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The latest Global Light Vehicle selling rate in November is stuck close to the 2020 pandemic year total of 78m units, according to LMC Automotive. In fact it appears to AutoInformed that the US is trending back to the Republican Great Recession levels of 12 million units. Semiconductors are at the heart of the supply crisis, according to the conventional wisdom.
However, the disruptions in supply chains are much deeper, with the pandemic returning in force with no end in sight. As the supply crisis continues in Europe and the Americas, the resulting scarce inventories are accompanied by higher prices, which eventually will be another problem hindering sales. Looming near term is a potential trade war with Canada, over proposed US incentives for union-made EVs. In parts of Asia, LMC claims that there are “some signs the worst of the crisis over, though demand will continue to be disrupted well into 2022.”
Europe
West European selling rate increased to 12m units/year in November, up from less than 11m units/year in October. “Although some improvement was seen in the latest result, it still reflected ongoing global supply issues currently hindering vehicle production,” said LMC. Consider: the result for 2019 was 16.3m units.
East European selling rate also improved last month, to 3.7m units/year. The modest uptick was helped on by Russia’s selling rate increasing to 1.6m units/year from 1.4m.
North America
US Light Vehicle sales fell by -15.8% Year-over-Year in November, to 1.01m units. The selling rate declined to 12.9m units/year. As has been the case for months, low inventory levels continued to haunt the market. Sales were restrained by supply‐side issues. However, transaction prices are increasing to new record highs at $44,515 in November. Incentive spending was down to an average of $1564 in November. At some point, if not now, affordability is an issue as well.
Canada LV sales decreased by -9.2% YoY in November, to117k units. The selling rate fell to 1.60m units/year in November, down from 1.64m units/year in October. November’s selling-rate was the weakest result since May, when the country was under COVID‐19 lockdowns. Low inventory continues. Some brands “that may have avoided a significant impact earlier in the year now being affected,” per LMC.
Mexico sales fell by -13.4% YoY in November, to 82k units, while the selling rate slowed to 867k units/year, the lowest rate since June 2020.
China
Advance data from the opaque Chinese market indicate an upturn in November, with improvements in the semiconductor supply. The November selling rate was 27.2M units/year, up 3% from October. That was the second highest rate so far this year and pushed the YTD average selling rate up to 25.5M units/year, almost the same level as total LV sales in 2019. YoY, sales declined by -6% in November, but expanded by 5% YTD. Are the worst of the supply issues gone?
In November, Chinese brands continued to perform well, but even foreign brands, such as VW, which had been severely impacted by the chip shortage, increased production markedly. NEVs (electric vehicles) remained the biggest factor in the market, expanding sales by 121% YoY. The Wuling Hongguang Mini BEV is set to become the best‐selling model this year, outselling the VW Lavida, which was in the top place in the last two years.
Elsewhere in Asia
Japan sales rebounded strongly in November, after two demanding months. The selling rate reached 4.5m units/year, +23% from a weak October, as OEMs secured parts, including semiconductors, and increased production. However, YoY sales declined for the fifth consecutive month. The half-full viewpoint shows the rate of the contraction slowed to -14.5% in November from more than -30% during the two previous months. The market is expected to finish 2021 with the third consecutive year of contraction.
The Korean market grew for the second consecutive month in November, as supply‐chain issues faded a bit. The November selling rate was 1.62M units/year, rallying from a 19‐month low of 1.4m units/year in September. This is still a listless rate, compared to the average of ~1.8m mn units/year in H1 2021. As the auto industry continues to wrestle with strong demand amidst the global supply disruptions, the government has extended the temporary excise tax cut on passenger vehicles again for six months to 30 June 2022.
South America
Brazilian LV sales fell by -25.1% YoY in November, to 161k units. The selling rate accelerated to 1.89m units/year in November, from 1.77m units/year in October. It was the strongest selling rate since June, but a rate below 2m units/year would be considered modest in normal circumstances. Although some OEMs are still pausing production, inventories are growing gradually. In November, inventories were up to 103.8k units from 93.5k units in October. This by LMC’s calculation would be enough for 18 days of sales.
In Argentina, LV sales declined by -20.8% YoY in November, to 26k units. However, the selling rate grew to 361k units/year, from 322k units/year in October. This was the strongest selling rate since June 2021. Due to the government‐imposed import restrictions, the five best‐selling LVs in Argentina in November were all locally built.
Back to the Future? November Global Sales Rate 80M
Click to Enlarge.
The latest Global Light Vehicle selling rate in November is stuck close to the 2020 pandemic year total of 78m units, according to LMC Automotive. In fact it appears to AutoInformed that the US is trending back to the Republican Great Recession levels of 12 million units. Semiconductors are at the heart of the supply crisis, according to the conventional wisdom.
However, the disruptions in supply chains are much deeper, with the pandemic returning in force with no end in sight. As the supply crisis continues in Europe and the Americas, the resulting scarce inventories are accompanied by higher prices, which eventually will be another problem hindering sales. Looming near term is a potential trade war with Canada, over proposed US incentives for union-made EVs. In parts of Asia, LMC claims that there are “some signs the worst of the crisis over, though demand will continue to be disrupted well into 2022.”
Europe
West European selling rate increased to 12m units/year in November, up from less than 11m units/year in October. “Although some improvement was seen in the latest result, it still reflected ongoing global supply issues currently hindering vehicle production,” said LMC. Consider: the result for 2019 was 16.3m units.
East European selling rate also improved last month, to 3.7m units/year. The modest uptick was helped on by Russia’s selling rate increasing to 1.6m units/year from 1.4m.
North America
US Light Vehicle sales fell by -15.8% Year-over-Year in November, to 1.01m units. The selling rate declined to 12.9m units/year. As has been the case for months, low inventory levels continued to haunt the market. Sales were restrained by supply‐side issues. However, transaction prices are increasing to new record highs at $44,515 in November. Incentive spending was down to an average of $1564 in November. At some point, if not now, affordability is an issue as well.
Canada LV sales decreased by -9.2% YoY in November, to117k units. The selling rate fell to 1.60m units/year in November, down from 1.64m units/year in October. November’s selling-rate was the weakest result since May, when the country was under COVID‐19 lockdowns. Low inventory continues. Some brands “that may have avoided a significant impact earlier in the year now being affected,” per LMC.
Mexico sales fell by -13.4% YoY in November, to 82k units, while the selling rate slowed to 867k units/year, the lowest rate since June 2020.
China
Advance data from the opaque Chinese market indicate an upturn in November, with improvements in the semiconductor supply. The November selling rate was 27.2M units/year, up 3% from October. That was the second highest rate so far this year and pushed the YTD average selling rate up to 25.5M units/year, almost the same level as total LV sales in 2019. YoY, sales declined by -6% in November, but expanded by 5% YTD. Are the worst of the supply issues gone?
In November, Chinese brands continued to perform well, but even foreign brands, such as VW, which had been severely impacted by the chip shortage, increased production markedly. NEVs (electric vehicles) remained the biggest factor in the market, expanding sales by 121% YoY. The Wuling Hongguang Mini BEV is set to become the best‐selling model this year, outselling the VW Lavida, which was in the top place in the last two years.
Elsewhere in Asia
Japan sales rebounded strongly in November, after two demanding months. The selling rate reached 4.5m units/year, +23% from a weak October, as OEMs secured parts, including semiconductors, and increased production. However, YoY sales declined for the fifth consecutive month. The half-full viewpoint shows the rate of the contraction slowed to -14.5% in November from more than -30% during the two previous months. The market is expected to finish 2021 with the third consecutive year of contraction.
The Korean market grew for the second consecutive month in November, as supply‐chain issues faded a bit. The November selling rate was 1.62M units/year, rallying from a 19‐month low of 1.4m units/year in September. This is still a listless rate, compared to the average of ~1.8m mn units/year in H1 2021. As the auto industry continues to wrestle with strong demand amidst the global supply disruptions, the government has extended the temporary excise tax cut on passenger vehicles again for six months to 30 June 2022.
South America
Brazilian LV sales fell by -25.1% YoY in November, to 161k units. The selling rate accelerated to 1.89m units/year in November, from 1.77m units/year in October. It was the strongest selling rate since June, but a rate below 2m units/year would be considered modest in normal circumstances. Although some OEMs are still pausing production, inventories are growing gradually. In November, inventories were up to 103.8k units from 93.5k units in October. This by LMC’s calculation would be enough for 18 days of sales.
In Argentina, LV sales declined by -20.8% YoY in November, to 26k units. However, the selling rate grew to 361k units/year, from 322k units/year in October. This was the strongest selling rate since June 2021. Due to the government‐imposed import restrictions, the five best‐selling LVs in Argentina in November were all locally built.