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J.D. Power sees world auto market up 6% in 2011

Global auto sales will increase 6 percent in 2011 to a record 76.5 million new light vehicles, J.D. Power and Associates said Tuesday.
/ Source: Reuters

Global auto sales will increase 6 percent in 2011 to a record 76.5 million new light vehicles, J.D. Power and Associates said Tuesday.

Auto sales in the so-called emerging economies made up more than half of global sales for the first time in 2010, said J.D. Power, which tracks auto sales.

In 2010, sales reached a record 72 million, beating the previous mark of 70 million set in 2007 before a global recession cut into auto sales, California-based J.D. Power said.

"Overall growth in the world economy has been supporting further recovery in auto sales," said John Humphrey, senior vice president of automotive operations at J.D. Power in a statement. "We're seeing signals of stability and increased consumer demand for new vehicles as economic optimism increases."

J.D. Power director of global forecasting Jeff Schuster said the cooling of auto sales growth in the emerging markets in 2011 is the major reason global growth is only 6 percent this year, compared with forecast growth of 11 percent in 2012, when Western Europe and North America are expected to rebound.

After experiencing a drop of 2 percent in sales in 2011, Europe will recover to show strong growth in 2012, which will help boost global auto sales to 85 million, Schuster said in a telephone interview.

The world's auto market is seen climbing to 90 million to 91 million in 2013 and surpassing 100 million new vehicle sales in 2015, said Schuster.

China, the No. 1 auto market, will sell 6 million more vehicles in 2011 than No. 2 United States, J.D. Power said.

China is forecast to sell 19 million new vehicles in 2011 for a growth rate of 11 percent -- down from 33 percent growth in 2009 and 48 percent in 2008. Chinese sales rose from 8.8 million in 2008 to 17.2 million in 2010, J.D. Power said.

General Motors Co. Chief Executive Daniel Akerson said in Beijing Tuesday: "China is a unique market sitting in what I think is the highest growth area in the world for the next 10, 20, 30 years."

South America
In 2010, China was the top auto market in volume of sales followed by the United States, Japan, Brazil and Germany, said Schuster.

By 2015, India will have the third-largest market and Brazil will be fourth, he predicted.

South American economies will show a moderation of sharp increases in sales in recent years, Schuster said. South American GDP growth will be 4 percent to 5 percent in 2011.

"The major near-term risks to the region include rising inflation and continuing monetary tightening, a sudden reversal in investor confidence, and a possible credit bubble in Brazil, which is the largest auto market in the region with nearly 75 percent of sales," said Schuster.

Just four years ago, China's auto market was 8.1 million vehicles sold, which was half the U.S. market. By 2009, China was the top market at 13 million in sales as the U.S. market dropped to 10.4 million vehicles, its worst showing in nearly three decades.

China's sales in 2010 and 2011 are still nearly all smaller vehicles, while half of the U.S. market sales are in more profitable sports utility vehicles and pickup trucks.

Schuster said profitable luxury autos were less than 4 percent of the overall Chinese market in 2010, and that will grow slowly over the next few years to about 5 percent.

Meanwhile, in the U.S. market, luxury autos were about 14.5 percent of the passenger-car market in 2010, a share that will rise to 17 percent in five years, not including pickup trucks.