Issue: Sep 2007


Annual Asia Pacific Auto Sales Projected to Increase by More Than 7 Percent in 2007



by John Larkin

Automotive sales growth in the Asia Pacific region is projected to surpass Europe's by 2009, according to J.D. Power and Associates.

By 2009, the Asia Pacific region is expected to net 23 million sales, compared with 22.7 million sales in Europe. The Asia Pacific region is already home to the world's second- and third- largest light-vehicle(1) markets -- China and Japan -- and future sales will be bolstered by continued growth in China, plus expected expansion in India, Southeast Asia and Korea.

"Clearly, global sales growth in 2007 and into the future is being driven by strong demand in Asia's two major developing markets, China and India, while sales in other regions are moderate," said Jeff Schuster, executive director of forecasting at J.D. Power and Associates. "Steadily rising incomes in the Asia Pacific region will make vehicle ownership possible for more consumers in those areas, and we expect China and India to remain the forces that drive future global growth."

Light-vehicle sales in the Asia Pacific region reached 9.7 million units in the first half of 2007, marking a 7.2 percent increase compared with the same period in 2006, according to J.D. Power and Associates.

By the end of 2007, vehicle sales in the Asia Pacific region are projected to reach 19.3 million units and to account for 28.1 percent of global demand. By comparison, other regions throughout the world are projected to post only moderate gains for the year. Sales in Europe are expected to grow by 3 percent to reach 21.6 million units, while North America sales are expected to decrease by 0.04 percent to 19.2 million units. South America sales are projected to increase by 10.6 percent to 3.4 million units. Sales throughout the rest of the world are expected to grow by 5 percent.

The anticipated growth in 2007 is primarily due to a projected sales increase of 18 percent in China. China automotive sales have experienced compounded annual growth of 25 percent since the country joined the World Trade Organization in 2001. Sales in Japan are projected to total 5.4 million units in 2007, a 2.7 percent decrease since 2006. Sales in India, the region's third-largest market, are expected to reach 1.67 million units in 2007.

"China's continued strong economic indicators -- including booming exports and a robust retail environment -- will fortify the country's thriving vehicle demand going forward," said John Humphrey, vice president and general manager of Asia Pacific operations at J.D. Power and Associates.

By 2014, light-vehicle sales in the Asia Pacific region are projected to reach 31.9 million units, or 36 percent of the total global light-vehicle market. As the key driver of Asia's growth, China sales are expected to expand at an average of 12 percent per year between 2007 and 2014, reaching 16.3 million units in that time period, which means China will remain the second largest market in the world behind the United States. Japan sales are expected to reach 5.9 million units in 2014, while India sales will reach 3.0 million units.

At the current pace of growth, J.D. Power and Associates expects that China will surpass the United States as the largest new-vehicle market in the world by 2025.

"With China's rapid rate of growth, combined with its enormous population, it seems inevitable that China will become the largest new-vehicle market in the world," said Humphrey.

(1) Light vehicles are defined as passenger cars, SUVs, vans and
commercial vehicles with gross vehicle weight of less than six tons.

Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, performance improvement, training and customer satisfaction. The firm's quality and satisfaction measurements are based on responses from millions of consumers annually. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

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