They assume that China will continue to expand her output despite the news that China is now switching to a more service oriented economic model.
China produces her vehicles mainly for domestic use, and will need to supply more as real incomes rise. More Chinese consumers will be able to afford a car, and more will need retail goods distributed by truck or van.
The big changes in market shares of the leading players in recent decades are a good reflection of the general trends in the world economy.
The US dominance in the post war world of the 1950s and 1960s was mirrored in the high market share the USA enjoyed in vehicles. Many of them were bought by US customers, as the US simply had more buying power than the rest of the world.
Japan’s rise to prominence and arrival as a stock market darling in the 1970s and 1980s coincided with her successful creation of a major auto industry.
Germany gradually re-established herself as a major manufacturing nation from the ashes of destruction in 1945, with steady growth of Europe’s largest vehicle industry built around a few strong brands.
In the last decade, growth has primarily come from China in the automotive area as with much else. Some worry that the recent devaluation of the yuan could pose problems for a successful vehicle exporter like Germany.
It is true that the yuan has fallen against the Euro under the new more market-oriented system for settling the Chinese exchange rate. It is however important to remember that the Euro has devalued by a quarter against the Chinese currency since 2011, and the yen has devalued by almost 40% since 2011.
