Data from LMC Automotive suggests that the global light vehicle market slipped back in November on weak sales in Eastern Europe, Japan and South America.
LMC estimated the global market at a seasonally adjusted annualised rate (SAAR) of just under 87m units a year, down from a record 88m units a year in October.
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Demand in China, North America and Western Europe continued to build on year-ago levels, LMC said. However, LMC’s analysts said that Eastern Europe remains a concern (even with government support in Russia), while Japan and Argentina fell back sharply.
The outlook for Russia’s vehicle market has worsened this week as the rouble has come under renewed pressure on lower oil prices, resulting in a hike to interest rates. The Russian economy is likely to enter recession next year.
On the positive side for the global vehicle market, LMC said the US light vehicle market continued to improve in November, with the selling rate standing at 17.1m units a year. For 2014, US sales are on course to total nearly 16.5m units.
In Canada, light vehicle sales were also higher last month and look set to top 1.8 mn units by year-end.
The rate of recovery of the West European market slowed last month, with one fewer selling day versus November 2013. In selling rate terms, after climbing above 14m units a year in October, the latest month’s result was a little lower at 13.9m units a year. However, LMC said that it expects further market growth as we head into 2015.
China still up
The Chinese market continued to accelerate through November, with the selling rate rising to 24.1m units a year, up 1.5% from a downwardly revised, yet strong October. The result was, however, mixed. Passenger vehicle sales continued to trend upward, while LCV sales continued to fall – a sign of China’s economic slowdown.
In South Korea, the selling rate surged to a strong 1.6m units a year in November, supported by expansionary fiscal and monetary policies. However, LMC noted that the country’s large export and manufacturing sectors remain depressed.
South America sluggish
The Brazilian market remains sluggish, but the November selling rate of 3.3m units a year was slightly better than expected, LMC said, perhaps boosted by the expiration of the IPI tax cuts in December.
The new finance minister plans to adopt fiscal austerity measures, which, if implemented, could weaken new vehicle sales further, at least in the near term, LMC said
Argentina’s notoriously volatile market slowed sharply after showing resilience in the wake of the country’s debt default in summer. The November selling rate was a five-year low of 518,000 units, down nearly 15% from October. The deteriorating economy suggests a further weakening in new vehicle sales, LMC said.
