LMC Automotive Global Light Vehicle Sales Update (March 2018)

2018/04/20

  • Global Light Vehicle sales grew by 1.2% year-on-year (YoY) in March. The selling rate rose to 94.1 mn units/year in March, up from 93.6 mn units/year in February.
  • In contrast to February, Western Europe suffered a YoY fall in Light Vehicle sales in March, but there was strong growth in the USA. Eastern European and South American markets continued their recoveries. There was a modest YoY increase in sales in China, while the Japanese and Korean markets dipped slightly.



Commentary

North America

  • In the US, new Light Vehicle sales finished March with 1,652,000 units sold, up 6.5% from a year ago. Although there was an extra selling day this year, this was the strongest gain since February 2016. This March performance translates into a selling rate of 17.4 mn units/year, up 400k from February’s figure. Retail sales totalled 1,283,000 units, and fleet represented 22.3% of sales, compared to 25.4% in February. Vehicle prices averaged $35,848 in March, in line with the previous month, but incentives grew to $1,823 from $1,592.
  • Sales in Canada inched down 0.6% YoY, to just under 187,000 units, which translates into a selling rate of 2.04 mn units/year, down 200k from February. Preliminary Mexico sales figures indicate a plunge of 12.9% YoY, to 119,000 vehicles. Easter was celebrated in March in 2018, but in April in 2017, contributing to the fall.

Europe

  • West European Light Vehicle registrations fell by 5.8% YoY in March. The UK market, in which March is one of the highest-volume months of the year, acted as a significant drag on the region, as sales were down 14.9% YoY. However, Germany and Italy also saw YoY falls, of 3.6% and 4.4% respectively, while France and Spain only saw modest gains. Although some markets had fewer selling days than a year ago, the West European Light Vehicle selling rate still fell to 16.0 mn units/year, from 16.9 mn units/year in February.
  • Russian buyers purchased 157k LVs in March, a 13.9% YoY increase. This was the weakest result of 2018 in YoY terms, but this may be partly explained by there being one fewer working day in March 2018 than in the prior year. There is also a higher base effect, as March 2017 saw the first increase for many months at that time, contributing to the slightly weaker YoY rise last month.

China

  • In China, the selling rate picked up slightly to 28.8 mn units/year in March, and averaged 28.3 mn units/year in Q1 2018. That is a modest slowdown, compared to last year’s total Light Vehicle sales of 28.6 mn units, but a good result, given that the temporary purchase tax on smaller vehicles expired in December 2017. On a YoY basis, sales increased by 3.2% in March and 2.4% in Q1 2018, driven by resilient Passenger Vehicle sales.
  • Looking ahead, China’s economic and sales outlooks are increasingly uncertain, due to the escalating trade frictions with the US. In an apparent effort to reduce some tensions, the Chinese government has continued to let the yuan appreciate sharply, which could start to dampen exports and the wider economy. Manufacturing and services PMIs both weakened in March, suggesting that the economy has lost some momentum.

Other Asia

  • The Japanese market ended Q1 on a lacklustre note, with the March selling rate being just below 5 mn units/year, virtually unchanged from February. Although the 5 mn-unit rate is not a bad result for Japan’s shrinking market, it was a slowdown, compared to the 5.5 mn-unit rate in Q2 2017. The strengthening yen and the clouding global export environment are dampening consumer and business confidence.
  • As expected, sales in South Korea rebounded in March after being disrupted by the PyeongChang Winter Olympic Games and the Lunar New Year in February. The selling rate reached just below 1.8 mn units/year in March. On a YoY basis, however, sales declined by 1.4% in March and 0.3% in Q1. While the geopolitical tensions with North Korea have eased, the rising trade frictions between the US and China present a threat to the South Korean economy and vehicle sales.

South America

  • Sales in Brazil continue to improve, with the March selling rate reaching 2.4 mn units/year. On a YoY basis, sales increased by 8.5% in March and 14.5% in Q1 2018, supported by falling inflation, record-low interest rates and the strengthening labour market. Yet, political uncertainty over the October presidential election remains a risk for the economy and thus vehicle sales.
  • The Argentine market remains robust, thanks to the tax cut on vehicles that went effect on 1 January. High inflation (26% YoY in February) must also be encouraging consumers to spend on durable goods, instead of saving. In Q1 2018, the selling rate averaged 970k units/year and sales increased by 17% YoY.

 

Sales (units) Selling rate (Units/year)
March
2018
March
2017
Percent Change Year to date
2018
Year to date
2017
Percent Change March
2018
Year to date
2018
Year
2017
Percent Change
WORLD
9,361,355
9,251,769
1.2%
24,160,459
23,588,810
2.4%
94,075,408
94,216,974
95,333,160
-1.2%
USA
1,652,433
1,552,235
6.5%
4,103,770
4,022,913
2.0%
17,378,787
17,163,565
17,183,864
-0.1%
CANADA
186,559
187,635
-0.6%
429,388
421,689
1.8%
2,042,617
2,227,050
2,041,609
9.1%
WESTERN EUROPE
1,912,404
2,029,952
-5.8%
4,409,602
4,415,596
-0.1%
15,989,052
16,701,617
16,200,662
3.1%
EASTERN EUROPE
397,492
367,041
8.3%
991,677
874,038
13.5%
4,528,922
4,646,756
4,223,947
10.0%
JAPAN
660,602
678,779
-2.7%
1,523,975
1,555,522
-2.0%
4,982,775
5,019,766
5,164,249
-2.8%
KOREA
162,593
164,973
-1.4%
417,308
418,696
-0.3%
1,797,615
1,719,481
1,751,938
-1.9%
CHINA
2,574,353
2,493,691
3.2%
7,080,667
6,916,504
2.4%
28,783,561
28,347,513
28,603,646
-0.9%
BRAZIL / ARGENTINA
281,023
259,490
8.3%
789,200
684,109
15.4%
3,365,559
3,305,277
3,045,263
8.5%
OTHER
1,533,897
1,517,973
1.0%
4,414,873
4,279,743
3.2%
15,206,521
15,085,948
17,117,982
-11.9%
Notes: The percentage change in the final column compares the average selling rate in the year-to-date with the last full year.
Late reporting countries and estimates are included in "Other".
Eastern Europe includes Turkey.
China includes estimate of light vehicle imports.

For further information or inquiries for forecast data, please refer to LMC Automotive's products.