Strong Growth Forecast For Auto Sales In 2021 With Europe Strongest.
“Europe will be the best performer in 2021 with projected vehicles sales growth of 10.8%”
This time last year experts were saying that the global auto market in 2020 would arrest the slowing trend seen since 2017, and then look what happened.
Global sales of cars and SUVs had been in gradual retreat from the 94.3 million high of 2017, but then dived about 16% to 76.5 million in 2020 as the coronavirus came out of nowhere to shut down many economies, according to IHS Markit.
Europe performed even worse in percentage terms. After roughly stagnating from 2017 to 2019’s 18.1 million, sales in Western and Central Europe slumped 24.2% in 2020 to 13.73 million.
So any attempt at forecasting how the industry will fare in 2021 will likely find a doubting audience, and anyone saying what will happen further out into the future will be seen as either brave or foolish.
That hasn’t stopped forecasters doing their best. Step forward one of the most successful, IHS Markit, and this despite many current lockdowns due to the pandemic across Western Europe and the U.S. suggesting the disease still has some way to go before abating.
Next year the global auto market will zoom ahead by 9% to 83.4 million, advance another 5% in 2022 to 86.9 million followed by another solid 4% in 2023 to 89.7 million. In Western and Central Europe sales will revive by 11.1% in 2021 to 15.25 million, move up to 16.58 million in 2 023, says IHS Markit. Is that brave or foolhardy?
Fitch Solutions agrees with this overall development pace, with global sales also up 9.0% to 83.7 million in 2021 and reckons Europe will be the best performer in 2021.
“Europe will be the best performing region in 2021 with projected vehicles sales growth of 10.8%. This reflects the fact Europe is coming back from not just an estimated decline of 18% in 2020, but also a weak year in 2019 with growth of just 0.4%,” Fitch Solutions said in a report.
Drive regional recovery
“Much of this recovery can be attributed to the coordinated effort of the EU member states to drive regional recovery from the pandemic through measures such as the EU Recovery Fund and EU Green Deal. This contrasts with North America where we forecast the lowest level of growth of just 5.9% in 2021,” Fitch Solutions said.
Leading data and analytics company GlobalData isn’t so sure, warning that Europe could be in trouble as coronavirus infections increase again and significant population restrictions return or are tightened in a number of markets.
“Turning to 2021, we expect a rebound in the global light vehicle market of around 15% to 85 million. However, we don’t expect to see pre-Covid sales levels to be attained across global markets before 2023 due to the creeping macroeconomic effects of the coronavirus-induced recession. If the vaccines can put the virus into reverse by Q2 2021, we would expect 2021’s recovery to be further strengthened,” GlobalData auto analyst David Leggett said.
According to forecaster LMC Automotive, the crash in global car sales earlier in the year and the subsequent powerful recovery, augurs well for the industry, particularly as China, the world’s biggest market, was leading the way. Also, the circumstances of the coronavirus have rebounded in favor of the car because of its private, sealed nature and its immunity from contact with the general public.
“There is renewed enthusiasm for owning and driving a car, at least while the virus remains a threat,” LMC Auto said in a report.
But ABI Research of Oyster Bay, New York, sounds a cautionary note.
“The first half of 2020 saw the market for new vehicles implode, contracting by around 70%. COVID-19 and the measures taken to contain the spread of the virus dealt a double blow to the already faltering automotive market, disrupting supply chains and depriving the industry of the bricks-and-mortar retail environment on which it heavily relies,” ABI Research said.
“Many (manufacturers) reported a return to growth in the 3rd quarter as offset demand from the first half, manifested in a summer period that saw many governments lift restrictions and allow auto dealerships to reopen. Moving into 2021, however, the automotive industry should not expect a return to the new vehicle sales volumes of recent years. The market size is expected to remain subdued until 2024 given the prospect of repeated lockdowns, long-term remote working, and a bleak macroeconomic outlook,” ABI Research said.