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Breakingviews – Corona Capital: Cambodia, New cars, And old ones

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HONG KONG/LONDON (Reuters Breakingviews) – Corona Capital is a daily column updated throughout the day by Breakingviews columnists around the world with short, sharp pandemic-related insights.


– Cambodia

– New car sales

– And old car sales

ANGKOR WUT? It’s getting pricier to see Siem Reap. Even as some small countries try to help cover virus-related travel costs, Cambodia is asking visitors to put up a $3,000 deposit to pay for a Covid-19 test upon entry and any other potential treatments or fees. And to be extra sure, officials also want proof of $50,000 of health insurance. A cautious approach is understandable for a nation with only 129 reported coronavirus cases and no deaths.

Additional barriers to entry, though, could be problematic for a place where travel and tourism accounts for more than 26% of GDP. Few insurance policies cover a known pandemic. Returning home to most countries often requires a 14-day quarantine. The comparative advantage of open borders also could disappear quickly. Some well-heeled travelers may be itchy to get to the renowned Angkor Wat temple complex, but Cambodia’s solution hardly seems like a passport to recovery. (By Jamie Lo)

HIT THE BRAKES. So much for automakers’ hopes for a V-shaped recovery. Sales by the likes of Volkswagen, Peugeot and Fiat Chrysler Automobiles are expected to decline by a quarter in 2020 compared with last year, according to a new forecast on Tuesday from the European Automobile Manufacturers’ Association.

The gloom contrasts with some analysts’ hopes that social distancing might actually be a positive, by making workers drive rather than use public transport. The estimate, equivalent to 3.2 million fewer European vehicle registrations than 2019, implies only a gradual uptick from a 41.5% year-to-date decline. The ACEA wants government help to bolster an industry that accounts for 11% of EU manufacturing jobs. The omens aren’t promising. Buyer incentives have so far focused on niche electric vehicles – less than one in 10 of the new wheels on the roads. (By Christopher Thompson)

CAR CHASE. By contrast, used car sales may be getting a viral turbocharge. At least that’s the pitch from online selling platform Cazoo, which is now worth $1 billion. The latest brainchild of Alex Chesterman, creator of Lovefilm and online property platform Zoopla, managed to convince investor Draper Esprit and others to inject another 25 million pounds on Tuesday, taking its total fundraising to 200 million pounds.

Investors have little way of knowing if they’ve bought a dud. The company launched just six months ago and so can’t even present a full set of accounts. Last week its finance director said Cazoo had generated 40 million pounds of sales since it hit the tarmac. If it maintained that pace throughout the year, its touted valuation would be roughly 10 times sales, way more than established U.S. rival Carvana’s six times. At least somebody trusts second-hand car salesmen. (By Aimee Donnellan)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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