Global Auto Sales Shift Hampers Reducing Vehicle Emissions

As emerging markets, led by the BRIC countries, eclipse mature markets in global auto sales growth, it will become more challenging to control or reduce emissions from vehicles powered by internal combustion engines (ICEs).

John Humphrey

A major reason is that passenger-vehicle buyers in these markets already tend to be more sensitive to price pressure than are buyers in economically mature markets, which favors the sale of traditional ICE-powered passenger vehicles. Therefore, it is unlikely that buyers in these developing markets will accept the price premium charged for hybrid-electric or battery-electric powertrains with a price differential expected to average about US $11,000.

Although some governments, such as China’s, are taking steps to reduce auto-related carbon emissions, the sheer volume of vehicles being added to the global fleet during the next decade will largely negate these efforts, which means carbon emissions and overall air quality will get worse before it gets better.

In addition to challenging the future reduction of vehicle emissions and promoting cleaner air, the global shift in growth toward emerging markets has significant implications for vehicle manufacturers. Automakers will need to reassess their global strategic priorities and reallocate resources to meet new market requirements.

It’s likely that the bulk of manufacturers’ new investments in vehicle production will shift to these new markets, particularly in Asia, and new plants will need to be supported by investments in automotive tooling and component manufacturers. In addition, global vehicle design and engineering operations will be more centered in Asia to better serve local market tastes. Also, more global sourcing decisions will be made in Asia, as the region will account for the greatest concentration of production and sales.John Humphrey, senior vice president of automotive operations at J.D. Power and Associates

Bookmark and Share

Leave a Reply




You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>