No-one disputes anymore that the world's motor industry is carrying far too much capacity and it is largely this that has placed so many of today's manufacturers in jeopardy. Yet WAIT can reveal that there are still plans in place to add almost a further 9 million units, if manufacturers do in fact proceed with their stated intentions.

According to our estimations, there is already installed capacity world-wide for some 50.4 million cars per annum and 18.6 million commercial vehicles. Yet sales in 1998 totalled an estimated 36.0 million cars and 16.4 million CVs. That implies that there is already over-capacity for an incredible 14 million per annum cars and 2.2 million CVs, with plans in place to increase those numbers by over 6.6 million per annum cars and nearly 2.2 million CVs.

The last time that we carried out the installed capacity analysis, it was not a surprise to learn that most of the planned new capacity was intended for emerging countries. It was also very revealing to note that the established manufacturers were choosing mostly to invest in developed countries, with companies like Daewoo and Hyundai opting for the riskier and less developed markets. The last year or so has seen something of a shift in those intentions. It is now expected that Europe will gain as much fresh capacity as the Far East will, unless there are compensatory plant closures, and the larger, more established companies have changed direction considerably in the past two years and have developed clearer and more determined plans for the emerging markets.

It would surprise no-one to learn that China and Brazil are earmarked for the biggest slice of the growth potential (when circumstances finally allow) but it probably would surprise many to know that the United Kingdom is the country that is expecting the third highest round of investments.

According to our estimations, North America has established capacity for 11 million pa cars and 7.5 million CVs. There is actually a reduction in capacity expected in Canada for car assembly, but even in the USA we are expecting to see some increases. In the USA there are still plans for further expansion, primarily from the Japanese manufacturers who are already established there. Honda can currently build some 640,000 units per annum but plans to raise that to 800,000 pa when their new assembly plant comes on stream in 2001. Toyota is also in the process of boosting build levels, from the current 400,000 to 600,000 pa with fairly immediate effect.

In Brazil there are stated intentions to lift capacity for cars to 2.6 million pa from the current 1.7 million, and for CVs to 716,000 pa from 400,000. GM and Chrysler are planning increases for light truck production, but it is mainly the Europeans and the Japanese who are laying down plans for increases in car build levels. Volkswagen and Fiat were close at one stage recently with regard to installed capacity levels, but the German company has plans to significantly boost capacity, from 500,000 pa cars to 900,000, but will maintain light CV output at 100,000 pa, although Volkswagen could well use Brazil to cut its teeth on the manufacture of heavier trucks, especially now that Volvo have jumped in and scooped up Scania.

In the United Kingdom there is actually planned reduction in capacity levels for Ford, but those are more than offset by increases that will come from the likes of Toyota, Honda, Nissan, and Rover - if they ever get their house in order. Honda has just begun construction work on its new assembly plant at Swindon, Nissan can boast that its Sunderland plant is the most efficient in Europe, and Toyota clearly has the space to double output at the Burnaston plant in Derbyshire. Rover is subject to a massive $3 billion redevelopment programme from BMW and could eventually build up to 700,000 vehicles a year, although the threat remains in place that BMW will shift some assembly overseas if Rover does not show substantial improvement very quickly.

Eastern Europe is subject for considerable investments, in particular Poland, Russia, the Czech Republic and the Ukraine, whilst Turkey has also been spotted as being the potential gateway into North Africa, the Middle East and Southern Europe.

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Progress in China is slowing as the country has developed at a much slower rate than originally anticipated. A number of plans are on hold, although they stay in place because China is still seen to be the land of most promise for the long-term development of the industry, and those who have already been allowed in are frightened to step too far backwards in case they get pushed out of line, as Ford was by the Fiat Group. Three years ago, South Korea was showing the largest potential increases and at that time of a planned 9 million unit boost in world-wide capacity, more than 4 million of that was down to Korean manufacturers. Those days are quickly gone and we now expect to see a reduction in capacity in South Korea when Samsung reaches the inevitable decision to cease attempts to build motor vehicles. The plant is brand new, but entices no-one as it is not even built on stable foundations and would be seen by most to be a pig in a poke.

Full details of all investment intentions, by country, manufacturer and plant are to be found in the WAIT 1999 Data Yearbook.