According to new data from LMC Automotive, last month saw the US and Western Europe continue to make progress. However, China sales slipped back by 7%, year on year, and the results from Russia and Brazil continued to reflect difficult economic conditions.

For the US, July US Light Vehicle sales stood at just over 1.5 million units — the strongest July since 2005 – translating into a selling rate of 17.5 million units/year. Two major segments, the Midsize SUV and the Large Pickup, experienced large gains YoY, which were helped by OEM incentives and low fuel prices. The US economy continues a slow-yet-steady pace of gradual improvement with consumer confidence remaining high and small incremental improvements in the labour market.

Canadian light vehicle sales were up marginally, surpassing the previous July record with sales reaching approximately 178k units — a selling rate of 1.95 million units/year.

Light vehicle sales in Western Europe continue to recover, helped by an improving economic backdrop and generally stronger consumer confidence than at the beginning of the year. With the risk of Greece exiting the Eurozone having been averted, at least for now, the solid sales growth momentum looks set to continue – full-year growth of 7% to 14.5 million units is forecast.

The picture in Eastern Europe remains heavily influenced by the tumbling Russian Light Vehicle market – Russian Light Vehicle sales were down 27.5% in July. While there are market support mechanisms (including extended funding for the scrappage scheme and a continuation of the preferential loan interest subsidy and preferential vehicle leasing schemes), a deteriorating economy and falling currency will continue to depress the market in the second half of 2015.

In China, advance data indicates that the market continued to decelerate markedly through July. The July selling rate was at a two-year low of 21.3 million units/year and down over 7% from June. Sales also declined by 7% in July – the second consecutive month of year-on-year decline, with both Passenger Vehicles and Light Commercial Vehicles lower. In the first seven months of the year, sales increased by a mere 1.5% relative to last year.

The July selling rate in Japan was an 11-month low of 4.6 million units/year, down nearly 8% from a relatively strong June. Sales of Mini Vehicles (which account for 40% of total Light Vehicle sales in Japan) continued to decline, due in part to the new stricter rules to qualify the eco-car tax exemptions.

The selling rate of the South Korean market continued to hover around 13-year highs, supported by record-low interest rates, low inflation, and rising real wages. Such a robust pace is not expected to be sustained though, according to LMCA, due to already high household debt and a slowing job market.

In Brazil, the July selling rate of 2.4 million units/year was unchanged from June. The market is, however, unlikely to have hit rock bottom yet. Consumer spending is increasingly constrained by soaring inflation and interest rates, the deteriorating job market, and a plunging currency.