The world’s light vehicle market is forecast to decline by 17.2 per cent to 73.6m units in 2020 due to the COVID-19 pandemic, according to GlobalData, a leading data and analytics company.
GlobalData’s analysis suggested that the damage to the global market would turn out to have been the most acute in the second quarter of this year, when strict lockdown measures were in place across the world.
Automotive Analyst at GlobalData, Calum MacRae said, “This is a bigger one-off shock than witnessed in the two years of the global financial crisis.
“GlobalData’s forecast sees Q2 around 34 per cent down on last year’s pace and way below the 2008 Q4 low point reached during the last big global downturn.
“However, vehicle markets are on the turn as we get into the second half of the year. China was first in to the crisis and was first out. China’s light vehicle market was up eight per cent in May and South Korea’s was up nearly 10 per cent. In Europe we are seeing some improvement to vehicle markets now too, helped by government subsidies for new vehicle purchases.”
A combination of pent-up demand and the effects of the government subsidy programme saw the French vehicle market surge back to life in June. Light vehicle sales increased by 2.4 per cent year-on-year in June to nearly 286,000 units. Passenger car sales increased by 1.2 per cent to just under 234,000 units.
However, MacRae cautioned that uncertainties remained as COVID-19 infections are rising again in some countries in Asia and the Americas.
“COVID-19 cases are on the rise in a number of US States, prompting new restrictions on populations. This brings further downside to GlobalData’s US light vehicle sales forecast. Increasing infection rates in three key US sales markets – California, Texas and Florida – means that stronger headwinds are a real threat.
“If tighter social restrictions are introduced or re-introduced in the coming days and weeks, prospects for the US market will suddenly look much dimmer than the 14.5 million (-15.2 per cent) GlobalData currently forecasts for the US light vehicle market and will potentially result in a sub-14 million market,” he said.