Provisional data compiled by GlobalData shows a much stronger demand picture for light vehicles in July than anticipated for the key Triad markets of North America, West Europe and Japan.

In West Europe, sales for the month are estimated at 1.3m with the Big Five markets of Germany, UK, France, Spain and Italy all having reported.

The July figure was 23.7% ahead of GlobalData's assumption for the month and just 1.9% behind last year's total. Surprises in the market were bountiful. Not least in the UK. Without incentives or a scrappage scheme in place, light vehicle sales totalled over 203,000, a whopping 10.6% ahead of year ago figures, and giving the UK market its best SAAR of the year at over 3m. The UK's trade body, the SMMT, attributed the uplift in sales to rising pent-up demand.

The incentive fuelled markets of Spain, Germany and France all showed a sequential improvement in sales. In Germany the light vehicle market fell 4.9% year on year, a considerable improvement from June's 31.5% decline. Spain's incentive programme kicked-in to leave the market 1.3% ahead of year ago totals, while France continued to benefit from generous incentives as sales increased 3.6% against last year. Italy, which is expected to announce a scrappage scheme shortly, narrowed its year on year fall to 10.8%.

In North America, the markets of the US, Canada and Mexico all made positive moves in the month. Collectively year on year the deficit narrowed to 12.4% with total sales of 1.46m. Canada was the strongest performer as it posted a decline of 5.1%, while the US' sales fell 11.9% to 1.22m. Mexico, despite being mired in COVID-19, managed to taper its losses to 31% year on year down from 41% in June. Collectively, the markets posted their strongest SAAR since February with the annual selling rate for July calculated at 17.6m.

Lastly, Japan's light vehicle market continued its sequential improvement with sales falling 12.9% year on year to 392,000, a stepped improvement on June's 23% slip. 

All told these are an encouraging set of results for the industry. More than ever a whole set of caveats have to be applied for those hoping that light vehicle markets are on the home straight now after being severely disrupted by the pandemic in the latter part of Q1 and throughout Q2. Not least among the caveats are the continuing management of the pandemic by governments and the secondary economic impacts of pandemic management. Also, for consideration are the after effects in European markets when scrappage schemes are tapered or ended. 

On the flipside, there's growing evidence that people are turning to individual transportation to counter the need to use public transport. This is seen in marked upticks in used vehicle sales and upwards pressure on auction prices. At some stage the cost differential between new and used might become so marginal that new vehicle sales are boosted. This is particularly apparent in India, in the midst of a surge in COVID-19 cases, as July's sales there narrowed their fall to just 15%. This was a vast improvement on the 85% and 49% falls seen in May and June.