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China likely to further pressure global LV sales in 2020

China likely to further pressure global LV sales in 2020

Mubasher: The world’s light vehicle (LV) sales fell to 89.8 million in 2019, its lowest level since 2015, declining by 4.8% year-on-year from 94.3 million, pressured by lower sales in China, according to GlobalData.

LV sales in China declined by 9.4% to 25.4 million, its lowest level since 2015, while sales in India plunged by 10.2% to 3.53 million, the data analytics and consulting company said in a report on Wednesday.

Meanwhile, the US, West Europe and Japan maintained the volume of LV sales last year.

Figures for the fourth quarter of 2019 show a slowdown in global market, signalling that a further drop is expected for 2020.

China’s seasonally adjusted annualised rate (SAAR) registered an average level of 23.9 million in Q4-19, indicating that an additional decline of about 1.5 million units is forecast for 2020.

On the other hand, India’s market recorded an average SAAR of 3.74 million during the September-December period of 2019.

The director of Automotive Product Development at GlobalData, Calum MacRae, commented, “China’s continuing weak outlook will no doubt see many question the long-term outlook for the China market.”

China’s “GDP growth at 6.1% was the lowest level recorded in 29 years and that weighed heavily on vehicle sales,” MacRae explained.

Aside from China, the timing of this global downturn, while never good, comes at a particularly inopportune time for the industry. China’s been a significant profit driver for the sector, profits that have been diverted in recent times by OEMs and suppliers alike in addressing the disruption that the CASE mega themes threaten the sector with,” MacRae noted.