Western Europe Vehicle Production to Struggle as Asia-Pacific Output Climbs

Light-vehicle production in the Asia-Pacific region equaled more than half of global vehicle production in 2012 and will continue to rise this year, while Western Europe will not grow until 2014 and may never reach pre-recessionary levels again, based on the latest WardsAuto/AutomotiveCompass outlook.

Including fourth-quarter estimates for some countries, worldwide LV output ended 2012 at 80.6 million units, marking a 7.4% gain on prior-year’s 75.1 million. Global production is expected to climb 4.2% in 2013 to 84.0 million.

Production increased in 2012 in all world markets except Western Europe and South America.

All regions are forecast to increase output in 2013 except Western Europe, which faces a 1.8% year-over-year decline to 12.5 million units. This still is an improvement on 2012’s 7.5% downturn from 2011 to 12.7 million.

Growth in Western Europe will resume in 2014 with a 1.5% increase. However, the region is not expected to come close to its pre-recession production level of 16.0 million units in 2007 during the current Wards/AC forecast through 2019.

Part of the pessimistic outlook for Western Europe is the continued shift of capacity to Eastern Europe, where output increased 3.3% to 6.8 million units last year and is forecasted to rise 3.5% in 2013 to 7.0 million. However, faster growth in Asia-Pacific and North America pushed down Eastern Europe’s share of global production to 8.4% in 2012 from 8.7% in 2011.

In Western Europe, only Germany, the Netherlands and Portugal are expected to maintain or pass pre-recessionary production levels over the next six years. But volume in Eastern Europe should continue to rise beyond 2013, although its share will remain mostly flat as growth in Asia-Pacific and South America accelerates.

The Asia-Pacific region accounted for 50.5% of global production in 2012, up from 48.9% in 2011, marking only the second time it surpassed half of worldwide vehicle output, following 50.6% in 2010.

Asia-Pacific production will increase 6.7% in 2013, with its global share climbing to 51.7% and continuing to ride the tailwinds of China, India and Southeast Asia – mainly in Thailand, Malaysia and Indonesia – eventually reaching 53%.

North American output will grow, but not as fast as Asia-Pacific or South America, according to the WardsAuto/AC forecast. Mexico will be the primary engine, although the U.S. will continue its upward trend. Mexico already has zoomed pass its pre-2008 level, and the U.S. will top its 2007 mark in 2014. However, Canada basically will remain flat and is not expected to return to pre-recession levels.

South America, where Brazil accounts for the majority of vehicle production, will outpace 2012’s global growth but still only account for 6.3% of the world total by 2019. Most of the increase will come from Brazil, with significant help from Argentina and a small boost from Colombia.

Morocco and South Africa will lead growth in the Middle East/Africa, but the region is expected to account for only 1% of global production by 2019.

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