LMC July 2015 World New Vehicle Sales

July 2015 World New Vehicle Sales Overview

• Global Light Vehicle demand slowed markedly in July, with the seasonally adjusted annualised rate of sales standing at 85.4 mn units/year.

• Below this headline figure, the story among key markets was mixed. The US and Western Europe continued to make progress. However, China sales slipped back by 7%, year on year, and the results from Russia and Brazil continued to reflect difficult economic conditions.

July 2015 Sales - Europe

• Light Vehicle sales in Western Europe continue to recover, helped by an improving economic backdrop and generally stronger consumer confidence than at the beginning of the year. With the risk of Greece exiting the Eurozone having been averted, at least for now, the solid sales growth momentum looks set to continue — full-year growth of 7% to 14.5 mn units is forecast.

• The picture in Eastern Europe remains heavily influenced by the tumbling Russian Light Vehicle market — Russian Light Vehicle sales were down 27.5% in July. While there are market support mechanisms (including extended funding for the scrappage scheme and a continuation of the preferential loan interest subsidy and preferential vehicle leasing schemes), a deteriorating economy and falling currency will continue to depress the market in the second half of 2015.

July 2015 Sales - China

• Advance data indicates that the Chinese market continued to decelerate markedly through July. The July selling rate was at a two-year low of 21.3 mn units/year and down over 7% from June. Sales also declined by 7% in July — the second consecutive month of year-on-year decline, with both Passenger Vehicles and Light Commercial Vehicles lower. In the first seven months of the year, sales increased by a mere 1.5% relative to last year.

• Weaker sales reflect a slowing economy. The sluggish real estate market and the recent turmoil in the stock market are weighing on consumer confidence. The currency devaluation this week has only highlighted the fact that the government is increasingly wary about the decelerating economy. Yet sales in minor cities appear to have remained robust, supporting some optimism.

July 2015 Sales - Other Asia

• The July selling rate in Japan was an 11-month low of 4.6 mn units/year, down nearly 8% from a relatively strong June. Sales of Mini Vehicles (which account for 40% of total Light Vehicle sales in Japan) continued to decline, due in part to the new stricter rules to qualify the eco-car tax exemptions.

• The selling rate of the South Korean market continued to hover around 13-year highs, supported by record-low interest rates, low inflation, and rising real wages. Such a robust pace is not expected to be sustained though, due to already high household debt and a slowing job market.

July 2015 Sales - South America

• In Brazil, the July selling rate of 2.4 mn units/year was unchanged from June. The market is, however, unlikely to have hit rock bottom yet. Consumer spending is increasingly constrained by soaring inflation and interest rates, the deteriorating job market, and a plunging currency.

Release Date - 12 August 2015