The
automotive industry is the largest private investor in R&D in the EU. The
ACEA members together spend over €26 billion every year on R&D, or about 5%
of their turnover. These figures, resulting from a recent ACEA survey among its
member companies, reflect the great importance that the automobile
manufacturers attach to R&D efforts to keep up their competitiveness and
long-term viability. Main areas of automotive R&D investment are
environment, road safety and production efficiency.
Overall
automotive R&D investments are even higher. According to the EU Industrial
Investment Scoreboard, the sectors ‘automobiles and parts’ and ‘commercial
vehicles and trucks’ represented R&D investment of €32.8 billion in 2008.
The actual number will be greater, as these categories do not include all
automotive supplying sectors. The Scoreboard ranks the pharmaceutical sector
second with €19.8 billion and the telecommunications equipment sector third
with €12 billion.
Chart of the week: driving car sales:
Carmakers
have had a pretty torrid time since 2009 – GM’s bail-out and Toyota’s product
recalls come to mind. So another global slowdown is hardly what the industry
needs.
Should
the industry pin its hopes on emerging markets? Where are the car sales coming
from?
According to Scotia
Bank’s December autos report, 2012 will
be the year that EMs overtake developed markets in car sales. According to the
bank:
We project that car sales in developing nations will
expand by 7 per cent in 2012, climbing to 31m units and exceed volumes in the
mature markets of Western Europe, North America and Japan. A decade ago,
developing nations accounted for less than 20 per cent of global car sales.
The shift to EMs is clear. And, as expected, China is
large part of that growth. Even luxury car sales are holding up in China, as Bentley can attest.
Forecast
car sales data from IHS Automotive predict that China
will be buying over 11m more cars in 2018 than in 2011 – more than a third of
the growth in sales over that period.
The
comparison with north America is most revealing. The forecast total China car
sales in 2018 of 29.6m is more than 10m greater than North America, on 19.3m.
China will account for 28 per cent of the world’s car sales in 2018, whereas
north America will represent 18 per cent.
But
one factor that is missing from all the car sales data is car production: who
is making the cars, and where is the demand? The US buys more cars than it
produces, making it a driver of growth. China, for years a factory for the
world, is now joining the US as a net importer. The chart below shows total
sales minus total production for US and China for 2010 to 2018.
The
US and Canada are together a net importer, with sales outnumbering production
by 2m-3m each year. But China, which in 2010 bought only 253,000 more cars than
it made, will see sales outpace production to the point where it is over 2.3m,
close to the north America 2018 figure of 2.7m.
In other
words – China will join the US as a big net importer of cars, as well as the
biggest market in total. That’s good news for Japan and South Korea, and for
the crisis-hit European Union economy, which remains a big net car exporter
despite its other challenges.
