Editor’s Note
This article outlines PWC’s key forecasts for the global automotive market through 2020, presented on the eve of the Paris Motor Show. The analysis provides a strategic overview of the trends expected to shape the industry’s evolution.
Global Automotive Market: PWC’s Forecasts
On the eve of the Paris Motor Show, the analysis and business consulting firm PWC has just detailed its forecasts for the evolution of the global automotive market up to 2020. François Jaumain, partner and head of the automotive sector, discusses the foundational elements of this outlook.
Auto Infos: What is the state of the global automotive market?
“Global production reached a historic level of 82.6 million vehicles in 2013. At PWC, we believe things will not stop there!”
A.I.: What are your forecasts?
“We forecast that this production will surpass the 109 million vehicle mark by 2020. This will correspond to a growth rate of over 4% per year. Furthermore, demand from emerging countries (including China) will contribute to the increase in automotive activity for more than 86%.”
A.I.: What about the comparative performance of automotive firms?
“The ranking of the top ten global manufacturers should remain relatively stable by 2020. It will continue to be dominated by Volkswagen, General Motors and Toyota, followed by the Renault/Nissan tandem. Their profitability will be linked to an increase in sales volumes, but also to their ability to use their production capacities effectively. If they are well utilized in developing regions, they will, in our opinion, improve in Europe to reach a utilization rate of 85%, established beyond the break-even points of industrial profitability.”
A.I.: What is your forecast for the European market?
“After reaching its low point in 2013, it will evolve favorably. This should translate into an increase in registrations of around 5% per year, as well as in 2015. This forecast is based on the observation that the economic confidence index of households and businesses has turned favorably.”
A.I.: And in France?
“In our country, demand should be driven by the natural renewal of the vehicle fleet. The auto market should recover by 1.7% in 2014.”
A.I.: Will the electric car market develop?
“In 2020, it will represent 0.9% of global production, compared to a current ratio of 0.3%. In fact, its evolution depends on policy.”
A.I.: Will sales of diesel cars decline?
“They are already declining across the entire European Union, as well as in France where they have fallen from 73% to 65% market share in two years. This is to be considered in light of a change in supply. The latter has occurred taking into account the increased performance of gasoline engines, stricter pollution standards, a threat to diesel taxation, as well as a reduction in the mileage driven by consumers.”