KPMG’s international annual assessment of the current state of the global automotive industry for 2012, based on a survey of 200 senior industry executives, shows that the four BRIC countries (Brazil, Russia, India and China) will have a combined market share of 43% by 2016, a phenomenal rise from just 24% in 2008.
According to the KPMG survey, LMC Automotive (LMCA) is forecasting that China’s automotive sales will be between 20 and 24 million vehicles in 2016 and between three and five million in India. The Chinese Government expects at least one of its OEMs to be in the world’s top ten by 2016.
Estimates for all BRIC countries can be seen in Fig 1. Russia has seen a significant increase in automotive production especially from overseas car producers and related suppliers. Around 200 companies are applying for the new industrial assembly regime in Russia, which is believed to be having a significant impact on the landscape of the country’s automotive industry resulting in many new formations of partnerships and collaborations.
The KPMG survey states that BRIC countries are not just focusing on serving their domestic markets with low-cost cars, but are starting to export vehicles to developed markets. KPMG’s global survey suggests that China will export a million or more vehicles by 2017, a rather conservative prediction given that exports for 2011 alone totalled 800,000 units. India and Brazil are also forecast to both export one million or more vehicles between 2017 and 2022. KPMG states that Russia will have to wait considerably longer to hit such a figure.
As the BRICs look to enter the more established automotive markets KPMG reports that they will be seeking new manufacturing hubs in relatively low cost countries.
According to the survey, the most popular choice to access Europe is Turkey where already 80% of the 1.1 million vehicles produced are exported. Asian automakers, notably from India and China, are attracted by Turkey’s customs union with the European Union and the short transport routes to Central Europe. Toyota and Hyundai already produce vehicles in Turkey and are expanding capacity, while Chinese firms Chery, Dongfeng Motors and FAW Haima, along with India’s Tata Motors are said to have plans for factories in the country.
The KPMG survey also focused, among other things, on the future prospects for electrified vehicles. Their report states that electric vehicles will not exceed 15% of annual global new car registrations before 2025, and that hybrids are expected to outsell battery-powered cars several times over in 13 years time.