Global markets are heating up

Feb. 27, 2014
At the close of the first quarter of 2014, international markets are heating up for automotive suppliers.

At the close of the first quarter of 2014, international markets are heating up for automotive suppliers. Reports from around the globe indicate gradual growth and strengthening in many markets.

China will retake the lead over the U.S. in oil demand growth this year as its manufacturing and transportation industries expand, according to the International Energy Agency. Much of this growth in oil consumption comes from burgeoning Chinese auto sales. China became the first country to see domestic vehicle sales surpass 20 million units a year in 2013. The state-backed China Association of Automobile Manufacturers forecasts that deliveries will rise as much as 10 percent this year.

Indonesia expects a new wave of automotive component sector investments to result from the expansion of passenger vehicle production capacity that is taking place in the country. Its Ministry of Industry predicts 20 to 30 automotive component manufacturers to announce new spending in the country over the next year, worth a combined $1.5 billion. This growth stems from new vehicle production capacity being built by automakers, including Honda, Suzuki and Nissan.

Malaysia has announced a partial opening of its auto industry to foreign energy-efficient car producers as part of liberalization efforts by Prime Minister Najib Razak's administration in a bid to compete with Thailand for investments. The new national automotive policy will ease restrictions on new manufacturing licenses for the production for cars and motorbikes that are powered by hybrid and electric engines. It also offers financial support in terms of soft loans and grants close to 2.1 billion ringgit ($633 million) for companies setting up plants to produce energy-efficient vehicles (EEVs).

Carmakers are predicting a gradual increase in demand in Europe this year after a sovereign-debt crisis and recessions led to a six-year contraction in deliveries through 2013. Consumers replacing old cars may account for some of the recovery, though gains are also being fed by continued incentives from automakers and a government program in Spain to encourage trade-ins of old vehicles for scrapping.

These results mirror results of the Q4 2013 “How’s Global Business” report from the Overseas Automotive Council (OAC) of the Automotive Aftermarket Suppliers Association (AASA). Each quarter, the OAC collects insights from its International Regional Directors and its Board of Governors on current business conditions in the regions they cover around the world.

Some highlights from the Q4 2013 report included:

·      Business in Brazil has slowed a little as it prepares for the Olympics and World Cup, but it remains healthy.

·      Chile appears to be stable – its economy is healthy and sales are up as compared to the same time last year.

·      Russia has been strong in 2013, as its growing and more affluent middle class spends money on vehicles.

·      There is growth opportunity in Puerto Rico as consumers spend money to maintain their current vehicles rather than replace them.

These quarterly “OAC How’s Global Business” reports provide first-hand reports on shifts and trends in markets throughout the world. Full reports are available to exclusively to OAC members. For more information on these reports or other programs and benefits, contact Curtis Draper, OAC executive director, at [email protected] or call 919-406-8856.

Editor's Note: Curtis Draper is the vice president of industry analysis, programs and member services at AASA and group executive of AASA’s international aftermarket councils: the China Aftermarket Forum (CAF) and the OAC. The CAF is a consortium of full-service suppliers that meet on a quarterly basis to discuss opportunities within the Chinese aftermarket and to identify ways to address challenges in the growing segment. For more details about CAF programs and initiatives, click here

The OAC promotes the sale in foreign markets of automotive and heavy-duty products manufactured in North America. Those products include components, accessories, chemicals, hand and power tools, service maintenance and repair equipment, and paint and body supplies for both cars and trucks. OAC has more than 350 members in more than 40 countries. More information is available through its Web site,

AASA exclusively serves manufacturers of aftermarket components, tools and equipment, and related products. It is a recognized industry change agent – promoting a collaborative industry environment, providing a forum to address issues and serving as a valued resource for members.

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