Data released by LMC Automotive shows that the global light vehicle market picked up sales momentum in March after a period of slower demand at the beginning of the year.
LMC said the seasonally adjusted annualised rate of sales increased to 88.9m units a year in March. The automotive forecasting firm expects the global market to expand to around 89m units this year from an estimated 87.2m units in 2014.
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However, the picture across the main regions of the world remains mixed. While vehicle demand in Western Europe, the US and China continued to show strength in March, a collapse in Russia and continued weakness in Brazil held growth back.
North America: US strength continues
LMC said that US light vehicle sales only edged upwards, in year-on-year terms, in March, but the solid 17m units a year annualised selling rate points to an “ongoing strong performance”. The analysts noted that growth in the whole first quarter “was almost entirely driven by light trucks”. Light truck sales are widely thought to be benefiting from low oil prices.
LMC also said that vehicle demand in Canada was solid in March, improving on last year’s strong result – though “we do not expect further growth in 2015 as a whole.
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By GlobalDataEurope: Recovery ticks up in West, but Russia gloom deepens
The West European market recovery picked up speed in March with a year-on-year gain of over 10%. The selling rate hit its highest level in four years at 14.7m units a year. While the UK market stood out, sales in Spain, France and Germany also showed solid upward movement, LMC said.
However, market conditions remained weak in Eastern Europe, which continued its nosedive in March, though “almost all of the decline can be attributed to the collapsing Russian market”. The annualised selling rate for Russia’s light vehicle market plummeted to just 1.6n units a year in March (2014’s total was 2.5m units).
LMC said that while it expects continued stability in other East European markets, the outlook for Russia remains weak over the coming year, “with no recovery from recent lows anticipated”.
China: Car market grew in March, but slowdown coming
China’s car market is continuing to show some volume growth in cars, despite reports of inventory pile-ups and the slowing of the Chinese economy. The March SAAR was 24.7m units, no change from the holiday-adjusted February. However, the divergence between passenger vehicles (PV) and light commercial vehicles (LCV) continued, with PV sales increasing by 12% (year-on-year) and LCV sales declining by 18% in March. The slowing economy and the stricter emission standards, which kicked in at the beginning of this year, continue to undermine LCV sales.
LMC also noted that the economy is showing signs of further slowdown. The rising risk of deflation, the sharp deceleration of the once booming property sector, and the uncertain global outlook are expected to force the government to step up its monetary and fiscal easing measures. If so, sales could pick up their pace in the coming months.
Other Asia
In Japan, the selling rate picked up to 5.2m units a year in March ahead of tax changes in April. The annual Mini Vehicle tax has been raised and the rules to qualify for the “eco-car tax exemptions” have been tightened. As such, sales are expected to lose momentum again in the coming months.
The South Korean market continues to surprise on the upside, with the SAAR selling rate exceeding a robust 1.7m units a year in March. Falling inflation, record-low interest rates, and a strong local currency are supporting consumers’ purchasing power. However, a sluggish economy and a slowing job market are concerns for the outlook.
South America sluggish
In Brazil, the selling rate increased by nearly 9% in March, compared to a holiday-distorted weak February. Yet, the market is continuing a general downward trend along with a deteriorating economy. A looming recession, soaring inflation and interest rates, and already high household debt are expected to undermine sales during the rest of this year.
In Argentina, the March selling rate of 540,000 units a year was little changed from February. The sales outlook remains bleak, LMC said, with falling real wages and deteriorating job prospects making consumers very cautious. However, if the government manages to increase its spending ahead of the October presidential election, that may help boost sales in the coming months, LMC noted.
Global Light Vehicle Sales
| March | March | %ch | Q1 | Q1 | %ch | SAAR | SAAR | |
| 2015 | 2014 | 2,015 | 2,014 | March 15 | Q1 2015 | |||
| WORLD | 8,545,883 | 8,374,525 | 2.0% | 22,120,296 | 21,801,677 | 1.5% | 88,866,890 | 88,093,356 |
| USA | 1,543,523 | 1,534,381 | 0.6% | 3,948,553 | 3,736,658 | 5.7% | 17,044,382 | 16,602,148 |
| CANADA | 160,051 | 157,343 | 1.7% | 367,888 | 359,115 | 2.4% | 1,748,216 | 1,764,032 |
| W. EUROPE | 1,723,115 | 1,559,773 | 10.5% | 3,785,988 | 3,484,533 | 8.7% | 14,690,223 | 14,327,571 |
| E. EUROPE | 337,748 | 412,674 | -18.2% | 866,252 | 1,053,258 | -17.8% | 3,976,676 | 4,133,333 |
| JAPAN | 681,503 | 758,774 | -10.2% | 1,544,662 | 1,803,764 | -14.4% | 5,237,630 | 5,069,501 |
| KOREA | 147,375 | 134,987 | 9.2% | 395,202 | 373,252 | 5.9% | 1,731,258 | 1,704,602 |
| CHINA | 2,257,663 | 2,138,915 | 5.6% | 6,292,551 | 5,962,199 | 5.5% | 24,663,874 | 24,703,070 |
| BRAZ/ARG | 272,609 | 277,031 | -1.6% | 798,595 | 980266 | -18.5% | 3,450,995 | 3,430,058 |
| OTHERS | 1,422,297 | 1,400,648 | 1.5% | 4,120,604 | 4048632 | 1.8% | 16,323,636 | 16,359,041 |
Source: LMC Automotive
Late reporting countries and estimates are included in “Other”.
Eastern Europe includes Turkey.
China includes estimate of light vehicle imports.
