The firm, which is now offering a Global Automotive Scenarios Service to examine the impact of possible macroeconomic outcomes, adds that if growth were constrained, the impact would be global and severe.

‘Emerging market slowdown may become more evident than our baseline forecast expects. For example, if Chinese government policy to curb speculative investment comes too late and is implemented too aggressively, the shift away from overinvestment could happen quickly, while a shortage of liquidity during the transition would be dangerous,’ according to Pete Kelly, managing director of LMC Automotive.

‘Tens of millions of light vehicle sales would be wiped off the global forecast for the next five years. The impact of a severe contraction in Chinese investment would carry over into neighbouring East Asia, but ripples would be felt worldwide with other emerging markets particularly vulnerable to the slowdown.’

This constrained growth in the BRIC countries is one of five scenarios considered in the Q3 release of the new Global Automotive Scenarios Service from LMC Automotive and Oxford Economics.

‘Under this particular scenario, global light vehicle sales growth would drop from our baseline assumption of 5.5% to just over 1% in 2014,’ said Mr Kelly. ‘Worldwide, more than 30 million units of light vehicle sales would be lost from our forecast between now and 2018.’ ‘Even though we have confidence in our baseline forecast, the future reality could be very different. In this context, quantifying the impact of different outcomes has become a key requirement for the automotive industry,’ Mr Kelly added. ‘Planning or stress-testing plans for different future macroeconomic outcomes is an important part of most organisations' approach to uncertainty.’

The new Global Automotive Scenarios Service has been designed in the wake of the recession to examine the impact of plausible macroeconomic outcomes on the global light vehicle industry, providing a means for businesses connected to the industry to make informed decisions. The Q3 release of this new service is now available.