By on January 6, 2011

Scotia Bank in Toronto has an insightful and resourceful car analyst, Carlos Gomes. Whatever he writes is worth reading. He expects car sales to rise and the “United States and the euro zone to climb out of their deep hole.” He also expects that the developed nations are ripe to be plucked and eaten by an upstart, roughhewn  crowd:

“In 2011, new car sales in China and the other BRIC nations (Brazil, Russia, India and China) will surpass the combined volumes of Western Europe and Japan, and account for roughly 30 per cent of global car sales.”

Here is his case:

  • Sales growth in China will moderate to about 15 per cent over the coming year. Per capita income in China is currently US$4,200 – the sweet spot for auto industry growth.

“Historically, vehicle sales have experienced the fastest growth, when per capita income is in the US$4,000-US$6,000 range. Even with the rapid sales growth in recent years, vehicle penetration in China remains low, only 40 vehicles per 1,000 people, compared with an average of 673 vehicles for the G7 nations. In addition, more than one-quarter of the world’s key vehicle-buying age group, 40-to-49 year olds, reside in China, and are experiencing rapid income gains.”

  • India has been the second-best performing major auto market over the past decade, with car sales climbing to a record 1.82 million units in 2010.

“Vehicle penetration remains among the lowest in the world at only 14 vehicles per 1,000 people – nearly half the level prevailing in all of Africa. India enjoys a special demographic advantage, one of the world’s youngest populations, half of its 1.2 billion inhabitants are less than 25 years old. In fact, India is home to 20 per cent of world’s population under 25 years of age. These 610 million potential future car buyers are twice the size of the entire U.S. population, and nearly two-thirds of the current global vehicle fleet, 965 million cars and trucks.”

  • Gomes expects car sales in Russia continue to post double-digit gains in 2011.

“Improving automotive credit and employment prospects – job creation is advancing at the fastest pace since mid-2008 – have lifted the willingness of Russian consumers to purchase big-ticket items to the highest level since the summer of 2008.”

Sorry, Marcelo, he didn’t mention Brazil. Must have been an oversight of the insightful analyst.

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4 Comments on “BRICS To Overtake Developed Nations By Car...”


  • avatar
    Philosophil

    The expansion of ‘development’ and the modern technological/industrial society that this kind of thing signals was pretty much inevitable (and I would say justified as well, from a social justice perspective), but I’m just not sure the world can take this level of globalized development. Not only will local and global ecosystems be strained, but the competition for resources between various nations and regions could be dangerous as well at a social/political level. The long-term effects of the level of development that this signals could be nasty, especially as certain nations or regions begin to feel the pinch from this overall shift in global affluence and power.

    • 0 avatar
      Autobraz

      Are you and your country ready to lower your collective living and consumption standards so that the developing countries can increase theirs with a lesser overall impact on resources and environment?
      The only way I see out of this conundrum is via technological development.

  • avatar
    forraymond

    Throughout history the wealthy have always lived well.  It is the powerless that bear the brunt of societal, political and economic change.
     
    America, welcome to the third world!

  • avatar
    Autobraz

    he didn’t mention Brazil.

    I’m betting he is either Brazilian or Portuguese (very likely for Toronto) and so may have a clearer view of Brazil and its economy. So much so that he knows Brazil is nowhere in the same league as India and China in potential for growth (in absolute numbers) or in many other measures.

    People love grouping Brazil together with them so they can get the nice sounding acronym. I don’t blame them, we are by far the most important country and with the most potential starting with the letter B!

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