(The following statement was released by the rating agency) Fitch Ratings-Barcelona/London-July 11: Global income growth and middle class expansion, particularly in Asia, will support increasing car demand and traffic, Fitch Ratings says. The impact will be lessened by changing technology and expanding personal mobility options but we expect the net effect on car sales and road infrastructure to be positive, benefiting automakers and toll road operators. The middle class is important as it has spending power to create demand for items beyond basic necessities, such as cars. Accelerated middle class expansion has been particularly evident in emerging Asia, representing around 90% of all new middle-class entrants in recent years, with China the largest contributor. The number of people counted as middle class in the wealthier countries in North America and Europe has been relatively stable. We expect these trends to continue in the foreseeable future.
Car demand largely mirrors middle-class development dynamics, with modest growth at best in most developed markets and stronger growth in emerging markets, driven by China, which has become the largest automotive market globally. We expect global demand for new vehicles to increase further in the medium term, albeit at a moderate rate in low single digits. Vehicle demand and demand for road infrastructure are interlinked. A growing vehicle fleet increases traffic and creates demand for road infrastructure. Construction of new roads, particularly in rural and previously inaccessible regions, then contributes to greater demand for cars.
China's motorisation rate growth has been tracking the pattern in the US about a century ago, which led the US motorisation rate - vehicle units per thousand people - to be among the highest in the world. This indicates very significant room for car fleet growth, given China's much larger population. However, evolving personal mobility options and growing environmental concerns will counterbalance these trends and in time are likely to slow motorisation in emerging markets.