LMC Automotive Global Light Vehicle Sales Update (June 2020)

2020/07/15

Summary

  • Global Light Vehicle (LV) sales fell by 18.1% in June, with the selling rate standing at 75.6 mn units/year. While the latest results are still well below healthy market levels, they do represent a continuing improvement from the April low. With lockdowns being lifted across much of the world, recovery appears to be underway, though a sizeable risk of deterioration remains.
  • Korea and China continue the positive YoY growth that began in May. Regional declines in other areas show continuing improvement on the nadir of April.



Commentary

North America

  • US Light Vehicle sales fell by 26.2% YoY in June, to 1.11 mn units, while the selling rate increased to 13.1 mn units/year from 12.2 mn in May. Although retail had its worst June since 2011, it performed much better than fleet thanks to incentives. They were above USD4,000 for the 12th month in a row, helping retail to decline by just 14.2% YoY, compared to a 68.6% plunge in fleet deliveries. Fleet sales accounted for just 9.5% of the total in June, up from 8.2% in May.
  • Canadian Light Vehicle sales are estimated to have fallen by 23.5% YoY in June, to 145k units. The selling rate climbed to 1.52 mn units/year in June, up from 1.16 mn units/year in May. Although this remains significantly below the almost 2 mn units/year rate seen in the first two months of 2020, it was an encouraging hint of nascent recovery. Mexican Light Vehicle sales were down by 41.1% YoY, while the selling rate accelerated to 786k units/year in June, up from 551k units/year in May.

Europe

  • West European LV registrations fell by 26.7% year-on-year (YoY) in June, while the regional selling rate stood at 11.5 mn units/year. Improvement across the region is highly variable with French Passenger Vehicle sales actually increasing YoY for the first time since the pandemic began. From the record-low in April, the May improvement has continued into June, though it is clear that demand remains very depressed and COVID-19 continues to weigh heavily on the regional economy.
  • East European LV sales fell by 8.6% in June, to 329k units for the month, noticeably stronger than most other regions, thanks in no small part to strong YoY growth in Turkey. The selling rate for the month increased again to 3.6 mn units/year, after an improvement in May, indicating steady recovery from April’s low.

China

  • According to advance data, wholesales in China continued to rebound strongly in June. The June selling rate reached 28.8 mn units/year, exceeding the pre-COVID-19 crisis level of 26.2 mn units/year in Q4 2019. On a YoY basis, sales increased by 6.0% in June. The concern over the pandemic, as well as aggressive discounts, appear to be encouraging consumers to buy their own vehicles.
  • So far, however, the main driver of the recovery was Light Commercial Vehicles (LCVs), which increased by almost 40% YoY in Q2. LCV sales were boosted by the implementation of the State VI emission standards, the crackdown of overloading, and booming e-commerce. Looking ahead, rising tensions with the US and an uncertain global outlook remain risks for the economic and sales outlooks.

Other Asia

  • The Japanese market has started to recover after the COVID-19 state of emergency was lifted in the entire nation in May. The June selling rate reached 4 mn units/year, up 32% from May. On a YoY basis, however, sales declined by 23% in June and 20% in H1 2020. The resurgence of new coronavirus cases and weak confidence are likely to hamper a quick rebound in the market.
  • In Korea, June registered the highest monthly sales on record, thanks to the temporary excise tax cut on PVs. The selling rate spiked to an all-time high of 2.3 mn units/year in June, up 20% from a robust May. On a YoY basis, sales increased by an impressive 42.5%, due partly to a low base. The concern over the coronavirus is encouraging consumers to purchase vehicles, too, to avoid public transportation.

South America

  • After two months under the 100k mark, Brazilian Light Vehicle sales ended June at 122k units, down by 42.7% YoY. Although the signs of the beginnings of recovery are there, it is estimated that 25% of this volume can be attributed to delayed registrations stemming from the closure of Department of Motor Vehicles offices in April and May. The selling rate accelerated from 704k units/year in May to 1.46 mn units/year in June.
  • In June, Argentina experienced its first YoY sales growth since May 2018. Sales were up by 1% YoY, to almost 35k units, making the selling rate increase from 245k units/year in May to 396k units/year in June, the strongest rate since December 2019.

 

Sales (units) Selling rate (Units/year)
Jun
2020
Jun
2019
Percent Change Year to date
2020
Year to date
2019
Percent Change Jun
2020
Year to date
2020
Year
2019
Percent Change
WORLD
6,363,889
7,772,783
-18.1%
32,609,072
45,080,575
-27.7%
75,600,233
66,263,213
90,323,332
-26.6%
USA
1,113,327
1,507,568
-26.2%
6,415,568
8,403,177
-23.7%
13,122,595
13,135,470
16,991,330
-22.7%
CANADA
144,851
189,297
-23.5%
657,773
985,205
-33.2%
1,520,653
1,387,489
1,927,737
-28.0%
WESTERN EUROPE
1,134,580
1,548,291
-26.7%
5,195,470
8,708,885
-40.3%
11,483,913
10,031,932
16,284,129
-38.4%
EASTERN EUROPE
328,904
359,776
-8.6%
1,538,647
1,970,042
-21.9%
3,642,570
3,367,640
4,127,016
-18.4%
JAPAN
342,609
443,976
-22.8%
2,177,689
2,718,459
-19.9%
4,042,751
4,178,631
5,128,473
-18.5%
KOREA
201,994
141,721
42.5%
914,401
849,638
7.6%
2,289,126
1,828,546
1,750,320
4.5%
CHINA
2,186,167
2,061,663
6.0%
9,761,293
12,132,215
-19.5%
28,793,100
20,269,970
25,500,447
-20.5%
BRAZIL / ARGENTINA
157,746
248,711
-36.6%
909,591
1,491,629
-39.0%
1,856,650
1,925,142
3,105,825
-38.0%
OTHER
753,710
1,271,780
-40.7%
5,038,640
7,821,325
-35.6%
8,848,875
10,138,394
15,508,056
-34.6%
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.