The global automotive industry needs to deal with likely damning economic realities despite growth projections for the sector this year, according to outlooks furnished by analysts.

While the overall sales prospect is high, with two-digit growth forecasts seen to dominate this year's performance, ratings agency Fitch is mindful that the 2012 expansion for international carmakers could face serious challenges in the form of realignments and the prevailing economic condition.

Standard & Poor's (S&P), according to Agence France Presse (AFP), is upbeat that global car sales would shoot up by an average of 7.7 percent in 2012, on the back of expected surges in North America and the emerging markets that mostly concentrated in Asia.

S&P said North America will account for sales growth of up to 10.6 percent this year while demands from Asian countries are expected to push up the region's sales numbers by 10.9 percent in the year, painting a generally rosy picture for the entire car industry that only a few years ago teetered in the brink of extinction.

Yet the positive outlook cannot overlook the situation in Europe, the performance of which last year proved as the exception in a period that was dominated by the international car industry's incredible turnaround.

General Motors for example booked record profits in 2011 but its achievements that year also highlighted a blot on its European subsidiaries, leading the American carmaker to report some $US750 million in losses for Europe.

Headlining that disappointing data is Peugeot's dismal sales numbers that were shaved off by 1.5 percent last year, with the yearly profits declining by almost 50 percent, AFP said.

Such spectre is representative of what is transpiring in the troubled region, Fitch said, whose car industry was one of the key sectors absorbing the negative impacts of its economy gradually going in a tail-spin.

"Over-capacity, relentless competition and heavy price pressure are compounded by the extremely tough environment with declining consumer and corporate confidence in several European markets," Fitch said as reported by AFP.

If the situation further deteriorates, carmakers can only be expected to implement drastic measures to protect their revenues and profits over the long haul, and that includes consolidation, plant closures and job losses, Fitch said.

All these could happen within the year, the ratings agency added, while noting that the only glimmering light seen in the region now is its biggest economy, Germany.

While its neighbours reported dwindling car sales, Germany saw its auto sales numbers soaring by 8.8 percent in 2011 and is gearing for expansion as its high-end car brands led by Mercedes-Benz, BMW, Porsche and Ferrari - the latter two recent acquisitions by German carmakers - prove becomingly more popular with Asian buyers now flushed with disposable cash.

Targeted markets by these luxury carmakers were mostly Chinese and Indian consumers, who this week will get a glimpse of some 140 new vehicles that will be rolled out at the 82nd Geneva International Motor Show.

The event serves as a breather for an industry still wiggling its way out of the difficulties that almost spelled its demise, at least for many of its major players.