Global Light-Vehicle Production to Hit Record 87.4 Million

Worldwide output of cars and light trucks 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 North America, bad weather and overproduction in the fourth quarter of 2013 pushed dealer inventories to 75 days, about 25% higher than normal. But Schuster still expects output to grow nearly 3% to 16.5 million units this year. He adds that slowing growth rates will create a very competitive environment for carmakers.

In Europe, production will advance almost 2% as output in western Europe returns to growth after three years of decline. Schuster expects output in eastern and central Europe will rise nearly 3%, aided by rising export volume. But he cautions that Europe overall remains "very weak" and could falter if vehicle production in Russia and Turkey slips.

Output in Asia will jump 6% to 45.2 million units, according to LMC. Schuster forecasts gains in all regions except Japan, where declining exports and a hike in the consumption tax in April will result in a 1% dip in production.