TOKYO - Another year, another great leap forward for Asia's emerging car markets.
With China and India -- the world's two most populous countries -- seeing an explosion of an elite class of wealthy consumers, Asia is poised for steep growth in car sales again this year, scaling past the United States and Europe to become the world's biggest auto market for the first time.
Many forecasts have vehicle sales in Asia growing faster this year than in 2006 as demand in Indonesia and Taiwan recovers after a battering from tighter credit and higher fuel prices.
Goldman Sachs forecasts vehicle sales in Asia to grow 11 percent to 18.66 million units this year, faster than an estimated 5 percent in 2006. It expects sales in China to surge 20 percent to 8.4 million units.
While Southeast Asia will likely remain a stronghold of Toyota Motor Corp. <7203.T> and other Japanese automakers, the vast markets of China and India offer some of the little remaining hope for many brands to advance, experts said.
"There's room for most automakers to do well in China, supporting their global ambitions," said Ashvin Chotai, director of Asian automotive research at Global Insight.
"But some are moving faster than others. I'm most optimistic about Toyota," he added.
Japan's top automaker is starting from a relatively low base of 300,000 units out of China's total passenger vehicle sales of more than 4 million units last year, as it lagged Volkswagen AG and General Motors Corp. in entering the market.
But with output of its popular Camry sedan scheduled to treble and a new 200,000-units-a-year factory due to line off this year, many experts say Toyota could leapfrog GM, Volkswagen and others to become China's top-selling foreign car brand by the end of the decade.
PASSAGE TO INDIA
The story is different in India.
The government's preferential tax treatment of compact cars with specifications unique to India has led to domination by three brands: national brands Maruti Udyog Ltd. and Tata Motors Ltd. , and South Korea's Hyundai Motor Co. <005380.KS>.
Toyota is a two-bit player, with sales barely reaching 50,000 units a year. Maruti, a subsidiary of Japan's Suzuki Motor Corp. <7269.T>, typically sells more than that in a single month.
Still, as tough competition grows tougher in China with more than 30 brands angling for that market, global automakers are scrambling for ways to crack the Indian market as they did in China during the past decade.
"Looking at 2007, the major capacity expansions will be at Suzuki/Maruti and Hyundai," Macquarie Securities wrote in a report. "From 2008, however, we see the field growing," it said, citing expectations for GM and Toyota to add up to 150,000 units of capacity each.
France's Renault SA and India's Mahindra & Mahindra Ltd. have also unveiled plans for a joint venture to build the no-frills Logan car and its derivatives in 2009. Renault's Japanese alliance partner, Nissan Motor Co. <7201.T>, whose Indian presence is limited to imports of a few hundred X-Trail SUVs a year, could join the project.
SILVER LINING
Establishing a footing in China and India is becoming increasingly important for the world's biggest automakers as demand stagnates in the United States, Western European and Japan. The three regions have a combined population that is less than India's.
Forecasters and industry executives predict the U.S. and European vehicle markets to stay flat at best in 2007, both settling under 17 million units.
Japan, whose vehicle market was overtaken by China's last year, is also expected to shrink this year. Automakers express little hope of a turnaround as the population begins to shrink and drivers wait longer to replace their cars.
Still, Japan's top automakers are making headway in the West, dealing in a double-blow to U.S. and European rivals.
"Asian car makers are in an enviable position," Goldman Sachs said in a report last month.
"Not only do they enjoy the fastest-growing markets (in their region), they are also taking an increasing share of key overseas markets such as the U.S. and EU."
Global Insight's Chotai said that trend may keep up for some time as consumers appear to be shifting permanently toward more fuel-efficient cars -- a strong spot for the Japanese.
"The fundamentals are favorable for the Japanese," he said.
Source: Reuters
Top | Go Back
|
RSS Feeds |
Email this article | Printer friendly
| Discuss This Article
The opinions
expressed herein contain positions and
viewpoints that are not necessarily those of
Auto-Talk.net. These are offered as a means for
Auto-Talk.net to stimulate dialogue and
discussion in our continuing mission of being an
educational website/organization.
The Auto-Talk.net site may contain copyrighted
material the use of which may not always have
been specifically authorized by the copyright
owner. Auto-Talk.net is making such material
available in its effort to advance understanding
of auto and car topics, car safety, car
insurance and loan understanding and car fraud
awareness issues, etc. We believe this
constitutes a 'fair use' of any such copyrighted
material as provided for in section 107 of the
US Copyright Law. In accordance with Title 17
U.S.C. Section 107, and such (and all) material
on this site is distributed without profit to
those who have expressed a prior interest in
receiving the included information for research
and educational purposes. For more information
go to:
http://www.law.cornell.edu/uscode/17/107.shtml.
If you wish to use any copyrighted material from
this site for purposes of your own that go
beyond 'fair use', you must obtain permission
from the copyright owner.
|
