Production outside the three major regions of Asia, Europe and North America will follow the global lead in most areas, with steady increases for the long run, based on Ward’s AutoForecasts outlook for the rest of world.
The regions of South America, Africa and the Middle East will combine for significant growth, with total annual production more than doubling from 2003 to 2011 to more than 7.8 million units.
South America, the fourth largest vehicle-producing region, will experience significant gains following the economic slump in the key market of Brazil – and an even steeper slide in Argentina – that halted what auto makers were betting would be a juggernaut a decade ago.
Huge investment in new assembly plants in the 1990s left Brazil and Argentina often struggling to utilize 50% of their capacity.
Production in South America bottomed out at 2.14 million in 2003, but from hereon is forecast for large increases.
Manufacturers in Brazil, which accounts for more than 80% of output on the continent, have increased their efforts to find export markets, with some success.
Higher demand overseas and a turnaround in the local economy will bump output in Brazil 22.8% in 2004.
Including a 13.6% increase in Argentina, as well as better numbers in Venezuela and other auto-making countries, total South American production is forecast to rise 25.1% in 2004 to 2.67 million units, followed by an even better 32.7% increase in 2005 to 3.55 million.
More export opportunities and the expectation that the overall economic picture in the region will stabilize in the long term should allow the region’s output to more than double by the end of the decade.
On the other hand, political and economic issues currently plaguing the region will remain largely volatile, even as they improve.
Thus, economic growth will be hampered somewhat, and vehicle production increases from exports will outstrip local demand. In 2003, production in South America equaled roughly 116% of the region’s sales. That figure will be closing in on 130% by the end of the decade.
Three of the Big Four manufacturing groups of South America – General Motors Corp., Volkswagen AG and Ford Motor Co. – are forecast for double-digit gains in 2004. However, only Ford and VW, at 35.2% and 28%, respectively, are forecast for a gain above the region’s total increase. Ford will follow 2004 with production increases of 31.7% in 2005 and 12.1% in 2006.
The fourth of the Big Four, Fiat SpA, is forecast for just single-digit growth of 4.9% in 2004, followed by industry-topping gains of 31.8% in 2005 and 12.7% in 2006.
GM is heading for the weakest growth of the four. After an 11.6% increase in 2004 and 17.6% rise in 2005, growth will slow to 3.1% in 2006, and largely tepid results will be the pattern through 2011.
Production in the Middle East should increase by more than one-half its current annual rate by 2011. But the region will remain relatively small volume, with production topping just 1.1 million at the end of the decade, compared with 662,000 in 2003.
Production on the African continent will almost triple from 561,000 units in 2003 to 1.5 million in 2011. South Africa is the manufacturing hub of the continent, accounting for two-thirds of the output in 2003.
But, South Africa’s output share of Africa is expected to drop to nearly 50% by 2011 despite steady growth in production, including increased output bound for export markets.