Auto Industry in Turmoil, but Chinese Production Surges

Michael Renner | Feb 11, 2010

The year 2009 was one of deep crisis for large parts of the world’s automobile industry, with production and sales that plunged in many countries, factory closings, job loss, and a reshuffling of the leading producers. Production of passenger cars and light trucks declined 13 percent, from 68.2 million units in 2008 to 59.2 million, according to the London-based IHS Global Insight Automotive Group.1 (See Figure 1.) The historic peak was 69 million vehicles in 2007.2 Sales dropped a less precipitous but still significant 6 percent, from 66.2 million light vehicles in 2008 (and the previous peak of 69.4 million in 2007) to 62.4 million in 2009.3

North America, Japan, and Western Europe have long been the industry’s dominant powers. But China is now the most dynamic force. Having overtaken Germany in 2006, and then the United States in 2008, China also breezed past Japan in 2009 to become the world’s largest automobile producer.4

China’s output soared from 8.6 million passenger vehicles in 2008 to 12.5 million in 2009.5 (See Table 1 and Figure 2.) Japan’s output declined from 11.1 million to 7.7 million.6 The United States saw a massive reduction, from 8.5 million vehicles to 5.6 million, and Germany—the fourth-largest producer—registered a less dramatic drop, from 5.8 million to 5.1 million units.7 Brazil and India were the only other leading producer nations where car manufacturing rose in 2009. Brazil’s output rose from 2.9 million to 3.0 million; India’s went from 2.1 million to 2.3 million.8

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