The global automotive industry can change dramatically from one country to another. Between 80 and 90 million new cars are sold every year in the 195 countries of the world. More than half of these cars (54 percent) are located in Asia, as is the majority of the world's population (59 percent). Other regions such as the United States and Canada account for only 5 percent of the world's population, but 19 percent of vehicle sales.
The industry has many faces depending on where you are. Some are quite developed in terms of technology. Other countries are lagging behind in terms of regulations and the importance of the sector within the GDP.
Who Is Ahead?
The European Union and the United Kingdom, the United States, Japan, Korea, and China are very well positioned. They have a strong regulatory, trade, tax, manufacturing, and R&D structure. That's why almost all the new cars that are presented come from these markets.
Both automakers and consumers can take advantage of the best conditions to sell, buy, and drive cars. The authorities are moving in harmony with the industry to improve development and innovation, although in Europe, the 2035 lawsuit is now holding court.
The Stellantis Factory In Tychy, Poland
Who Is Working Hard?
Behind these markets are countries working hard to become attractive for foreign investment. India, Southeast Asia, North Africa, South Africa, and some Latin American markets are improving their automotive landscape by introducing more efficient and flexible regulations and making it easier for automakers to invest.
However, there are still issues related to import taxation and population income that make it difficult for developed economies to keep pace. Brazil, for example, has a strong manufacturing hub, but is unable to adopt the latest technologies because most consumers cannot afford them. However, India is close when it comes to regulations.
The BMW Rosslyn Plant In South Africa
The Worst Countries For The Automotive Industry
Countries with the poorest automotive industries are usually those isolated in terms of trade, or where local production is nearly impossible due to lack of infrastructure and support from local authorities.
This is the case of Iran, for example. Its economy is largely blocked by international sanctions which make it almost impossible to import new and competitive cars at competitive prices. It is also very difficult to produce locally due to a lack of components and access to international technology. All cars produced in Iran today are rebadged older-tech models no longer produced in Western economies.
A large part of the African continent is also experiencing great difficulties. The heavy presence of used car imports puts new cars in a very difficult position, considering the very low income of the population. Most Africans cannot afford a new vehicle. The result? The streets are filled with polluting cars and old technology.
The Russian Case
Russia is also heading towards a difficult situation. As Western automakers have abandoned this market after the invasion of Ukraine, local production is shrinking to a handful of small companies that lack the technology to compete in global markets.
AVTOVAZ Plant In Russia
Furthermore, it is slowly becoming a satellite market for Chinese manufacturers, which means that consumers will not have much choice in the foreseeable future.
The author of the article, Felipe Munoz, is an Automotive Industry Specialist at JATO Dynamics.