Not only has your grandfather's Oldsmobile disappeared from autoland, it's doubtful a car salesman from 1990 would have a clue about what's happened in the industry. And the 2010 version of the auto industry could see as much change and unpredictability as 2009. In that recent time we saw Chrysler and GM go into bankruptcy, brands dropped or sold, car sales crash in America until government tax credits hit, Toyota surpass GM in total sales. Many governments bailed out auto makers and then found sweeteners to get buyers to buy.
NEW CENTER OF GRAVITY: ASIA
The center of gravity in the global auto industry may have shifted to Asia. This shift will have unpredictable effects on major auto makers. And on we shmoos who buy one now and then.
Buick sells far better in China than Toyota’s Prius. GM sales in China were higher for 2009 than GM’s American sales. Gasoline prices are tightly controlled in China. China’s government is hoping to grow an auto export industry, not just build cars for the domestic market there. It is a far different market than North America or Europe. Every year there are hundreds of thousands of first-time car buyers in China, making that market even less predictable than other major markets. China currently has about 40 cars per thousand population while G7 nations average 600 cars per thousand people.
For the first time in history annual sales in China topped those in the U.S. By three million units. According to some measurers. Scotia Capital doesn’t see China by-passing the US in auto sales in 2009, but does clearly show the trend is in that direction. And nobody's really pushing electrics or hybrids to the Chinese market now.
India’s auto market is also growing rapidly, and Indian private firms are building domestic and export brands. And Detroit can't even claim the year's first auto show. There's one already underway in New Delhi. There the big word is "small."
Japan’s domestic auto sales were down 9% in 2009 from the previous year. However, government subsidies boosted December sales by more than 35% from previous year. If the Japanese government continues to pump money into their home auto market, sales there can be increased for awhile. Imports account for less than one-tenth of overall new car sales in Japan.
DETROIT LIVES ON
Volt. Courtesy: General Motors. This is the year we see the “new” GM’s Volt. This car will be primarily electric-powered with a small gas engine for re-charging the batteries, not directly powering the drive chain. Gasoline prices, competition from hybrids and other electrics, GM’s pricing and marketing tactics will all be pertinent when the Volt hit’s the dealers.
And the huge Detroit auto show is first on the calendar, bringing plenty of reports on new cars, new models, industry gossip. For the first time ever the huge show has 37-thousand square feet labeled “Electric Avenue.” So the alternative energy cars are getting plenty of marketing space. Will they get market share ?
Among the vendors on Electric Avenue will be Tesla and ZAP. Both are American electric car start-ups.
Some X-Prize competitors will have their prototypes on display in Detroit. I’ve blogged about this global contest to build a 100 MPG vehicle.
Previewing the auto show, the GM CEO today predicted his firm would make a profit this year. It is now 61% owned by the federal government, the rest privately held. GM's top man also noted there may be a small-scale consumer release of the Volt BEFORE its official November release.