The first month of light vehicle sales for 2021 have now been collated for global markets. They show a marginal rise of 0.6% when compared with last year. The SAAR came in at 81.46m, the lowest since June 2020, and slightly below the level of January 2020 due to a different balance to regional sales.
The geographic disparity in sales performance is most demonstrated by the results in Europe. For the region as a whole sales fell 20.4%, but this partially hid a steeper fall in lockdown-affected West European markets of 23.5%. Here, key markets such as the UK, Spain and Germany all fell in excess of 30% in January.
North America’s sales also fell. The US was the least affected there with sales down by just 3.7%, but sales in Canada and Mexico dropped by a combined 23.3%.
South American markets lost a bit of recovery momentum in January, with both the Brazilian and Colombian markets impacted by a resurgence in COVID-19 infections. Falls in the two markets led the region’s sales down 7.2% year-on-year despite notably strong growth from Argentina and Chile.
Once again, growth was provided by Asia Pacific markets. All four major markets performed strongly – China up 21%, Japan up 7.1%, India up 10.1% and South Korea up 19% – and contributed to overall regional growth of 15%. These are the markets that we expect to power the industry through a difficult first quarter. Uncertainties about demand have been compounded by the global semiconductor shortage which OEMs expect to limit sales opportunities in the first quarter.
GlobalData estimates OEM downtime announcements add up to a ~400,00 unit loss from forecast Q1 global production, but the opportunity cost – if the OEMs were producing to full capacity – is some 715,000. This leaves the Q1 revenue impact anywhere between US$12bn and US$22bn.
We expect 2021 to be just as tumultuous as 2020. This will be particularly true in the first two quarters. Year-on-year comparisons against extremely low bases will come into play in the first half. For example, our latest forecast sees a 16.7% increase in February’s numbers globally, followed by 53% in March and nearly 74% in April, which will seem totally out of kilter with the fundamental macroeconomics. However, this could spur consumer confidence, and coupled with vaccine rollouts around the world, a stronger market for 2021 than many anticipate may be in the offing.
Once European infection rates subside and lockdowns ease, we expect the sales running rate to become progressively better through the year.
Once European infection rates subside and lockdowns ease, we expect the sales running rate to become progressively better through the year. For Q1 we forecast a SAAR of 81.9m, improving to 83.8m for Q2 and by the final quarter we expect a sales rate averaging 88.4m for the year. GlobalData’s automotive composite index – using alternative data sets such as M&A activity, financial filing sentiment, news sentiment and job hirings – continues to trend upwards and it’s proved to be a reliable indicator of sales progress through the pandemic and provides some directional assurance on the industry in 2021.
For 2021, our base forecast now stands at 85.1m – that’s 13.1% ahead of 2020, but 4.4% shy of 2019’s total. Regionally, we see the strongest gains in MEA (+21.4%), South America (+20.7%) and Europe (+16.5%). For the major market of China, we forecast an 8.8% gain to 24.8m which will take the market just past 2019’s total. In the US, we see a 12.3% progression to 16.26m, while Germany is forecast to increase by 15.1%. Finally, in Japan we see a growth rate of 8.3% taking the market to 4.9m.