Major Auto Makers Find Solace, Risks in Emerging Markets

Putting together Ward’s annual state of the international industry package, posted this week on our website, at times was like trying to hit a moving target.

Over the many weeks of researching, reporting and writing for this report about the world’s major automotive markets, vehicle sales and production surged and crashed, currencies rose and fell, market economies climbed and tumbled, trade wars threatened to break out and political crises were around every curve.

Such are the dynamics of the global industry. There’s never a dull moment. Yet, as our editors reviewed 2010’s first three quarters, the overriding conclusion was this year is better than last.

Ward’s is forecasting world sales will hit 72.7 million units, up 13% from year-ago’s 64.3 million cars, light trucks and medium- and heavy-duty vehicles.

Worldwide production should reach 77.6 million units, up more than 25% over 2009 and outpacing sales by 7%. This is in contrast to the prior year, when global OEMs slowed output and reduced inventories in the midst of widespread recession

But that doesn’t mean there are no worries. At forecast levels, most of the growth will come from the Asia/Pacific region, which – thanks largely to China and India – will grab 44.4% of global sales compared with North America’s 8.2%. South America should come in at 6.7%, while Europe remains stalled at -0.8%.

As a consequence, auto makers in the U.S., Europe and Japan are shifting resources away from their flailing home economies and toward the booming emerging markets.

And while there continues to be success stories, such as General Motors in China and Brazil and Ford in India and Thailand, there also are challenges, as many of the under-developed regions are armed with protectionist measures and suffering from currency fluctuations, political instability and overcapacity.

It’s no wonder fear and loathing still stalk the international industry, especially with sales momentum gained in the year’s first six months now stalling.

To read more, please see an overview of our report: “Global Bounce Back: Auto Industry in Flux” at http://wardsauto.com/ar/global_bounce_back_101020/ . Subscribers can read the full “State of Industry: International” package at http://subscribers.wardsauto.com/reports/2010/soi1/ .