Excluding China, Scotiabank’s most recent Global Auto Report says, vehicle purchases fell by 3 per cent year-over-year worldwide.
February 26, 2019 by Canadian Plastics
Global auto sales fell by 9% year-over-year (y/y) in January owing to a steep 18% y/y drop in the Chinese market, which represents about a third of the global market, a new report from Scotiabank says.
Excluding China, Scotiabank’s most recent Global Auto Report says, vehicle purchases fell by 3% y/y worldwide.
In Canada, Scotiabank said, purchases contracted year-on-year for the eleventh consecutive month, although from an all-time January-high and amid adverse weather in Central Canada. Nationwide sales fell 7.2% y/y off an all-time January-high in 2018, but posted a solid increase of 4.4% month-on-month (m/m) to 1.91 million units delivered on a seasonally-adjusted annualised rate basis. “We forecast that auto sales will post their fourth highest year on record in 2019 at 1.93 million units delivered compared to the all-time record of 2.04 million, achieved in 2017,” the report said.
In the U.S., auto purchases dropped by 2.1% y/y to record their steepest month-on-month contraction since 2011 at 5.1% m/m. However, the monthly decline follows strong sales in the final quarter of 2018 and may have been further exacerbated by especially adverse weather in the Midwest. “We expect U.S. sales to decline by around 2% in 2019 to 16.8 million units,” Scotiabank said.
In Mexico, auto sales rose in year-on-year terms for the first time in twenty months, Scotiabank said, but the 1.9% y/y increase is the result of a low base in January 2018, which in turn stems from an adjustment in sales-reporting methodology by General Motors. “Excluding GM, vehicle purchases fell sharply again by 7.4% y/y in January after December’s market-wide 10.6% y/y drop, reflecting our diminished macroeconomic projections for 2019,” the report said.
Chinese auto purchases dropped by 17.7% y/y in January, marking five months of back-to-back declines. “We forecast that sales will remain flat in 2019 as weakness in the first half of the year is offset by improved sales activity later in the year on the back of government stimulus,” Scotiabank said.
Vehicle purchases in Western Europe fell again last month by 5% y/y, the report said, although sales figures improved across most countries in the region after December’s decline of 8.6% y/y. “Alongside a worsening economic outlook, sales in the European Union are currently in a period of adjustment to new emission testing standards introduced in September 2018 which led to a shortage of qualifying vehicles upon their introduction,” the report said.
Finally, sales activity in South America – down 5.8% y/y – remains depressed by plummeting purchases in Argentina – down 53% y/y in January – while vehicle sales growth slows in Brazil tough remains strong, growing by 8.7% y/y last month. “Vehicle sales rose by 3.8% y/y in Peru; an increase in sales taxes on new autos in Peru last June has nevertheless led to a nearly uninterrupted protraction in purchases since its introduction,” Scotiabank said. “In Colombia, auto sales fell by 3.5% y/y following extraordinary growth of 26% y/y and 33% y/y in November and December, respectively, with sales figures boosted by the international auto show in Bogota.”