You have heard the whole year about the exploding Chinese car market. Surprise: Production growth in the U.S. appears to be stronger than China. In a few days or weeks, we will have the 2010 sales numbers. In this economy, what’s more important than spending money is making money, and that means jobs. For that, we have to look at the motor vehicle production numbers by country. For those, we will have to wait many months until OICA gets around to tabulating them. Let’s make a best guess estimate for who’s on top and by how much.
First, some housekeeping. The numbers are for all “motor vehicles,” that is, an “automobile, automobile truck, automobile wagon, motorcycle, or any other self-propelled vehicle designed for running on land but not on rails,” as per §18 USC.
Counting “cars” alone would come to shocking results, especially in the U.S.: Less than one third of the U.S. production is “cars,” the rest is “trucks.” The number of “real” medium and heavy trucks and busses is a tiny fraction of the total the world over. In order to avoid confusion caused by varying definitions from country to county, it is best to count total of all motor vehicles.
Second, there are differing methodologies from country to country. Some count produced CKD (Completely Knocked Down) or SKD (Semi Knocked Down) kits, produced for export, as vehicles produced in their countries, some don’t. OICA gives the production number to the country of final assembly. This forecast attempts to replicate the OICA methodology, but it will remain an approximation only.
Lastly, there are always some end of the year shenanigans and surprises.
Speaking of surprises, the big surprise this year will not be China, it will be the U.S.A. According to Ward’s Auto data, U.S. production stood at 7.2 million units by end of November, compared to 5.2 million last year. It looks like the U.S.A. will have produced somewhere around 7.8 million units by year’s end, a growth of 37 percent. Percentage-wise, the U.S.A. beats China in production growth. Now keep in mind that the U.S. was in the dumps in 2009, whereas China had gone completely ga-ga.
China, says the CAAM, will close out the year with 18 million units produced and sold. That would be a growth of 31 percent. No country has produced so many cars in a single year, ever.
Japan needs careful treatment. According to Japan’s manufacturer association JAMA, Japan had already produced 8.87 million motor vehicles by end of November, which indicates 9.65 million by year’s end. However, Japan has a high number of CKD production, and OICA will not reflect this. A good OICA-compatible guess for total Japanese production by year’s end is 8.87 million or thereabouts, an increase of 12 percent.
Next in line is Germany. Despite a cratering home market and a likewise sicklish European market, Germany could increase its production over the strong 2009. If we extrapolate the November YTD production numbers provided by Germany’s VDA, we arrive at close to 6 million cars by years end. However, with a slight CKD effect removed, it looks more like 5.77 million, and an increase of 11 percent.
So there you have it. No change in ranking. China far ahead. The U.S. coming back strong. The U.S. will not be able to unseat China in the near and distant future. The U.S. has a fighting chance of kicking Japan off the #2 podium next year. Japan’s production numbers should be much lower this coming year, due to the strength of the yen, combined with a contracting domestic market. Germany is holding is own. If the Euro remains low, Germany will continue its strong exports this coming year. If the Euro rises, the EU economy will be on the mend and EU sales should rise. In case you are wondering who’s on 5th: South Korea again. Many million behind Germany. Despite vigorous growth and strong export numbers, South Korea will have to grow a whole lot more before mixing it up with the big boys.