Automotive industry trends in China, USA and Europe

21.12.2011
​An overview of industry trends for leading world countries.
 

​The sales of automobiles slow down in emerging countries: the Chinese example.

After the market upsurge in 2009-2010 (growth by 30/40% per year) driven by recovery measures (with the implementation of a scrappage allowance of $730 per unit), the Chinese market leveled off in 2011 with comparatively weak growth of only 4% to 5%, a trend that should continue over 2012. Thereafter, the Chinese sector’s growth should return to close to 10% a year, due to the country’s rising wealth and thanks to a very low car ownership rate of only 5% (compared to 60% in Europe and 80% in the US).

 

United States: a slow revival led by vehicle replacement purchases

The world market will benefit from the continued rebound in the US market, which even so will remain well below its pre-crisis level. This is a ‘technical’ recovery (+13% in 2011 and +8% in 2012) in that the collapse of sales between 2008 and 2011 has meant lost sales of around 20 million new vehicles, leading to ageing of the existing fleet. Notably, the car ownership rate has fallen for the first time, dropping from 819 vehicles per thousand inhabitants in 2005 to 814 in 2010, an exceptional development in a land where ‘the car is king’.

 

 

Europe: the market remains depressed, especially in the south of Europe, -3% to -5% for 2012

 

Europe continues its long decline. The market is still -15% in 2011 below its pre-crisis level, hit notably by the economic difficulties of countries in Southern Europe. With austerity plans in place in most European countries, the market should continue to slide over 2012, contracting by -3% to -5%, with continued deterioration in the British (-3%), Italian (-4%) and French (-10%) markets, provoking implosion in the European auto sector.
The French market, artificially sustained at a high level with the end of scrappage allowances and numerous manufacturer rebates in 2011, the year 2012 should prove difficult, with a contraction of 10%, taking volumes back to their long-term level, the result of the additional registrations generated by the scrappage allowances (around 500,000 units in 2009 and 2010) and the much-touted rebates in 2011, which generated and additional 200,000 registrations to the average level of sale.
 
By Yann Lacroix, Economic Studies Sector studies department Manager at Euler Hermes.