INDIA SURGES UP GLOBAL CAR MARKET
- February 21, 2019
- Posted by: Simon Wait
- Category: Industry News
India replaced Germany as the world’s fourth largest car market last year, but global sales fell for the first time since 2009.
European, Chinese and US markets stalled during the year, leading to an overall decline in sales of 0.5%.
Felipe Munoz, JATO’s global analyst, said, ‘ Last year could be considered as the beginning of a new era for the automotive industry.
Strong results in India, Brazil, Russia and South East Asia offset stalling sales in Europe, China and the US. “The dip in the Chinese market had ramifications upon the rest of the global market in 2018. As China makes up nearly 30% of global vehicle sales, any change that happens there is felt across the rest of the world,” explains Munoz. Besides stalling sales in China, the automotive industry also had to deal with uncertainty in the European market, following the fallout from Brexit and the introduction of more complex environmental regulations. It also had to deal with leadership changes at some of the world’s biggest car makers, which are not always easy to navigate.
In what was one of the most significant results from 2018, India became the world’s fourth largest car market, as it was finally able to outsell Germany. India’s growth is projected to continue over the next few years, with it expected to become the third largest market by 2021.
Elsewhere, Russia climbed the rankings and overtook South Korea, while Argentina and Turkey – two big producers of vehicles – saw declines, having felt the effects of challenging economic times. China continued to lead the world rankings with 28.08 million sales, followed by Europe with 17.7 million sales and the US with 17.3 million sales. Meanwhile, Latin America outsold Japan, recording 5.6 million and 5.2 million sales, respectively.
Meanwhile, 2018 marked a record year for the sale of battery-powered electric vehicles. Passenger electric cars recorded 1.26 million sales throughout the year, up by a huge 74%. It was one of the highest increases among all car categories on the global market, which can be explained by several factors.
Firstly, Chinese demand for EVs soared throughout 2018, as the car-type gained more visibility among consumers, due in part to their promotion by local governments for their environmental impact. Secondly, Tesla finally took off. The Model 3 became the world’s best-selling EV, as it was boosted by sales in North America, where it first became available. Finally, the diesel crisis in Europe also helped to raise awareness among consumers about the benefits of driving electric.
SUVs once again drove sales in the global market, proving that the boom in demand for the segment was not just a fad, but a long-lasting trend that continues to appeal to consumers around the world. However, as was expected, growth in the segment did slow down to single digits, with seven per cent growth. Even though growth in the segment remained strong, as SUVs recorded the highest percentage increase among all segments, it was the lowest result of the past four years and was almost half the growth registered in 2017, when sales increased year on year by 13%.
All SUV subsegments recorded positive results. Compact SUVs continued to be the most popular among consumers, recording 12.3 million sales during 2018, followed by midsize SUVs with 7.2 million sales. Elsewhere, small SUVs recorded double-digit growth with 6.6 million sales, while 3.7 million large SUVs were sold.
The continuous demand for SUVs came at the expense of sales of traditional cars. Among them, MPVs posted the largest drop, where volume was down by 14% to 6 million units – nearly one million less than in 2017 – as they lost ground in almost every market. Compact cars (hatchbacks, sedans and SWs) also recorded a decline, as volume fell by eight per cent following drops in the US and European markets.