China to Remain Strong No. 1 Auto Market

A new J.D. Power and Associates report says that China’s hold on its position as the world’s largest auto market is only getting stronger. The country became the biggest market in 2009, and 2010 will also prove to be an excellent year as demand continues to rise.

John Humphrey, J.D. Power’s senior vice president of global automotive operations, said recently in a statement, “The center of the automotive universe is shifting quite rapidly away from the established markets of North America and Europe.”

The report shows that previously established markets “may be flagging.”  June sales in the U.S. slowed, and the European auto market is uncertain. Meanwhile, demand in a number of emerging markets is increasing: Brazil, Russia and India (in addition to China) are all growing markets. The only sector of the auto market that has slowed in China is light truck sales, which is in the lower double digits compared to last year’s 50% increase in demand.

For established markets, J.D. Power’s makes the following predictions for 2010:

Light vehicle sales in North America will increase 12% over 2009 to 14.2 million.

  • Overall U.S. sales will likely rise to 11.8 million, up 13% (depending on speed of market recovery).
  • The largest North American gain will be in Mexico, with sales growth of 14% likely.
  • Canadian sales have not suffered greatly in the recession; a 5% rise is expected.
  • Scrappage and incentives programs as well as debt crises in several countries mean a drop in European sales of 5%. Germany will drop around 20%, 7% down in the UK and sales are predicted to fall 5% in Italy.
  • Sales in Japan are expected to increase 11%.

The Asia-Pacific market is the “global powerhouse,” says J.D. Power. Humphrey noted, “Sales in the region are forecast to grow 16% year over year to end 2010 at 27.9 million units. China is doing the heavy lifting, even though there are signs that growth in the China market is slowing slightly.”

In developing markets, J.D. Power predicts the following for 2010:

  • Chinese sales could grow to 15.6 million in 2010, 3 million more than the United States.
  • Brazil’s sales will increase 8% to 3.3 million.
  • India will grow 19% to 2.5 million vehicles.
  • Russian sales are expected to increase to 1.6 million vehicles.

The forecast also predicts that hybrid sales will grow globally by 25% to 910,000 vehicles, then to 2.3 million in 2015 and will represent 4% of all vehicles sold.

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