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Beyond BRIC Markets Are the Last Frontier of Growth for the Auto Industry

Four Emerging Regional Clusters Offer Serious Growth Prospects for Car Manufacturers and Suppliers That Master the Challenges

The Beyond BRIC markets—the rising automotive markets emerging behind the quartet of Brazil, India, Russia, and China—offer the last great growth opportunity in a world in which established markets are largely characterized by stagnation or low growth and the key stakes have already been distributed in the BRIC markets. This is the finding from a report released today by The Boston Consulting Group (BCG); Beyond BRIC: Winning the Rising Auto Markets is the fourth publication in BCG’s Winning the Localization Game series.

BCG projects that the group of Beyond BRIC markets highlighted in the report will generate 6 percent annual growth in sales from now through 2020, growing four times as fast as the established Triad markets. By 2020, the Beyond BRIC markets will account for one-fifth of global new-vehicle sales.

Companies need to take a unique approach to winning this “last frontier.” “None of the Beyond BRIC auto markets on their own can generate sales volumes comparable to that of a single BRIC market. Companies must think in terms of regional clusters rather than individual markets in order to seize this opportunity,” says Nikolaus S. Lang, a senior partner and coauthor of the report.

Four Clusters of Opportunity
BCG has identified four clusters of opportunity for OEMs and suppliers:

• The ASEAN Nations. This cluster includes many of the members of the Association of Southeast Asian Nations such as Indonesia, Malaysia, and Thailand. It is projected to have annual new-vehicle sales of 4.6 million by 2020, making it larger than the projected Russian market of 4.4 million.
• The Emerging Mideast. This cluster—which includes Iran, Saudi Arabia, and Turkey—will boast up to 5.8 million new-vehicle sales in 2020, overtaking Brazil’s projected 5.2 million.
• The Andeans. This cluster—which includes Argentina, Chile, and Colombia—has 2.9 million new-vehicle sales projected for 2020, making it nearly the size of the German market (at 3.6 million).
• The North African Belt. This cluster—which includes Algeria, Egypt, and Morocco—is projected to have 1.2 million new-vehicle sales by 2020. Although it will remain comparatively small, this region is a potential site for promising localization by OEMs—and the gate to Africa.
“These regional clusters should be on the growth list of every OEM and supplier with ambitions to be a truly global player,” said Thomas Dauner, a senior partner and coauthor of the report.

Getting It Right
Winning in these clusters will be challenging. Companies must reckon with local and regional complexities and adjust business models to succeed. Based on more than 70 in-depth interviews conducted with senior executives at the world’s leading OEMs and suppliers, BCG offers best practice examples in the report, including:
• How to succeed in North Africa
• Why cars need to be different in the important Indonesian market
• What companies need to do to sell cars in Saudi Arabia
• Why it takes three different production strategies to sell across South America.

“It is amazing how much you can learn from local best-practice examples. Leveraging these lessons and applying them across the clusters could offer a unique opportunity and create a real competitive advantage for OEMs,” says Marco Gerrits, a Beijing-based partner at BCG and a coauthor of the report.

It’s Time to Act
The report concludes that few automotive companies have yet managed to dominate these last-frontier markets. This leaves plenty of opportunity for those companies with the right ambitions and approach. “Although many OEMs have been successful in one regional cluster, very few have achieved a dominant position across all or even the majority of the clusters. Agile companies will learn from these Beyond BRIC champions and carve out their own path for winning the last frontier,” Lang says.

A copy of the report can be downloaded at

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Wed. June 19th, 2024

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