2012: A Year of Transition in China’s Auto Industry

Marvin Zhu

It’s likely that 2012 will be a key transitional year in China’s automotive industry, according to China expert Marvin Zhu, a senior analyst with LMC Automotive who writes for China Automotive Monthly published for J.D. Power Asia Pacific. Zhu offers observations and an outlook for the auto industry in relation to changes in the economy and government programs and policies. He also looks at how foreign and domestic automakers are changing their strategies in a diversifying market.

China’s Growth May Slow to Less Than 9% in 2012 Due to Global Challenges

 The economic environment in China is one of the most critical factors driving the country’s domestic auto market. Faced with both external and internal challenges, China’s GDP growth in 2012 will most likely be below 9%, which would be the lowest level since 2001. At the same time, the global economy is facing its greatest downward pressure since 2008, largely due to the debt crisis in the eurozone, a slow recovery of the US and Japanese markets, and unrest in the Middle East and North Africa. Continue reading ›

India Auto Market Experiences Fast Growth; Stakes Claim as a Small Car Leader

John Humphrey

India has quickly become one of the largest and fastest-growing automotive markets in the world. This momentum has been driven by a more open and market-driven economy; an empowered and less risk-averse workforce; a more consumer-driven culture; and a focus on small-car production. There are tremendous opportunities for auto industry growth in India during the next decade if there is active government support for the industry along with the development of an infrastructure to support India’s economy.

Global Small Car Production Hub

In addition to developing policies that favor general market liberalization and encourage foreign investment, India’s government has pursued policies meant to support development of the country’s automotive industry. The main thrust of these policies has been to position India as a global hub for production of small passenger cars.

These policies include a reduction on the sales tax of small cars (defined as those less than 4,000 millimeters in length and with an engine displacement of 1.2 liters or less) and providing financial incentives for automakers to build and export vehicles overseas. As a result, many automakers have been shifting their small-car production operations to India, or designing vehicles specifically to fit Indian market needs. Continue reading ›

Clean Diesel Engines—A Technology that Needs its Image Burnished

Christopher Malott

Diesel-powered passenger vehicles have been in production since the early 1930s. Diesel powertrains, which are internal combustion engines (ICEs) that burn diesel fuel, have been options in passenger vehicles in Europe for decades, and account for nearly 50% of new-vehicle sales in that region. However, it continues to be a struggle for diesel technology to gain the same level of penetration in the United States. In recent history, much improvement has been made to both diesel engines and the fuel used to power them, resulting in reduced emissions as well as less odor, engine noise, and visible vehicle exhaust. Yet, the acceptance of clean diesel technology continues to be slow in the United States not only due to concerns about cost and perceived fuel availability, but also from the lingering perception that diesel is ‘dirty.’

It’s been determined that clean diesel engines are the second-least considered powertrain among four major alternative powertrain choices—including hybrid electric, plug-in hybrid electric, and battery electric vehicles—among consumers approaching the new-vehicle market. Less than one-third of new-vehicle intenders (31%) cite that they “definitely will” or “probably will” consider this technology, based on data from our 2011 U.S. Green Automotive Study. The primary benefit cited most often by clean diesel engine considerers in the study is the lower fuel costs this technology can provide through improved fuel economy. Continue reading ›