Like it or not the auto industry is global with wide-ranging effects across continents.
Global Light Vehicle (LV) sales fell- 8.2% year-on-year (YoY) in January, although the selling rate rose to 91.2-million units/year, from December’s 90.3-million units/year, according to consultancy LMC.
A worrisome ghost dancing across AutoInformed’s screen is that 2019 began in a cowed manner in most major markets with the weakness that has been evident for several months continuing. Chinese LV sales were again the most influential for the global market, with another double-digit YoY decline. China of course us is enmeshed in a Trump tariff tirade.
This is bad enough, but negative sales results in the Americas and Europe with their leaders playing the foil or fool to Trump’s increasingly irrational tantrums, decrees, tariffs and mockery of NATO are the antidote to our optimism about the global automotive economy, if not the global marketplace. (Wither US Automotive Sales? Uncertainties Abound Doomsday? No-Deal Brexit Impact on UK Light Vehicle Market Trump Tariffs Hurt New Auto Prices, Jobs, Consumers)
North America
U.S. consumers bought or leased 1,126,000 new LVs in January 2019, down by -2.4% YoY. This January performance means a selling rate of 16.6 million units/year, down almost 1,000,000 units from December 2018. As with 2018, January retail sales were down and fleet deliveries were up – by -6% and +10%, respectively. The 832,000 units sold by dealerships were affected by a higher negotiated price (up by 2.4% to $36,542) and lower cash incentives (down by -0.7% to $1,548).
Canada and Mexico sold roughly the same volumes in January – 111,000 LVs each. However, this volume represents a decline of -5% YoY in Canada, the third consecutive negative result, while sales in Mexico grew for the first time in 19 months, up by 2.2% YoY. The annualized rate was stronger in Canada, at 1.96 million units/year, compared to 1.37-million units/year in Mexico.
Europe
Western European LV registrations were down -4.4% YoY in January. However, the selling rate increased from 14.7-million units/year in December to 16.4-million units/year in January. After several months slow selling rates from the disruption caused by the introduction in September of the WLTP emissions testing because of widespread diesel emissions cheating by makers, a rate above 16-million units/year represents maybe a return to normality, given that total West European LV sales were 16.2-million units in 2018. The January 2019 tally looks good since January 2018 saw Western Europe’s highest selling rate since August 2007.
Russian LV sales for January came in at 103,000, an increase of 0.6% YoY. This represented a significant slowdown compared to the mainly double-digit growth rates recorded in recent months (and the 12.8% increase achieved for 2018 as a whole). However, the increase in the VAT rate – from 18% to 20% on 1 January 2019 – should have prompted a more significant pull-forward in demand into Q4 2018 at the expense of Q1 2019. January’s selling rate was unchanged from that of December 2018, at 1.9-million units/year.
China
Advance and always suspect data show that the Chinese market is off to a sluggish start in the New Year. The January selling rate was 25.2-million units/year, down 2.3% from December. On a YoY basis, sales fell by 16% in January, the fifth consecutive month of double-digit decline in mostly Personal Vehicle sales. The weak outcome can be attributed to de-stocking at dealerships, as the inventory level in Q4 2018 was high.
The sales outlook this year remains uncertain at best, due to the ongoing US-China trade spat, which at the moment to mix metaphors looks to be a Mexican standoff. Sales could be swayed by the timing of the planned implementation of the State VI emissions standard, as well as the mandatory sales quota of New Energy Vehicles for OEMs, which just went into place this year with unknown consequences, On the ‘two-handed economist’ positive side, the government is increasing stimulus measures, which could help sales.
Non-Chinese Asia
The Japanese market started 2019 solidly, with sales growing 2% YoY, and the selling rate reaching 5.6-million units/year in January. Sales are expected to leap before the planned consumption tax hike on 1 October 2019. LMC claims, the swings in sales are now likely to be mild, as the government has announced a series of measures to cushion the negative impact of the tax hike on vehicle sales.
The South Korean market is off to a lifeless start in the New Year, with LV sales up 1.2% YoY in January, and a, well, pedestrian selling rate of just above 1.7-million units/year. The sharp deceleration in the country’s export sector clouds the LV sales outlook, although the government’s fiscal stimulus measures could support sales this year.
South America
Following the financial rally owing to the inauguration of Brazil‘s new president, Jair Bolsonaro, LV sales rose by 8% YoY to 191,000 units. The January selling rate was 2.6-million units/year, which was an increase of 356,000 units from December 2018.
In Argentina, detrimental economic conditions, such as soaring inflation and interest rates, once again took a toll on vehicle sales. Usually the strongest month of the year, January saw sales of 58,000 units, which is a decline of 50% YoY. The January selling rate was only 500,000 units, 65,000 units fewer than that of the previous month, and about half of the rate in January 2018.
Global Light Vehicle Sales Start New Year with a Whimper
Like it or not the auto industry is global with wide-ranging effects across continents.
Global Light Vehicle (LV) sales fell- 8.2% year-on-year (YoY) in January, although the selling rate rose to 91.2-million units/year, from December’s 90.3-million units/year, according to consultancy LMC.
A worrisome ghost dancing across AutoInformed’s screen is that 2019 began in a cowed manner in most major markets with the weakness that has been evident for several months continuing. Chinese LV sales were again the most influential for the global market, with another double-digit YoY decline. China of course us is enmeshed in a Trump tariff tirade.
This is bad enough, but negative sales results in the Americas and Europe with their leaders playing the foil or fool to Trump’s increasingly irrational tantrums, decrees, tariffs and mockery of NATO are the antidote to our optimism about the global automotive economy, if not the global marketplace. (Wither US Automotive Sales? Uncertainties Abound Doomsday? No-Deal Brexit Impact on UK Light Vehicle Market Trump Tariffs Hurt New Auto Prices, Jobs, Consumers)
North America
U.S. consumers bought or leased 1,126,000 new LVs in January 2019, down by -2.4% YoY. This January performance means a selling rate of 16.6 million units/year, down almost 1,000,000 units from December 2018. As with 2018, January retail sales were down and fleet deliveries were up – by -6% and +10%, respectively. The 832,000 units sold by dealerships were affected by a higher negotiated price (up by 2.4% to $36,542) and lower cash incentives (down by -0.7% to $1,548).
Canada and Mexico sold roughly the same volumes in January – 111,000 LVs each. However, this volume represents a decline of -5% YoY in Canada, the third consecutive negative result, while sales in Mexico grew for the first time in 19 months, up by 2.2% YoY. The annualized rate was stronger in Canada, at 1.96 million units/year, compared to 1.37-million units/year in Mexico.
Europe
Western European LV registrations were down -4.4% YoY in January. However, the selling rate increased from 14.7-million units/year in December to 16.4-million units/year in January. After several months slow selling rates from the disruption caused by the introduction in September of the WLTP emissions testing because of widespread diesel emissions cheating by makers, a rate above 16-million units/year represents maybe a return to normality, given that total West European LV sales were 16.2-million units in 2018. The January 2019 tally looks good since January 2018 saw Western Europe’s highest selling rate since August 2007.
Russian LV sales for January came in at 103,000, an increase of 0.6% YoY. This represented a significant slowdown compared to the mainly double-digit growth rates recorded in recent months (and the 12.8% increase achieved for 2018 as a whole). However, the increase in the VAT rate – from 18% to 20% on 1 January 2019 – should have prompted a more significant pull-forward in demand into Q4 2018 at the expense of Q1 2019. January’s selling rate was unchanged from that of December 2018, at 1.9-million units/year.
China
Advance and always suspect data show that the Chinese market is off to a sluggish start in the New Year. The January selling rate was 25.2-million units/year, down 2.3% from December. On a YoY basis, sales fell by 16% in January, the fifth consecutive month of double-digit decline in mostly Personal Vehicle sales. The weak outcome can be attributed to de-stocking at dealerships, as the inventory level in Q4 2018 was high.
The sales outlook this year remains uncertain at best, due to the ongoing US-China trade spat, which at the moment to mix metaphors looks to be a Mexican standoff. Sales could be swayed by the timing of the planned implementation of the State VI emissions standard, as well as the mandatory sales quota of New Energy Vehicles for OEMs, which just went into place this year with unknown consequences, On the ‘two-handed economist’ positive side, the government is increasing stimulus measures, which could help sales.
Non-Chinese Asia
The Japanese market started 2019 solidly, with sales growing 2% YoY, and the selling rate reaching 5.6-million units/year in January. Sales are expected to leap before the planned consumption tax hike on 1 October 2019. LMC claims, the swings in sales are now likely to be mild, as the government has announced a series of measures to cushion the negative impact of the tax hike on vehicle sales.
The South Korean market is off to a lifeless start in the New Year, with LV sales up 1.2% YoY in January, and a, well, pedestrian selling rate of just above 1.7-million units/year. The sharp deceleration in the country’s export sector clouds the LV sales outlook, although the government’s fiscal stimulus measures could support sales this year.
South America
Following the financial rally owing to the inauguration of Brazil‘s new president, Jair Bolsonaro, LV sales rose by 8% YoY to 191,000 units. The January selling rate was 2.6-million units/year, which was an increase of 356,000 units from December 2018.
In Argentina, detrimental economic conditions, such as soaring inflation and interest rates, once again took a toll on vehicle sales. Usually the strongest month of the year, January saw sales of 58,000 units, which is a decline of 50% YoY. The January selling rate was only 500,000 units, 65,000 units fewer than that of the previous month, and about half of the rate in January 2018.