The latest forecasts from LMC Automotive predict that the global light vehicle market will hit a new record this year of 91.9m units, some 3.2% ahead of last year.
LMC analyst Pete Kelly told an industry conference in London that the main sources of global growth in recent years have been vehicle markets in North America, Western Europe and China. “That theme has continued into this year,” he said. “But we are now seeing a slowdown in the US vehicle market. The recovery in the US economy has matured and the recovery in the vehicle market is complete, following on from the depths of the financial crisis.”
Go deeper with GlobalData
Light vehicle sales in the US are forecast by LMC at 17.7m units in 2016.
Kelly also told delegates that there are currently areas of weakness for car sales in South America, Russia and other emerging markets.
“From 2009 we have had a period of rapid growth in emerging markets, but there has been a plateau in recent years. These markets are struggling to advance because of economic conditions in places like Russia and Brazil, but also we have seen reversals in markets in ASEAN.”
The light vehicle market in China is subject to volatility according to Kelly. Car restrictions in cities have created a volatile demand situation, he maintains.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData“Sales are being boosted by the purchase tax cut this year. Our current assumption is that the incentive will expire at the end of this year and the market will fall as a result. However, we know that the Chinese authorities have a record of intervening if they see a weak market situation emerging. The end of that tax cut is by no means assured.”
China’s light vehicle market is forecast by LMC to see single-digit growth to around 26.3m units in 2016. In the long-term, LMC sees the market maturing so that annual rates of sales growth are of the order of 3-5%. “It’s still a very large volume of vehicle sales,” he points out. LMC projections show that by the early 2020s, the Chinese passenger vehicle market will be running at around 30m units a year.
