Figures released by JD Power/LMC indicate that the global light vehicle sales rate declined to 56.2 million units in October from 56.4 million units in September. JD Power says that the drop was quite modest, with weak sales in the USA, Western Europe and Japan being compensated for by strong results from Canada, South Korea and Brazil. There was also an improvement in Eastern Europe.
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Sales in the US continued their slump, falling to a 15.45 million unit selling rate in October, technically their lowest level since August 1998 (although May sales were only 15.7 million units). JD Power says that incentives continue to be a key factor in the weakening pattern of sales.
Although some improvement has occurred, incentives remain well below peak levels in July and August and (more importantly) consumers appear to be waiting for incentives to rebound.
Canadian sales continued to boom, with October recording a new high, falling just short of the market’s first 1.8 million-unit selling rate.
After an exceptionally strong month in September, the selling rate in Western Europe also fell back a little in October. But there is no mistaking the upward trend in demand, taking the second half year as a whole. German demand clearly bottomed out in the first half of this year, and has been gradually rising since, despite poor macro-economic conditions, and Italian government incentives have pushed up the selling pace there also.
This has not been fully offset by declining French demand, while the selling pace in the UK has so far fallen only a little from its very high recent peak.
Latin American sales continued to improve from depressed levels earlier this year. Argentina, still in the grips of an economic and political crisis, posted its second straight monthly increase, but sales levels were less than half their year-ago levels. Brazil sales hit their highest level since October 1997, and the SAAR rose by half a million units/ year from last month. However, Brazil’s year-to-date average selling rate is still well below last year’s average.
Economic weakness is having a dampening effect on sales in the rest of Latin America, including Mexico. Indeed, while Mexican sales improved modestly in October, sales were still well below near-term highs in April and May.
Asian markets were mixed in October, with Japan’s sales down for the second straight month and the rest of Asia mostly up. For example, sales in the Korean and Australian markets were up substantially from September (on a SAAR basis). Sales in both countries were well above their selling rates at the end of last year. Sales are generally in line with economic developments, with Japan’s economy still struggling and much of rest of Asia continuing to enjoy economic strengthening.
