PwC: Heavy Demand for Light Vehicles

PwC’s automotive analyst group, Autofacts, expects 2012 global light vehicle assembly will exceed 79 million units, an increase of 6.8 percent from last year.

Although many market uncertainties will carry over into 2012, Autofacts remains optimistic that the global automotive industry outlook will be positive, assuming that a policy resolution in the European Union materializes in the near-term.

Monetary tightening and other policy shifts in Brazil, India and China caused slower growth in 2011. But, with inflationary fears in these markets subsiding (prompting correspondingly looser monetary policy), these markets could be poised for substantial growth once again. Russia is positioned for another year of strong local demand.

Meanwhile, potential exists for strong output recovery in Japan and Thailand as the auto sectors in both countries work to satisfy pent-up demand, clear product backlogs, and rebuild inventory in the wake of 2011’s natural disasters.

The North American industry outlook remains positive although volumes are not expected to achieve prior peaks. Autofacts predicts an 860,000 year-over-year increase in N.A. production predicated on healthier inventory, export growth, and U.S. light vehicle sales of 13.6 million units in 2012.

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