Growth of the Car Industry Worldwide
In 2000 global vehicle production stood at 58,374,162, but by 2018 this had risen to 91,538,640 – that’s a massive 157% increase.
But which countries dominate the automotive industry, and has their share of the global car market changed over the years? And what about Brexit – could it affect the automotive industry?
Quotezone.co.uk explores the growth of the car industry worldwide.
Global Motor Productivity Over the Past 18 Years
In the early 2000s the global vehicle manufacturing market was dominated by the USA and Japan, but since 2008 China’s car production has grown exponentially: the country went from manufacturing 9.3 million vehicles in 2008 to a whopping 25.7 million in 2018 (that’s a 176% increase).
How The World Has Shared Vehicle Production
The actual number of vehicles produced by each country has largely held steady or risen over the past 18 years, but when we look at each country’s share of global production we can see that huge changes are taking place in the automotive sector.
As China’s market share has jumped from less than 5% in 2000 to an impressive 30% in 2017 the market share of other countries has fallen sharply.
Germany’s share has dropped from 9% to 6%, while Japan has seen its market share fall from 17% to just 10%.
But it is the USA that has seen the biggest fall in the wake of China’s meteoric rise, with the US market share dropping from 22% in 2000 to just 12% today.
The World’s Most Productive Countries
China accounted for 19% of global automobile production between 2000 and 2018.
The USA accounted for 14% of global automobile production between 2000 and 2018.
Japan accounted for 13% of global automobile production between 2000 and 2018.
Germany accounted for 8% of global automobile production between 2000 and 2018.
China: The New Industrial Powerhouse
China’s vehicle manufacturing sector has seen the most dramatic growth during the past 18 years, with the country rising from the world’s seventh most productive nation in 2000 to the global leader in car production today.
In fact, China’s automotive industry gained the number one spot in 2008, at a time when the car industries in much of Europe and North America were beginning to struggle under the weight of the credit crunch and resulting economic recession.
But the financial crisis wasn’t the only reason for China’s growing dominance in car production – the country’s GDP growth and population growth during the past 18 years has outpaced the growth of any other country, creating a huge domestic market for Chinese motor cars. In addition, a number of the country’s own policies have had a significant impact too:
- In the 1990s China added a ban on imported vehicles, which resulted in an increase in local production by expanding car manufacturer agreements.
- China then entered the World Trade Organization in 2001, opening up China’s trade to more possibilities, and thus advancing the Chinese car industry further.
- Ten years ago China implemented a plan to emphasise the growth of automobile production and sales, including increased R&D and production capacity. The results were impressive: vehicle production grew 48% in one year.
Are We Already Seeing the Impact of Brexit?
The UK’s share of the global vehicle production market has largely held steady at around 3% over the past 18 years, although it did experience a 33% decline in 2009 in the wake of the financial crisis.
While 3% market share might seem insignificant, it amounts to an impressive 24.3 vehicles produced each year for every man, woman and child in the country, demonstrating that cars are still an important export for the country.
Unfortunately we could already be witnessing a Brexit effect on that export market, with the UK’s automotive production falling by 9.5% between 2017 and 2018. While that fall pales in comparison to the 33% drop the country saw during the financial crisis, it should be considered in light of the fact that the Society of Motor Manufacturers and Traders (SMMT) had predicted in 2015 that the country’s automotive industry would soon begin setting new records for vehicle production at two million cars per year.
Could 2021 Be the UK’s Lowest Ever Share of Production?
Unfortunately the UK’s rate of car production could fall even more within the next two years, following Honda’s announcement in February 2019 that it will be departing the UK in 2021 with the loss of 3,500 jobs.
But what does Honda’s decision mean for the UK’s car industry? Well, from 2012 to 2016 Honda produced, on average, 135,693 cars in the UK, meaning the British share of global car production could potentially drop to 1.59% in 2021 – the lowest it has ever been.
Germany’s Output Has Dropped to Nearly Half – and Brexit Could Bite There Too
Germany was manufacturing 12% of the world’s passenger cars in 2000, but by 2018 this had dropped to nearly half at 7%.
Germany’s automotive industry is one of the largest employers in the world and the country is home to 41 automotive plants, which means its automotive industry could see an even sharper fall in the wake of Brexit than the UK’s car industry might see.
In fact, according to research by Deloitte Germany if the UK leaves the EU without a deal German automakers could see a €6.7 billion drop in annual turnover and 18,000 jobs in the German automotive industry could be directly endangered.
Worldwide Production Declined 6% in 2018
Last year saw a big downturn in the world’s auto production, with output falling by 6%.
It’s the first time we’ve seen a drop like that since 2009, when the industry was weakened by the global financial crisis and rising fuel prices, which resulted in a 12.7% fall.
So what’s the reason for the falling production levels in 2018? Industry experts have alluded to the new emission control measures in Europe, which meant huge changes in the manufacturing process so that engines could be tested beforehand, thus slowing down production times.
Of the 14 leading countries in car manufacturing not one enjoyed an increase in production in 2018.