Emerging Markets – Its not just about the USA

Today the global automobile market is about 65 million vehicles and by 2010 it is predicted to rise to 73 million.  This growth will be principally in four countries, Brazil, Russia, India and China.  All the car companies will be wading in to get the biggest piece they can.  In 2001 the annual car sales in these four countries was about 5 million and the prediction is that by 2012 it will be 18 million or more.  That is huge.

The drag along is even far larger.  With cars comes the need for a fuel supply infrastructure to feed all those gas tanks.  That means more refineries in these countries and an network of retail distribution that will be there when the cars need to be refueled.  It also means that the demand for crude oil will be far more than it is today.  We’re not just talking about fuel and lubricants for cars either.  There are so many components that go into the manufacture of automobiles that use petroleum and byproducts.

Paint, brake fluid, antifreeze, cloth, wiring, electronics, and more go into today’s cars.  The demand is just going to ramp up.

More cars will change these countries in ways they don’t expect.  With all those cars demands for better roads will become an absolute.  This will result in demands for more heavy equipment and the skills of engineers and surveyors.  People with cars and a road to go places on will drive and then they will need to eat and shop.  More food franchises and consumer shops will appear along with credit to allow for purchases beyond ready cash.

It will also impact pedestrians, perhaps literally.  Look at how the layout our our towns and cities have been altered by the need to accommodate motor vehicles.  Usually at the expense of people who walk and people who ride bicycles.

In a pedestrian-based town the dwellings are often incorporated in the commercial buildings or at the very least they are in close proximity.  When motor vehicles are introduced the roads get paved, they get wider, and parking lots appear.   Weather is accommodated by gutters and a sewer system to deal with run off.  Traffic controls appear and so do traffic laws with a complexity that introduces new rules to behavior and every day life.

All these cars will need servicing.  New tires, and lubrication changes.  People will require new technology and training to go along with the additional electrical needs and access to the Internet.

What we developed in an iterative fashion over decades will rush into the lives of these populations in less time than ten years.

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One Response to Emerging Markets – Its not just about the USA

  1. Mike says:

    Jim … in China, the demand is enormous. Not only for cars, but first, for people learning how to drive. I’ve met so many people who are enrolled in driving schools all across Beijing (it’s a bit scary that there will be that many NEW drivers, on top of all of the new cars).

    Just this week, I’ve seen a new Lexus & Cadillac dealership pop up in the outskirts of Beijing. The “wealthy class” cars are also now starting to hit the roads here.

    Beijing announced a huge public transportation project this week, with a goal of having 40% of the daily commuters in Beijing using mass transit (subways, trains, buses). If they don’t succeed at this, Beijing will need to build a spider web of roads & highways to handle all of the traffic.

    Gas stations & repair shops…repair shops seem to already be plentiful in Beijing, you know when you find one, because it’s typically not just one, it’s a row of about 10. There actually aren’t many gas stations, at least I don’t notice them. I typically see long lines at the pumps here, and it’s not because of cheap gas.

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