Global passenger car sales growth skewed by China data

Focus article by Mark Victory

LONDON (ICIS)–Global passenger vehicle sales in key automotive purchasing regions in the world rose by 2.17% in the first four months of 2015, ICIS analysis shows on Thursday.

The rise represents the aggregate of sales figures covering the EU and European Free Trade Agreement (EFTA) countries, the US, China, Japan and Brazil.

New passenger vehicle registrations in 2015

The aggregate also shows an increase in sales of 23,618 vehicles in April 2015, compared with April 2014. Sales figures comprise data from the European Automobile Manufacturers Association (ACEA), AutoData, the China Association of Automobile Manufacturers (CAAM), the Japan Automobile Manufacturers Association (JAMA), and Associacao Nacional dos Fabricantes de Veiculos Automotores (ANFAVEA).

The majority of the rise in auto sales was driven by increases in China. Nevertheless, CAAM records sales as shipments to dealers rather than sales to end-use customers. China’s dealer network expanded by 30% between 2011 and 2014. The China Automobile Dealers Association has previously stated that 70% of dealerships were unprofitable in 2014. Much of the expansion in the Chinese auto sales figures may be linked with dealer inventory build rather than underlying sales growth, according to previous analysis by Paul Hodges, chairman of consultancy firm International eChem.

Removing auto sales data from China reverses the trend, showing a decrease in automotive sales across the key auto purchasing regions of 36,182 vehicles in April 2015 and 138,518 vehicles from January to April 2015, compared with the same periods in 2014. Losses in the US, Japan and Brazil counteracted growth in Europe.

Growth in European auto sales has coincided with rising GDP in the eurozone and the 22nd month of expansion in Markit’s Purchasing Managers’ Index for the eurozone in April.

In the US, strong sales of light trucks have been counterbalancing the fall in passenger cars, with an overall January-April 2015 year-on-year growth across total light vehicle sales because of an 11% growth in year-on-year light truck sales during that period.

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