Recently when our Finance Minister Mrs. Nirmala Sitharaman mentioned that drop in car sales is due to Millennials (the generation of people born between the early 1980s and 1990s) not buying cars, logistics business models have become simple and NBFCs are shrinking due to change in lease models, people from many parts of India ridiculed her saying that she is wrong and it is because of her lack of business and industry knowledge. A global survey by a German Firm which elaborately covered India endorsed the views of our Finance Manager and indicated 20 major risks to impending global recession and its impact on countries like India in the medium and long term.
The survey cautions that unless Indian businesses change their business models, many will perish soon.
20 MAJOR RISKS TO GLOBAL FINANCIAL MARKETS IN THE COMING YEARS (LONG TERM)
1. Most people will stop buying cars in a decade-and-a-half because it is better to rent / lease
2. People will increase the renting of assets (over buying these) because they are not sure of where they would be living a few years
3. The cost of commute will become virtually free
4. Most cars will be made from recycled steel and it will lead to ore companies closing down
5. The large steel sector debt will become bad debts to banks.
6. Electric cars would accelerate the death of the automobile components industry.
7. The demise of the auto component industry will affect the steel sector
8. Oil companies will not be able to repay their loans due to low consumption of oil
9. Electric vehicles will rule the market with an unlimited warranty.
10. Oil-based economies (Saudi Arabia, Iran, Iraq, Russia, Nigeria etc) will collapse.
11. Funding from oil producing countries will disappear and the world will become a more peaceful place.
12. Cash-rich automotive lubricant companies will discover that there is nothing to lubricate.
13. 3D printing will reduce the gap between developed and developing nations.
14. Artificial Intelligence will clean out jobs
15. A number of skills will be taken over by robots
16. Renewable energy (like solar energy and wind energy) will kill coal, oil and natural gas
17. Large coal companies employing thousands will file for bankruptcy
18. Institutions like banks will have more AI systems than people
19. The world will move towards deflation arising out of an abundance of money and relatively limited spending.
20. The new retirement age will become 50 years (average).
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