to be exploring are the rest of South East Asia, India (such a big market so list it seperately to SEA), and Africa. I guess the US being such a big economy should get a guernsey too. I'll leave Asutralia out as it's not a big market and we should all really be aware of whats going on here whether we want to or not.
Any info relating to the inflationary data, interest rate movements/predictions, consumer confidence/retail expenditure, and other economics that may result in VMT's increased/decreased success in these regions would be highly appreciated. Especially contracdicting what I or anyone else finds.
As VMT investors I'd think we would all be keeping an eye on this info as it's really what shapes the playing field VMT plays in and determines the likelyhood of increased/decreased sales.
Starting with European Union Inflation Rate:
European Union Interest Rate:
European Union Consumer Spending:
Quick Summary:
Great for VMT investors to see inflation in the region is coming under control/much closer to the goal inflation rate within the last quarter and a half.
However, interest rates show they have not yet responded. I see some news out there that a few european countries, czech and hungary from memory, have already cut rates and hopefully the rest follow. However as we all know, the inflation rate can respond quickly to interest rate cuts so we may see a bit of a tango between inflation/interest rates around these levels for some months/year.
Consumer spending is the interesting one.
DON'T BE FOOLED!
People must be careful to take this statistic with a grain of salt as it measures the amount in money and is not adjusted for inflation.
So, the large jump in 2021 is actually just a return to historical levels and then inflation exploded 2021-2023.
Knowing this, we should be able to understand that the higher reported "consumer spending" from 2021-current day, is more or less a false reading as the jump in money being spent by consumers can be explained by inflation (each item costing more as opposed to consumers buying more items) and if measured in items or products bought and not the cost of those products its very likely we would see people in Europe are actually buying less than they used to. This is obviously reflected in VMT's figures.
Again, each item is just costing them more than it has historically.
For this reason, in high inflationary environments it could be argued that consumer spending figures are misleading and not worth viewing alone.
So, what we need in Europe:
Inflation steady/slight decrease. Interest rates dropping.
These two things will slowly transition into more consumer purchases on a wider array of products (but not neccessarily increased consumer spending) as their mortgage repayment/food/fuel/utilities etc drop and they have more money freed up in their budgest to spend on things like motorbikes and scooters.
Of course, the one thing that would/could be nice to stay high in europe and globally for us VMT investors would be the cost of fuel (though this contradicts us wanting to see reduced inflation). If this (fuel prices) stays high and basic items drop in price, it could be assumed people will be more inclined to buy electric vehicles.
The below chart shows in the UK fuel was hit hard. From 2020-2023 it sky rocketed. Obviously Ukraine/Russias war is playing into this with supply driven inflation.
Though, all said and done, if inflation declines, interest rates decline, and by some chance Russia's Ukraine invasion/war ends (hopefully) and in turn, fuel prices decline, the elephant in the room becomes prominnent once more.
