Auto sales declining in America, Europe, Japan, rising in BRIC in 2008
Automobile sales is declining in the world’s three largest established markets – America, Europe, and Japan – in 2008, further squeezing global car makers’ margins, but booming BRIC nations – Brazil, Russia, India, and China – hold some hope for growth.
According to recent media reports, North American industry sales to decline to the lowest level in 10 years in the uncertain economic environment, and there is severe downturn in the commercial-vehicle market.
Sales are being shored up in Western Europe by rising demand in the new EU states, but low consumer confidence and weak housing markets may depress 2008 car sales in Germany, UK, and Spain, S&P said in a report.
The unclear American economic outlook is also a concern for Japanese automakers, as America is their largest market, the agency said.
However, the BRIC nations, which represent 20 percent of global car sales, are predicted to increase strongly by more than 10 percent per year over the medium term, S&P said.
Yet, even if demand is robust, profitability in China has already sunk to world average levels due to fierce competition, overcapacity, and market fragmentation, it therefore cannot offset the effect of persisting negative industry trends in established markets, S&P said. In North America, General Motors Corp, Ford Motor Co, and Chrysler continue to gradually lose market share, partly by design as they retrench from daily rental fleet sales.
Japanese and South Korean automakers, meanwhile, continue to steadily gain market share in America.
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