In 2001 the BRIC countries—Brazil, Russia, India, and China—accounted for 5.1 million units of light vehicle sales. In 2009 those countries will represent 13.8 million, or 25% of the projected total of 54.9 million. In 2001, the BRIC countries were just 9% of the global total sales.
PwC notes that its 2009 forecast of 54.9 million units depends on an improved second half in many of the regions where monetary and fiscal stimulus programs are expected to help things. The first quarter of 2009 had a running rate that annualized out to only 45 million units.
The Institute’s 2009 forecast for U.S. sales is pegged at 10.1 million units, with 8.7 million of them made in North America—the lowest level of domestic production since 1982. The U.S. contribution to that is forecast for 5.9 million, a level of output not seen since the late 1940s.
Summarizing its Analyst Note report of April 3, 2009, the PwC Auto Institute said policy makers have little choice but to stimulate the market, because the global industry is not structured to function at sales of 45 million per year. Because of the overall industry’s capital intensity, it barely made an acceptable return when global sales volume went toward 70 million units.
The report concludes that once the global economy makes at least a soft landing, which is what most policy is now aimed at, industry restructuring should begin quickly as the various players deal with the fundamental problem of excess supply.
The full Analyst Note report contains market information by global region and can be downloaded from the PricewaterhouseCoopers website. It’s not uplifting reading, to be sure, but it gives an excellent summary of the worldwide auto market in a brief, easy-to-read format. —[email protected]