Global

Global Light Vehicle Sales Update
December 2019

Commentary

  • Global Light Vehicle (LV) sales grew 1.1% year-on-year (YoY) in December, while the annual total for 2019 stands at 90.3 mn units, 4.4% lower than 2018.
  • Once again, results for both the year and the month are unimpressive, bolstered by strong December results in Western Europe but hindered by the consumption tax hike in Japan, rising prices in the US, and the continuation of disappointing China sales results

 

Global Light Vehicle Sales

Summary

North America

  • US Light Vehicle sales fell by 6.4% in December, to 1.52 mn units, hindered by prices rising by 3.2%, incentives falling by 2.2%, and the loss of one selling day in comparison to December 2018. December’s selling rate fell to 16.8 mn units/year, down from 17.1 mn units/year in November. For 2019 overall, sales fell by 1.4%, to just under 17.0 mn units, the first year that sales have not reached 17 mn units since 2014.
  • Canadian Light Vehicle sales are estimated to have fallen by 4.4% in December, to 110k units. The selling rate dropped to 1.7 mn units/year in December, finishing a year in which sales decreased to just over 1.9 mn units, down by 3.4%. In Mexico, sales declined by 8.4% in December, to just under 130k units. The selling rate dropped below 1.2 mn units/year, as the year closed with an 8% annual fall.

 

Europe

  • West European LV registrations grew by 18.4% YoY in December. This particularly strong headline result, buoyed by substantial YoY growth in all five major economies, demonstrates further recovery from the September low. A weak December 2018 explains part of this YoY improvement, though the relatively strong selling rate activity suggests some pull-forward in sales prior to the 2020 CO2 In full-year terms, registrations rose by a more modest 0.8% to 16.3 mn units, kept from negative growth territory by December’s strong result.
  • Russian Light Vehicle sales came in close to our latest forecast in December, leaving the total market at just under 1.76 mn units for the year (-2.3%). A total of 179k units were sold in the final month of 2019, a 2.3% increase and the best YoY result of 2019. The seasonally-adjusted annual running rate (SAAR) came in at 1.88 mn/year units, narrowly below the November SAAR. The market was expected to hold up well in the last two months of 2019 as a result of forward buying ahead of January 2020 price increases. However, given the high possibility of weak income growth, the market may suffer another small decline in 2020.

 

China

  • According to preliminary data, the Chinese market ended 2019 on a subdued note. The December selling rate was 26.2 mn units/year, up marginally from November. On a YoY basis, sales declined by 1.2% in December, extending the contraction to the 18th month. In 2019 as a whole, total Light Vehicle sales declined by 8.3% to 25.4 mn units, the second consecutive year of contraction and the worst YoY performance in at least two decades.
  • There are, however, signs that sales in lower tier cities are bottoming out and so are sales of Light Trucks, which were hit hard by the tightening regulations on overloading last year. With some progress in the US-China trade negotiations, consumer and business confidence are likely to improve, raising expectation that the market will stabilize this year.

 

Other Asia

  • The Japanese market ended 2019 on a subdued note, as the consumption tax hike on 1 October 2019 continued to weigh down consumer spending on new vehicles. The December selling rate was 4.7 mn units/year, flat from November. Total 2019 Light Vehicle sales were 5.13 mn units, down 1.4% from 2018. The surge in sales before the tax hike was not as large as expected, but the slowdown in Q4 2019 was steep.
  • In South Korea, preliminary data indicate that the selling rate surged to a robust 1.9 mn units/year in December before the temporary tax cut on Passenger Vehicles expired at the end of 2019. The launch of the Tesla Model 3 helped boost sales, too. On a YoY basis, sales increased by nearly 9% in December, bringing total Light Vehicle sales in 2019 to 1.75 mn units, a good result, though a 1.6% decline from 2018.

 

South America

  • Brazilian LV Sales grew by 11.6% in December, reaching 252k units. Despite the robust year-on-year growth, the selling rate fell to 2.67 mn units/year, from 2.72 mn units/year in November. 2019 was the third consecutive year of recovery from 2016’s low point, but the rate of growth slowed to 7.6%, from 13.9% in 2018.
  • In Argentina, LV sales fell by 25.4% in December, to 20k units. According to preliminary data, Argentina saw the largest percentage decline in sales of any country in 2019, at 43.1%. An annual total of 438k units was the worst performance since 2006, although the selling rate improved to 426k units/year in December, from 350k units/year in November.

 

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