Source: The Economic Times, Oct. 27, 2010
NEW DELHI: Booming Chinese and Indian markets will put the global auto industry back on track after two successive years of dip in sales.
The Chinese market is expected to grow by 24% to 17 million cars, truck and bus market in 2010 while India, coming second in the global league, may produce over 3 million vehicles in this calendar year, a growth over 22% over 2009.
According to global automotive body, International Organisation of Motor Vehicle Manufacturers’ (OICA), which tracks passenger and commercial vehicles, China is expected to surpass its production forecast of 15 million units while India would also cross the estimated 3 million mark, paving the way for a global recovery this year. OICA follows a calendar year against India’s April-March ending fiscal year. The year 2010 may see a record production of 74 million cars and commercial vehicles.
“Asia pacific markets-China & India-are the backbone of the global automotive industry. These two countries would sell enough vehicles on their own that would take the global markets out of red this year,” OICA head Dave McCurdy said.
The trend is already visible with the global auto industry clocking 42% growth for the first six months of 2010 driven by rising demand from India and China and flat growth in other bigger markets like Brazil and North Korea.
“While China has grown by leaps and bounds, there is great optimism India. We have one of the highest growth in several segments globally-like trucks and buses- but it could been even better given the capacity and supply constrain the Indian auto industry is facing. Despite that, we would breach the production estimates for 2010 by a big margin,” president Society of Indian Automobile Manufacturers’ Pawan Goenka said.
The economic downturn had plunged automotive industry into a negative territory as the global market dipped 4% to 70.5 million units in 2008 and further slipped 12.5% to 61.7 million in 2009. The major impact came from US and Japan, once the largest auto markets – before China over took them in 2009 – that fell 34% and 31% respectively in the same year over 2008. Germany, the third largest market globally, too fell 14% to 5.2 million units in the same year.
Auto industry’s dismal sales in many markets like Ukraine (-84%), Russia (-60%), Austria (-52%), Sweden (-49%) and Uzbekistan (-43%) had shrank the market 13% to 61.71 million units in 2009.
The emergence of India in the global auto scene has seen world’s top automakers such as German Volkswagen AG, Man Motors, BMW, Audi and American Navistar International starting their local operations to cater to the booming market. The onset of festive season is likely to bolster the growth.
While the strong performance of 2010 is expected to improve, China is also looking at touching the 20 million mark in 2011. “Our forecast is to clock a 15% growth next year. While our market is strong, the buoyant economy is expected to keep the sales momentum going for few more years,” China Association of Automotive Manufacturers’ executive VP Dong Yang said.
