The Libyan crisis, which sent oil prices through the roof, actually proved to be a blessing in disguise for automakers. Rising oil prices prompted consumers to look for more fuel-efficient alternatives, which then resulted in a surprising surge in automobile sales.
With an increase in demand for fuel efficient alternatives, cars such as Toyota's
To start off
Since Toyota's and Honda's
The U.S.' top automakers saw both their top and bottom lines increase. General Motors
Last year, the global automobile industry sold 72 million units. Analysts estimate that number to grow by almost 33% by 2015. While much of the recent growth was supported by a domestic resurgence in demand, much of this forward growth is expected to come from the emerging markets. With the top automakers looking to expand further as the year rolls on, they would look to fully capitalize on this expected increase.
Future growth should bring good news to all players across the industry, including those that act as feeders to big assembly and design firms. Tire maker Goodyear
The emerging market
Automakers across the globe have pinned their hopes on the emerging nations to drive their growth through the decade. Their hopes aren't without basis. China's automobile industry has been expanding at a very fast pace. From just 6 million cars sold in 2005, the number of automobiles sold in China surged to 18 million units last year. That number is expected to go up further. An interesting fact to note here is that the driving age population, which is currently at 700 million, is expected to go beyond 1.1 billion within the next decade -- and so should demand for autos.
With a market share of 12.8% in China, GM is already well-poised to capitalize on this. Japan's top carmakers also have their plans in place for China. Last fiscal year, Honda got close to 18% of its revenues from China. It plans to produce electric vehicles in the country next year. Also, Toyota expects to double its sales in Asia in the next five years to almost 1.8 billion. Ford has a market share of around 2.5% and hopes to increase it further by doubling its dealerships.
Situation post-Japanese crisis
With key auto parts shortages still hampering production schedules, ripples are being felt by global automakers as well. For Japanese carmakers, production is expected to run under capacity at least till the middle of the year, with U.S. carmakers expected to face difficulties through the rest of the year as well. Car dealers such as AutoNation
The Foolish bottom line
Despite a strong start to the year, part shortages threaten to hamper sales. Although the recovery is on track, it will still be some time before Japanese factories start operating at their full capacity. This will affect U.S. carmakers as some major auto parts come from Japan. Even though the signs looked good at the start of the year, the earthquake and tsunami have severely dampened spirits. I expect the middle of the year to come with certain setbacks, but ultimately I see automakers surging over the medium and long term. Keep an eye out.