Beijing ( TheStreet) -- Not long ago, the auto industry looked eagerly to emerging markets as an area where sales would grow rapidly, but that perception has changed dramatically.
Now, BRIC is broken.
"Volatility in emerging markets is creating huge challenges for auto companies," said Mike Hanley, global automotive leader for professional services firm EY -- formerly Ernst and Young -- in an interview. "There cannot be such a rush to put capacity in these markets (because) the economies are not taking off. They have to more carefully manage growth."
In Brazil, light-vehicle sales in 2013 fell 0.9%, the first decline in a decade; growth had averaged more than 10% in each of the previous 10 years. In Russia, light-vehicle sales fell 5.5% in 2013, following three years of strong growth. In India, 2013 auto sales fell 10%, the first annual decline in 11 years.
Among the BRIC countries, only China defies the trend. In 2013, sales rose 14% to 22 million, as China became the first country where more than 20 million cars were sold.
In general, the negative results are continuing this year, as are the positive trends in China.
"Are Emerging Markets the new Achilles heel of the Automotive Industry?" consulting firm LMC Automotive asked recently in a recent press release, where the firm did something that is rare in the forecasting business: It admitted that it had been wrong.
In September, the firm said, it projected that 2014 would bring single-digit automotive sales growth in five emerging markets: Argentina, Brazil, India, Russia and Turkey. But in April, LMC revised that forecast. Now it sees full-year declines of 27% in Argentina, 20% in Turkey, 9% in Russia and 4% in Brazil.
Also, LMC now forecasts 3% growth in India, down from its September forecast of 9%. It now forecasts a 20% decline in Thailand; it had predicted a decline of 9%.
"While the U.S., China and Western Europe continue to be likely sources of expansion in 2014, driving our outlook for the year, a number of large and previously dynamic emerging markets have moved from growth to stagnation, or even outright contraction," said Pete Kelly, managing director of LMC Automotive, in a prepared statement.
As for China, it remains a mixed picture, despite the positives.
Chinese domestic automakers are generally losing share, but the international companies are flourishing. Ford's (F - Get Report) 2013 sales rose 49% to 935,818 units and sales by market leader GM (GM - Get Report) rose 11.4% to 3.16 million.