Auto Industry Guru Predicts Explosion in Worldwide Vehicle Production

Published: Sunday, March 28, 2004 - 23:00

"More vehicles will be produced in the next 20 years than were manufactured in the previous 110-year history of the industry," says Garel Rhys, director of the Centre for Automotive Industry Research Cardiff University Business School in Wales.

Rhys’ statements came at an address to members of the Society of Automotive Analysts at the 2004 World Congress of the Society of Automotive Engineers. "The increased production will require an $80 trillion investment, 180 new assembly plants, and require most existing factories to be renewed, retooled, refurbished or replaced to remain effective," he says.

Much of the increase will be the result of emerging markets, those now experiencing dynamic growth and those yet to become players in the world automotive market. China, India and Eastern Europe are rapidly becoming mobile as their economies and societies evolve.

The world automotive market is like a "coil spring that can go any direction," says Rhys. Large firms rely on product philosophy and business methods rather than innovation, while smaller firms may be more creative and willing to take chances.

"The love affair we talk about with automobiles is really a love affair with individual mobility," he continues. "As GDP/head increases, so do the wants and needs of people to come and go with more style and individuality."

Lean manufacturing will continue to play an important role in the definition of successful automobile production. "Lean manufacturing is a footnote to economists but a career to manufacturing consultants," says Rhys. "Russia is on the verge of getting it right and will become more of a contender in coming years. There will be nowhere for the inefficient to hide."

Although Rhys predicts that production overcapacity is likely to remain essentially unchanged into the foreseeable future, it may be the only static variable. The global automotive industry "is the most dynamic and interesting industry of all," he says.

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