Car, Light-Truck Production Headed for Record High

Global output of passenger vehicles this year will rise nearly 4% to a record 87.4 million units, led by strong growth in China and India, LMC Automotive predicts.

Regional volumes will grow everywhere except South America, where output is likely to fall 4%. Jeff Schuster, who heads forecasting at LMC, cites a multitude of issues there, including an economic crisis in Venezuela and import restrictions in Argentina.

In Europe, production will advance almost 2% as output in western Europe revives after three years of decline. Output in eastern and central Europe will rise nearly 3%, aided by rising export volume. But Schuster cautions that the market remains "very weak" and could stall if vehicle production in Russia and Turkey slips.

In North America, bad weather and overproduction in the fourth quarter of 2013 pushed dealer inventories to 75 days, about 25% higher than normal. Even so, LMC expects output to grow nearly 3% to 16.5 million units this year.

The firm figures vehicle manufacturing in Asia will jump 6% to 45.2 million units. Schuster forecasts gains in all Asian markets except Japan, where declining exports and a hike in the consumption tax in April will result in a 1% dip in output.