Even with General Motors reporting its first annual profit since 2004, it may be too early to say the automotive market is back. However, auto executives around the world are feeling generally optimistic about 2011, thanks largely to China, where just about every brand is digging for gold. Market analysts agree.
In a survey by PricewaterhouseCoopers, completed in the fourth quarter and polling 90% of automotive CEOs worldwide, executives said they are "confident or very confident" in achieving revenue growth in the next 12 months. The firm said those results are nearly as strong as before the global financial downturn in 2008.
The CEOs polled in PwC Autofacts said Brazil, Russia, India and China (BRIC) -- and China in particular -- will lead future growth. Sixty-four percent of auto chiefs said China would be the top future market.
PwC Autofacts, which interviewed 1,201 executives in 69 countries during the last quarter of 2010, predicts that 80% of global growth from 2010 to 2017 will come from emerging markets, and 34% of that forecast will come from China alone. The nation has been the largest automotive market since 2009.
The firm says that for the first time, emerging auto markets accounted for more than one-half of global light-vehicle sales (51%), reflecting a shift over the past five years that will continue this year.
Data from J.D. Power & Associates supports that analysis. The firm predicts global new light-vehicle sales this year will reach 76.5 million vehicles, which would be a 6% improvement over 72 million light vehicles sold last year.
"Overall growth in the world economy has been supporting further recovery in auto sales," said John Humphrey, SVP of automotive operations at J.D. Power, in a statement. "We're seeing signals of stability and increased consumer demand for new vehicles as economic optimism increases."
The firm says the U.S. market saw sales of 11.6 million light vehicles last year, an 11% increase from 2009. China's light-vehicle sales were up by more than 30% from 2009 to 17.2 million vehicles. India also saw a growth of more than 30% in 2010, finishing the year at 2.7 million units.
John Zeng, director of Asian automotive forecasting at J.D. Power Asia Pacific, Shanghai, agrees that China is the market to watch. "China's automotive market remained robust in 2010, defying all expectations that the market would slow along with the economy. We expect sales to slow somewhat in 2011, but still maintain double-digit growth," he said in the statement.
The firm predicts auto sales in China will exceed 19 million units this year -- an increase of 11% compared with 2010 -- remaining the top global market by a large margin.