Emerging auto markets will overwhelm green gains by U.S., Europe, Japan

Despite auto emissions efficiency gains in the U.S., Europe and Japan, growth in markets in Brazil, Russia, China and India will entirely overwhelm those green savings.
Written by Andrew Nusca, Contributor

Here's a sobering fact: despite all the efficiency gains made by the auto industry in mature markets such as the United States and western Europe, the incredible growth of vehicular transport in Brazil, Russia, China and India will entirely overwhelm those savings.

That's according to a new report by J.D. Power and Associates, which notes that the share of global light-vehicle sales in emerging markets has surpassed share from economically mature areas.

Leading the charge? You guessed it: China.

"Mature markets like the United States, Western Europe and Japan are only expected to return to pre-recessionary sales levels by 2015," said J.D. Power automotive SVP John Humphrey in a statement. "During that period, they will be overshadowed by exponential growth in China, India, Brazil and Russia."

Fast facts:

  • In 2010, light-vehicle sales in emerging markets represented 51 percent of global sales.
  • Share of emerging markets is expected to increase steadily, to 60 percent in 2015.
  • Sales in China in 2015 are projected to total 29 million units. (The U.S. follows, with only 16.5 million units.)
  • Global light-vehicle sales are expected to increase from 77 million units in 2011 to 103 million units in 2015.
  • By 2020, global sales are projected to total 125 million units.
  • Of this total, the BRIC nations -- Brazil, Russia, India and China -- are expected to account for 57.7 million light vehicle sales, or 46 percent of the global total.

It took about 95 years for the world to see 500 million passenger vehicles in operation. (It was achieved in 2010.) With BRIC countries coming online in a big way, J.D. Power predicts that it will take just 20 years to do it again, surpassing one billion vehicles on the road.

But the real story is how that will impact environmental gains by the auto industry. This globalization and growth will be "a major obstacle thwarting efforts" to reduce overall emissions from internal combustion engine vehicles, J.D. Power says.

Plus, emerging markets won't necessarily subscribe to the latest efficiencies, meaning the cars on the road from their economic growth will likely not be the Chevy Volts and Nissan Leafs of the world -- nevermind that those hybrid- or all-electric vehicles are more expensive ($11,000 more on average), an unsustainable proposition (financially speaking) for consumers in emerging markets.

It's a tough pill to swallow for greenies: carbon emissions and air quality will get worse before it gets better.

But it's a lesson for the world's largest automakers, who have a hand in dispersing efficiency gains across continents.

Can automakers pursue revenues overseas without stamping out their sustainability initiatives at home? Or will money talk louder?

This post was originally published on Smartplanet.com

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