Biggest Share of Auto Sales Now in Emerging Markets

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The emerging markets accounted for 51 percent of global light vehicle sales last year. The trend is led mainly by large growth in China according to a report from research firm JD Power and Associates. 

In 2015, light vehicle sales in the emerging markets are expected to increase steadily to 60 percent. Markets in the US, Western Europe and Japan on the other hand are only expected to return to pre-recession sales levels in the same period - and remain overshadowed by exponential growth in China, India, Brazil and Russia according to VP of  JD Power and Associates, John Humphrey. 

“With China at the forefront, emerging markets will continue to be the primary source of growth for the sector going forward”

The company projected sales in China to amount to 29 million units in 2015. The US will only produce 16.5 million units. The firm estimates global sales will increase from 77 million units this year to 125 million units by 2020. 

Brazil, Russia, China and India are expected to sell a combined 55.7 million units and account for 46 percent of global sales in 2020. Also owing to the countries’ potential for exports. 

However the shift in global auto sales will be a major obstacle when it comes to controlling and reducing carbon emissions - more so in the developing countries. Humphrey also added “The global growth pattern points to vehicle carbon emissions and overall air quality getting worse before they get better.”

Buyers in the emerging markets are also more price sensitive and favour sales of traditional internal combustion engine vehicles. Average hybird-electric vehicles cost US$11,000 more and it’s unlikely buyers will tolerate the price premium. 

The report also noted that global shift in growth toward emerging markets has significant implications for the world’s automakers who will need to reassess their global strategic priorities and reallocate resources to meet the new market demands. 

New investments in vehicle production are also likely to be shifted to emerging markets, especially in Asia, driving investment in automotive tooling and component manufacturing as well.