DETROIT (Reuters) - The source of the auto industry’s growth has seen a permanent shift to emerging markets that appear promising but also hold great risks, according to an AlixPartners study released on Wednesday.
Auto sales in China have leveled off recently, an indication that growth will be “bumpy” in most newer markets that were once simply sources of cheap parts and workers.
Companies and investors in those areas may find themselves contending with downturns and other issues more quickly than they expected, the study said.
“What’s not so certain is which markets in particular will really take root and blossom, and which will have a false spring and then fade away,” AlixPartners managing director John Hoffecker said.
Russia has captured a lot of attention now, Hoffecker pointed out. But India was once in that position.
AlixPartners projects that 76.4 million cars and trucks will be sold worldwide in 2011. About 18.8 million light vehicles will be sold in China.
Auto sales in the United States will be about 12.7 million this year, about 1 million more than last year’s level, according to the study. AlixPartners predicted that although profits are up, U.S. auto sales will climb more gradually than some of the most bullish estimates out there.
This week, Ford Motor Co (F.N) said U.S. sales this year may land at the bottom end of its previous forecast of 13 million to 13.5 million vehicles.
Next week, major U.S. automakers will report their monthly sales figures for July.
Reporting by Deepa Seetharaman; Editing by Gary Hill