The year 2010 is set to be a record year for global light vehicle assembly according to analysts at PwC. Despite sluggish demand in the world’s mature markets, the global total is being driven by continued strong demand growth in emerging markets and widespread inventory replenishment.
In contrast to the level of output recorded at the industry’s last peak in 2007, when BRIC countries accounted for 18.7% of global output, PwC says that these key growth markets will likely account for over 30% of 2010’s global assembly forecast of 69.9m units.
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The projected record global assembly total will surprise many in the industry who are still reeling from the impact of severe recession on established automotive markets.
“In light of a muted sales recovery in the US and the effects of government incentive withdrawals being felt across Europe and Japan, it should not be surprising that sales in the established markets through 2010 are in decline or stable at best,” said Calum MacRae, analyst at PwC.
“Indeed, given such uncertain circumstances for the world’s major automotive markets, a record level of vehicle assembly in 2010 would have been dismissed a year ago,” he said.
“Thanks to BRIC country performance and the rebalancing of inventory, as automakers cut back aggressively in the first half of 2009, 2010’s global light vehicle assembly output is on track to beat the 2007 pre-crisis record.
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By GlobalData“With more economic uncertainty as a result of austerity budgets in many countries, the onus for the industry’s development in 2011 is once again certain to lie with the developing markets.”
According to the latest Autofacts forecast, Japan, Western Europe and the US boosted light vehicle sales by 5.6% in the first eight months of 2010, equivalent to almost a 1.1m unit sales improvement. However, it was the BRIC countries that led growth, boosting sales by a third (33%), equivalent to a 3.5m unit increase.
Thailand, Indonesia and Malaysia also contributed to emerging market growth, delivering a combined 500,000 sales uptick in 2010, providing further evidence of a power shift towards Asia.
