Automotive market sees growth and challenges
The global automotive aftermarket is set to grow by 0.7% by the end of 2010
The global automotive aftermarket is set to grow by 0.7% by the end of 2010 but strong first half figures do not mean that troubles are over, says market analyst.
The predicted market increase and recovery in global volumes is being fuelled by emerging markets and a 2.2% growth in the number of vehicles on the road, however as government subsidies are withdrawn manufacturers are facing a shortfall in demand at a time when increasing commodity prices and higher interest rates will begin to bite.
Marcus Johnson, automotive analyst at Datamonitor, comments: “Despite a wave of optimism industry players must note that this is a recovery not absolute growth and a lot must be done to make sure that this recovery is uniform.”
In Europe, the weakening bloc currency and end of government scrappage schemes have dampened the effects of growth; whilst despite restructuring efforts and a respectable growth in GDP in the US, the market is set to stay below recession levels for some time. In fact, China replaced the US as the world’s largest automotive production market last year, and Datamonitor is forecasting growth there of over 30% out to 2013.
“It’s difficult to ignore that when it comes to automotive recovery, China is holding the torch”, adds Marcus. “However, even in China we expect the second half of 2010 to be more sobering as sales stabilise form a period of high growth”.
Other emerging markets are also showing high potential for growth, though not to the level of China. Datamonitor identifies India, Japan and Brazil as worthy of note due to increasing GDP and international investment. However, huge investments are needed to reduce emissions and to design high volume models that are fuel efficient, compact and able to meet the demands of these regions.
Marcus concludes: “The natural consensus is that the automotive aftermarket will recover, but the fundamental question remains when. Datamonitor expects the global aftermarket to reach E640 billion in 2011 following growth of 2.1% over 2010, as automotive players shift their focus away from Western markets and toward high growth emerging economies.”
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