Global auto sales expected to grow to 89 million in 2016, Continental forecasts

DETROIT -- German supplier Continental expects global production of cars and light trucks to grow only slightly in 2016, to 89 million vehicles from about 88 million in 2015.

The forecast of modest growth reflects the new reality faced by automakers and parts suppliers in an industry no longer enjoying rapid growth in China and substantial gains in the U.S. market.

Fifteen years ago the auto industry produced fewer than 57 million light vehicles, according to the International Organization of Motor Vehicle Manufacturers, known as OICA. But the market expanded rapidly as economies in China, Russia, Brazil, India and other emerging markets flourished, and the U.S. and Europe enjoyed near-record sales.

Even the financial crisis couldn’t slow the industry down and by 2012 global production exceeded 80 million vehicles.

But economic trouble in Russia, Brazil and now China has tempered expectations overseas at a time that the U.S. market is at or near a peak after record sales of 17.5 million vehicles in 2015.

“For 2016, we see only very moderate growth in the auto industry,” Continental CEO Elmar Degenhart said at the Detroit auto show this week. China “is good for 3-4 points of growth in terms of production,” although that’s a slower rate than the country has seen in recent years.

The CEO added he sees the U.S. vehicle market as “stable, with a slight positive upside.”

Neverthless, Degenhart expressed confidence his company will grow at a faster rate as it pushes ahead with automated driving technology and other innovations sought by automakers.

Continental expects is own sales to rise about 5 percent in 2016 to about 41 billion euros ($44.5 billion). 

In 2015, Continental saw sales increase 14 percent to 39 billion euros, with adjusted earnings before interest and taxes coming in at 4.4 billion euros.

Automated driving

The company is counting on heavy investment in automated driving technology to power its continued growth. At NAIAS, it launched a web site, 2025AD.com, intended to presenting its vision of and draw input from other suppliers, automakers, regulators and consumers.

Continental expects fully automated vehicles -- in which the driver does not have to monitor the road or be prepared to take control -- to be available for sales by 2025.

By 2020, highly automated vehicles -- those in which the drive doesn’t have to monitor the system but must be able to take control if warned by the car -- should be on the road, according to Continental’s road map for the technology.

Currently, safety systems allow what Continental calls partially automated driving -- the driver must monitor the road and the vehicle and must be ready to take control at all times.