Analyst Notes

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A stumble may prevent a fall - 21 April 2014
A historically frigid winter in the US, political turmoil in South America and Eastern Europe, and seemingly endless recall announcements around the globe highlight some of the hurdles the industry has encountered to start the year. The good news? Global sales and production are still expected to grow.

Gaining traction - 21 Feb 2014
Added security, better torque management, increased stability and affordability... these are the ingredients that have made all-wheel drive (AWD) and four-wheel drive (4WD) more attractive while preserving the driver experience. A brief look at the present and future of drivetrain technology.

China: The pollution solution? - 11 Feb 2014
With increasing global attention on the country’s battle against pollution, China's major municipalities are taking action. As of December, all four of China’s "tier one" cities have enacted various measures to alleviate the growing level of pollution and traffic congestion, including license restrictions.

Beyond the city limits: Change in inevitable amidst global urbanization - 06 Dec 2013
The accelerated urbanization of emerging markets is expected to change how the world defines transportation, particularly in areas that are rapidly growing. The role of automobiles - from design to function to ownership - will likely see a drastic shift amidst the rise of megacities.

Russia: How to manage the downside risks? - 01 Nov 2013
After three years of strong growth, the automotive market in Russia has slowed, prompting government-backed subsidies in July in hopes of a revival. The effectiveness of the measure is yet to be seen, calling into question recent (and significant) capacity investments and overall market prospects.

Quarterly Forecast Update - Industry poised to end year on a good note - 21 October 2013
Despite ongoing concerns in select regions, the stabilisation of several key automotive markets in 2013 has positioned the global automotive industry to forge ahead with technological innovation, further driving strategic partnerships and increased merger and acquisition activity.

Quarterly Forecast Update - Slow go in 2013 as the industry looks ahead - 15 July 2013
While the world waits for the European Union to turn the corner, moderate growth in some regions is offset by erosion in others, keeping the industry in neutral. Despite these mixed signals, R&D remains strong as the industry approaches a new era of innovation and collaboration.

Car Jacking and Car Hacking - In-vehicle security emerges as connectivity evolves - 22 May 2013
Technological advances with telematics and infotainment have resulted in enormous amounts of software and electronics ? many of which are now standard features. As cars find their way into the information age, how should OEMs address automotive cyber risks?

EU+EFTA: Light at the end of the tunnel? April offers hope that the market has bottomed out - 20 May 2013
New car demand has been battered by the brutal cycle of financial crises, recession, debt crisis, and recession again. While the economic and financial environment will undoubtedly remain weak, the first quarter may have marked the low point, but uncertainty remains? are further declines ahead?

Quarterly Forecast Update - Distinct regional trends driving topline - 16 April 2013
Global assembly is forecasted to reach 82.1m units in 2013, a 4% YoY increase from 2012. But the real news lies below the topline, where three distinct storylines are playing out across Europe, North America and Asia-Pacific. Meanwhile, several global megatrends continue to gain attention.

US: Does diesel have staying power? Now clean, but consumers still need convincing - 18 March 2013
With several new diesel offerings on the market, light-duty applications automakers are once again testing the waters for the fuel efficient technology. However, automakers will have to do more than just convince US auto consumers that diesel is no longer a "dirty word".

Look Mom, No Hands! Forging into a brave new (driverless) world - 18 February 2013
With two states allowing testing of autonomous vehicles on the road, driverless cars are now a tangible, self-driving reality. If we are indeed on the cusp of a revolution, what should OEMs and suppliers do to secure their place in this pivotal and lucrative change in landscape?

Quarterly Forecast Update - 2013 outlook: A mixed bag - 31 January 2013
The global topline continues to head in a positive direction, thanks to BRIC growth and a revitalized North American market. However, the collective outlook for both the European Union and Japan remains depressed? all as the global industry longs for a state of relative normalcy.

The Fiscal Cliff & the Auto Industry : Will the threat of another downturn derail progress? - 18 December 2012
While the US government remains locked in debate regarding the merits of sequestration, the auto industry continues to outpace the greater economy in recovery. Even in a worst case scenario, the sector should endure only minor body damage.

China: The Impact of the Island Dispute - Politics cast a shadow on Japanese brands - 19 November 2012
The sovereignty dispute over the Senkaku-Diaoyu Islands has sparked a collective protest of Japanese brands in China. The automotive sector has been especially impacted with plummeting sales of Japanese-branded vehicles as well as the temporary closure of several assembly plants.

Quarterly Forecast Update - One step forward, two steps back - 22 October 2012
The strong rebound of the automotive industry in North America has been tempered by continued struggles in Europe and several key Asian markets. While participants forge ahead, many are wondering just how long will it be until we see a true global recovery within the sector.

US: The return of automotive financing - Subprime car loans fuel sales growth - 17 September 2012
US new light vehicle sales are up and have yet to slow, despite tepid economic growth casting a pall over a full recovery. A perfect storm of pent-up demand, cheap credit, and the return of subprime financing has heavily contributed to the surge in demand.

Japan: Seeking a Sustainable Future - Auto sector prepares for tough times ahead - 17 August 2012
The Japanese automotive industry has shown a remarkable recovery from the natural disasters of 2011. However, the positive impact of the government?s eco car cash incentive on domestic sales during H1 2012 is about to expire, leaving a bleak outlook for the market.

Quarterly Forecast Update - Cautious optimism reigns supreme - 23 July 2012
While markets such as China and India will continue to lead global volume growth, North America is also expected to see solid assembly gains throughout the forecast window. Meanwhile, growth in Brazil and Russia has cooled, along with their respective long-term outlooks.

European Union: The rollercoaster continues - 14 June 2012
After initial optimism in the early months of the year, the economic outlook for Europe has again taken a turn for the worse. A raft of negative indicators in May suggest that the outlook has weakened and the financial crisis has become more widespread, but there may be hope ahead.

Brazil: A new way forward Government hopes to steer automotive growth - 17 May 2012
The Brazilian government recently unveiled new legislation designed to increase the competitiveness of the country's automotive sector. These measures are intended to attract new product and capacity investments, and to stimulate R&D innovation within Brazil's borders.

Quarterly Forecast Update - Day of reckoning for Europe's auto sector? - 23 April 2012
North America's auto industry appears to be in exceedingly good health in 2012, especially as Q1 sales figures are challenging the sector's capacity to respond to resurgent demand. This dynamic falls in sharp contrast to much of Europe as weak demand looks set to force capacity rationalisation.

China - 2012: accelerating out of the pit lane - 19 March 2012
China's light vehicle sales growth slowed considerably in 2011 with an uncharacteristic 2.2% annual increase compared with 2009 and 2010's 54.2% and 27.8% advances. However, 2011 will prove to be more exception than rule, as the country's long-term demand potential remains strong.

India: The Effects of Fuel Subsidies - Policy reform underpins fuel duel - 20 February 2012
Outside of Europe, India is one of the most prominent markets for diesel powered light vehicles and this eminence is the result of long-standing policy support. But, with pressure to remove fuel price controls mounting, India's automotive sector is approaching a pivotal crossroads.

Quarterly Forecast Update - Accentuate the positive, contain the negative - 16 January 2012
Assuming the European debt crisis is contained within the region's borders, the auto industry has reason to be optimistic about 2012. Monetary easing in major growth markets as well as recovery in Japan and Thailand should deliver a third sequential global record for light vehicle assembly in 2012.

EU: Debt Crisis Outlook - In need of a New Year's resolution - 12 December 2011
Negative news surrounding the European sovereign debt crisis has slowly escalated in recent weeks, and without a resolution or prevailing policy strategy, sentiment and economic indicators have been adversely impacted. Yet, to date, many new vehicle markets have proven quite resilient.

US Automotive Finance - Auto loans perform amid deleveraging cycle - 14 November 2011
During the economic and industry downturn, casual observers may have associated auto loans with other non-performing debts related to outsized mortgages, untenable credit card balances, and mounting student loans - but an array of strong auto lending metrics now defy comparison.

Quarterly Forecast Update - Downside risk abounds, but autos roll onward - 17 October 2011
Swirling global economic side winds may hold the potential to undermine fragile automotive recoveries in mature markets, but austerity measure debates and widespread macroeconomic unease in the west do not appear sufficiently strong to destabilise emerging market momentum.

The Green Mile(s) - Policy push to clean the US vehicle fleet - 22 September 2011
While economic uncertainty continues to dominate headlines, the US auto industry is making quiet, but significant investments in technologies that will power future generations of vehicles. Boundless innovation and cross-sector collaboration will be key to meeting future emission standards.

European Union - Germany: global expansion and regional strength - 08 August 2011
Amid European debt crisis turmoil, German light vehicle registrations have exhibited strength in 2011, returning the market to pre-crisis levels. Additionally, growing global demand for German autos continues to drive export assembly and is catalyzing a series of global capacity expansions.

Quarterly Forecast Update - Near-term outlook improves on Japan's recovery - 18 July 2011
While a host of complex macroeconomic and geopolitical issues continue to add uncertainty to the global automotive demand equation, strong vehicle production in H1 2011, led by a faster than expected Japanese industry rebound, is helping drive assembly volumes above prior estimates.

Middle East and Africa : The North Africa Opportunity - 13 June 2011
North Africa is becoming an important low-cost option for light vehicle assembly and also holds long-term potential as a developing domestic automotive market. Despite near-term unrest, the scope and scale of future industry growth opportunities in the region should not be overlooked.

United States - Jobs and Cars: why unemployment matters - 09 May 2011
High US unemployment and its impact on consumer spending remains an impediment to economic growth in today's post-recession environment. But the relationship between employment woes and demographics may help explain why joblessness could weigh heavy on future auto demand.

Quarterly Forecast Update : Aftershocks imminent for the global auto sector - 18 April 2011
Complexities and intricacies in modern automotive supply chains make it difficult to gauge the immediate and mid-term effects of the devastating events in Japan. But the global auto industry has recently proven to be adaptable to rapid change, which may provide much needed resilience.

China : A long-term view of the largest global market - 14 March 2011
Following two years of rapid growth aided by government support measures, China's automotive market enters 2011 faced with the challenges of vehicle registration limits and higher interest rates, but these hurdles are merely interim impediments to the realisation of China's true potential.

Russia : Near-term recovery boosts long-term prospects - 14 February 2011
Russia's automotive industry has endured a roller coaster ride in recent years: an historic sales boom, followed by a severe slump that was remedied by government support. Longer-term, the sector's future depends on its ability to become a robust, diversified, full-service industry.

Quarterly Forecast Update - 2011: Recover, rebalance, and rebound - 17 January 2011
Despite lingering uncertainties that persist in some regional economies, the recovering automotive sector is well-prepared to embrace a new era of global growth. A resilient and rebalanced auto landscape across both mature and emerging markets should deliver impressive results in 2011.

Brazil - Growth is imminent, but control is key - 13 December 2010
By most measures, Brazil's economy is running hot: GDP growth is poised to reach ~7.6% in 2010, auto and home loans are surging, and influxes of foreign capital have markets brimming with confidence. Few doubt the country's recent economic performance and large-scale auto industry potential, but maintaining fiscal control during periods of accelerated growth will play a large role in Brazil?s automotive evolution.

Electric Vehicle Outlook - Charging Forward - 08 November 2010
Electric vehicles (EVs) represent a promising solution to reducing vehicle emissions and creating a more sustainable passenger vehicle fleet, but numerous challenges must be overcome for EVs to realise mainstream market success. With innovation happening faster than ever before, maintaining a watchful eye on both breakthroughs and bumps in the road will be necessary for industry participants to compete effectively in this space.

Quarterly Forecast Update - New order: 2010 world in motion - 18 October 2010
Despite a muted sales recovery in the US and the effects of government incentive withdrawal in Europe and Japan, Autofacts' latest forecast suggests that strong demand growth in emerging markets and widespread inventory replenishment will mark 2010 as a record year for global light vehicle assembly, eclipsing 2007's pre-crisis high point.

North America: US Automotive Consumer Outlook - 13 September 2010
The protracted economic and auto industry recession highlighted a symbiotic relationship between automotive consumers and lenders that historically supported a higher level of light vehicle sales. However, in the current post-crisis era, significant changes to consumer credit conditions and lending practices are fundamentally altering industry volumes and norms.

China: Chasing the electric dream - 09 August 2010
With China's domestic sales growing at rapid pace, Beijing has turned its attention from bolstering the sales environment to building a competitive auto industry. Apart from industry consolidation efforts, development of alternative propulsion technology, (e.g. electrification and hybridisation) is an area that the government is eager to nurture and support.

Quarterly Forecast Update - Assembly and sales remain out of equilibrium - 19 July 2010
Residual effects of widespread industry crisis in 2009 have altered the traditional relationship between light vehicle assembly and sales in 2010. As auto industry recoveries take different shapes in mature and emerging markets, regional responses to the downturn are creating highly variable assembly and sales figures that are likely masking underlying dynamics.

The Rollercoaster Continues in Europe - 14 June 2010
With European scrappage schemes largely ended and economies recovering, the outlook for EU new car demand was starting to stabilise and improve. However, additional uncertainty has now been added to the mix. Mounting government debt and budget deficits in many countries has forced the imposition of tough austerity measures that could derail economic recovery and ultimately undermine vehicle demand.

Japan: Recalculating the automotive equation - 10 May 2010
The global economic crisis of 2009 exposed the growing structural vulnerability of the Japanese automotive industry. Overseas assembly transfers, a declining domestic market, and export reductions have created vast amounts of excess capacity similar in magnitude to the mid 1990s. However, without the widespread risk of OEM insolvency that characterised the bygone era, capacity cuts may prove untenable in today's environment.

Quarterly Forecast Update : Sailing a steadier course - 19 April 2010
While it has not been a case of "business as usual" in the first quarter of 2010, it was a case of "business as expected". Thus far, none of the major automotive markets have sprung any surprises sufficient to derail prior assumptions. Moving into Q2, the focus will shift to the strength and sustainability of the economic recovery as stimuli are scaled back or removed.

East Europe: Kick-starting the Russian market - 08 March 2010
Until recently, Russia was viewed by most auto industry observers as the next big market in Europe - possibly even bigger than Germany. Although it is true that Russia has strong potential for growth, the financial crisis has underlined many structural weaknesses that will likely impact the future trajectory of the market.

North America: Embracing the New Paradigm - 08 February 2010
The current inflection point in North America presents an historic, once-in-a-generation chance to allow economic fundamentals to drive volume, rather than relying on an array of demand stimulants. With the economy slowly improving and many major restructuring initiatives complete, the auto industry appears ready for methodical, market-derived growth.

Quarterly Forecast Update: 2010: The dawn of a new automotive decade - 11 January 2010
At the start of 2009, many feared a total automotive meltdown as global economies stalled and the financial system faced collapse. However, various forms of government intervention engineered a relatively soft-landing for the industry given the turbulence. In the case of China, the auto sector not only averted crisis, but posted extraordinary growth.

The Curious Case of the Super Premium Segment - 14 December 2009
The 2009 Frankfurt Motor Show was one of remarkable contrast. Alongside mainstream products and environmentally-focused electric vehicles, were a noticeable number of low-volume, high-priced luxury and sports cars - which begs the question: why, in the midst of a severe global recession and environmental push, are OEMs launching such vehicles?

Next Generation Brazil: Setting the world's stage - 18 November 2009
The Brazilian automotive industry has been tirelessly compared with Russia, India, and China in terms of its vast emerging market potential, but several important structural, social, and economic conditions that previously impeded Brazil's highly anticipated growth trajectory may be on the verge of momentous change.

Electric Vehicle Outlook: Charging up - 19 October 2009
Electric vehicles (EVs) continue to dominate auto headlines with flashy vehicle introductions, government financial support, and strategic partnerships announced between automakers and battery suppliers. Identifying the key drivers behind this trend will provide a clearer understanding of the potential impact EVs can have in a rapidly evolving marketplace.

Quarterly Forecast Update: China's Great Leap Forward - 12 October 2009
Although the 2009 outlook for established regions of North America and the European Union is stabilising, China's remarkable advancement in a downturn has prompted an upward revision to the AUTOFACTS global assembly topline. Looking into 2010, uncertainty around the strength of economic fundamentals and the scope of government influence will persist.

EU: Sales Gap Bridged or Impending Hangover? - 14 September 2009
Following France's lead, all major European countries introduced scrappage incentive schemes in 2009. Unexpectedly enthusiastic participation has created dramatic sales growth in what could have been a highly depressed environment, leading to the premature exhaustion of funding and real concern over the negative implications for demand in 2010.

China's Light Vehicle Market - 24 August 2009
Bold actions recently taken by the Chinese Government not only reversed the declining trend in domestic automotive sales, but may eventually help China challenge the US as the world's largest automotive market. However, near-term sales acceleration may ultimately delay longer-term government consolidation efforts within the nation's highly fragmented industry.

Quarterly Forecast Update: The visible hand - 09 July 2009
Direct government action is pervasive in the automotive industry in 2009. Tax changes and incentives have been used in markets the world over, while in the US the government has taken a direct hand in the restructuring of two key players. Adam Smith's invisible hand that promotes the wealth of all nations has been replaced by market intervention, perhaps forestalling the sector's needed deeper and wider restructuring.

US Fuel Efficiency Update: Overview and Implications - 22 May 2009
President Barack Obama recently announced a new federal fuel economy standard of 35.5 mpg by 2016, effectively ending an ongoing dispute regarding whether states should be allowed to establish and enforce individual emission standards. However, many challenges remain in aligning the interests of the government, automakers, suppliers, and consumers.

China Automotive Update: A crisis is a terrible thing to waste - 17 April 2009
Governments and automakers around the globe have entered crisis mode as the auto industry works to avert collapse. However, the Chinese government views this crisis as an opportunity to address long standing structural concerns such as a high level of market fragmentation, excess capacity, and the lack of environmentally-friendly and safe products.

Quarterly Forecast Update: Global crisis yields mixed results and responses - 03 April 2009
Our forecast for 2009 global light vehicle output now stands at 54.9 million units - the lowest year since 2001. But whereas in 2001 the BRIC countries accounted for only 5.1 million units (9% of the total), in 2009 they represent 13.8 million (25%), indicating that it is established industry players that are suffering the greatest pain.

Automotive M&A Insights: Volume Slowed, Value Crashed - 27 March 2009
The 2008 automotive deal market realised a significant reduction in the total disclosed transacted value of $31.6 billion, down from $57.1 billion in 2007. However, the number of transactions was greater than 500 for the seventh consecutive year.

North America: Domestic Dealer Distress - 17 March 2009
Imperiled automotive dealers are attempting to endure the devastation of prolonged credit shortages, a consumer confidence contagion, and damaging uncertainties surrounding a domestic auto industry contemplating its mortality. Dealer consolidation was once a key automaker restructuring priority, but accelerated dealer distress may alter the equation.

Global Supplier Outlook: Exposures Reveal Supplier Duress - 23 February 2009
During an industry downturn, all links in the automotive value chain become vulnerable. The supply sector, having just emerged from a period of inflated commodity prices, is now being impacted most severely by declining volumes, difficulties in obtaining credit, the risk of business failures of their own suppliers and liquidity concerns of their largest customers.

Quarterly Forecast Update: Global Update - 09 January 2009
The automotive sector is troubled more than most in difficult economic times - a new vehicle is the ultimate discretionary purchase and the second largest purchase a household makes following their home and consumers are deferring purchases until confidence is restored. In addition, the absence of available credit is now severely hindering affordability and involuntarily forcing consumers out of the market globally. After a very dispiriting end to 2008, many markets and automakers are expected to continue enduring a tumultuous path in 2009. We set out below our viewpoint and forecast of developments in light vehicle production within each of the world's key regions and markets.

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