Research conducted by Standard and Poor's and carried on the just-auto.com website concludes that Asia will account for a growing proportion of global auto industry demand and production in the future. In the next decade, vehicle demand in Asia (excluding Japan) is expected to increase at a compound average annual rate of 8.3% to reach 14.8m units in 2010. By 2010, we expect Asia (excluding Japan) to account for 20% of global (excluding Africa and Middle East) demand. Including Japan, Asia's share of global sales is expected to be 30% in 2010.

However, the short-term picture remains less buoyant as demand struggles to recover from the hammer blow it received with the economic crisis of the late 1990s. Doubts are beginning to reappear about the sustainability of the recovery. On the plus side, economic indicators continue to show improvements over the corresponding period in 1999. However, there have been few meaningful attempts to tackle the question of non-performing loans and the faster than expected recovery in 1999 has reduced the commitment to structural reforms. The region's currencies and stock markets, reflecting worries over further interest rate increases and a possible slowdown in the US economy have been weakening in recent months and there is an upward pressure on interest rates.

just-auto.com's Managing Editor, David Leggett commented: "The Asian economy and auto industry clearly faces challenges ahead. Nevertheless, long-term prospects for the region's auto sector are extremely positive."

To read the full Standard and Poor's assessment of prospects for the Asian auto industry, please click on the link: www.just-auto.com/features_detail.asp?art=255

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