Movers & Shakers

May Arthapan, Director, Asia Pacific Forecasting

19 March 2019

We published a blog back in January flagging key issues to watch in the global auto industry in 2019, with a focus on macro drivers, including trade, Brexit and the latest news on what a global mover and shaker like China is up to. In this follow-up blog, we look at similar themes, but with a micro slant.

Who is winning?

VW Group looks set to maintain its position as the world’s largest automaker. But the interesting twist is that the German giant will strengthen its lead by widening the gap between its own global sales and those of its closest competitor, Renault-Nissan-Mitsubishi (RNM). VW sold 10.65 million Light Vehicles globally in 2018, outselling rival RNM by 348,000 units. The gap is expected to expand to 825,000 units this year and to more than a million units from 2020 onwards. There is little denying that the group’s success in the Chinese market has fostered its leadership position since 2013, when it overtook Toyota Group to claim the crown as the top global automaker. Second-placed Toyota Group was then usurped by RNM in 2017, bolstered by the acquisition of the Mitsubishi brand.

What products are trending?

The inexorable rise of SUVs is an unequivocal global phenomenon, with the body type becoming the most popular, on a worldwide basis, since 2017. With a global share of roughly 31% in 2018, SUV outsold its closest contender, hatchback, by six percentage points. We expect SUV share to continue to expand and approach 43% by the end of our forecast horizon in 2031, compared with an estimated drop in share to 17%, from 25% in 2018, for the hatchback segment. Sedan looks set to take third place, with a share of 14% over the timeframe. When it comes to Pickup Trucks, future share will likely remain significant, although that may have more to do with the love affair with the bodystyle in Thailand and the Americas than on the global stage.

In terms of powertrain, there is a clear, albeit gradual, trend against traditional internal combustion engine (ICE) models, driven largely by a push for electrification in China, and a need to de-dieselise in Europe, the lion’s share of which will be replaced by 48V mild hybrid. China’s CAFC rules, which regulate fuel consumption, will promote the adoption of 48V. These drivers explain why we anticipate an increase in global share for this technology. China’s New Energy Vehicle (NEV) requirements, meanwhile, will be the major impetus behind the increase in global BEV share.