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As the world’s largest car market, China continues to magnify the ups and downs of global sales totals.

Back in 2017, China pushed light-vehicle demand to a record high of more than 95 million units. This year the country will drag down the total to just under 89 million, predicts LMC Automotive forecasting.

Revised Outlook

LMC had predicted worldwide sales would remain flat from 2019 to 2020. Now, says Pete Kelly, the firm’s forecasting chief, sales will decline 2% due to the impact of the coronavirus outbreak on Chinese car production

But 2023, Kelly says, China will haul the market back up to a record 98 million units. the country will continue to call the shots through 2025. By then, sales will approach 104 million, with China chipping in nearly 30% of the total.

The world market, excluding China, has been a calmer place, Kelly observes. Example: LMC says car sales in China will fall 14% from 2014 through 2020. Over the same period, sales by everyone else will dip 3%, or 2 million units.

The global market isn’t all about China, though. Kelly points to several other notable quirks that influence the market.

Business vs. Consumers

Confidence about the future is a big one, especially in the U.S. and Europe. Auto industry executives have become notably gloomy, fretting about tariffs and trade conflict.

But judging by actual sales through 2019, consumers could care less. Volumes slipped only 1% in the U.S. last year. Deliveries rose 1% in Europe last year. But it’s been difficult to tell where the real market is, thanks to production mayhem triggered by a messy switch to Europe’s new WLTP emission test procedures.

The SUV Craze

Meanwhile, SUVs continue to be the single biggest phenomenon in the global car market. Kelly says worldwide demand for the body style surged 70% from 2014 to 2019, delivering a compound annual growth rate of 14%.

The boom in SUVs was partly offset by a 15% drop in demand for regular cars over the same period, LMC says. Yet sales of premium cars during that time climbed 27% (driven largely by Asian demand for German brands). Kelly says that trend will continue through 2025.

EV Outlook

Electrified vehicles are another happy corner of the global car market. Sales of hybrids and all-electrics are skyrocketing, particularly in Europe, where carmakers need EV sales to meet carbon dioxide emission standards.

Sales of pure electric cars have been dominated by Tesla. Last year the company captured 28% of the EV market, followed by China’s BYD with a distant second-place share of 12%, according to LMC. Volkswagen Group accounted for only 5% of the EV market.

But that is about to change. LMC predicts that by 2021, VW’s share of the EV market will zoom to 23%, displacing Tesla at 21%. By 2025, the sector leaders will be VW (26%), Tesla (13%) and the Renault-Nissan-Mitsubishi alliance (13%).


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