Summary
The beginning of a significant revival in auto sales will start in 2011. Global sales of new light vehicles are forecasted to reach 60.8 million units, an 11% increase over 2010. This will finally bring the global industry back to 2008 demand levels.
Analysis
Of the top 15 sales countries globally, CSM forecasts five will be able to achieve 2007 volumes or above by 2011.
This list is led by india with a growth of 45% by 2011 over 2007, followed by China (39%), Brazil (26%), South Korea (6%) and Australia (2%). All other key markets will not be able to reach their 2007 results by 2011 as their recoveries will take longer. The countries furthest from recovery are Spain, Russia and the UK. These three markets were hit hardest by the economic crisis and are not forecast to be back on track before the 2014-15 time frame.
2009 will be remembered as one of the darkest years for the industry. The strategy of adding capacity first and then bringing buyers to the market was brought to an abrupt halt this year.
Nine months into 2009 we are starting to see some improvement. The industry has reached a plateau and the freefall of the past several months has slowed. OEMs and suppliers are starting to look forward again. As planning for 2010 continues, market intelligence and long-term forecasts have become much more important.
Global light vehicle demand in 2009 will come in at around 52.7 million units, which is about 9 million less than 2008. For 2010 CSM expects a global growth of about 3.6%, resulting in 54.6 million units. This remains below 2008 levels for two key reasons:
First, a lag exists between a market coming out of a recession and improvements in employment. As production rises, it usually takes six to nine months before we see results in the labor market. Even as consumer confidence rises, customers will still be reluctant to make big-ticket purchases.
The second reason relates to government incentives and scrappage programs. Several countries launched programs in 2009 to support the auto industry. The pull-ahead effect of these programs will be felt next year.
Over the next two years, the global markets will generate additional sales volume of 8.1 million units, of which 1.9 million will be generated in 2010 and 6.3 million units will be generated in 2011. The volume decrease of the past two years will need about three years to level out.
