The firm’s data shows that the seasonally adjusted annualised rate of sales dipped to 86.2 million units/year. LMCA said that this remains strong in almost any context, but weakening in emerging markets is of increasing concern.

It added that the US market recovered from the weather-constrained outcomes in January and February while European sales continued to slowly gain ground. Strong demand in China was supplemented by a pre-tax spike in Japan but Brazil and Turkey stood out as weak performers.

For the US, the company found that as the bad weather effects of January and February have now passed, US Light Vehicle sales bounced back with a selling rate of 16.1 million units/year in March. Light trucks continued to perform well, with smaller segment trucks especially strong.

Sales in Canada improved to 1.76 million units/year, remaining at near record levels.

West European sales once again stayed on track for recovery, though the 10% year-on-year increase is a little flattering since early 2013 marked the very lowest point in the market’s recent period of decline. The selling rate remained stable at 13.2 million units/year and slow expansion in 2014 remains the firm’s core assumption.

Risks, however, continued to grow in Central and Eastern Europe. While Russian sales were solid in March, the market in Turkey fell sharply – Light Vehicle sales were down 30% year on year – to a selling rate of 590,000 units/year, the lowest level for over four years. Furthermore, LMCA now expects the Russian market to contract again this year with weakening expected to become more evident in the coming months.

For China, according to preliminary data, the selling rate picked up to a near record-high of 23.3 million units/year in March from the holiday-adjusted February rate of 23.1 million units/year. Looking more closely, however, passenger vehicle sales decelerated, while light commercial vehicle sales kept apace.

LMCA believes that passenger vehicle sales have been pulled ahead as a result of the expectation that an increasing number of major cities will impose restrictions on car purchasing in order to reduce air pollution: the city of Hangzhou has just, in fact, announced such an intention. Another concern arises from increasing inventory at dealerships and OEMs.

In the economy, Beijing has recently revealed a series of measures to boost the sluggish economy, including rail, road and housing projects. The central bank has also shifted to monetary easing. Such measures could help support vehicle sales in the coming months.

In Japan, the consumption tax was raised on April 1st for the first time in 17 years. Ahead of the tax hike, vehicle sales surged, but the March selling rate of 6.1 million units/year was not as robust as expected. Nonetheless, a plunge in sales in the coming months will be unavoidable.

The South Korean market has kept a strong momentum, with the selling rate averaging 1.6 million units/year in the first quarter. However, downside risks to sales arise from heightened military tensions with North Korea and the rising unemployment rate.

For South America, the Brazilian market slowed sharply in March due, at least in part, to the Carnival holiday. Rising interest rates, stubbornly high inflation, and growing household debt have also dampened sales. The near-term sales outlook is darkening, as a slow recovery in investment is leading to a weakening job market.

In Argentina also, sales plunged in March, something that can be more directly attributed to the deteriorating economy. Rampant inflation, shortages of imports, and the rising risk of a financial crisis are undermining sales. Furthermore, the recent tax hike on high-end models has been a major blow to new car sales.