Automotive: Global light vehicle industry faces total overhaul

Akron, OH—In four years time, the global automotive industry that emerges from today’s highly volatile environment will be radically different in the kinds of cars that are offered as well as where they’re increasingly made and sold. JD Powers Executive Director Automotive Intelligence Jeff Schuster laid out the global light vehicle market to 2012 and beyond during a presentation at ExxonMobil’s Elastomer University, held July 29-30 at the company’s Advanced Elastomer Systems unit in Akron, OH. MPW attended the event.

While production and sales largely stagnate in established markets like North America and Western Europe, Schuster told attendees to keep a close eye on the so-called BRIC (Brazil, Russia, India, China) markets going forward, which saw their sales rise from 5 million units in 2000 to 15 million last year. By 2012, Schuster forecasts annual production of 3.5 million units in India and Russia each, with Russia more than quadrupling production from the 700,000 units of the early ‘90s. Brazil will be approaching 3 million units by 2012, with China expected to reach 16.3 million units/yr in four years. Schuster noted that in 2000, China and Brazil were the only emerging countries ranked in the top 15 globally for light-vehicle production, but by 2014, seven such countries will figure in the top 15, with the list changing in order from the U.S., Japan, Germany, and France, to China, Japan, the U.S., and Germany, with India climbing to No. 5 as France falls to No. 8.

Schuster said that China, including its 46 automakers, only accounts for 6% of total global sales but will experience 86% growth to 2012, while established players like GM and Ford stand to lose market share. At this point, India makes up only 1% of the global market, but from that small base it is experiencing 100% growth.

Over this same time, Schuster expects flat demand growth in North America, with production in 2009 ranging from 13.5 to 14.7 million vehicles, depending on economic factors, with 2008 likely to mark the weakest year in automotive production on the continent since 1992. Schuster says 67% of production growth going forward will come in Asia, with North America expanding only 1% (including the recently announced Volkswagen plant), while European production climbs 26%, although 90% of that will come in Central and Eastern Europe. Overall, light vehicle capacity is expected to rise from 25 million in 2004 to 47 million by 2014, exhibiting the vast potential that remains in automotive for plastics, even if it’s in different regions. Finally, Schuster says that desperate times could produce desperate measures for established names. “Look for strange bedfellows,” Schuster told attendees, saying the joint ventures, mergers, and buyouts that occur under current levels of duress might be surprising.—[email protected]