J.D.

Power and Associates Reports:

Reducing Vehicle Carbon Emissions Will Become More Difficult
As Emerging Markets Eclipse Mature Markets in Growth

“Emerging” Automotive Markets Have Arrived, with Global Share Exceeding that of Mature Markets
WESTLAKE VILLAGE, Calif.: 18 April 2011 — Share of global light-vehicle sales arising from so-called
“emerging” markets has surpassed share from economically mature regions, led largely by growth in the China
market, according to J.D. Power and Associates.
“This marks a new world order with respect to global automotive sales,” said John Humphrey, senior vice
president of automotive operations at J.D. Power and Associates. “Mature markets like the United States, Western
Europe and Japan are only expected to return to pre-recessionary sales levels by 2015, and during that period they
will be overshadowed by exponential growth in China, India, Brazil and Russia. With China at the forefront,
emerging markets have overtaken mature markets, and will continue to be the primary source of growth for the
sector going forward.”
In 2010, light-vehicle sales in emerging markets comprised 51 percent of global sales. Share of emerging markets
is expected to increase steadily to 60 percent in 2015. Sales in China in 2015 are projected to total 29 million units,
with the U.S. following with just 16.5 million units.

Global light-vehicle sales are expected to increase from 77 million units in 2011 to 103 million units in 2015. By
2020, global sales are projected to total 125 million units. Of this total, the BRIC countries (Brazil, Russia, India
and China) are expected to account for 57.7 million light vehicle sales (46% of the global total). Moreover, each

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of these countries has high potential for exports, so their combined production should account for an even greater
percentage of global output in 2020.
To put the impact of the emerging markets growth into perspective, Humphrey points to the fact that while it took
approximately 95 years to get the first 500 million passenger vehicles in operation simultaneously (achieved in
2010), with the addition of the emerging markets, it will only take another 20 years for units-in-operation on the
world’s roads to exceed one billion.
Impact on Vehicle Carbon Emissions
This shift in global auto sales will be a major obstacle thwarting efforts to control or reduce emissions from
internal combustion engine (ICE) vehicles. Countries that are still developing economically and technologically
may be less inclined (or capable) of keeping pace with global norms and standards for emission reductions.
Furthermore, vehicle buyers in these markets tend to be more sensitive to price pressure than are buyers in
economically mature markets, which favors sales of traditional ICE vehicles. It is unlikely that buyers in
developing markets will tolerate the price premium charged for hybrid-electric or battery electric powertrains,
with the price differential expected to average approximately $11,000 USD.
“Although some governments are taking steps to reduce auto-related carbon emissions, the sheer volume of
vehicles being added to the global fleet over the next decade will largely negate these efforts,” said Humphrey.
“The global growth pattern points to vehicle carbon emissions and overall air quality getting worse before they
get better.”
For the world’s automakers, the global shift in growth toward emerging markets bears significant implications, as
vehicle manufacturers will need to reassess their global strategic priorities and re-allocate resources to meet this
new market paradigm. For example, the bulk of new investments in vehicle production will be shifted to these
new markets (particularly in Asia), and these new production plants will need to be supported with investment by
automotive tooling and component manufacturers. In addition, global vehicle design and engineering operations
will be driven more extensively from Asia to better serve local market tastes and more global sourcing decisions
will be made in Asia, as the region will account for the greatest concentration of production and sales.
About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services
company providing forecasting, performance improvement, social media and customer satisfaction insights and
solutions. The company’s quality and satisfaction measurements are based on responses from millions of
consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone
ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill
Companies.

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