Look who's driving world auto sales now
Emerging-market drivers now buy the majority of the world's cars. The BRIC nations lead the charge that will boost auto sales for new and established automakers.
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The Brazilian market, dominated by European automakers, is also booming. Sales soared more than 10 percent in 2010 over 2009 to 3.3 million, the fourth straight year of increases.Skip to next paragraph
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While much of the world's new middle class will be sliding behind the wheel of their first Ford or Volkswagen, it's not clear when US drivers will do the same with emerging-market nameplates.
The Chinese "thought they were going to do what the South Koreans did, [only] in a lot shorter time, and they've realized maybe it's not that easy," Baum says. With only 1 car per 40 people in China (compared with 1 per 1.2 people in the US), there's plenty of pent-up domestic demand for China's automakers. "They're practicing on themselves" before they enter the US market, he says.
When demand for cars in China cools, "as it's starting to do now, then I think they'll look outside of China," says Jeff Schuster, executive director of global forecasting at J.D. Power. There's "no question" that China will be the next major player in the US market, Mr. Schuster says. Chinese-made cars could be on US roads in as little as five years.
Still, the Chinese must leap a daunting set of hurdles, including establishing a dealer network (or, more likely, partnering with an established brand), complying with US safety regulations, and meeting US consumer expectations for quality and features.
Thus, some of the first emerging-market vehicles to head to the US in any appreciable numbers may come from Brazil and Argentina, which have strong sales of small trucks, a market that US-based manufacturers have ignored in recent years, Mr. Visnic says.
Some of these home-grown automakers own foreign brands: China's Geely (Volvo), China's Hawtai Motor Group ($222 million invested in Saab), and India's Tata (Land Rover and Jaguar). But Chinese- or Indian-made imports into the US might not arrive under these luxurious brand names.
"You want to be careful," Visnic says. "These brands are premium brands. There's only so far down the price ladder that you want to extend a brand that has a premium history and reputation."
What we're seeing now, Baum says, is the tail wagging the dog. The Buick LaCrosse was developed in large part to make it attractive to Chinese, not American, buyers. "Buick is now designing a lot of its products with China in mind," he says, "and then saying, 'OK, now, what do we do to change them for North America and for Europe?' "