Global light vehicle market accelerates to new record
That’s the finding of the latest monthly report from LMC Automotive, which shows very strong sales seen in China, a robust performance in the US market, steady progress in Europe and strong Japanese sales. Meanwhile, sales in South America cooled.
For Europe, the report shows that West European light vehicle sales remained on an improving path, though the selling rate slowed a little in November, to 13 million units/year from last month’s 13.3 million units/year. The UK market remained strong, as it has done for much of 2013, though German and French sales disappointed somewhat.
Central and East European markets were firm, for instance in Turkey, while the important Russian market picked up speed after several disappointing months – the selling rate jumped to almost 3 million units/year – though it is possible that government market intervention may be creating near-term volatility.
For China, the preliminary data shows that the selling rate hit yet another record high of 23.5 million units/year in November, continuing to accelerate since this summer. Inventory fell to 1.29 months at the end of October, below an “alert level” of 1.5 months in China, which has boosted deliveries from OEMs to dealerships.
Consumers also rushed purchase cars on the expectation that many cities will soon begin to impose restrictions on vehicle sales in order to curb worsening air pollution. In December, however, it is possible that the sales pace will slow, as many OEMs are likely to “hide” many sales and report them as January sales to achieve their sales targets in the first quarter, says LMC Automotive.
Elsewhere in Asia, the selling rate in Japan continued to surge to a strong 5.5 million units/year in November, as consumers are now rushing to vehicle purchases ahead of the planned consumption tax hike in April 2014. Sales are, however, expected to decline next year due to the pull-ahead effect.
In South Korea, the selling rate remained solid at 1.5 million units/year last month, supported by expansionary fiscal and monetary policies. The recovery in the country’s large export sector should help support sales next year.
For South America, the Brazilian market appears to have resumed a downward trend, with the selling rate slowing to 3.4 million units/year in November after a surprisingly robust 3.7 million units/year in October. While consumer confidence remains in optimistic territory, rising interest rates and already high household debt are constraining sales.
In Argentina’s volatile market, the selling rate fell sharply to 819,000 units/year last month after an exceptionally strong one million units/year in October. While rampant inflation and a weakening peso have continued to encourage consumers to spend instead of save so far this year, sales are unlikely to continue to rise rapidly in the face of looming financial risks.
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