BRIC offers hope to auto industry

Wednesday, 19 November 2008

The biggest emerging markets could throw a lifeline to an automotive sector facing a tough few years, according to a new report.

PricewaterhouseCoopers, the global accounting firm, says in the report that ‘increasing fuel costs, CO2 emissions reductions, fluctuating exchange rates, shifts in consumer behaviour’ are creating a difficult climate for the industry as traditional demand has declined – but that solutions may be found in growing, emerging markets.

The report states that ‘95% of light vehicle growth will originate from emerging markets, with BRIC [Brazil, Russia, India and China] countries eminent’. The report states that sales of new cars have risen by 66% in Russia in the last year.

Philippe Vincent, a partner in PWC, commented: ‘Great opportunities exist for the auto makers and suppliers who will be able to deliver solutions to this structural industry transformation. A clear challenge lies in the ability of western auto makers to adapt to the clear dichotomy existing between the established, mature markets and emerging markets.’