J.D. Power sees world auto market up 6%

Main markets

In 2010, China was the top auto market in volume of sales followed by the United States, Japan, Brazil and Germany, said Schuster.

By 2015, India will have the third-largest market and Brazil will be fourth, he predicted. A forecast by consulting firm Booz & Co predicted that the auto market in India would outstrip the US by size over the next 25 years.

South American economies will show a moderation of sharp increases in sales in recent years, Schuster said. South American GDP growth will be 4 percent to 5 percent in 2011.

"The major near-term risks to the region include inflation and monetary tightening, a sudden reversal in investor confidence, and a possible credit bubble in Brazil, which is the largest auto market in the region with nearly 75 percent of sales," said Schuster.

Luxury

Four years ago, China's auto market was 8.1 million vehicles sold, which was half the US market. By 2009, China was the top market at 13 million in sales as the US market dropped to 10.4 million vehicles, its worst showing in nearly three decades.

China's sales in 2010 and 2011 are still nearly all smaller vehicles, while half of the US market sales are in more profitable sports utility vehicles and pickup trucks.

Schuster said profitable luxury autos were less than 4 percent of the overall Chinese market in 2010, and that will grow slowly over the next few years to about 5 percent.

Meanwhile, luxury autos in the US were about 14.5 percent of the passenger-car market in 2010, a share that will rise to 17 percent in five years, not including pickup trucks.

Reuters