Global

Global Light Vehicle Sales Update
October 2019

Commentary

  • Global Light Vehicle (LV) sales fell 3.8% year-on-year (YoY) in October, while the selling rate dropped to 88.3 mn units/year, down slightly from the revised 90.3 mn units/year in September.
  • This uninspiring picture is in part due to one-off factors: the General Motors strike in North America; the consumption tax hike and the impact of typhoon Hagibis in Japan. The impact of further WLTP emissions testing in September 2019 has started to recede in Europe, but selling rates certainly have room to improve. China’s demand has softened again recently.

 

Global Light Vehicle Sales

 

Summary

North America

  • With average transaction prices at a record high of US$34,233, US sales totalled 1.3 mn units in October. This volume is 2% lower than in October 2018 and translates into an annualised selling rate of 16.5 mn units/year, down by 800k units from September. The steep decline was mostly caused by lower General Motors fleet sales, hurt by a strike that stopped production for six weeks. Overall fleet sales plunged by 14.4% in October, while retail sales were up by 0.9% to 1.1 mn.
  • Preliminary numbers indicate that Canadians bought 161k Light Vehicles in October, marginally down YoY. The annualised rate fell to 2.0 mn/year units from September’s 2.1 mn/year, though this was the fourth time this year that it was above 2 mn/year. Sales in Mexico plunged by 9.0% to 107k units, which represents a selling rate of 1.3 mn units/year.

 

Europe

  • Western European LV sales grew 6.6% YoY in October, due to a low base effect stemming from last year’s WLTP-related disruption. The selling rate rose to 15.5 mn units/year in October, from 14.9 mn units/year the previous month, itself the result of further WLTP changes on 1st However, the selling rate remains low, with the latest result the second-lowest result so far this year. Of the big five markets, four saw an increase in the selling rate this month, with only Spain’s rate falling.
  • Russian LV sales amounted to 152k in October, a YoY decline of 5.2%. Accounting for seasonal adjustment, the annualised rate for the month came in at 1.6 mn units/year, the second-weakest result of the year to date. Funding for a number of government incentives ran out towards the start of October, contributing to the downward trend.

 

China

  • According to preliminary data, sales in China lost momentum again in the face of the slowing economy. After exceeding 27 mn units/year in June, July and August, the selling rate slowed to 26 mn units/year for the second consecutive month in October. Note, however, that was still higher than the average selling rate of 24 mn units/year between January and May this year. On a YoY basis, sales declined by 4% in October, the 16th successive month of contraction.
  • Sales continue to be hampered by the timing of the launch of State VI-compliant vehicles, which varies depending on the region. Weak consumer and business confidence, as well as a slowing economy, are dampening sales, too. Sales of electric vehicles were particularly affected, due to reductions in government subsidies.

 

Other Asia

  • As expected, sales in Japan plunged in October, due to the consumption tax hike at the start of the month. Sales were also disrupted by the super typhoon, Hagibis, which severely flooded central and northern regions of Japan. The October selling rate was 4.2 mn units/year, down 24% from September, and the lowest rate since the Tohoku earthquake and tsunami in 2011. On a YoY basis, sales declined by 25% in October.
  • In South Korea, the selling rate exceeded a robust 1.7 mn units/year for the third consecutive month in October, despite a slowing economy, and the downturn of the country’s important electronics sector. Sales were supported by increasingly available WLTP-compliant imports, as well as the temporary car tax reduction, which is set to expire at the end of this year.

 

South America

  • Despite a near-2% decline in sales, the Brazilian market remains on its recovery path. According to preliminary numbers, 241k Light Vehicles were sold last month, which translates into a rate of 2.8 mn units/year, the second-highest this year. Brazilian sales passed the 2-million mark last month, about 20 days earlier than in 2018.
  • The market in Argentina continues to contract at a fast pace. Sales plunged by 33.8% in October to 31k Light Vehicles – so far this year, sales are down by 44.2%. At 352k units, the annualized rate has reached another low and was down by 42k units from September.

 

 

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