Moody's: China drives global auto sales growth.
Summary: growth rate for US shipments set to decline
China will continue to drive global auto
sales growth over the next 12 to 18 months, while shipments of US-made
vehicles will slow, Moody's Investors Service says in a new report. The
outlook for the global automotive manufacturer industry remains stable,
which has been Moody's position since September 2011.
"We expect global sales of light vehicles to increase 3.2% this year,
before easing to 3% in 2015," says Vice President -- Senior Analyst,
Bruce Clark. "China continues to be the main buyer of light vehicles; its
share of that market is set to rise from 27% this year to 28% in 2015."
Auto sales in China grew 8% in the first seven months of this year, and
should meet Moody's full-year growth forecast of 8.1%, Clark says in
"Global Growth to Slow Modestly; China Remains World's Strongest Market."
Growth is likely to moderate next year, three years out from 2013's
rebound, but will continue in the medium term, spurred by China's
relatively high economic growth and relatively low vehicle penetration.
Growth in US unit shipments will slow from 4.3% in 2014 to a modest 1.5%
during 2015, Clark says. "Shipments from the US will moderate as the
supply of used cars rises, as an increasing number of vehicles come off
lease. Used car prices will drop as a result." Additionally, much of the
pent-up demand created during the 2009-10 downturn has been satisfied,
after rapid sales growth from 2011 through 2014.
In Western Europe, sales of light vehicles will grow by around 4.7% this
year on the back of higher-than-expected sales growth in the UK and
Spain. Moody's forecasts 1.6% growth for Western Europe in 2015, given
gradually improving economic conditions, with falling unemployment and
rising consumer confidence.
Meanwhile, in Japan, the effect of a hike in consumption tax has not been
as dramatic as expected. Indeed, in 2014 new car sales will be the
highest they have been for five years, surpassing the previous high in
2012 when consumers took advantage of tax incentives associated with the
purchase of eco-friendly cars such as electric vehicles and hybrids.
"Global auto sector profitability will be supported by continued demand
and cost-cutting over the next year or so," Clark says. "In the US,
pricing and production disciplines are being maintained, while in Europe
restructurings and recovering demand are easing pressure on profits,
while the Chinese market remains strong." Profit growth will however
remain vulnerable to regional cyclical downturns, he notes, due to
underutilized capacity, price discounting and other pressures.
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|Publication:||EMBIN (Emerging Markets Business Information News)|
|Date:||Sep 24, 2014|
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