Global Sales

We are constantly hearing how bad thing are in the automotive industry. Yes, we agree that it gets depressing. These are September figures and commentaries from JD Power it gives you an idea of what "goes on" around the planet, and provides a wider perspective of the industry.

September Global Light Vehicle Sales

Summary. Like the stock market screens with which we are now all too familiar, the year-on-year comparisons of light vehicle sales in almost all regions are increasingly turning red as markets drop. Sales have fallen particularly sharply in mature markets — the U.S. and Western Europe in particular — while growth in emerging markets has started to slow sharply. There are some bright spots — Brazil for instance — but these are now massively outweighed by the negatives in the major markets. 2009 is shaping up to be a tough year for the global automotive industry. 

North America. After staging a modest rebound in August, September sales in North America once again dropped to levels not seen since the early 1990s. The U.S. market was the main culprit, with sales dropping to 12.5 mn units/year (slightly lower than its July pace). Payback for incentives in August most likely explained both the rebound and the relapse and raises concerns that the steadily weakening U.S. economy is going to generate even lower sales in the months ahead. Canadian sales also have been struggling in recent months, with September sales only slightly improved over a decidedly weak August. Still, the market is on track to have its second-best year in history. Mexico’s market was little changed from a month earlier and, although the market has been on a very gradual downward trend in recent years, sales have remained above 1 mn units/year.

Europe. European light vehicle sales continued to slide in September — sales were down by over 6%. In seasonally adjusted annualised terms, the market fell to under 20 mn units/year. Compare this level with last year’s out-turn of 21.35 mn units to see just how rapidly the market has shifted downwards. The market profile in Western Europe has now taken on some similar characteristics to the market downturn during the early 1990s economic recession, though East European demand mitigates this somewhat. This time will be different of course and, in some ways, may even have more troublesome elements with which to deal, for example, the debilitating impact of expensive or scarce credit for vehicle purchases. Demand may fall by up to 10% in Western Europe in 2009 while previously booming Russian sales growth may be reduced to low single digits.

Asia. Light vehicle sales in Asia are also beginning to show worrisome signs of stress, which could intensify as U.S. economic weakness spreads globally. Of course, Japan’s market has been struggling for some time. And, while sales improved modestly in September from a month earlier, the market was below 5 mn units/year for the second straight month — the first time that has happened in at least two decades (if not longer). Australia and Korea, both generally healthy markets in recent years, were below 1 mn units/year in September, continuing a moderate downward trend that has been in place over the last two years, but which has accelerated in the last six months.

South America. In contrast to Asia, the Mercusor region of South America has been on an upward trend in recent years, and both Brazil and Argentina enjoyed improving sales in September from the previous month. In the case of Brazil, that gain was a partial recovery from an unusually sharp sales decline in August and could signal more problems ahead if the economy runs into trouble. In the case of Argentina, while the trend is still upward, the  market may have peaked in May of this year and the gain in September still leaves the market well below that May peak. Hopefully, the regional market’s performance will not be reversed by the spreading global economic problems.

15 October 2008

Global Light Vehicle Sales

 

 CHINA

Light Vehicle Sales Report

22 October 2008

Summary.  China’s automotive market has remained relatively weak, after a marked slowdown in August.  In September, total light vehicle sales on a seasonally adjusted annualized rate (SAAR) basis were 8.33 mn units/year — little changed from August’s 8.27 mn units/year and the second lowest sales rate so far this year.  A weak September brought the year-to-date average down further to less than 8.9 mn units/year, continuing a general downward trend since the beginning of this year.  Cooling vehicle sales coincide with a slowing economy, with GDP growth dipping to 9% in the third quarter, after 5 consecutive years of 10+% growth. The ongoing global financial crisis, slowing exports, and plunging stock and property prices appear to be taking a heavy toll on consumers’ ability and willingness to spend.  

Given the deteriorating global outlook, sales in China are expected to remain weak over the remainder of this year and into the next.  Possible simultaneous recessions in the U.S., Europe, and Japan will be a major blow to China’s exports and, thus, income growth and spending on new vehicles.

 China Light Vehicle Sales