Posted on May 16, 2012, at 2:00 am
 Marvin Zhu In 2011, China’s automakers shipped nearly 850,000 vehicles from different harbors in China to other world regions. Exports were up 50% from the previous year and contributed US $11 billion (69.55 billion RMB) to the country’s trade balance, which was an increase of 57% from 2010.
While most of the Chinese home-grown brands are suffering to some extent from declining market share in the domestic market, surging exports might help local automakers to counter this decline, according to Marvin Zhu, senior automotive analyst with LMC Automotive.* Recently, he wrote about how China’s local automakers are making inroads in other countries’ auto markets in China Automotive Monthly, published for J.D. Power Asia Pacific. The article is excerpted:
Some Local Companies are Already Overseas Players
“Chery, China’s largest local carmaker, recorded sales of 642,000 units in 2011, down 6% year over year. Its export volume reached 160,000 units, which amounted to one-fourth of the company’s total sales. Last July, Chery set up a US $400 million (2.54 billion RMB), fully-owned factory with a complete production line in Brazil. It became the Wuhu-based carmaker’s 17th overseas plant. While this growth and investment is happening internationally, the company announced it would drastically reduce its investments for ongoing R&D projects for the local market. Continue reading ›
Posted on April 11, 2012, at 5:00 am
 David Sargent The global automotive spotlight was shining brightly on the dozens of new model debuts and more than 1,000 vehicles on display earlier this month at the New York International Auto Show. While some of the vehicles shown in New York had already debuted at previous shows in Los Angeles, Detroit or Geneva, Switzerland, many were seen for the first time by the public.
There was an overall buzz at the Javits Center in New York City about the auto industry rebounding to sales levels last seen before the financial crisis of 2008. J.D. Power’s forecasting alliance partner LMC Automotive expects global light-vehicle sales to increase to 79.2 million in 2012, a 5% increase from 2011. All major regions are expected to post stronger sales in 2012, compared with 2011.
Japan is expected to see strong growth with sales of 4.8 million, up 16% from 2011. Sales in India are expected to reach 3.2 million in 2012, up 11% from 2011, while China’s sales are expected to increase 9% to 19.7 million. Brazil’s sales are expected to grow 1% in 2012 to 3.5 million. In addition, LMC Automotive expects 14.1 million new light vehicles to be sold in the U.S. this year. Continue reading ›
Posted on March 12, 2012, at 5:00 am
 Geoff Broderick In the coming scramble to win sales in the Tier 2-4 markets and earn profits in China, there is the temptation for OEMs to invest heavily in production, which can result in overcapacity. Discipline must be maintained in China or history will repeat itself—as illustrated by the imbalance of supply and demand in the U.S. market during the past decade. There is likely still more consolidation to come in the global auto market, but there is room for the smart players with solid business and product plans.
In the past five years, the combined vehicle sales market share of the emerging countries—including China and India—grew from less than 20% of the world’s total, to more than 50%. Among all emerging markets, China has one of the longest runways for continued growth based on its low penetration rate (vehicles per 1,000 people), in addition to a growing per capita income and rising disposable income. There also is a real opportunity for a steep takeoff, especially in China’s Tier 2 and 3 urban markets.
China Remains a Pillar in the Global Auto Industry
By 2018, China, the United States, India, Brazil and Russia will be the world’s five largest auto markets in terms of light-vehicle sales, with China as the far-and-away frontrunner at almost double the sales of the United States (30-35 million units vs. 17 million units). Japan, followed by Germany, the UK, Italy and France will round out the 10 largest markets, according to J.D. Power and LMC Automotive Forecasting.*
With closely aligned global supply and demand coupled with improved macroeconomic conditions—albeit slower for Europe—and significant new product introductions and an improvement in available credit—at least in the U.S. market—global sales, led by China (32.9 million unit sales), will boom by 2018 to slightly less than 114 million units.Although China will continue to see an increase in discretionary income, as well as much sales growth fueled from a further penetration of financing and the introduction of leasing, there will likely be intense competition to gain share in Tier 2 and Tier 3 markets. Continue reading ›
Posted on November 17, 2011, at 1:01 pm
 During a welcome address at this week’s first day of the L.A. Auto Show press previews, Mazda Motor Corp. President and CEO Takashi Yamanouchi spoke about the trials that Japan’s automakers have endured since the March 11 earthquake and tsunami in Japan and recent setbacks in obtaining parts after major floods in Thailand. He said Japan’s automakers joined together and formed a task force to work with Tier-1, -2 and -3 suppliers to share inventories of parts.
Yamanouchi also said that Mazda has been on the road to production recovery since June, and pointed to the “stylish, insightful, spirited” lineup, including the new 2013 Mazda CX-5 compact crossover (CUV) with the automaker’s new SkyActiv engine, transmission and architecture design strategy that sets Mazda apart from rivals. He said during the next 5 years, Mazda plans to introduce six new SkyActiv models, and these models will be promoted with Mazda’s next-generation version of a “sustainable” Zoom Zoom ad tagline. The new CX-5, which launches early in 2012, has a lighter-weight all-wheel-drive (AWD) system with stiffer suspension, and it will offer information and entertainment system connectivity with nine speakers. Continue reading ›
Posted on August 2, 2011, at 2:04 pm
Brazil’s new-vehicle market is projected to continue to grow rapidly in the coming years. Passenger-vehicle sales are forecast to reach nearly 3.53 million units in 2011, up from 2.72 million units in 2008. This represents an average annual growth rate of 9% during the past three years.
Just last year, Brazil passed Germany in . . . Continue Reading Rapid Growth in Brazil’s Auto Market Brings Promise and Tough Competition
Posted on August 2, 2011, at 12:07 pm
 Jon Osborn Although owners of passenger vehicles in Brazil say they are most satisfied with the quality and reliability of their vehicle, they also indicate being least satisfied with the cost of vehicle ownership, which is the most heavily-weighted of four measures evaluated in our inaugural J.D. Power do Brasil 2011 Vehicle Ownership Satisfaction StudySM (VOSS). The new study is based on nearly 5,000 online interviews with Brazil’s vehicle owners after an average of two years of ownership.
We find that overall ownership satisfaction in Brazil—the fourth-largest new-vehicle market in the world—averages 743 (on a 1,000-point scale), with the highest satisfaction score of 780 for vehicle quality and reliability and the lowest score of 698 for satisfaction with the cost of ownership. That’s a gap of 82 points.
Collectively, owners of sub-compact and compact models comprise 61% of the vehicle market in Brazil, and ownership-cost satisfaction among these small car owners is the lowest among all vehicle segments examined in the study—averaging 682 for sub-compacts and 693 for compacts. In comparison, average cost-of-ownership satisfaction among respondents in Brazil is considerably higher among larger vehicle segment owners—averaging between 713 and 747. Continue reading ›
Posted on June 6, 2011, at 2:36 pm
 Jeff Schuster Through May, the major effects from the March 11 earthquake and tsunami in Japan and continuing crisis at the Fukushima nuclear power plant on the auto industry remain concentrated in that country, but there has been an increase in lost production volume in China, India, and in North America, as parts sourced from Japan are in short supply. The impact on markets in Europe and South America are less severe since the Japanese OEM volume in these regions is not as significant.
Globally, J.D. Power has raised its estimate of lost volume through the second quarter to 2.2 million units from 2.1 million units, although we now expect more than 70% of the volume to be made up during the balance of 2011. Overall, the global risk to 2011 production volume remains at 860,000 units, with additional risk of further reduction concentrated in Asia.
The impact of the Tohoku earthquake disaster on our short-term production outlook through June 2011 calls for a loss of 1.6 million units in production in the Asia Pacific region. In North America, production will be about 450,000 units lower, while Europe may lose about 100,000 units and South America’s production will be diminished by only 11,000 units. Continue reading ›
Posted on May 2, 2011, at 7:00 am
 Jeff Schuster Japan’s earthquake and tsunami on March 11 and the disruption of power from the continuing nuclear plant crisis have dampened the country’s automakers’ chances for near-term market recovery through the second quarter. In addition, we are beginning to see the effect of vehicle and parts shortages in other regions through downtime and reduced daily output.
The short-term volume impact on North American production will be a loss of at least 320,000 units through the second quarter, which we expect to be made up in the second half of the year at the top-line level. As inventory falls for Japanese brands, however, we will likely see some of the lost volume made up by the Korean and Detroit-based OEMs. This could mean measurable share gains for the Detroit-based automakers and for the Hyundai Group.
Our Automotive Forecasting division has calculated that the short-term impact on global light-vehicle production will be a loss of 2.1 million units through June 2011. We also expect that half of that volume will be made up during the rest of the 2011 calendar year. Continue reading ›
Posted on April 19, 2011, at 1:45 pm
 John Humphrey A new world order has been established with respect to global automotive sales. With China at the forefront, emerging markets—especially the BRIC countries, which also include Brazil, Russia and India—already have overtaken mature automotive markets in terms of sales, and will continue to be the primary source of growth for the sector going forward.
In 2010, light-vehicle sales in these emerging markets comprised slightly more than one-half (51%) of global sales. Going forward, the share of emerging markets is expected to increase steadily to 60% of global automotive sales in 2015. Sales in China alone in 2015 are projected to reach 29 million units, with the United States following with just 16.5 million unit sales. The U.S. and other mature markets like Western Europe and Japan are expected to return to pre-recession sales levels by 2015. Continue reading ›
Posted on February 18, 2011, at 7:52 am
We are looking for the global marketplace to continue to pick up. The growth rate slows a little from what we saw in 2010. We expect about a 6% increase this year—rounding to 76.5 million units worldwide. North America is expected to pick up 11% more sales and end the year at 15.5 million units. The US is forecasted to come in at 13.0 million units—up 12% from 2010.
 Jeff Schuster The drag on global sales will continue to be in Europe. Europe is basically flat at 18.1 million units for 2011. We are expecting weakness in the southern regions of Western Europe as well as in Ireland and the UK. However, we forecast that Germany will rebound, with a projected increase of 8%.
In Asia, China continues to be the market to watch in 2011 as light vehicle sales are expected to increase 11% to 19.0 million units. John Zeng, our director of Asian automotive forecasting at J.D. Power Asia Pacific in Shanghai, points out that China will be the driver for global market growth and says that China’s automotive market remained robust in 2010, defying all expectations that the market would slow along with the economy. Continue reading ›
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