Market Insight: Global car sales tumble in March

NEW-VEHICLE sales in Australia are in dire straits and in global terms the escalating coronavirus epidemic is wreaking havoc on the automotive industry as consumer confidence is shattered and dealerships shuttered in markets where heavy restrictions are in place.

As Australia recorded an 18 per cent downturn in sales last month, overseas countries that have  tighter restraints on social and commercial activities, including full lockdowns, found their new-vehicle sales plummeting much deeper – and analysts expect the pain to last for several months.

Just as there is no way of knowing just how deep an impact COVID-19 will have on Australia in terms of case numbers and mortality compared to other countries, we cannot simply assume our new-vehicle market will exactly replicate the downward spiral in other major markets.

But we are not immune.

New Zealand new-vehicle sales fell 37 per cent last month (to 8317 units) as the country went into full lockdown on March 25 to prevent the spread of the virus, while Italy, which had large parts of its northern region locked down from March 8 and the entire country from March 10, plunged 86 per cent (to 28,326).

Car sales in Spain fell 69 per cent (to 37,644) as it went into lockdown on March 14, while France, which imposed similarly heavy restrictions two days later, also suffered a 72 per cent hit to new-vehicle sales (to 62,668).

New-car sales in Germany fell 38 per cent (to 215,119), no small wallop for the biggest market in the region, while the United Kingdom, which is the next-biggest market and traditionally the strongest in March (when the year’s first new numberplate series is issued, the second in September), slumped 44 per cent (to 254,684 passenger cars and SUVs).

Light-commercial vehicle sales in the UK, which are reported separately, fell 54 per cent, with just 30,247 vans bearing the new ‘20’ numberplate hitting the streets.

Figures for Western Europe as a whole collated by analysts LMC Automotive last week show a 53 per cent sales plunge in March across the continent (to 774,280) and the figures for April will be even more shocking, given public life across most countries will remain almost at a standstill until at least the end of the third week.

In the United States, further LMC figures released last week show that demand is expected to have braked 38.6 per cent last month to 982,953 units compared to March last year, marking the second-biggest monthly decline since February 2009 (-41.4%) during the global financial crisis.

Putting this into context, last month’s total volume in the US was still higher than almost every month during 2009, and LMC notes that monthly sales have come in below the one-million mark only 27 times over more than two decades since January 2000.

Not every car-maker has reported in the US, and some are now only providing quarterly results, meaning the final figures are still to be verified.

But they should not be far from the numbers detailed here – and the consensus among analysts is that the results for April and May are set to be worse, given the first week in March in the US was considered “relatively normal”.

Projected March results for Canada point to the new-vehicle sales falling 48 per cent to around 95,000 units.

In China, the world’s biggest auto market, official data shows a decline of 43 per cent (to 1.43 million units).

This follows earlier reports that sales had been improving on a weekly basis since the start of March, clawing back lost ground that saw the entire market plummet 79 per cent in February (to 310,000).

The big Japanese brands all reported serious downturns for their sales in China last month – including Toyota (101,800, -15.9%), Nissan (73,297, -44.9%) and Honda (60,441, -50.8%) – while in the Japanese domestic market new-vehicle sales were down just nine per cent (to 581,438).

This is sure to change now that Japanese authorities are only just beginning to implement measures to prevent the rapid spread of COVID-19.

The one anomaly among the world’s major motor vehicle markets last month was South Korea, which saw its domestic market – which covers Hyundai, Kia, GM Korea, Renault Samsung and SsangYong – rebound nine per cent (to 151,016) after taking a big hit in February when it was down 20 per cent year-on-year as plants closed temporarily.

Imported vehicles, which are reported separately, were also positive territory, up 12 per cent collectively (to 20,304).