Nikkei Sees "Sharp Slowdown" In Global Car Production. They Need Glasses

Bertel Schmitt
by Bertel Schmitt

Last year, world car production had jumped 26 percent to 77.8 million units, as it recovered from a carmageddon-induced slump. This year, global car output will see a “sharp slowdown,” if The Nikkei [sub] is to be believed. The Tokyo business paper cites IHS and J.D.Power, both expect only 4 percent growth. The Nikkei however should do some chart studies before writing.

As the graph above shows, that growth rate is not a sharp slowdown, is simply is a return to normalcy. Last year’s 26 percent jump was the counter-reaction to a 12.4 percent slump in 2009. From 1998 to 2007, the global car market expanded at an average rate of 3 percent per year – in a more or less linear fashion. Pre-carmageddon, the rolling 3 year average was a little above 4 percent annual growth. The worldwide market is simply getting back into its old pace.

The cars lost during carmageddon however appear to be lost for good.

What I am seeing is a sharp slowdown in my trust in major wire services.

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=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Getacargetacheck Getacargetacheck on Oct 31, 2011

    Just wait until the next shoe drops in the financial markets.

  • Robert.Walter Robert.Walter on Oct 31, 2011

    Glasses of what? All levity aside, I too have an unsettling feeling about the financial markets and their ability to continue to hurt the overall economy.

    • Bertel Schmitt Bertel Schmitt on Oct 31, 2011

      I have followed this market through (as far as I can remember) four energy crises, the Black Monday of 1987, the Saving & Loan crisis, the Dot Com crisis, and sundry others up to the recent ones. I have heard countless "this will be the big one" and "this time it's different." Long-term, it never is. Anyway, this is not about making projections. This is about 4 percent growth being no "sharp slowdown." Four percent growth is the normal.

  • Vbofw Vbofw on Oct 31, 2011

    At the risk of making a pointless rebuttal of a pointless rebuttal, it is pretty apparent to a reader that the Nikkei is saying the RATE OF GROWTH is slowing RELATIVE TO LAST YEAR. Nobody informed would think they are saying production units are declining, or that production growth is declining relative to the historical norm you quote of 4 percent. Or am I nuts?

    • Bertel Schmitt Bertel Schmitt on Oct 31, 2011

      Even whackier: "Global Car Output To See Sharp Slowdown In '11 NEW YORK (Nikkei)--With flagging demand in emerging economies and Europe, worldwide auto production will likely increase only 4% on the year in 2011, compared with an increase of over 20% recorded a decade ago."