China Automotive Monthly - Market Trends (08.12)

Formerly J.D. Power Automotive ForecastingOxford ●Detroit ●Frankfurt ●Bangkok ●ShanghaiWebsite: ‐auto.com; email: forecastingasia@lmc‐auto.com2012China Automotive MonthlyMarket TrendsAugust, 2012Published by LMC AutomotiveAugust, 2012                                                                       China Automotive Monthly –Market Trends ©LMC Automotive Ltd, 2012. All rights reserved in all countries2PerspectiveAccordingtoLMCAutomotive,globallight‐vehiclesalesareexpectedtoreach79.4millionunitsin2012,outperforming2011’srecordlevelof75.5millionunitsby5percent.Globallight‐vehiclessalesthroughthefirsthalfof2012setaveryrobustsellingrateof80millionunits,askeymarketsincludingtheUnitedStates,JapanandChinaoutpacedthesaleslevelsofayearago(thesellingrateduringthefirsthalfof2011wasat74.5millionunits).However,thesellingpaceisexpectedtosoftenthroughthesecondhalfoftheyear,asbothemergingandmaturemarketsweighupslowingeconomicgrowthandcurbedconsumerspending.“AsthelevelofuncertaintyrisesastheresultoftheEuropeancrisisanditsimpactonothermarkets,sodoestheamountofpressureonautosalesaroundtheworld,”saidJeffSchuster,seniorvicepresidentofforecastingatLMCAutomotive.“AlleyesareonEuropeforasignalofthedirection,asvolumegrowthholdsin2012butremainsatrisknextyear.”In2013,globallight‐vehiclesalesarepoisedfora6percentincreasetonearly85millionunits.Manymarketsareexpectedtocontinuetobeextremelydynamic,whichputsdownwardvolumerisknextyearat3to5millionunitsglobally.EuropeWeaknesshasplaguedEurope,aslight‐vehiclesalesinWesternEuropefell8percentinthefirsthalfof2012.EconomicrecessionandconcernsoverthefutureoftheEurozonehaveweighedheavilyontheregion’svehiclemarkets.AmongthefivekeymarketsinWesternEurope,therehasbeenadivergencebetweentherelativelybetterperformingmarketsintheUnitedKingdomandGermanyandthoseofSpain,FranceandItaly—thelattertwohitbydouble‐digitpercentagedeclinessofarin2012.“ThepressureintheEuropeanmarketisimmenseatthemomentastheautoindustrystruggleswithfallingsalesvolumes,increaseddiscountingandidleplantcapacity,”saidJonathonPoskitt,headofEuropeansalesforecasting.“IftheEurozonecrisisworsens,Germanyisnowshowingsignsofaslowdownaswell,thereisarealthreattoanychanceofameaningfulrecoveryinthenear‐term.”For2012,theregionisprojectedtodecline5percentto18.2millionunits.The8percentdropinWesternEuropeisexpectedtobeoffsetbya4percentincreaseinEasternEurope,astheRussianmarketbenefitsfromhigheroilpricesearlierintheyear.For2013,light‐vehiclesalesareexpectedtogrowby25percentiftheEurozoneremainsintact,andcoulddeclineby2millionunitsifacostlybreak‐upoccurs.NorthAmericaIncontrasttotheyear‐to‐datedeclinesinEurope,theNorthAmericanmarketincreasedby14percentduringthefirsthalfof2012,withtheUnitedStatesandMexicoincreasingbydoubledigits(15percentand12percentrespectively)andCanadanotfarbehindwitha7percentincrease.“TheUnitedStatesandCanadapostedstablesellingratesinJuly,butthegrowthratefortheremainderoftheyearisnolongerDespite Mounting Risk,2012 Global Light‐Vehicle Sales are Still Expected to be Strongexpectedtobeasstrong,astheeconomycoolsandconcernswithEuroperise,”saidSchuster.“However,wedoexpecttheNorthAmericanmarkettobeabletorideoutthepotentialstorm,albeitatalowerlevel.”Asaresultofhighereconomic‐drivenrisk,LMCAutomotiveisloweringthe2012light‐vehicleforecastfortheUnitedStatesto14.3millionunitsfrom14.5millionunits.Inaddition,the2013forecasthasbeentemperedto15.0millionunitsfrom15.2millionunits.AsiaThelight‐vehiclemarketsacrossAsiaendedthefirsthalfof2012positively.Year‐on‐yeargrowthisbeingledbyJapan,up53percentasthemarketrecoversfromthe2011disaster,helpedbytaxincentivesforfuelefficientvehicles.Indiaposteda14percentincreasewhilethemonth‐on‐monthsellingratedeclinedoverthepastfourmonths.Chinasalesremainedstrong,withanincreaseof6percentandasalesvolumeof18.9millionunitsinthefirsthalfof2012.Thailandcontinuestorecoverstronglyfromthefloodsin2011,withfirsthalflight‐vehiclesalesvolumeup40percentfromthesameperiodin2011.For2012,salesintheregionasawholeareprojectedat33.4millionunits,up10percentfrom2011.AsChina’sandIndia’seconomiesbegintocoolandexportstoEuropeslowfurther,thereremainsriskofweakerautosalesintheremainderof2012andinto2013.SalesinChinaareforecastedat19.5millionunitsandIndiaisexpectedtosell3.2millionunits.Combined,volumeriskisinthe500,000unitrangeforthisyear.Light‐vehiclesalesinAsiaareexpectedtogrowtonearly37millionunitsin2013,withChinarepresenting90percentofthegrowth.Thisisonthelikelihoodthatthenewgovernmentleaders,whotakeofficeinOctober,willincreaseinvestmentspendingandlaunchavehiclesubsidyprograminruralareas.SouthAmericaEvenwiththedowngradingoftheeconomicoutlook,light‐vehiclesaleshaveincreasedsharplyoverthelasttwomonthsinBrazil.ThisisduetotheAugustexpirationofthetemporaryIPItaxcutdrivinganincreaseinvolume.Evenwiththesignificantincrease,volumeinBrazilforthefirsthalfof2012wasdown4percentfromthesameperiodlastyear,withasellingrateof3.3millioncomparedwith3.5millionlastyear.Argentinaaveragedasellingrateof777,000inthefirsthalfof2012,withvolumedown10percentfromthesamep