The analysts at IHS forecast that growth of the global light vehicle market will slow in 2015, weighed down by weaker sales in many emerging markets and Europe. Nevertheless, IHS forecasts that the market will grow to 88.6m units, an increase of 2.4% over 2014.

Growth of the world vehicle market in 2015 would continue and unbroken five-year run of sales recovery and growth from the last low point set in the depth of the recession in 2009. However, IHS also points out that a slowdown is being signalled with just two of the high-potential BRIC markets likely to see increased sales this year.

IHS says that China and North America will lead the upswing.

The size of the contraction of the Russian car market remains a significant wild card that will impact the European market throughout the year, according to the analysis, while other countries in the region continue to recover at a rate of 2.5-3% percent, helped by the European Central Bank's (ECB) commitment to "Quantitative Easing".

China's economic growth to ease back further

IHS says that China's economic growth will decelerate further this year, to 6.5% from 7.4% in 2014, as a result of industrial overcapacity and weakness in the real estate sector. However, IHS analysts still expect light vehicle sales in China to grow by 7% in 2015 to 25.2m units, aided by increased auto finance penetration, fast dealership expansion and government vehicle scrappage programs.

IHS also notes that the current anti-trust campaign environment could alter the relationships among consumers, dealers and OEMs. The campaign is expected to have a long-lasting effect on premium parts/vehicle prices in China. Coupled with this, the momentum could lead to downward adjustment in premium pricing, which "helps provide solid foundation for premium vehicle penetration to further increase in China in the next decade". IHS says it expects premium vehicles in China to top 2m units in 2015 with year-over-year growth of 15%.

IHS Automotive experts also expect SUVs to remain the fastest-growing segment in China in 2015. "We see SUV market share (as percent of passenger vehicle sales) to increase from 26 percent in 2014 to 28 percent in 2015 as consumers look to this segment to address evolving transportation needs," said Lin Huaibin, manager, China light vehicle sales forecast, IHS Automotive.

In India, falling inflation, lower interest rates, energy prices and a regained confidence will help lift the car market into growth mode starting in 2015 after a two-year lull.

North American market to continue expansion

IHS said that North America continues to be an impetus to global light vehicle demand levels.

"Although the economic conditions and pace of recovery differ slightly among the North American countries, consumer confidence, credit availability and pent-up demand have played key roles in sustaining auto demand momentum since the Great Recession," said Chris Hopson, manager, North American light vehicle sales forecasting, IHS Automotive. "This should help motivate sales once again in 2015."

IHS Automotive projects regional light vehicle sales volume in North America to hit more than 20m units in 2015, up 2.5% from last year.

In the US, IHS Automotive analysts continue to believe the upside risks for auto demand are more apparent than the downside risks - fuelled by lower energy prices. With a strong exit to 2014, and gasoline prices currently plunging, IHS says that "consumers may feel even more positive throughout 2015". The IHS Automotive U.S. light vehicle sales forecast for 2015 is 16.9m units.

South American politics cloud demand prospects

IHS estimates that South American vehicle sales closed 2014 at 5.34m units - a 10% drop from 2013; with politics impairing Argentina and Venezuela, and the economic climate weighing down markets like Brazil, Chile and Peru, where it "may take a few years for demand to recover to previous highs".

IHS notes that uncertainty lingers over Argentina, Brazil, Chile and Venezuela for 2015. Argentina is displaying hints of the "tango crisis" of 1998: uncontrolled inflation, lack of foreign currency and risk of devaluation. As a result, IHS Automotive is expecting 2015 sales in Argentina of roughly 500,000 units. In Brazil, banks have been tightening credit for the last three years, and they are not showing interest in boosting credit to the automotive sector. This, along with the increase in the IPI (an industry tax) in early January, higher financing rates and weak job generation should translate into sales in Brazil of 3.25m units.

European market adversely impacted by Russia's problems

In Europe, the crisis in Russia could offset the gain from lower fuel prices for Europe's car buyers and even the new economic stimulus ('QE') boost from the ECB. As the Russian economy slumps into a deep recession in 2015, its negative impact on the eurozone and surrounding countries could be large enough to offset the consumer benefit from falling fuel prices. Overall, the IHS forecast for light vehicle sales in Western Europe has only been fractionally upgraded for 2015 despite the benefits of $50/barrel oil.

After a better-than-expected 5% increase in 2014, light vehicle sales in the mature West European region are forecast to improve by another 3% in 2015, with upside coming if the apparent open-ended commitment to QE by the ECB pushes the euro down still further.

"The size of the market contraction in Russia is the biggest wild card facing vehicle manufacturers across the European continent, if not the world, in 2015 and 2016," said Nigel Griffiths, chief automotive economist, IHS Automotive.

After the recent enormous volatility of the Russian currency, prices of imported cars look like they will increase well over 20% or so and even domestically-produced vehicles will have to see double-digit price hikes. This, along with a deep recession compounded by the recent credit rating downgrades, could push the market down to just 1.8m units; a 27% decline over 2014 and nearly 40% (1.2m) below the market level recorded in 2012.