PARIS — When PSA Peugeot Citroën said last week that it was building its third car factory in China to meet surging demand there, the announcement underscored both the problems facing the global auto industry and the measures manufacturers are using to address them.
Like just about every American, Japanese and European carmaker, Peugeot faces tepid demand at home and little prospect of improvement anytime soon. But in China, now the world’s largest car market, Peugeot’s business is sizzling, and the French company has said it expects capacity at its two existing Chinese factories to reach “saturation” soon.
For Volkswagen, Peugeot’s biggest rival in Europe, China is already its largest single market in terms of sales.
“Developing markets are where all the growth is,” Dennis DesRosiers, an independent auto analyst in Toronto, said. “North America and Western Europe have to face the music.”
As the Paris Auto Show, which opens to the media Thursday and to the general public Saturday, gets under way, that fundamental shift is driving the industry. The problem is that duplicating the Western pattern of car use in countries like China, India, and Brazil threatens not just to create more huge traffic jams like those evident lately outside Beijing, but to accelerate climate change resulting from a rise in the gases that contribute to global warming.
That is one reason the organizers of this year’s show have sought to focus attention on new technologies, with the theme “The Future, Today,” pointing to what many in the industry hope signals the successful commercialization of zero-emission electric cars.
J.D. Power & Associates, an auto market research firm, predicts global light vehicle sales this year of about 70.4 million units, 10 percent above the 2009 level, and 74 million next year. China, with a market that J.D. Power estimates will grow 25 percent this year, to 16.2 million units, has overtaken the United States, where the firm expects sales this year of about 11.2 million units, up nearly 12 percent. The European market will shrink just under 3 percent, it estimates.
