THE EASTERN CAPE, with its strong automotive manufacturing base and geographical situation, is well positioned to take advantage of an expected growth in vehicle volumes in developing countries. While many in the auto industry are focusing on over-capacity and tough competition, a British forecasting company predicts that the world is going to need more vehicle plants, not less. It should be good news for South African auto assemblers, as the next area of growth is expected to be the developing world, says Max Pemberton, editor of Autintelligence’s Managing the Future – World Vehicle Forecasts and Strategies To 2020.” “Demand exists - and continues to grow - and the suppliers will continue to find ways to meet that demand. In the developed world, there is a place to discuss GDP, disposable income, the economic outlook and many more macro concerns, but the real driver of the vehicle market in this well-heeled region is, and will continue to be, the replacement cycle, augmented by new, organic demand,” he says. In the developing world, the main drivers of demand are low ownership levels combined with rapidly growing personal incomes, the development of a used car market, the availability of finance, and exposure to the consumer activities of the people in the developed region. “Increased ownership is also a prime political driver, if burgeoning populations are to be fed and nourished, economic progress is to continue, and aspirations of the population are to be met,” says Pemberton. The worldwide industry has suffered some serious setbacks over the last forty years or so, which have slowed, but not halted, the remorseless growth in global auto activity. Global vehicle sales volumes grew by 63 per cent between the period 1981 to 2000 inclusive, compared to 1961 to 1980 inclusive, with a similar uplift forecast for the period 2001 to 2020 inclusive. The big difference comes in the growth rates for the two regions. In the first period, the developing countries (DCVs) accounted for 13 per cent of an industry that sold 579.7 million vehicles. In the second period, the DVCs sold 20.7 per cent of a 946.7 million-unit industry. In the forecast period, the DVCs will sell 38 per cent of a 1.54 billion-unit industry. “These are very big numbers and may deceive the eye! But consider, even if the industry didn’t expand at all from the current level of 59 million units a year, it would still sell about 1.2 billion units over the twenty years, so the numbers begin to look realistic. “Even though the major growth is in the developing world, major and increasing, volumes will continue to be sold in the developed world, which will still provide the necessary and solid foundation for total world volume,” he says. The extra manufacturing capacity necessary to do this on a global basis is the equivalent of 170 plants capable of turning out 300,000 units a year. There is room for duty-free auto exporting operations in both the East London and Coega Industrial Development Zones in the province.