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Global car manufacturing industry continues to motor along
The global car manufacturing industry exhibited strong growth in 2013, although it should be noted that the situation differed greatly from country to country. Some of this country specific growth was encouraged by government schemes to encourage the domestic manufacture and purchase of cars. One such example was the increase of import tax for cars in Brazil, introduced in 2012. The industry stabilized in Western Europe following a sharp contraction in 2012, as countries such as the UK continued to perform well.
Globally, the industry grew by 4.3% in terms of value in 2013 to reach a value of $888.5bn, representing a compound annual growth rate (CAGR) of 9.8% for the period 2009-2013. Volumes also increased in 2013, growing by 4.2% to reach a volume of 62.8 million cars produced.
The Asia-Pacific region continues to be important to industry growth, representing over 40% of the industry’s global value. The major manufacturing center of China has contributed heavily towards this, as has 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 region is likely to be a main driver of growth in future years as consumer demand for cars continues to increase in countries such as India and China.
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, namely Volkswagen, Daimler and BMW, having a significant global presence. Some of the more developed Western European countries have struggled in recent years, with France and Italy both experiencing decline. The fortune of both of these industries are closely linked to the large domestic manufacturers of PSA Peugeot Citroen SA, and Fiat SpA. However, Europe’s position has been fortified somewhat by strongly developing industries in Eastern Europe, with Hungary and Romania exhibiting particularly strong growth due to new production facilities opening.
Looking ahead, the Asia-Pacific region is likely to be a major driver of global growth in future years as a number of its domestic economies have encouraged overseas investment through lower manufacturing costs.
Looking towards the future, European car policy appears to be heading towards proposals of encouraging the development and eventual widespread use of clean and energy efficient vehicles; as well as other forms of transportation such as 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 performances are projected across the 2013-2018 period.