So says LMC Automotive in its latest global light vehicle market report, adding that while Western Europe continues to make progress from a low level, and the US and China are still making headway, Eastern Europe and South America are finding the going much tougher.

The firm said that the figure of 1.0% for year-on-year improvement in the global light vehicle market was the weakest gain in over a year. With the selling rate averaging under 86 million units/year in the last three months, this is around one million units lower than the Q1 selling rate.

The West European Light Vehicle market expanded once again, though the rate of growth slowed to under 2% for August, partly reflecting one less selling day. The selling rate also slowed, to 13.2 million units/year, though the region remains on course for a solid improvement for 2014 (to circa 13.5 million units) after six years of falling sales.

In contrast, Eastern Europe continues to contract. The Russian market fell by 26% in August, pushing the cumulative decline for the first eight months of the year to 12%. It was recently announced that the Russian authorities were planning a new scrappage scheme running until the end of the year — while this will help the market in the final months of 2014, the outlook for 2015 for Russia looks bleak.

For China, preliminary data indicates that the August selling rate was 23.6 million units/year, up 3.6% from July. Looking at the recent trend, the selling rate has stopped rising and levelled off at about 23 million units/year since Q4 2013. While the selling rate of passenger vehicles has continued to trend upward, the selling rate of light commercial vehicles has been falling gradually since summer 2013.

In the passenger vehicle market, robust income growth is continuing to help boost sales, while a risk arises from the local governments’ restrictions on vehicle purchases (in order to reduce air pollution). In the light commercial vehicle market, sales in the recent months have been undermined by uncertainty over the impending China IV emission standard, which is expected to be much stricter than the current standard.

Japan’s August selling rate of 4.6 million units/year was the lowest rate since the consumption tax hike in April. While the job market is improving, inflation-adjusted real wages are still falling due to high inflation, constraining consumer spending.

The South Korean market slowed in August after a robust July, due in part to supply disruptions caused by partial labour strikes. A slowing economy and high household debt are among the concerns for the sales outlook.

For South America, in Brazil, the selling rate declined by nearly 10% to 2.8 million units/year in August, instead of rebounding after the World Cups. Tighter credit, a slowing job market, and an uncertain economic outlook are undermining consumer spending.

The Argentine market is holding up well after the country’s default on its debt at the end of July. The August selling rate of 633,000 units/year was better than expected. Yet the sales outlook remains bleak, as the recession is expected to deepen.