New Delhi, Dec 21 (UNI) Even as auto sales appear to decline in the world's three largest established markets - the United States, Europe, and Japan - in 2008, only the booming BRIC nations--Brazil, Russia, India, and China--hold some hope for growth of automakers, a study says.
World's leading rating agency Standard&Poor's in a report says ''North American industry sales could decline to their lowest level in 10 years in the uncertain economic environment.'' Agency credit analyst Maria Bissinger says "In Western Europe, sales are being shored up by rising demand in the new EU states, but low consumer confidence and wobbling housing markets are likely to depress 2008 car sales in three of the largest European markets of Germany,the U K, and Spain.
''The unclear economic outlook in the US is also a concern for Japanese automakers, as the US is their largest market.
Only the booming BRIC nations--Brazil, Russia, India, and China--hold some hope for growth for automakers,'' the report says.
''They already represent 20 per cent of global car sales and are predicted to increase strongly by more than 10 per cent per year over the medium term,'' adds Ms Bissinger.
Standard&Poor currently expects 2008 U S light-vehicle sales to be about 15.5 million, down from an expected 16 million in 2007.
German car sales dropped by 8.2 per cent in the first eleven months of 2007 and are likely to continue on a downward trend in 2008, reflecting low consumer confidence levels and uncertainty about future carbon dioxide(CO2) regulation, leading customers to postpone car-buying decisions.
By contrast, the Brazilian vehicle market outperformed all expectations and forecasts in 2007. Vehicle sales were about 1.8 million units, in line with the 1997 peak, driven by solid economic growth over the past two years and a sharp decline in interest rates, which stimulated repressed demand for financed vehicles.
The Russian automotive market, too, has been one of the most dynamic in 2007, with demand for imported cars driving the growth.
According to industry estimates, sales of foreign cars in Russia increased by 63 per cent and 566,715 units through January-November as compared to the same period of 2006 and totaled 1,467 million cars.
The Indian automotive market is expected to continue to grow at about 15 per cent per year by the end of the decade, while the Chinese passenger-car market is likely to cool down to 10-15 per cent per year over the medium term.
''Growth in the BRIC regions will offset the declines in volumes for global automakers, but cash flows in these regions will be dampened by high capital expenditure requirements and ultimately declining profitability levels as these markets mature,'' says Bissinger.