After a solid 2012, which saw global light vehicle sales increase by 5% to 81m units, LMC Automotive forecasts a slower expansion in 2013.

Global light vehicle sales are forecast to rise by 3% to 83m units this year.

In 2012, LMC points out that regional performances varied strongly. Markets in North America and much of Asia faired well whilst those in Europe and, to a lesser degree, South America, suffered from underlying economic weakness, poor consumer confidence and on-going political/economic uncertainty.

“While some large markets have performed solidly in 2012, notably in the US and China, the key macroeconomic risks that prevailed during 2012 look likely to persist well into 2013 with negative implications, and an unbalanced risk profile, for Europe,” said Pete Kelly, Managing Director of LMC Automotive. “In our view, this regional variation will also be a feature for 2013.”

Europe looks weak

West European light vehicle markets, having fallen in total by 9% in 2012, look likely to deteriorate further in 2013, with a drop in the 2-5% range - the baseline forecast being for a 3% drop to 12.7m units. Some stabilising offset has come from Eastern Europe, notably Russia where sales were up by 11% in 2012, but there is risk that growth in Eastern Europe may slow sharply in 2013, LMC maintains.

“While some European manufacturers have performed well through broad geographical diversity and strength in premium and export markets, those tied closely to the performance of European markets will find the going tough in 2013. Inventory accumulation in the context of continued overcapacity may haunt a number of European OEMs this year and beyond,” said Justin Cox, Head of European Production Forecasting at LMC Automotive’s Oxford, UK office.

North America: recovery continues

In the US, continued recovery from the depths of the 2009 crisis led to a surge in light vehicle sales, to 14.5m units in 2012, up by 14%. Encouragingly, the selling rate continued to improve throughout the year, ending on a high note of over 15m units in December. North American light vehicle sales in 2013 are expected at 17.8m units, an increase of 4 % from 2012 as the US market posts further growth at a slower rate.

“The US faces the hurdle of the budget and spending debate, but otherwise is set to be one of the few bright spots of the major markets around the world in 2013,” said Jeff Schuster, Senior Vice President of LMC Automotive in the US. “It has been several years since the market faces more upside potential than downside risk.”

China looking good for 10% growth

China light vehicle sales (including imports) rose year-on-year by 6.2% to 19.1m units in 2012, which was higher than the annual growth rate of 4.4% in 2011. This improvement was largely due to the phase-out of pay-back effects from the booming car sales during 2009-10, particularly in the light commercial vehicle sector. With the anticipated more favourable economic environment in 2013, the light vehicle market is expected to reach 21 million units, a 10% increase over 2012.

John Zeng, LMC Automotive’s Asia Pacific Director in Shanghai, also sees a favourable political cycle. “With a change in political leadership being formalised in early 2013, the positive impact of the political-business cycle should provide support for vehicle demand. The sales momentum that started to rebuild in Q4 2012 also indicates a good start for the light vehicle market in Q1 2013”.

Other Asian markets poised for growth also

Meanwhile, other markets in the region are poised for further growth. India and the ASEAN region performed well in 2012, with ASEAN light vehicle sales rising by 40% and sales in India up by 12%. The outlook for 2013 is favourable for continued growth in the region.

“We are likely to see slower growth in the Asia pacific region this year. While growth would remain relatively strong in China, India and Indonesia, 2013 looks to be a tough year for most other markets in the region. With the end of government incentives that propped up the market last year, vehicle demand is expected to decline in Japan and Thailand,” said May Arthapan, Asia Pacific Director of LMC’s Bangkok office.

Light Vehicle Sales in 2012 and 2013



Millions




2012 %ch 2013 %ch
World 81.0 5.3 83.0 2.5
Asia-Pac 33.9 11.8 35.5 4.9
China 19.1 6.2 21.0 9.9
Europe 18.0 -5.5 17.7 -1.7
West Europe 13.1 -8.7 12.7 -3.3
North America 17.1 12.4 17.8 4.0
USA 14.5 13.5 15.1 4.1
South America 5.1 -1.5 5.2 2.3

Source: LMC Automotive