The global automotive industry stands on the cusp of a new age, presenting myriad opportunities for investors with an eye on long-term global trends, according to Jim Wood-Smith, head of research at the UK investment management firm Williams de Broë.

There is no doubt that the world’s car industry is in flux and having to rapidly adjust to a whole host of “game-changing” influences, from ever-increasing environmental concerns to sweeping demographic changes in emerging markets. A new generation of car-users is emerging at the same time that great technological strides are being made and this, according to Wood-Smith, is creating massive investment opportunities – especially in the area of electric cars.

Alternative fuel sources have of course been high on the agenda for some years now, the world cognisant that fossil fuel supplies cannot last forever, not to mention extraction difficulties and concerns over pollution. But while once alternative fuel cars were a rarity, they are rapidly becoming more mainstream in the West and demand is set to explode in Asia, and in particular in China, Wood-Smith told journalists at a press briefing yesterday.

Williams de Broë’s conviction is underpinned by some extremely compelling figures, both concerning the growth of the Chinese automotive market as a whole and demand for “green” vehicles.

Analysts have predicted that by 2050 more than 2 billion people in emerging markets will become first-time car owners, and looking specifically at China the firm notes that first-time buyers represented 80 per cent of automotive sales in the country in 2009. Add to this the fact that just 2 per cent of China’s 1.3 billion population currently owns a car and the market’s immense growth potential becomes clear.

At the same time, while the Chinese population is increasingly getting “on the road” as it grows in affluence, much of these first-time car owners will live in crowded, highly polluted cities where the authorities are anxious to keep auto emissions to a minimum, and so it is easy to see how Chinese demand for cleantech cars will build. That the Chinese will shape the industry going forward seems in little doubt: in the words of Wood-Smith, “the future of the motor car depends on demand from Asian markets.”

But its not just Chinese demand which is shaping up to be a “game-changer” for the global electric car industry. Williams de Broë also highlights the huge low-cost Federal loans the US authorities have given to the manufacturers Tesla and Fisker to make electric and hybrid cars – Tesla’s electric high-performance roadster having already grabbed headlines with its sportscar credentials.

Car manufacturers aside, according to Wood-Smith, investors should perhaps regard infrastructure as the cleverest investment related to the eco-car trend as the take-up of electric or hydrogen fuel cell cars of course relies on the availability of charging stations. Infrastructure is in his view a “huge opportunity” and in this regard Germany is showing greatest momentum, with plans afoot for the construction of 100 hydrogen stations over the coming five years, and we can expect similar drives soon elsewhere. “Massive infrastructure investment is needed,” he said, but with demand for small, eco-friendly, cost-effective cars only going to grow there is little doubt that the funds will be found to nurture what is an exciting, if fledging, industry.