Emerging economies soon will dominate the world, not only economically but in automotive manufacturing, eclipsing such stalwarts as Germany, Japan and the U.S., aglobal production forecast reveals.
Euromonitor International, a consumer research and analysis firm, predicts emerging markets will account for 51% of global economic output in 2013, the first time that group will provide the majority of the world’s adjusted gross domestic product.
Euromonitor’s GDP calculations include purchasing-power adjustments based on exchange rates that put countries on an even footing.
Not surprisingly, the auto industry is following that economic growth pattern.
Theforecast calls for a combination of developing and emerging markets to produce more than half the world light-vehicle volume for the first time in 2013. In 2014, emerging markets, alone, will produce more than 50% of global output.
Furthermore, sales in emerging markets also will pass the 50% level, if not this year, then in 2014.
Emerging and developing markets in the Wards/AC outlook are based on classifications by the International Monetary Fund.
Generally, an emerging market is a country ramping up its industrial output, growing its service sector and improving its technological infrastructure so that its standard of living eventually will be on par with that in advanced economies. Developing countries typically are considered to be those with mostly agrarian-based economies and extremely low per-capita incomes.
Much of the automotive growth in emerging markets will come from China and India.
Except for the U.S. and some smaller producers in the group, 2013 output in most advanced economies will be flat or down from prior-year levels, with only a slight improvement expected in 2014.
Declines in Europe will erode the global production share (and curtail economic growth) for the advanced economies. While world vehicle output is forecast to rise 4.3% in 2013, production in the European Union will decline 1.0%.
Canada and Japan are forecast for declines in 2013, as well, while South Korea output likely will be nearly flat. An expected 5.1% increase in the U.S. mostly is responsible for keeping 2013 year-to-year results in advanced economies unchanged, rather than in decline.
China, at a 49% share, again will account for nearly half of emerging-economies production this year and in 2014. India’s share of production among emerging economies will near 11% by 2014 from 10.1% in 2012. Both countries will see double-digit year-to-year growth in 2013 and 2014.
Argentina, Brazil, Hungary, Mexico, Romania, Russia, Thailand and Venezuela also are expected to post solid gains.
LV sales in emerging markets tracked by WardsAuto totaled 48.3% of global deliveries in 2012, vs. 51.0% for advanced economies. The emerging markets’ 2012 share was up from 47.6% in 2011 and 46.3% in 2010.