Economic Outlook: The Auto World Championship

Worldwide vehicle sales are forecast to reach 95.8 million in 2017 (+2.1% annual growth rate) and 98.2 million in 2018 (+2.5%), boosted by sales growth in China and India. The auto market is on course to reach a milestone in 2019, when 100 million units are expected to be delivered to clients. Yet, compared to 2016, the rate of growth is lower due to the decline in sales in the US and the UK.

The Electric Cup. Electric Vehicles (EV) enjoy a strong growth

momentum: the worldwide stock could exceed 3 million cars in 2017

after crossing the 2 million unit threshold in 2016. China, the US, the UK,

France, and Germany are in pole position. The magnitude of government

subsidies, the expansion of the charging network, and battery prices will

drive the growth of the electric car market.


The Profitability Cup. The industry enjoys strong profitability with

an average EBIT margin of 6.0 % in 2016, up from 5.5.% in 2015. Japanese

manufacturers and Italian suppliers take the lead. With the exception of

American and Italian car makers, the debt burden of manufacturers is

now lower than their pre-crisis levels. Working capital requirements and

capital expenditures are stable.


The Innovation Cup. Innovation will rely on R&D expenditure,

patentable technology, and M&A. Traditional manufacturers in Germany,

Japan and the US lead the first two categories, while China automotive

sector is the world leader for ICT M&A, totalling USD6.2bn over 2012-2017.

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