Global Light Vehicle Sales Poised for Modest Growth in 2013

OXFORD, England--Jan. 28, 2013: After a solid 2012, where Global light vehicle sales increased to 81 million units -- a 5 percent increase over the previous year -- LMC Automotive forecasts a slower expansion for 2013. Sales are expected to rise by 3 percent to 83 million units this year.

In 2012, regional performances varied strongly, however. Markets in North America and much of Asia faired well while those in Europe and, to a lesser degree, South America, suffered from underlying economic weakness, poor consumer confidence and on-going political/economic uncertainty.

"While some large markets have performed solidly in 2012, notably in the U.S. and China, the key macro-economic risks that prevailed during 2012 look likely to persist well into 2013 with negative implications, and an unbalanced risk profile, for Europe," said Pete Kelly, Managing director of LMC Automotive. "In our view, this regional variation will also be a feature for 2013."

Europe

West European light vehicle markets, having fallen in total by 9 percent in 2012, look likely to deteriorate further in 2013, with a drop in the 2-5 percent range - the baseline forecast being for a 3 percent drop to 12.7 million units. Some stabilizing offset has come from Eastern Europe, notably Russia where sales were up by 11 percent in 2012, but 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 America

In the U.S., continued recovery from the depths of the 2009 crisis led to a surge in light vehicle sales, to 14.5 million units in 2012, up by 14 percent. Encouragingly, the selling rate continued to improve throughout the year, ending on a high note of over 15 million units in December. North American light vehicle sales in 2013 are expected at 17.8 million units, an increase of 4 percent from 2012 as the U.S. market posts further growth at a slower rate.

"The U.S. 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 U.S. "It has been several years since the market faces more upside potential than downside risk."

Asia Pacific and China

China light vehicle sales (including imports) rose year-on-year by 6.2 percent to 19.1 million units in 2012, which was higher than the annual growth rate of 4.4 percent in 2011. This improvement was largely due to the phase-out of pay-back effects from the booming car sales during 2009-10, particularly in the light commercial vehicle sector. With the anticipated more favourable economic environment in 2013, the light vehicle market is expected to reach 21 million units, a 10 percent increase over 2012.

John Zeng, LMC Automotive's Asia Pacific director in Shanghai commented, "With a change in political leadership being formalized 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 percent and sales in India up by 12 percent. 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.