Auto Industry Guru Predicts Explosion in Worldwide Vehicle Production at Society of Automotive Analysts Meeting

ANN ARBOR, Mich., March 9 -- "More vehicles will be produced in the next 20 years than were manufactured in the previous 110-year history of the industry," said Professor Garel Rhys today, which will require a "$US 80 trillion investment, 180 new assembly plants [and require most existing factories to be] renewed, retooled, refurbished or replaced to remain effective."

The future of the world automotive industry is a mighty big topic, but Professor Rhys, world renowned expert on the industry, offered his insights to a gathering of the Society of Automotive Analysts (SAA) Tuesday morning. Rhys, director of the Centre for Automotive Industry Research Cardiff University Business School in Wales, was in town this week for the 2004 World Congress of the Society of Automotive Engineers (SAE).

Much of that 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 particularly Eastern Europe are rapidly becoming mobile, as their economies and societies evolve. The key factor, according to Professor Rhys is that the country's gross domestic product per head must rise to a level that will support the development of infrastructure and increase personal income. This formula also applies to the virtually stagnant economies of Central Asia though those will take much longer to develop.

The world automotive market is like a "coil spring that can go any direction," in Professor Rhys' view. Large firms hang on to product philosophy and business methods rather than innovate, 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. As GDP/head increases, so do the wants and needs of people to come and go with more and more style and individuality."

Lean manufacturing is not only here to stay but will continue to define successful automobile production. "Lean manufacturing is a footnote to economists but a career to manufacturing consultants," said the professor. Russia is on the verge of getting it right and will become more of a contender in coming years. With the remarkable gains in production efficiency has come the ability to offer ever-widening varieties of vehicles. "There will be nowhere for the inefficient to hide," said the professor.

But technical excellence is not enough. The role of "brand" and marketing is ever increasing. The pace of change and innovation as well as unprecedented competition puts the customer in a controlling position.

While Professor 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, he says, "is the most dynamic and interesting industry of all."

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