Global new car market up 5.3% in June – Polk data

25 July 2014 #SMMT News

Based on results (preliminary in some cases), passenger vehicle sales in June were up 5.3% from the year before. After weakening somewhat in May (up 3.0%), growth in registrations regained its former strength at the end of the first half. In the first six months of the year, new registrations are up by around 2.23 million units over last year (up 5.9%).

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Growth in the Asia/Pacific region was 8.4% in June. Growth in this region was driven by double-digit growth in China, but sales in India also provided a boost. Following the Indian elections, the Indian market was also up by double digits, for the first time this year. The Japanese market, on the other hand, continues to suffer from the effects of the VAT rate hike in April.

After a weak start to the year (severe winter weather in the northeast), North American demand is continuing to rebound outstandingly. The NAFTA region posted strong growth in June (up 11.1%), as it did last month as well, for a gain of 5.4% YTD.

Sales in Latin America were down significantly once again (down 15.2% in June and 6.9% YTD). Sales in the region’s two largest markets, Argentina and especially Brazil were down sharply from the year before once again.

Sales in Western Europe were up 3.0% in June (YTD: up 5.7%). Boosted by incentives, the Spanish market posted the strongest gain, but Germany and the United Kingdom also did their part.

The slumps in Russia and Turkey especially weighed down the Eastern European market last month (down 4.4% in June, down 5.1% YTD).

2014: New registrations expected to be 78.5 million units

Global new registrations will once again set a new record in 2014, growing by about 4.0% over 2013.

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The extension of the sales incentive program in Spain and the strong performance in the United Kingdom especially led to an upward revision in the forecast for the Western Europe region. The forecast for LATAM, on the other hand, and Brazil especially, was cut significantly once again. The same applies for Eastern Europe, where the forecast for Turkey has been reduced by a significant amount. Positive adjustments to the Asia/Pacific region (particularly in China) and the US more than make up for the afore-mentioned reductions.

New registrations in the Asia/Pacific region will increase by 6.1% in 2014 compared to 2013. In China alone, sales in the current year will be up around 1.77 million units from the year before. The outlook for India was raised only gradually at first, but should the present uptrend be confirmed, a further upward revision is likely.

New registrations in the NAFTA region are also expected to continue to climb to about 19.1 million units (up 5.2%). Sales in the Latin American markets, on the other hand, will fall to about 5.6 million units (down 5.7%).

Sales will be down in Eastern Europe as well (down 5.3%). The region’s largest market, Russia, is currently suffering from the impact of the Crimean crisis (flight of capital out of the country) and a weakening currency (inflation). Sales will also be down this year in Turkey, the region’s second-largest market.

Passenger vehicle demand in Western Europe, on the other hand, will be up once again in 2014 (up 4.5%), as gains in key markets like the United Kingdom and Germany, as well as in Southern Europe (especially Spain), will more than make up for losses in relatively small markets like the Netherlands, Switzerland and Austria.

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