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Global car manufacturing continues to motor
The global car manufacturing industry exhibited strong growth in 2012, although it should be noted that the situation differed greatly from country to country. Some of this growth was encouraged by certain government schemes to encourage the domestic manufacture and purchase of cars. One such example was the increase of import tax for cars in Brazil. In 2012, the levy imposed on cars produced outside of Brazil was increased from 25% to 55%, meaning that a Toyota Corolla that sells for $16,230 in the US costs the equivalent of $29,000 in Brazil. Consequently, it has become necessary for car companies that wish to sell in Brazil to manufacture there and the last five years has seen a rush of new entrants such as Hyundai, Kia and Nissan.
The global car manufacturing industry grew by 8.5% in terms of value in 2012 to reach a value of $918.6bn, representing a compound annual growth rate (CAGR) of 3.9% for the period 2008-2012. Volumes also increased in 2012, growing by 5% to reach a volume of 60.3 million cars.
The Asia-Pacific region continues to dominate the industry and represents over 40% of the industry’s global value. The major manufacturing centers of China and India have contributed heavily towards this as well as the major car brands of Japan and South Korea, such as Toyota and Hyundai, whose global presence and demand has sustained these countries’ domestic manufacturing industries. The Asia-Pacific industry is likely to be main driver of growth in future years as certain domestic economies have encouraged overseas investment as a result of lower manufacturing costs.
Europe continues to have a significant industry share with Germany being the largest regional market. This has much to do with the country’s major car brands, i.e. Volkswagen and BMW, having a significant global presence. Some of the more developed Western European markets have struggled in recent years, with Belgium, France, Italy and Spain all experiencing decline. However, Europe’s position has been fortified somewhat by strongly developing industries in Eastern Europe with Russia and the Czech Republic exhibiting particularly strong growth.
The Asia-Pacific market is likely to be main driver of growth in future years as certain domestic economies have encouraged overseas investment as a result of lower manufacturing costs.
Looking towards the future European car policy certainly in Western Europe is heading towards proposals of encouraging the development and eventual widespread use of clean and energy efficient vehicles, as well as other forms of transportation like electric vehicles.
Car manufacturing in the Americas is on an upwards trend as countries like Brazil and Mexico turn into manufacturing hubs thanks to cheaper production costs and protectionist policies. This, coupled with a strong recovery in the US, means that strong performance is projected towards 2017.
Find this interesting? For more, you may read our latest ‘Industry Analysis Reports on Car Manufacturing‘.