Global light vehicle sales will decline 14.7% from 2008 levels to 55.2 million units in 2009, according to RL Polk & Company. The study also predicts that the automotive markets won't emerge from the worldwide recession until 2012, later than previously forecast, due to worsening economic conditions. Growth is in Asia.
Polk points out that its current forecast for 2009 of 55.2 million units is 23% below the 71 million vehicles that it predicted in mid-2008, which was prior to the start of the economic crisis in Q4-2008. But as the scenario changed thereafter, it seems that global light vehicle sales through 2015 will be more than 80 million units lower than predicted in mid-2008. The US auto market has been flattened by this ongoing economic crisis. New vehicle sales have dropped from a high of almost 17.5 mln in 2000 to 13.2 mln in 2008, with a further decline to 10 mln projected for 2009, forecasting that the US market will reaching the 12.5 unit level only in/after 2012. It is also predicted that 2009 will mark the end of US market share dominance for the domestic automakers: Asian manufacturers will capture 47% of the US market share, compared to 44% for American automakers and 9 for European brands.
Long-term growth for the global automotive market will come from the emerging markets of Latin America, Central and Eastern Europe, Africa and the fast-growing Asia-Pacific/Middle Eastern region, excluding developed Japan . Beginning in 2015, it is expected that more light vehicles will be sold in the emerging markets than in the combined �saturated� markets of the United States, Canada, Western Europe and Japan. China and India are viewed as the key drivers of growth, as vehicles become attainable for an increasing percentage of these countries' huge consumer populations. These emerging markets will come out of the current crisis three years earlier than the saturated regions. Light vehicle sales in the emerging markets will top 2007 levels in 2011; this won't happen until 2014 in the saturated regions.
Under this scenario, Western Europe will do better than the United States and Canada in the short term, in large part because of scrappage incentives introduced in Europe. The proposed US cash for clunkers bill is mired in partisan and pressure group politics with no immediate passage in sight. As a result, light vehicle sales in Western Europe will fall 9% from 2008 to 2009, compared to 24% in the United States and Canada during the same time frame. Worldwide, Toyota will maintain its position as the top manufacturer, with a fairly stable market share of 12% through 2020. Ford and General Motors have both seen their global market share drop by nearly 5 percentage points from 2000 to 2008, and it is expected that both will lose more market share through 2012. Volkswagen is making great inroads in China , which will certainly boost its success worldwide. At some point in 2009, Volkswagen is expected to surpass GM as the number two manufacturer in the world.
The automotive industry crisis, now a worldwide phenomena, began during H2-2008. This sector is facing a crisis situation in United States and, by extension, Canada , due to the Automotive Products Trade Agreement. However, auto makers globally, and particularly in Europe and Japan are also suffering from the crisis.
The Oil crisis caused by record high oil prices in 2008 was the first weak link in the auto sector, as it made fuel costs very prohibitive, causing customers to spurn large sports utility vehicles (SUVs) and pick up trucks, the principal market stronghold of the American " Big Three"- General Motors, Ford and Chrysler. The US automakers had to also endure significantly higher wages than their non-unionized counterparts, including salaries, benefits, healthcare and pensions. Management granted concessions to its unions that resulted in uncompetitive cost structures and sizeable legacy costs in exchange for labor peace. The Big Three suffered from consumer perception of relatively higher quality models available from abroad, particularly Japan and Europe-and from foreign cars being manufactured or assembled in the United States. The Big Three had neglected development of passenger cars due to better profit margins from the pick up trucks sector, to offset the considerably higher labour costs, lagging behind Japanese and European automakers in these market segments. In H1-09, the global automakers have been hit hard by the economic slowdown and recession. The industry continues to reel from the gas price surge, housing collapse and banking crisis. Consumer confidence has been hammered, and many potential buyers are waiting on the sidelines for some sign that the economy is recovering before they jump. The purchase decision for something new is always pushed back in economically difficult times. This time it was the credit crisis, not just gas prices that cut into sales. Many buyers were unable to get the credit they needed to buy a car and a growing number of dealers saw their own credit cut off, causing widespread failures.
The Japanese domestic automotive market, which has been declining steadily for the past several years, experienced further decline in Q4-08. Exports to the US and EU also slowed due to the difficult market conditions. Toyota reported a double-digit decline in sales for the month of June, similar to figures reported by the Big Three.
In December 2008, Toyota declared that it expected the first time loss in 70 years in its core vehicle-making business. Loss of US$1.7 billion, in its group operating revenue, would be its first operating loss since 1938 (the Company was founded in 1937). Toyota saw its sales drop 33.9% and Honda Motor by 31.6%. Suzuki Motor Corporation is expected to face its first profit drop in 8 years for financial year ending in March 2009. Although the Holden Commodore retained its status as the highest selling vehicle in Australia in 2008, long-term segment trending suggests indigenously built large vehicles will cede share to smaller cars and crossovers, which are likely to be imported due to ongoing import tariff reductions in this million unit sales market.
China's automobile sales will "definitely break the 10-million-unit barrier" in 2009, the China Passenger Car Association said, raising its forecast for the automobile industry this week on the back of a robust growth in vehicle sales in May, the fifth consecutive month it has climbed this year.
| Data released by the association showed that China sold 812,178 units of passenger vehicles, including minivans, sports utility vehicles, and multipurpose vehicles, in May, another monthly high. Sales jumped by a faster-than-expected 54.7% year-on-year, and up a slight 1.2% from April. Total passenger car sales in the first 5 months jumped 29.6%, to 3.64 million units from the same period last year.
South Korean automakers have been generally much more profitable than their US and Japanese counterparts, recording strong growth even in depressed markets such as the United States. The crisis turned into an opportunity for many South Korean automakers. The continued growth and success is attributable to the country's fuel-efficient and well-equipped, yet affordable cars with generous warranties, attracting global consumers at a time of severe economic recession, rapidly rising oil prices and increasing environmental concerns. However, in December 2008, Hyundai Motor Company begun reducing production at plants in the US, China, Slovakia, India and Turkey because of sluggish demand. The company missed an earlier projection of 4.8 mln units for 2008 and announced a freeze of wages for administrative workers and shortened factory operations as demand weakens amid a global financial crisis.