World car sales are set to stagnate this year in saturated Western markets with the best growth prospects in China, India and Russia says a new study by Standard and Poor's. Competition between car makers in Europe, the U.S. and Japan will increase this year suggesting that car makers will be setting their sights on emerging markets the report concluded.
In the U.S., sales of light vehicles are due to fall slightly in 2006, due to rising gas prices and interest rates, the study said. A total of 16.9 million cars were sold there in 2005, a rise of 0.5% compared with the previous year.
In Europe, passenger car sales, which decreased by 0.7% in 2005, are due to stagnate this year or at best regain 1.0% if prices drop. In Germany the market is picking up and Spain is set to stay the most dynamic European market after a 0.8% increase in sales in 2005. Meanwhile, the Italian and British markets are set to contract. In Britain sales fell by 5% in 2005. The French market is due to remain stable due to stagnant purchasing power there.
In Asia, Japan saw a slow year for private car sales in 2005 and the trend is will to continue this year, the study said, despite a preference for smaller and smaller models because of rising gas prices and an ageing population. China, however, has seen its market leap forward with an increase of 60%-70% in car sales in recent years and is due to maintain a 10% to 15% sales growth each year. Sales exceeded 3 million units in 2005. Chinese car exports are also accelerating, jumping from 1,000 units in 2003 to 170,000 in 2005, a figure higher than the number of cars imported.
The Indian market is following the Chinese trend. In both countries there are still less than 10 car owners per 1,000 people who are old enough to drive.
On a lesser scale, Russia also promises strong sales potential, the survey said.
Copyright Agence France-Presse, 2006