A report released on Thursday by IHS Automotive, an auto industry research institution under the name of IHS Global Vision, pointed out that the global auto industry will have explosive growth in the next seven years, and the annual production is expected to exceed 100 million vehicles by 2021, of which China will account for half of this increase.
According to the IHSAutomotive report, as the industry recovers from the impact of the global economic downturn, annual global vehicle production will increase by 21 million units to 106 million units by 2021. Mark Fulthorpe, head of global auto production forecasting, noted that "there is a global shift in the industry as emerging markets shift the balance of the market and mature markets face pressure to downsize."
Global automakers are aggressively betting that a rising middle class in emerging markets will offset a shrinking European market. But slowing growth in the so-called BRIC nations of Brazil, Russia, India and China has sparked concerns in the auto industry that previous transitions could lead to a supply glut.
The IHS report points out that China, the world's second-largest economy, will account for half of the additional 21 million annual production over the next seven years, with North America and Europe also being key drivers. On the other hand, production in Japan and South Korea will decline due to the migration of OEM production overseas.
Mark-Folthorpe added that overcapacity in China and other emerging Asian countries is also an industry concern. "If we look at China and emerging Asian countries, we see a lot of announcements of capacity additions, especially as global OEM production seeks to scale up further in these markets," he noted. Could this be a long-term threat? If the market doesn’t deliver on the expected growth rate, it will.”
While the report named Europe as a growth region, IHS also noted that the market will have a slow start to growth due to slowing demand from Russia and Turkey, with production growth limited to 1% in 2014.
The report predicts that this situation will change in 2015. European production will increase by 4% between 2015 and 2017. The re-acceleration of this growth will be due to the recovery of domestic demand, and mainly to the United States and China. Driven by the continuous improvement of market exports.
After suffering heavy losses in the recession of the past few years, economic improvement in Spain and Italy will contribute half of the output growth to 2021 in the Western European market. However, the study also pointed out that the Western European market's share of total European production will fall from the current 70% to 50% by 2021.
"European automakers will face a very different demand environment depending on their exposure to different parts of Europe," said Denis Schemoul, manager of European vehicle production forecasts at IHSAutomotive.