BRICS To Overtake Developed Nations By Car

Bertel Schmitt
by Bertel Schmitt

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.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Forraymond Forraymond on Jan 06, 2011

    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!

  • Autobraz Autobraz on Jan 06, 2011

    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!

  • CanadaCraig You can just imagine how quickly the tires are going to wear out on a 5,800 lbs AWD 2024 Dodge Charger.
  • Luke42 I tried FSD for a month in December 2022 on my Model Y and wasn’t impressed.The building-blocks were amazing but sum of the all of those amazing parts was about as useful as Honda Sensing in terms of reducing the driver’s workload.I have a list of fixes I need to see in Autopilot before I blow another $200 renting FSD. But I will try it for free for a month.I would love it if FSD v12 lived up to the hype and my mind were changed. But I have no reason to believe I might be wrong at this point, based on the reviews I’ve read so far. [shrug]. I’m sure I’ll have more to say about it once I get to test it.
  • FormerFF We bought three new and one used car last year, so we won't be visiting any showrooms this year unless a meteor hits one of them. Sorry to hear that Mini has terminated the manual transmission, a Mini could be a fun car to drive with a stick.It appears that 2025 is going to see a significant decrease in the number of models that can be had with a stick. The used car we bought is a Mk 7 GTI with a six speed manual, and my younger daughter and I are enjoying it quite a lot. We'll be hanging on to it for many years.
  • Oberkanone Where is the value here? Magna is assembling the vehicles. The IP is not novel. Just buy the IP at bankruptcy stage for next to nothing.
  • Jalop1991 what, no Turbo trim?
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