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BRIC Analysis: Will Recession threats Hinder BRIC Country Growth?

SpecialChem / Jun 24, 2008

Brazil, Russia, India, and China (BRIC) are the current engines of assembly and capacity growth in the automotive industry. From 2007 to 2015, Brazil will contribute 7%, Russia 12%, India 16%, and China 21% of global assembly growth - 56% in total. However, BRIC market growth is inextricably tied to the performance of mature economies, as they serve as the principle destination for manufactured goods and raw material exports - which provide the requisite income for light vehicle sales expansion. All global economies are currently experiencing pressure from increases in the cost of living, driven by rising commodity costs, foodstuffs, raw materials, and tightness in the credit markets. The growing interdependence between mature and emerging markets presents a danger inherent in an interconnected global economy. For the BRIC countries, exports to the EU and US combined range from 36% to 59% and any material downturn in mature markets could undermine growth prospects in emerging markets.

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