Sales of light vehicle globally were strong in June 2014.
14 Jul 2014 | 3609 Views | By Autocar Pro News Desk
Sales of light vehicle globally were strong in June 2014. According to market intelligence provider LMC Automotive, the market remains above the 87 million units per annum level again, on a seasonally adjusted basis, after similarly strong May sales.
The recent market improvers – China, the US, and Western Europe ...
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Sales of light vehicle globally were strong in June 2014. According to market intelligence provider LMC Automotive, the market remains above the 87 million units per annum level again, on a seasonally adjusted basis, after similarly strong May sales.
The recent market improvers – China, the US, and Western Europe – continued to offset weakness in other markets, notably in South America and Eastern Europe. Brazilian sales fell as the World Cup diverted consumer attention.
North America
Sales in the US posted another strong result in June and, with a Light Vehicle selling rate of close to 17 million units a year, the market could be considered as having fully recovered from the 2009 recession. However, LMC says it may be difficult to sustain this high level of sales in later months of the year, so overall 2014 sales are likely to be below 16.5 million units.
Likewise in Canada, sales remain at a high level and it is expected that the market may close in on, though perhaps not surpass, 1.8 million units.
Europe
Sales deteriorated further in Central and Eastern Europe in June as Russian sales dragged the regional total down. Russia was not the only concern though; sales are much weakened in Turkey and Ukraine. Some stability is expected to emerge in the coming months but a rapid turnaround is not likely this year.
In Western Europe, light vehicle sales continued to improve with a selling rate of 13.6 million units a year, running slightly ahead of LMC Auto’s full-year expectation. More slow and steady growth is expected in the remainder of this year.
China
Advance data indicates that the Chinese market has remained buoyant, with the June selling rate reaching 24 million units a year. While passenger vehicle sales were strong, Light Commercial Vehicle (LCV) sales were weak due to the uncertainty surrounding the implementation of China’s IV emission standards for LCVs. Looking ahead, the government’s recent mini-fiscal stimulus measures and some monetary easing are expected to help support the economy and vehicle sales. On the other hand, falling property prices in many cities may start to dampen consumer confidence.
Other Asian markets
The Japanese market has remained resilient after the consumption tax hike in April, in part due to back-orders that were still eligible for the lower tax. In particular, mini vehicles, which account for about 40 percent of sales in Japan, have continued to post a year-over-year gains.
In South Korea, the selling rate averaged a robust 1.6 million units a year so far this year, boosted by new model launches and strong sales of high-end imports. Yet a slowing economy suggests that such a pace may not be maintained in the coming months.
South America
As expected, the selling rate in Brazil fell below 3 million units a year in June, as consumers were busy watching the FIFA World Cup, which Germany won yesterday. Sales are projected to rebound after the competition, but the outlook remains clouded by tighter credit and high inflation. The IPI tax cut has been extended through to the end of this year, but its effectiveness to boost sales is questionable.
The market in Argentina has undergone a collapse in 2014 – the selling rate switched from the 900,000 units a year level in 2013 to a rate of closer to 600,000 units a year in the three months to May – and the current-year outlook is clouded further by risks associated with the ongoing debt negotiations.