DETROIT — PwC’s Autofacts Global Light Vehicle Assembly forecast is 79.1 million units in 2012, increasing to 83.9 million units in 2013. Although a strong rebound in the automotive industry occurred in North America, it was tempered by continued struggles in Europe and several key Asian markets.
Autofacts’ North America assembly forecast is currently at 15.3 million units for 2012. The region will also benefit as a result of increased assembly localization from Europe and Japan as automakers look to minimize risk by expanding their global footprint. The group’s U.S. light vehicle sales forecast remains at 14.5 million units, driven largely by pent-up demand and increased availability of financing, despite the impact that Hurricane Sandy had on purchases in October.
“One thing that the industry can never fully predict is the effect of a natural disaster,” said Brandon Mason, senior automotive analyst with PwC’s Autofacts team. “However, we do not think it will have a significant impact on full-year sales, as minimal inventory was lost and the supply chain remains largely intact.”
The European Union remains the biggest area of concern, as continued weak demand has resulted in painfully low utilisation levels at some automakers, forcing the need for capacity rationalisation in the near future. Assembly is still expected to stabilise over the next year, reaching 15.7 million units in 2013, an approximate increase of 100 thousand units compared to 2012.
“Europe continues to weigh against truly realizing global economic recovery,” said Michael Gartside, senior automotive analyst, PwC’s Autofacts. “We expect assembly to stabilise within the region over the next year with growth returning mid-2013. This is on par for an overall recovery in the second half of the year and into 2014.”
Japan is experiencing a significant assembly boost to recover lost inventory during the natural disasters of 2011, but the long-term assembly outlook remains bleak. Autofacts forecasts 9.1 million units of assembly in the country for 2012, which represents peak volumes during the forecast window through 2018. Continued appreciation of the Yen, along with the overall trend of localisation to manage geopolitical and supply chain risks, are expected to result in an accelerated assembly shift to current export markets.
For more details about PwC’s forecast of Global Automotive Light Vehicle Assembly download the October issue of PwC Analyst Note at: www.autofacts.com.