ANALYSIS: China drives global car market to new record in January
Data released by LMC Automotive shows that the January global light vehicle market hit a new record in January.
In seasonally adjusted annualised terms, the world's light vehicle market was the highest ever at almost 86m units a year. Sales were up 12%, year-on-year, as surging Chinese demand pushed the market upwards.
China's light vehicle market in January hit a staggering 24.1m units seasonally annualised rate ahead of the Chinese New Year.
LMC said that this year has therefore continued the trend of 2012 in which Chinese and US demand drove growth and more than offset the deterioration in Europe. Brazil also registered a modest upturn, LMC said.
Highlights by region:
- US light vehicle sales started 2013 strongly with a 14% gain on last January. The 15.2 mn units/year selling rate represented further consolidation of the improvements in late 2012. Notably, the Large Pickup segment outpaced the market and was up nearly 20%.
- The US 2013 market is forecast by LMC at 15.1 million units with 12.4 million in retail sales.
- Canada’s January 2013 sales did not perform as well and were down 4.3% with a 1.69 mn units/year selling rate (marginally better than last year’s total of 1.68 mn units). Weaker car sales were the culprit for the month’s lower sales pace with a 5% decline compared with January 2012, while truck sales were flat in the month.
- The January result in Western Europe is of increased concern as the selling rate plunged to 12.6 mn units/year – a historic low – though the outturn may have been depressed further by expired end-of year deals in December. LMC's core projection for Light Vehicle sales in 2013 in Western Europe is for a 4% decline.
- In Central and Eastern Europe, the situation is more stable, but is far from being able to offset the declines in the much larger West European market. Total European light vehicle sales were, therefore, down by 6%.
- Preliminary data indicates that the selling rate soared to a record high of 24.1 mn units/year in January, up 21% from December. Sales were boosted by campaigns ahead of the Chinese New Year. Many OEMs are said to have recorded some of their December sales in January in order to improve the appearance of their first quarter performance — a reason for temporarily strong sales in January.
- Despite a robust January, however, LMC has decided to keep its sales forecast unchanged at approximately +10% for 2013, as the selling rate is likely to be distorted by the timing of the Lunar New Year, falling in February this year compared with January last year (in part explaining the larger year-on-year gain). In addition, the sales outlook is increasingly uncertain, as the government is launching a number of measures to reduce worsening air pollution in big cities, LMC said.
- In Japan, the selling rate in January jumped by 9% on the month to a strong 5.1 mn units/year. The falling yen, the stock market rally, and high expectations for the positive impact of “Abenomics” are lifting confidence and sales. However, the sustainability of such strong sales momentum is questionable, LMC cautioned.
- In Korea, sales remained solid in January, despite the end of the temporary tax cuts in December. Increasing signs of China’s economic recovery bode well for Korea’s economy and vehicle demand this year.
- According to preliminary reports, Brazil’s January selling rate is estimated to be 3.8 mn units/year, up about 4% from December. The temporary IPI tax cuts have been extended and will be phased out by June 2013: this should support sales in the first half of 2013. Sales, however, could be dampened by rising inflation and possible monetary tightening, LMC said.
- In Argentina’s notoriously volatile market, the selling rate plunged by 27% (on the month) in January after a spike in the previous two months. The government’s interventionist economic policy continues to distort the market.
|Sales (units)||Selling rate (Units/year)|
|Jan||Jan||Percent||Year to date||Year to date||Percent||Jan||Year to date||Year||Percent|
|BRAZIL / ARGENTINA||308,217||278,472||10.7%||308,217||278,472||10.7%||4,513,081||4,513,081||4,322,071||4.4%|
Source: LMC Automotive
NOTE: Eastern Europe includes Turkey; China data includes estimate of light vehicle imports, and excludes heavy vehicles. Late reporting countries and estimates are included in "Other".The percentage change in the final column compares the average selling rate in the year-to-date with the last full year.
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