Auto sales data is now available for the first 4 months of the year, covering the 5 key markets of China, US, EU, Japan and India. These account for 75% of global sales. As the chart shows:
• Demand patterns in 2013 (red line) have been more volatile than in 2012 (green)
• Total demand is up just 3%, compared to a 6% rise at this time last year
• January and April were both above 2012 levels, whilst February and March were lower
This confirms the view of industry analysts Polk, who expect only 3% global growth this year.
The position in individual regions is also quite variable:
• China remains the strongest market, with sales up 18% due to high licence plate values
• US sales gorwth is slowing, up 7%, as the Hurricane Sandy effect ends
• Europe is down 7%, with consumer spending weak and the Eurozone economy contracting
• Japan is also down 7%, as its ageing population no longer needs many new cars
• India is down 20%, with its market suffering from slowing GDP growth
Another key factor is slowing growth in the luxury car segment. In China, the new leadership’s anti-corruption campaign has reduced growth to just 4%, compared to an average 36%/year over the past decade. This is particularly hitting German producers, who dominate the sector. They are also next in line in the trade war now beginning between the EU and China, which began with EU duties on solar panels.
Companies wanting to succeed in the New Normal need to carefully review the strategies that brought them success in the past. Winners in the future will have to refocus. In auto markets, for example, the major growth markets will instead be for car-sharing and lower-priced entry level models.