By combining expansion into these REEs, Booz says, "more than 370 million additional vehicles could be sold by 2013 and more than 715 million by 2018. But business models in the auto industry are not currently equipped to capture these increases."
Traditionally, 80 percent of auto sales and production has been in the U.S., Europe and Japan. Automakers need to better understand REE markets, including Brazil, Russia, India and China. They'll also have to investigate the group of 100 lower-growth economies that could become players for motorized transportation after 2020.
Here are the leading REEs:
Brazil. With 188 million people, Brazil has 104 cars per 1,000 people, which is 10 times the auto density of India. Global Insight says car sales in Brazil are expected to grow relatively slowly, just two percent between 2008 and 2013, but it has an expanding middle class and a growing number of first-time buyers who prefer compact cars (and SUVs because of the rough terrain).
Russia. The 142 million people own 213 cars per 1,000, twice the rate of Brazil. Global Insight says its sales will expand 6.5 percent by 2013, outstripping western Europe and Japan. It's now the largest auto market in Europe.
India. This is a huge growth area, not only for car buyers but also for auto production. With more than a billion people and tiny auto density of 11 per 1,000, the country is poised for huge auto expansion, and 14.7 percent growth by 2013. Local big players are just three, Maruti Sazuki India Ltd., Tata (maker of the would-be globe-conquering Nano) and Hyundai.
China. With more than 1.3 billion people, China is likely to become the world's biggest auto market. In March, for instance, more than a million cars were sold there. There are more than 140 cities with populations over one million, and auto density of just 18 per thousand now. Sales growth by 2013 is projected at 8.3 percent, but it is likely to accelerate rapidly. The Chinese government encourages 50-50 partnerships with foreign automakers, but as Malcolm Bricklin found in his rocky attempt to partner with Chery Automotive, "poor intellectual property rights enforcement puts the design and engineering innovations of foreign vehicle makers at constant risk." For Bricklin, the end of the road was a massive, $14 billion lawsuit.
As Booz points out, each of these four "has a completely different set of market and industry dynamics." And how.