Thailand’s light vehicle (LV) market has been contracting as demand for one tonne pickups runs out of steam. For over 10 years, Thailand and Indonesia have taken turns to be the largest and second largest LV markets in the ASEAN region. However, 2023 will be a challenging year for Thailand to maintain its position within the top two markets in the region. For the first nine months of this year, Indonesia held on to the top spot with cumulative sales standing at 699k units. Thailand remained in second place with sales of 571k units. Malaysia came in at third place with sales reaching 568k units. However, when looking at the current year-on-year (YoY) growth rate, one can see that sales in Thailand plunged by 7.2% YoY in the first nine months of 2023, while sales in Malaysia grew by 11.9% over the same period. At the end of the year, we expect that Malaysia will have overtaken Thailand as the second-largest LV market in the region. Since October 2022, Thailand’s LV market has been contracting and has not yet returned to positive growth. While the YTD decline to September for total LVs was a fairly modest 7.2%, it was 27.0% for the Light Commercial Vehicle (LCV) segment as demand for 1-ton Pickups ran out of steam. The Passenger Vehicle (PV) market has remained strong with a 12.2% YoY rise from January to September 2023, but this was insufficient to offset the significant decline seen in the LCV segment. It is worth noting that in 2022, the LCV segment accounted for 49% of total LV sales in Thailand while PVs accounted for 51% and the 1-ton Pickup truck was the biggest seller within Thailand’s LCV market, accounting for around 96% of total LCV sales in the country.
Western Europe up
Passenger car sales in Western Europe rose again in November according to GlobalData. The selling rate rose slightly in November to 12.5 million units/year, from 12.0 million units/year in October. The region registered 968k vehicles in November, 5.3% higher YoY, with 10.6 million units sold year-to-date – almost 16% higher than YTD November 2022. Germany was the only major West European country with negative YoY growth at -5.7%, but this is due to November 2022 being a strong month as consumers brought forward their purchases before the government reined in EV incentives from the start of 2023. France and Italy, however, continue to recover strongly with double digit YoY growth thanks to improved supply conditions. Western Europe’s PV market sales have been benefiting in 2023 from easing supply constraints, helping OEMs tackle backlogged orders. Looking ahead, we expect to see more growth, albeit at a slower pace than the recent YoY results. 2024 will see supply shortages make way for a market that better reflects underlying demand. However, constraints on household budgets, including high interest rates, are set to limit more meaningful growth and market recovery. With the economic outlook looking more muted next year, the PV forecast for 2024 has been adjusted downward.
India’s vehicle market has continued to grow above expectations this year and GlobalData has again raised its forecasts. The market continues to surprise on the upside, as total Light Vehicle (LV) wholesales in October reached an unparalleled 449k units. Sales were up by 7% month-on-month (MoM) over the previous month’s peak and by 16% year-on-year (YoY). About 382k Passenger Vehicles (PVs) were dispatched in October, up by 7% MoM and 15% YoY. Demand for Light Commercial Vehicles (LCVs) with Gross Vehicle Weight (GVW) of up to 6 tonnes exceeded 67k units (+9% MoM, +18% YoY). LV sales in the month started on a weak note due to the inauspicious Shraddh period until 14 October 2023 but picked up in the latter half of the month during the auspicious Navatri period (October 15 to 24). Consequently, the October selling rate reached 5.15 million units/year, which was virtually the same rate as the record high of 5.18 million units/year in August. Inventory build-up for the festive season and increased output (thanks to improved supply of semiconductors) helped to boost wholesales results in October. Sizeable discounts and incentives from OEMs and dealers also sustained sales momentum in the month. It also appears that sales in rural areas started to recover after below-average monsoon rainfall had an impact on rural incomes.
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In the spectrum of day-to-day car checks, engine oil and tyre pressures are generally taken care of – but what about the condition of tyre tread? In the spectrum of day-to-day car checks, engine oil and tyre pressures are generally taken care of – but what about the condition of tyre tread? One check which is frequently overlooked by private motorists is tyre tread and overall tyre ‘health’. eBay is warning drivers on the risks of driving on worn tyres, with new research highlighting that 11% of participants were not confident when checking the tread on their tyres and 10% stating that they have no idea about the recommended tyre pressures for their vehicle. With this in mind, eBay has relaunched its tyre purchasing and fitment service for customers, allowing buyers to order the correct tyres for their vehicle, choosing a local fitment centre and selecting a time and date for when the new tyres to be fitted. eBay’s programme allows customers to choose from more than 250,000 tyre listings and over 3,000 installers across the UK. Alongside the launch of the online service, on the 29th of this month eBay hosted an event at Millbrook Proving Ground in the UK, which allowed participants to brake test a vehicle with new tyres, as well as one with extremely worn tyres to highlight the dangers. We had a go, too.
According to preliminary estimates, US Light Vehicle (LV) sales grew by 8.5% year-on-year (YoY) in November, to 1.22 million units. The YoY growth was helped by weak sales a year ago. While the results were a little lower than expected, the selling rate is at a similar pace to recent months. However, with inventory improving, it seems that customers are having to be enticed with higher incentives than has been the case since the onset of the chip shortage. US LV sales totaled 1.22 million units in November, according to GlobalData. The annualized selling rate was 15.4 million units/year in November, down from 15.6 million units/year in October. The daily selling rate was estimated at 48.9k units/day in November, compared to 48.2k units/day in October. Despite the uptick in the daily selling rate, it appears that November sales were slightly disappointing, with Thanksgiving and Black Friday sales not delivering quite as robust an acceleration as hoped. According to initial estimates, retail sales totaled around 1.03 million units, while fleet sales accounted for approximately 191k units, representing around 15.6% of total sales.
China strong, too
The Chinese market remained strong in October 2023, with Light Vehicle (LV) wholesales growing by 13% year-on-year (YoY) to a total of 2.8 million units. At the model type level, Passenger Vehicle (PV) sales (i.e., wholesales) for October increased by 12% YoY to 2.5 million units. At the same time, the Light Commercial Vehicle (LCV) sector grew rapidly by 24% YoY, with sales reaching 0.3 million units. On a month-on-month (MoM) basis, PV sales fell 0.3%, while LCV demand edged up 1% in October. Since the beginning of this year, the total cumulative wholesales volume of LV has reached 23.6 million units, an increase of 8% over the same period last year. The good market performance in October led to a selling rate for the month of 31.6 million units/year, the fifth consecutive month that sales exceeded the 30 million mark. That brings year-to-date sales to an average of 29.7 million units per year, compared with 26.7 million LV sales last year.
And in South Korea
Domestic sales by South Korea’s five main automakers combined increased by almost 3% to 132,589 units in November 2023 from 129,290 a year earlier, according to preliminary wholesale data released individually by the manufacturers. The data do not include sales by South Korea’s low-volume commercial vehicle manufacturers including Tata-Daewoo and Edison Motors, while import brands are covered in a separate report later in the month. The domestic vehicle market in November was underpinned mainly by a strong performance by Hyundai, which reported an 18% rise in local deliveries to 72,058 units thanks mainly to strong demand for newly released models including the Grandeur sedan and the Sportage SUV. GM Korea also reported sharply higher sales compared with weak year-earlier levels, while all other brands saw their domestic sales decline last month. In the first 11 months of the year, domestic sales were up by almost 7% at 1,343,342 units from 1,258,350 units, reflecting a 13% rise in Hyundai sales to 699,905 units and a 6.5% rise in Kia sales to 523,956 units. GM Korea’s domestic sales were slightly lower at 36,541 units in this period; KG Mobility reported a 2% fall to 59,838 units; while Renault Korea’s sales plunged by 53% to 23,102 units.
New vehicle sales in Japan rose 9% to 411,089 units in November 2023 from 377,079 a year earlier, according to the Japan Automobile Manufacturers Association (JAMA). Volume continued to recover from last year’s supply chain bottlenecks when acute semiconductor shortage severely impacted domestic vehicle output. The economy shrank 2.1% year on year in the third quarter following a strong rebound a year earlier, according to provisional government data, reflecting falling capital expenditure, weakening exports and flat consumer spending.
GlobalData’s Energy Monitor reported this week on the latest wrangling over fossil fuels from COP28 in Dubai. For people in the climate world, the annual two-week extravaganza that is COP28 is a moment to see and be seen – even if this particular event is bankrolled by oil and gas revenues. The COP is a chance to meet all the think tanks, businesses and policymakers you spend much of the year speaking to over Zoom. As a journalist, you get access like nowhere else: instead of being presented with a spokesperson or junior analyst, suddenly there is the CEO of an organisation right in front of you, ready to be cornered straight after a panel for a quick comment. Much of the early days of COP28 – when more than 100 global leaders descended onto Dubai’s Expo City – could be spent celebrity-spotting. From the UK alone, PM Rishi Sunak, energy minister Claire Coutinho, former PM Tony Blair, leader of the opposition Keir Starmer, shadow climate minister Ed Milliband, and former chief secretary to the treasury were all spied by Energy Monitor. “I’ve caught the bug – I enjoy it very much,” said former UK environment minister Therese Coffey, when asked by Energy Monitor why she was in attendance at this climate conference (her fifth), despite losing her minist erial portfolio a few weeks before. “COP is great because instead of just having high-level debates and discussions, suddenly here is a forum where all countries and peoples with different needs and strengths converge,” she said. “There is a real chance to turn actions into ambition.” Unlike previous COPs, such as COP27 (which ran out of water) or COP26 (where a plug or a place to sit down was worth its weight in gold), the Expo 2020 Centre that is hosting COP28 is a swish, multi-building outdoor complex, blessed with space, swanky food and drink facilities, and an army of attendants at the beck-and-call of the estimated 80,000 attendees.
A £70 million pilot scheme has launched in the UK to power up motorway service areas to pave the way for ultra-rapid EV chargepoints. Transport Secretary Mark Harper made the announcement on COP28 Transport Day in Dubai. During his speech he laid out plans for up to 10 trial sites in England with boosted electrical network capacity ensuring electricity network capacity is future-proofed for at least 10 years, to 2035. Part of the government’s rapid charging fund (RCF) will cover a portion of the costs of upgrading the electricity grid at successful motorway service areas, ensuring that the private sector can continue to expand the charging network and providing consumers more confidence to choose EVs.
Veoneer has entered into an agreement with an investment fund managed by American Industrial Partners (AIP), for the acquisition of its restraint control systems business from SSW Partners (SSW). The transaction completes the strategy of finding the right long term homes for Veoneer’s three original lines of business: Arriver Software, now owned by Qualcomm; Active Safety, now owned by Magna International and Restraint Control Systems, to be acquired by AIP Fund VII. AIP invests in industrial businesses including several stakes in the automotive sector. In April 2022, SSW acquired Veoneer in an all-cash transaction worth US$4.6bn.
ZKW Mexico expansion
Austria based lighting supplier ZKW has commissioned the third expansion phase of its Mexican plant in Silao with an additional 15,700 square metres. At the same time, a groundbreaking ceremony was held for the next expansion phase which will create 7,000 square metres of additional production space and 1,100 new jobs by 2025. “With the expansion, we are increasing production capacities and creating around 2,000 new jobs to manufacture innovative lighting systems for customers in the strategically important NAFTA economic region,” said group CEO Wilhelm Steger.
VW China audit
An audit of Volkswagen Group’s jointly-owned – with SAIC – site in Xinjiang, China, has found no evidence of forced labour, the automaker said earlier this week. The audit, which was commissioned by VW, was undertaken by firm Loening Human Rights & Responsible Business and executed by a Shenzhen law firm with “extensive experience in social audits and international and Chinese labour law, accompanied on site by Loening,” VW said in a statement on its website. Some 197 employees were interviewed, including 150 Han, and minority ethnic groups, including 47 Uyghurs, the automaker said.
Chery Indonesia EV build
Chery Automobile said it had begun electric vehicle (EV) production in Indonesia, anticipating strong growth in demand for zero-emission vehicles in south east Asia’s largest economy. The automaker, trading as Chery International, has spent US$16m this year to tool up for the new model at the Pondok Ungu plant in Bekasi, a city just east of Jakarta, which it operates with local assembler PT Handal Indonesia Motor. The plant already produces Chery internal combustion engine (ICE) models including the Tiggo and Omoda 5. The company has a production target of 400 Omoda 5Es by the end of January with official scheduled in January with deliveries in February.
Have a nice weekend.
Graeme Roberts, Deputy Editor, Just Auto