Total 2017 global light vehicle sales will reach 93.5 million
units, a growth rate of 1.5 percent over 2016, according to the
most recent forecast from IHS Markit (Nasdaq: INFO), a world leader
in critical information, analytics and solutions. However, industry
risk in mature markets is at the highest level it has been since
the Lehman Brothers collapse and global industry downturn from 2008
through 2010, and will be a key factor for the near future. Engine
propulsion options are expected to have an influence as well.
“Political uncertainty could cause a significant rift in light
vehicle sales both in the U.S. and Europe, as both regions are
undergoing fluctuations in policy, leadership and other dynamics,”
said Henner Lehne, senior director, global vehicle group for IHS
Markit.
In addition, IHS Markit forecasts in 2017 the decline of diesel
vehicle sales share in Europe will further accelerate more than the
European light vehicle market has experienced in the last decade.
This represents just the start of a growing trend of diesel decline
expected in the coming years, due in part to significant challenges
around RDE regulation alongside the arrival of the EU6d emission
standards.
Despite the daily publicity, sales of BEV (battery electric
vehicles) and PHEV (plug-in hybrid electric vehicles) light
vehicles also were relatively flat between 2015 and 2016, according
to IHS Markit analysis, despite the ever-present longer-term growth
fundamentals. Global BEV production remains significantly below 1
million units and will represent just 0.7 percent of new vehicle
supply globally in 2017, according to IHS Markit forecasts.
The majority of global growth can be attributed to a revised
Chinese automotive legislative regime, as Chinese-targeted auto
excise duty incentives are expected to continue through 2017,
albeit at a lower rate of 7.5 percent for qualifying vehicles (up
from 5 percent in 2016). Provisional figures analyzed by IHS Markit
suggest that China accounted for approximately 76 percent of the
2016 volume growth in global auto sales, with December being the
last month of a full-tax break stimulus program.
The mature markets, together with China, were key to the overall
2016 automotive growth story, according to IHS Markit, with
provisional 2016 year-end total industry volumes set at 92.1
million units globally, up 4.6 percent, with counter-synchronized
auto sales cycles across regions.
Looking forward, IHS Markit expects China to continue to be the
world’s largest car market for the foreseeable future, and has
upgraded its 2017 China forecast to 28 million units (up 1.9
percent) and expected payback effects will now be in play for 2018
(slipping 0.8 percent).
U.S. auto sales have lost some momentum already this year, and
the change of administration somewhat complicates the near-term
picture. The policies and changes proposed by the Trump
administration regarding trade and environmental regulations
creates some uncertainty, countered by a slightly improved economic
picture for 2018–21, according to IHS Markit analysis. It is
difficult (and unlikely) to sustain and continue to grow at the
same rates the U.S. market has seen over the past 8 years, and a
leveling off is underway. In 2017, IHS Markit forecasts U.S. light
vehicle sales at an unchanged 17.4 million units, a slight
moderation on 2016 levels, down just 1.0 percent.
For Western Europe, Brexit uncertainty, banking fears, and
election concerns are on the agenda for the EU projection—and after
a decent 2016 (up 6.2 percent), the market could lose momentum for
2017, though IHS Markit forecasts the industry will close out the
year with 1.0 percent growth. The outcomes of elections in France
and Germany could skew consumer confidence and policy, and
therefore influence new vehicle purchases. From a manufacturing
perspective, the recent hard Brexit announcements had various
automakers publicly state that they would need to revisit the terms
of their investments, though some had made agreements with the UK
government following the Brexit announcement, which intensifies the
risk to UK-based auto manufacturing.
After four consecutive years of decline, the light vehicle sales
market in Russia seems to have finally reached its bottom. IHS
Markit forecasts a growth rate of 8.25 percent for 2017 – even
considering the expected stagnation in the coming 4-6 months.
According to forecasts, in the second half of 2017, a slight
recovery is expected as the light vehicle sales market will profit
from somewhat improved energy prices, a stabilized exchange rate
and improved consumer expectations. However, sanctions will remain
a key negative driver, but IHS Markit also acknowledges upside
“risk of recovery.”
South Asian demand should recover further in 2017 and light
vehicle sales in the region are expected to be 5.9 percent in 2017,
but India is expected to feel a negative demonetization impact and
limit 2017 growth to just 7.7 percent. Meanwhile, Association of
Southeast Asian Nations (ASEAN) car markets are forecast to
accelerate by 4.6 percent as recoveries continue in key markets.
Japan and South Korea remain similarly depressed by tax-related
hangovers and economic (Japan) and political (Korea) concerns.
Brazil remained firmly in the red for 2016, but appears to be
close to the cyclical low. According to IHS Markit forecasts, the
country should regain momentum through 2017 (up 1.1 percent). The
Middle East region is also forecast to stabilize, supported by oil
prices and the end of Iranian sanctions, with light vehicle sales
forecast to grow 1.3 percent from 2016.
IHS Markit 2017 Global Light Vehicle Sales Forecast
CY 2016 CY 2017
% Change2016/2017
Greater China 28.0 28.5
1.9% North America 21.1 21.0
-0.6% West Europe 15.8 16.0
1.0% South Asia 7.9 8.3
5.9% Japan/Korea 6.7 6.7
1.0% MEA 4.8 4.8
0.6% Central/East Europe 4.0 4.1
4.5% South America 3.9
4.0 2.1%
92.1
93.5 1.5%
Note: Volumes in millionsSource: IHS Markit, February 2017
About IHS Markit
(www.ihsmarkit.com)
IHS Markit (NASDAQ: INFO) is the automotive industry’s leading
source for market-wide insight, expertise and advanced planning
solutions. With a reputation of enabling better decisions and
better results for nearly a century, the world’s leading OEMs,
suppliers and their transportation partners rely on IHS Markit to
power growth, improve efficiency and drive a sustainable
competitive advantage.
Automotive offerings and expertise at IHS Markit span every
major market and, the entire automotive value chain -- from product
planning to marketing, sales and the aftermarket. Headquartered in
London, the automotive team is part of the IHS Markit information
and analytics powerhouse that includes more than 15,000 colleagues
in 150 countries, covering energy, chemical, aerospace and defense,
maritime, financial, technology, media and telecommunications. For
additional information, please visit www.ihsmarkit.com or email
automotive@ihsmarkit.com.
IHS Markit is a registered trademark of IHS Markit Ltd. All
other company and product names may be trademarks of their
respective owners © 2017 IHS Markit Ltd. All rights reserved.
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