The company says that the regional variations seen in 2012 will also dominate in 2013, in particular for Europe, where the light vehicle markets fell 9% last year and are set to deteriorate further in 2013, with a drop of 2-5% – the baseline forecast being for a 3% drop to 12.7 million units. 

LMC added that although the downturn in Western Europe was offset by increased demand from Eastern Europe, notably Russia where sales were up by 11% in 2012, there is risk that growth in Eastern Europe may slow sharply in 2013.

‘While some European manufacturers have performed well through broad geographical diversity and strength in premium and export markets, those tied closely to the performance of European markets will find the going tough in 2013. Inventory accumulation in the context of continued overcapacity may haunt a number of European OEMs this year and beyond,’ said Justin Cox, head of European production forecasting at LMC Automotive’s Oxford, UK office.

North American light vehicle sales in 2013 are expected at 17.8 million units, an increase of 4 % from 2012 as the US market posts further growth at a slower rate, following a rise of 14% to 14.5 million units last year.

‘The US faces the hurdle of the budget and spending debate, but otherwise is set to be one of the few bright spots of the major markets around the world in 2013,’ said Jeff Schuster, senior vice president of LMC Automotive in the US. ‘It has been several years since the market faces more upside potential than downside risk.’

Looking at China, light vehicle sales (including imports) rose year-on-year by 6.2% to 19.1 million units in and is expected to reach 21 million units in 2013, a 10% increase over 2012.

John Zeng, LMC Automotive’s Asia Pacific director in Shanghai, commented: ‘With a change in political leadership being formalised in early 2013, the positive impact of the political-business cycle should provide support for vehicle demand. The sales momentum that started to rebuild in Q4 2012 also indicates a good start for the light vehicle market in Q1 2013.’

Meanwhile, other markets in the region are poised for further growth. India and the ASEAN region performed well in 2012, with ASEAN light vehicle sales rising by 40% and sales in India up by 12%. The outlook for 2013 is favourable for continued growth in the region.

‘We are likely to see slower growth in the Asia pacific region this year. While growth would remain relatively strong in China, India and Indonesia, 2013 looks to be a tough year for most other markets in the region. With the end of government incentives that propped up the market last year, vehicle demand is expected to decline in Japan and Thailand,’ said May Arthapan, Asia Pacific Director of LMC’s Bangkok office.