The auto industry, like others, is now recovering from an unprecedented crisis
As we enter a recovery phase around the world, we aim to bring you the latest news and intelligence on the speed, nature and shape of the automotive sector’s recovery from the COVID-19 pandemic.
This regularly updated article follows on from our COVID-19 daily update article that covered rapidly unfolding crisis developments and their immediate impact on autos (first published March 12).
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The US light vehicle market surprised on the upside in March, coming in much stronger than analysts expected. LMC Automotive said the March light vehicle market came in at an annual selling rate of 18m units, the highest ever for the month.
New Zealand’s Motor Industry Association said last month was the strongest March on record for sales of new vehicles, a year on from the country’s first COVID-19 lockdown restrictions. But the sector was still operating with disrupted supply amid chip shortages.
Japan’s new vehicle market expanded by 5.4% to 613,003 units in March 2021 from 581,438 units a year earlier, according to registration data released by the Japan Automobile Manufacturers Association. The vehicle market continued to perform positively last month despite the global shortage of semiconductors which continues to hold back vehicle production. Business sentiment improved significantly in the first quarter despite new measures introduced by the government to contain a recent jump in COVID-19 infections.
Geely-owned Volvo Cars has reported the best first quarter in its history as the company’s global sales increased by 40.8% compared with the same period last year. Total sales during the period amounted to 185,698 cars, up from 131,889 cars in the same period last year. In Europe and the US, the company managed to improve sales compared to the first quarter last year, while managing to cope with the ongoing effects of the pandemic. China has by now recovered from the impact of the pandemic, which was peaked in Q1 2020.
Mercedes-Benz Cars sales rose 22.3% year on year in the first quarter of 2021 to 590,999 units. Worldwide, plug-in hybrids and all-electric cars accounted for 10% of sales – 59,000 ‘electrified’ and 16,000 all-electric. “The current worldwide shortage of supply in certain semiconductor components affected deliveries in the first quarter and will continue to affect sales in Q2,” Daimler said.
Domestic sales by South Korea’s five main automakers combined declined by 6.7% to 140,971 units in March 2021 from 151,025 units a year earlier, according to preliminary data released individually by the companies. This moderate decline followed a 20% sales surge in the first two months of the year and comes against reasonably strong year earlier sales when the domestic market rebounded from the initial impact of the COVID-19 pandemic.
The UK new car market was up 11.5% on last year’s pace in March, but remains well under normal levels, according to data released by the SMMT. The comparison with last year is against a first lockdown impacted low base and the SMMT pointed out that the March monthly total was some 36.9% adrift of the 10-year March average.
Normally, an 85.5% year on year monthly sales rise would lead to a breaking out of champagne. Not this year. The tally of 56,122 vans registered in the UK in March 2021 has to be compared with the first month of the 2020 COVID-19 outbreak and lockdown, a 20-year low for the market. March is often a bumper month due to the ‘plate change’ (to 21 last month) but sales were off 10.9% compared to the pre-pandemic 2015-2019 average, as prolonged nationwide lockdown continued to suppress business confidence in the first quarter of the year.
Stellantis will halt production at its plant in Melfi, southern Italy for the period 2-12 April because of low demand triggered by the COVID-19 crisis, the UILM union said on Monday. The union told Reuters production at the plant, which makes Jeep Renegade and Compass models and the Fiat 500X compact SUV, has been repeatedly disrupted due to weak demand and semiconductor supply shortages.
UK car production fell 14.0% year-on-year in February, with 105,008 units produced, according to the latest figures released today by the Society of Motor Manufacturers and Traders (SMMT). The SMMT said the decline was the 18th consecutive month of decline and the weakest February performance in more than a decade as the impact of the coronavirus pandemic shuttered UK showrooms.
Thailand’s new vehicle market declined by almost 13% to 58,960 units in February 2021 compared with 67,533 units a year earlier, according to wholesale data compiled by the Federation of Thai Industries (FTI). After stabilising in the fourth quarter of 2020, the Thai vehicle market has since declined sharply, reflecting weakening domestic sentiment as the government announced more social restrictions in response to a new spike in COVID-19 cases in the country. Surging infection rates and renewed lockdowns in other countries have also reduced the prospect of a rebound in Thailand’s depressed tourism sector this year.
Malaysia’s new vehicle market rose by just over 4% to 42,784 units in February 2021 from 41,088 units in the same month of last year, based on registration data released by the Malaysian Automotive Association (MAA). The association said showroom visits increased significantly in the month after the government lifted the Movement Control Order (MCO) it re-imposed at the beginning of the year following a spike in COVID-19 infections.
As the UK marks a year since its first population lockdown and the auto industry – among many industries – reflects on a year of unprecedented turmoil caused by the COVID-19 pandemic, Calum MacRae offers some thoughts on what has been learnt.
Porsche SE said group after tax profit for 2020 was EUR2.6bn, down 40.5% year on year due mainly to the effects of the COVID-19 pandemic. Volkswagen contributed EUR2.7bn versus EUR4.4bn in 2019. On 31 December 2020, net liquidity of Porsche SE was EUR563 versus EUR553m.
Volkswagen in Brazil is suspending vehicle production for 12 days from March 24 due to the worsening COVID-19 public health crisis in the country. VW said it is stopping manufacturing in order to “protect the health of its employees and their families.” However, Brazil’s President Bolsonaro has controversially opposed shutdowns of the economy, in spite of the worsening crisis.
Porsche said it set a new revenue record in 2020 EUR28.7bn, up EUR100m year on year.
Operating profit of EUR4.2bn was down from EUR4.4bn before special items and EUR3.9bn a year ago. The return on sales was 14.6% in 2020, Porsche said without comparison, was “within the strategic target corridor despite the tense economic situation”.
Damper specialist Thyssenkrupp Bilstein is expanding its presence in China. In Changzhou, the company is currently investing in new production capacities for electronically adjustable damper systems. The move followed the receipt of several production orders from Chinese manufacturers of electric vehicles. Work on setting up the new production line began at the start of the year. With the product introduction and test phase due to begin mid-year, the line will be fully operational from 2022.
It’s not yet good news everywhere. Indonesia’s new vehicle market continued to plunge in February 2021, by 38% to 49,202 units from 79,573 units a year earlier, according to member wholesale data compiled by industry association Gaikindo. The vehicle market remained extremely depressed after GDP shrank by 2.1% last year on weaker domestic consumption, investment and exports. Prolonged restrictions on consumer and business activity have had a devastating effect on the small and medium business sectors with unemployment levels also soaring over the last year.
Honda Motor last night said supply chain issues would halt production at most of its US and Canadian vehicle plants for a week. According to a Reuters report, the automaker added the issue would result in some production cuts next week at all US and Canadian plants, citing “the impact from COVID-19, congestion at various ports, the microchip shortage and severe winter weather over the past several weeks”.
South Korea’s leading electric vehicle battery manufacturer LG Energy Solution announced it would invest KRW5trn (US$4.4bn) by 2025 to expand its US manufacturing operations to meet growing demand, according to local reports. The company, spun off into a separate entity in December 2020, remains a wholly-owned subsidiary of LG Chem. It plans to expand its US battery production capacity to 75 gigawatt hours (GWh) by 2025, creating 10,000 jobs directly and 6,000 additional jobs among its subcontractors.
China’s new vehicle market rebounded strongly in February 2021, by 365% year-on-year to 1.455m units after plunging by over 79% to 310,000 units a year earlier, based on passenger car and commercial vehicle wholesale data released by the China Association of Automobile Manufacturers (CAAM). February last year was the first full month after the Chinese government took decisive action to control the spread of the COVID-19 pandemic which first emerged in the city of Wuhan in November 2019.
Sales of imported light passenger vehicles in South Korea jumped by over 33% to 22,290 units in February 2021 from 16,725 units in the same month of last year, according to vehicle registration data released by the Korea Automobile Importers & Distributors Association (KAIDA). The market last month rebounded from weak year-earlier levels, when the government began to introduce social restrictions as the COVID-19 pandemic spread across the globe. Domestic sales by local manufacturers also increased sharply last month, by almost 24% to 101,356 units.
Sales of new energy passenger vehicles in China jumped by 675% to 97,000 units in February 2021 from depressed year earlier sales, according to retail data released by the China Passenger Car Association. Sales last year were hit by widespread lockdown as China began implementing measures to fight the COVID-19 pandemic. A stronger rebound would have taken place had it not been for the Lunar New Year holidays, which fell in February this year.
Hyundai Motor Group said it aims to increase sales in China by 23% to 817,000 vehicles in 2021 from 664,744 units in 2020, as the market continues to lead the global recovery from the COVID-19 pandemic. South Korea’s leading automotive group, which includes the Hyundai, Kia and Genesis brands, has struggled in China in recent years initially due to the diplomatic spat over South Korean deployment of the US THAAD missile shield system in 2016.
South Africa‘s National Automobile Dealers’ Association (NADA) said February sales were more encouraging than had been expected. “Overall, dealer sales across all segments increased by almost 3,000 units month on month,” NADA chairman Mark Dommisse told bizcommunity.com. “It was heartening to see that passenger vehicle sales increased by almost 1,500 units and light commercial vehicle sales improved by close to 2,000 units. “A slow start to the year had been expected, as the coronavirus and sluggish local economy have had a negative effect on consumer and business confidence. But February sales figures proved better than we, as the dealer body, had anticipated.
Japan’s new vehicle market was just slightly higher at 432,299 units in February 2021 from 430,185 units a year earlier, according to registration data released by the Japan Automobile Manufacturers Association. The market last month was affected by some plant stoppages due to the global shortage of semiconductors, with some manufacturers affected more than others. Sales overall are trending higher, however, after rebounding strongly in the fourth quarter of 2020 and growing by almost 7% in January as the country continues to recover from last year’s sharp recession caused by the global COVID-19 pandemic.
Two fewer selling days compared with last year and severe winter weather left the US light vehicle market around 13% off last year’s level according to industry estimates. However, the underlying picture was one of still recovering demand and some forecasters are revising forecasts for the year up in the light of a better economic picture and rapid COVID-19 vaccine rollout in the US.
Sales of new light commercial vehicles in the UK grew 22% year on year in February 2021, according to the Society of Motor Manufacturers and Traders (SMMT). February usually is one of the year’s weaker months as many operators wait for the updated March number plate but last month was the strongest February for LCV sales since 1998.
The UK’s new car market was down by 35.5% year-on-year in February as dealers showrooms remained shut under government lockdown orders. February is usually a weak month in terms of the calendar year and this year’s result was the lowest since 1959, with just 51,312 new cars registered. The UK auto industru trade association, the SMMT, has revised its market outlook to 1.83 million new car registrations in 2021, down from the 1.89 million predicted in January.
Malaysian national carmaker Proton reported an almost 20% year-on-year sales rise to 11,873 vehicles in February 2021, which it claims is the highest level in over a decade.
India’s car market is bouncing back. Year-on-year (y-o-y) passenger vehicle sales in India grew by 23% in February. Bakar Sadik Agwan, Senior Automotive Consulting Analyst at GlobalData, says that India has ‘overcome the COVID-19 blues’.
Domestic sales by South Korea’s five main automakers combined rebounded strongly in February 2021, by almost 24% to 101,356 units from weak year earlier sales of 81,772 units. Sales rebounded from depressed year earlier volume when numerous vehicle assembly plants halted operations due to component shortages as the first wave of the global COVID-19 pandemic disrupted supply chains in China.
Tata-owned Jaguar Land Rover (JLR) is planning to reduce its manufacturing capacity by a quarter over a five-year period to 2027 as part of its latest strategic plan under new CEO Thierry Bollore. The company also reported an ‘encouraging turnaround’ in China, despite COVID, and said there has been a significant improvement in China business and quality of sales.
Global production by Japan’s eight main automakers fell by 4.5% year-on-year to 2.12m vehicles in January 2021, which was blamed partly on the global shortage of semiconductors. Toyota reported a 4% rise in output to 741,704 units last month, the fifth consecutive monthly rise as global demand continued to recover from the impact of the COVID-19 pandemic.
UK car production fell 27.3% in January to 86,052 units, according to the latest figures issued today by the Society of Motor Manufacturers and Traders (SMMT). Although it was another poor monthly output level in a run of weak results hit by the pandemic, there was another positive for electrified vehicles, output of which continues to rise. The SMMT said it was the worst January performance overall since 2009.
SUVs started 2021 in Europe “with a success story”, according to JATO Dynamics, which said data for 27 markets showed the sector accounted for 44% of all new passenger car registrations in January, the highest share ever recorded for SUVs. Global analyst Felipe Munoz noted: “The demand for SUVs shows no signs of stagnation, and Europe is showing similar patterns of growing popularity to those seen in the US and China. Considering their higher prices and emissions levels, the results are particularly noteworthy.”
The Thai new vehicle market declined unexpectedly by 23% to 55,208 units in January 2021 compared with the 71,688 units reported a year earlier, according to wholesale data compiled by the Federation of Thai Industries (FTI). After beginning to stabilise in the fourth quarter of 2020, the vehicle market experienced another leg down in January 2021 – reflecting weakening domestic sentiment as COVID-19 cases around the world continued to surge.
A ground-breaking ceremony – jichinsai – took place today in Japan to mark the official start of construction work for Woven City, Toyota’s prototype for a future, fully connected community. Toyota Motor Corporation and Woven Planet Holdings launched the project just a year after its announcement, despite the limitations imposed by the global COVID-19 pandemic.
The first month of light vehicle sales for 2021 have now been collated for global markets. They show a marginal rise of 0.6% when compared with last year. The SAAR came in at 81.46m, the lowest since June 2020, and slightly below the level of January 2020 due to a different balance to regional sales. The geographic disparity in sales performance is most demonstrated by the results in Europe. For the region as a whole sales fell 20.4%, but this partially hid a steeper fall in lockdown-affected West European markets of 23.5%. Here, key markets such as the UK, Spain and Germany all fell in excess of 30% in January.
Magna has recorded fourth-quarter sales up 12% to US$10.6bn. Full-year 2020 sales fell 17% to US$32.6bn, compared to vehicle production declines of 20% and 23% in Magna’s most significant production markets of North America and Europe. “Magna navigated a challenging year from a position of strength attributable to our entrepreneurial spirit, market leading portfolio and healthy balance sheet,” said Magna CEO, Swamy Kotagiri. “From the time COVID-19 first struck, our primary focus was on protecting the health, safety and economic well-being of our employees.”
Malaysia’s new vehicle market fell by almost 24% to 32,829 units in January 2021 from 42,942 units in the same month of the previous year, based on registration data released by the Malaysian Automotive Association (MAA). The sharp fall is blamed on the re-imposition of the Movement Control Order (MCO)at the beginning of the year, which severely restricts social and business activity in the country to help combat the recent resurgence of the COVID19 pandemic.
Daimler has reported its annual net profit (2020) up by 48% to EUR4 billion (2019: EUR2.7 billion). Lower vehicle sales due to the pandemic were more than offset by lower costs and cash preservation measures. The company also said it expects sales, revenues and operating profit (EBIT) in 2021 to be significantly above the prior-year’s level.
Michelin has reported 2020 sales down 15% to EUR20bn (US$24bn) and segment operating income of EUR1.9bn. “In the midst of this major health and economic crisis, I would first like to thank the Michelin teams for their dedication and commitment,” said Michelin managing chairman, Florent Menegaux.
Michelin says in 2021, in a still highly uncertain environment as the health crisis unfolds, passenger car and light truck tyre markets are expected to expand by 6% to 10% during the year, truck tyre markets by between 4% and 8% and speciality markets by 8% to 12%. In this market scenario and barring any new systemic impact from Covid-19, Michelin’s objectives are to deliver full-year segment operating income in excess of EUR2.5bn at constant exchange rates and structural free cash flow of around EUR1bn.
ZF says it expects consolidated sales of EUR32.6bn (US$40bn) for the fiscal year 2020, based on preliminary and non-audited figures. This represents a decline in sales of around 11% compared to the previous year, while adjusted EBIT margin for 2020 is 3.2%. The first half of 2020 saw a 27% decline in sales and an adjusted EBIT margin of minus 1.3%. ZF initiated cost reduction and restructuring measures immediately following the outbreak of the corona pandemic. Supported by a significant market recovery, this led to a substantial improvement in sales and earnings in the second half of 2020.
New vehicle sales in the Philippines began to stabilise in January 2021 with total volume down by just 1.4% at 23,380 units from 23,723 units in the same month last year, according to member wholesale data released jointly by the Chamber of Automotive Manufacturers of the Philippines Inc (CAMPI) and the Truck Manufacturers Association (TMA). The Philippines is one of the countries in Asia worst hit by the COVID-19 pandemic with GDP shrinking by 9.5% last year due to prolonged lockdowns across the country throughout the year and falling exports.
Taiwan’s new vehicle market surged by almost 30% to 51,179 units in January 2021 from weak year-earlier sales of 39,417 units, according to local reports citing registration data compiled by the Directorate of Highways. The country has recorded very few COVID-19 infections since the outbreak began over a year ago and day-to-day domestic economic activity has largely been unaffected by the pandemic.
Sales of imported light passenger vehicles in South Korea jumped by almost 27% to 22,321 units in January 2021 from 17,640 units in the same month of last year, according to member data released by the Korea Automobile Importers & Distributors Association (KAIDA). Deliveries continued to benefit from the 30% sales tax discount introduced in June last year, which expired at the end of the year. Domestic sales by local manufacturers also increased sharply last month, by 16% to 116,270 units.
China‘s new vehicle market rebounded strongly in January 2021, by 29.5% to over 2.51m units from weak year-earlier sales of 1.94m, based on passenger car and commercial vehicle wholesale data released by the China Association of Automobile Manufacturers (CAAM). In January last year the vehicle market declined by 18% to 1.94m units, with sales affected by fewer working days in the month due to the Lunar New Year, which this year falls in February, and as the government began to acknowledge the seriousness of the COVID-19 pandemic and started to take action.
Vietnam‘s new vehicle market rebounded strongly in January 2021, with sales surging by over 60% to 24,216 units from 15,123 units in the same month of last year, according to wholesale data released by the Vietnam Automotive Manufacturers Association (VAMA). Economic growth in the country has recovered steadily since hitting a low of 0.4% in the second quarter of 2020, accelerating to 2.6% in third quarter and to 4.5% in the fourth quarter of the year.
Honda Motor said sales revenue for the third fiscal quarter of 2020/2021 rose 0.6% to JPY3,771.5bn due to an increase from its automobile business. Operating profit rose 66.7% to JPY277.7bn “due primarily to increased efficiency of R&D expenditures and cost reduction efforts. This was despite unfavorable currency effects”, the automaker said.
Nissan Motor has returned to a positive operating profit of 27.1 billion yen for the quarter ended 31 December 2020. The company benefited from a rebound to sales, lower incentives and tighter cost management. Nissan also reduced its forecast operating loss for the year ended March 31, 2021 to 205 billion yen from 340 billion yen previously forecast.
The new vehicle market in Japan expanded by 6.8% to 384,442 units in January 2021 from 360,103 a year earlier, according to registration data released by the Japan Automobile Manufacturers Association. This followed a strong rebound in the fourth quarter of 2020 as the economy continued to recover from a sharp decline earlier in the year under the impact of the global COVID-19 pandemic. GDP is estimated to have grown by close to 4% year-on-year in the fourth quarter after a 23% bounce in the third quarter year-on-year, driven by rebounding domestic consumption and exports.
New car sales in the UK were down almost 40% in January as showroom closures due to population lockdowns stifled demand. According to SMMT data, just 90,249 new cars were registered in January – the worst start to a year since 1970 despite click and collect preventing greater fall.
Perodua, Malaysia’s second national car company, said it aimed to increase sales by 9% to 240,000 vehicles in 2021 from 220,163 units in 2020. Malaysia’s largest vehicle manufacturer, with Daihatsu Motor as its strategic shareholder, said demand this year would be underpinned by the recently announced extension of the sales tax exemption until the end of June 2021.
Starting 2021 on a strong note, Volvo Cars reported the best January in its history as Europe, China and the US all reported increasing sales. Global sales rose by 30.2 per cent to 59,588 cars, boosted by a strong year-on-year performance in China where the company more than recovered losses from earlier COVID-19 shutdowns.
After a year that saw the sharpest drop ever in EU car sales due to the COVID-19 pandemic, the European Automobile Manufacturers’ Association (ACEA) forecasts that 2021 will mark a first step on the path to recovery, with sales rising by about 10% compared to 2020. The trade association says the fallout of COVID is expected to persist into the first quarter of 2021, but the car market should pick up in the second half of the year as vaccination programmes progress.
New Zealand‘s Motor Industry Association (MIA) said January 2021 new vehicle registrations showed “a strong start for the new year”. Registrations of 13,893 were 6.2% up on January 2020, making it the third strongest January on record.
Ford on Tuesday announced an investment of US$1.05bn (R15.8bn) in its South African manufacturing operations, the biggest investment in the automaker’s 97-year history in the country. It also represents one of the largest-ever investments in the South African automotive industry, boosting production capability and creating new jobs.
Shanghai-based SAIC Motor Corporation said it was stepping up its global expansion with a new overseas sales target of 1.5m units by 2025, according to local reports. The company is looking to increase overseas sales fourfold over the next five years, compared with 2020 volume, which increased by over 11% to 390,000 units despite the global COVID-19 pandemic.
Domestic sales by South Korea’s five main automakers combined increased by over 16% to 116,270 units in January 2021 from weak year-earlier sales of 99,962 units, according to preliminary data released individually by the companies.
Tata Motors’ Jaguar Land Rover boosted pre-tax third quarter profit to GBP439m, up GBP374m quarter on quarter and GBP121m year on year. The automaker said “improved profits reflect revenue of GBP6bn, up GBP1.6bn from Q2 while still lower than pre-COVID levels a year ago, with favourable sales mix, cost performance and partial reversal of prior-period reserves”.
Daimler said in a preliminary full year 2020 results announcement its industrial free cash flow, group EBIT, Mercedes-Benz Cars & Vans return on sales adjusted and Daimler Mobility return on equity adjusted were “all significantly guidance or significantly above market expectations for the financial year 2020″.
Toyota Motor has beaten Volkswagen by around 220,000 units in the global sales race for 2020. Group global sales, including Toyota/Lexus, Daihatsu and Hino, totalled 9,528,438 units, down 11.3%, the automaker said. Domestic Japan volume fell 7.8% to 2,156,738 while exports and local production overseas accounted for 7,371,700 vehicles, down 12.3%. “Despite the COVID-19 pandemic, which has been spreading since the beginning of 2020, Toyota was able to continue corporate activities through comprehensive implementation of various infection prevention measures, and by working together with partners including suppliers and dealers,” the automaker said in a statement. “[We were able] to limit the decline in sales to just 10.5% year-on-year and maintain domestic production at the 3m unit level.” Volkswagen Group sold 9,305,400 vehicles worldwide last year, a decrease of 15.2% year-on-year due to COVID-19, it said.
UK car manufacturing output fell 29.3% in 2020 to 920,928 units, the lowest total since 1984 as the industry was hit by lower global demand due to the pandemic. Data issued by the SMMT showed production for UK and overseas markets declined 30.4% and 29.1% respectively, but with more than eight in 10 cars exported. Forecasts for 2021 point to some recovery, with UK car output projected at around one million units this year. However, much depends on an easing of the health emergency around the world and returning economic growth and confidence.
British commercial vehicle production fell 15.5% in 2020 to just 66,116 units, the lowest annual output since 1933, according to the Society of Motor Manufacturers and Traders (SMMT). UK engine manufacturing fell 27% to just over 1.8m units.
Strong demand for EVs resulted in two electric models securing places in the top three European best-selling cars sales chart last month. Behind the popular Golf, Volkswagen’s ID.3, launched in the fourth quarter, registered almost 28,000 units and became the second most popular car in Europe, during December, according to JATO Dynamics analysis.
Malaysia’s new vehicle market surged by 25.5% to 68,836 units in December 2020 from 54,842 units in the same month of the previous year, based on registration data released by the Malaysian Automotive Association (MAA). The vehicle market continued to recover from a 41% decline in the first half of the year, including a 55% drop in the second quarter after the government imposed a strict Movement Control Order (MCO) in March to help slow the spread of the COVID-19 pandemic.
Toyota Motor Thailand said it expected the overall Thai vehicle market to recover strongly from the COVID-19 pandemic, with overall sales forecast to rise by between 7% and 14% to 850,000–900,000 units in 2021. The country’s leading vehicle manufacturer released its forecast just days after the Federation of Thai Industries (FTI) announced a much gloomier outlook for this year – forecasting a more than 5% sales decline to 750,000 units after declining by more than 21% to 792,146 units in 2020.
Now that 2020 is receding into the distance what can we expect for the global light vehicle market in 2021? If anything, we expect 2021 to be just as tumultuous as 2020. This will be particularly true in the first two quarters. Year-on-year comparisons against extremely low bases will come into play in the first half, but it’s a bumpy ride in prospect this year.
Preliminary financial results for 2020 issued by Volkswagen Group showed a strong recovery during the course of the year, underpinned by much stronger sales in China. In a statement, the company said that VW Group deliveries ‘continued to recover strongly in the fourth quarter and even exceeded the deliveries of the third quarter 2020, leading to strong group turnover’.
Although COVID-19 infections and deaths have remained relatively low in New Zealand, due to the country closing its borders and imposing strict quarantine rules still in effect, the pandemic still hit new vehicle registrations in 2020.
The Thai domestic vehicle market will likely decline by a further 5% this year after a more than 21% drop in 2020, the Federation of Thai Industries (FTI) said. It is forecasting domestic sales to reach 750,000 units in 2021, down from 792,146 last year, with the recent COVID-19 outbreaks around the world expected to hold back economic activity in the country.
In 2020, PSA Group‘s final full year before the Stellantis merger with FCA, the French automaker’s sales recovered strongly in the second half of the year (up 40% vs H1; full year total 2.5m worldwide) and final quarter market share rose quarter on quarter (+0.5pt vs Q3) with an increase for Peugeot (+ 0.1 pt year-on-year) and DS Automobiles (+0.1 pt year-on-year on the premium market), and a rebound of Opel-Vauxhall in Q4 (+0.3 pt compared to Q4 2019).
Porsche Automobil Holding SE said it expects after tax profit for full year 2020 will “presumably be significantly positive, given the fact that Volkswagen AG has “announced it expects an operating result before special items related to diesel of around EUR10bn”. The Porsche group holds 31.4% of VW so its after tax earnings are significantly affected by Volkswagen group results.
Thailand’s new vehicle market rebounded strongly in December 2020, with sales rising by over 7% to 95,636 units from 89,285 units in the same month of the previous year, according to wholesale data compiled by the Federation of Thai Industries (FTI). While the rebound came against weak year-earlier sales, the vehicle market had become much more stable in the last few months. Day-to-day domestic economic activity in the country had largely returned to normal after the government eased social and business restrictions towards the end of the second quarter as the threat of COVID-19 receded.
Indonesia’s new vehicle market continued to decline sharply in December 2020, by almost 35% to 57,129 units from already weak year-earlier sales of 87,664, according to member wholesale data compiled by industry association Gaikindo. Indonesia was one of the countries in Asia worst affected by the global COVID-19 pandemic, with domestic consumption, investment and exports weakening significantly last year. GDP declined 3.5% in the third quarter after shrinking 5.3% in the second quarter, and continued social and business restrictions pointed to a further decline in economic activity in the fourth quarter of last year.
Porsche said it delivered 272,162 new cars worldwide last year, only 3% below its record 2019, despite the COVID-19 pandemic. “The corona crisis posed a great challenge from spring 2020 onwards. Nevertheless, we were able to keep deliveries comparatively stable for the year as a whole,” said sales and marketing head Detlev von Platen.
Toyota and Honda have restarted their plants in Malaysia as the government updated its list of essential businesses allowed to operate. However, an analyst has criticised the Malaysian government’s handling of the COVID-19 crisis and warned that the country needs to be more efficient in dealing with the crisis and its economic impacts, or risk deterring investment.
New vehicle sales in the Philippines continued to fall in December 2020, by over 18% to 27,596 units from 33,715 in the same month of the previous year, according to member wholesale data released jointly by the Chamber of Automotive Manufacturers of the Philippines Inc (CAMPI) and the Truck Manufacturers Association (TMA). The Philippines was one of the countries in Asia worst hit by the COVID-19 pandemic, with GDP declining by 11.5% year-on-year in the third quarter following an almost 17% contraction in the second quarter.
China’s new vehicle market continued to recover in December 2020, with sales rising by 6.4% to 2.83m units from 2.66m units in the same month of the previous year, based on passenger car and commercial vehicle wholesale data released by the China Association of Automobile Manufacturers (CAAM). Earlier, the China Passenger Car Association (CPCA) had said the country’s new passenger vehicle market also continued to recover last month, with sales rising by 6.6% year-on-year to 2.29m units. The Chinese economy has rebounded strongly from the COVID-19 pandemic, with GDP growth estimated at around 5.5% year-on-year in the fourth quarter of 2020.
Vietnam’s new vehicle market continued to rebound in December 2020, with sales rising by over 11% to 34,860 units from 31,255 units in the same month of last year, according to wholesale data released by the Vietnam Automotive Manufacturers Association (VAMA). The economy has steadily recovered from the 0.4% year-on-year growth seen in the second quarter of 2020, with growth accelerating to 2.6% in third quarter and to 4.5% in the fourth quarter of the year. While restrictions on international tourism remain a significant drag on the economy, the country has benefited from the trade war between China and the US with manufacturing and exports leading the recovery.
China’s new passenger vehicle market continued to recover in December 2020, with sales rising by 6.6% year-on-year to 2.29m units, according to retail data compiled by the China Passenger Car Association (CPCA). The Chinese economy has rebounded strongly from the COVID-19 pandemic, with GDP growth estimated at around 5.5% year-on-year in the fourth quarter of 2020. The economy expanded by 4.9% in the third quarter and by 3.2% in the second quarter after a 6.8% contraction in the first quarter, according to Chinese government data.
A sector of the economy that has grown through COVID-19 lockdowns is online retail and the associated logistics that move ordered goods to customers. Electric vans aimed at the urban delivery segment are coming to market in increasing numbers. General Motors is innovating with a new electric van aimed at fleet operators and backed up by a suite of software and services as part of ‘BrightDrop’. The EV600 electric van powered by Ultium batteries is slated for first deliveries to FedEx in the US later this year.
The Japanese new vehicle market continued to recover in December 2020, with sales rising by just over 10% to 379,896 units from weak year-earlier sales 344,875 units, according to registration data released by the Japan Automobile Manufacturers Association. The market rebounded strongly in the fourth quarter of 2020, from weak year-earlier sales after the government hiked the general sales tax from 8% to 10% at the beginning of October 2019. The economy has also rebounded strongly, by 23% year-on-year in the third quarter after plunging by 29% in the previous quarter due to the global COVID-19 pandemic.
Sales of imported light passenger vehicles in South Korea rose by 4.5% to 31,419 units in December 2020 from 30,072 units in the same month of last year, according to member data released by the Korea Automobile Importers & Distributors Association (KAIDA). Over the full year, import sales increased by over 12% to 274,859 units compared with 244,780 units previously, with German brands accounting for over two-thirds of the total with 186,179 sales. This compares with a 4.9% rise in domestic sales by local manufacturers to 1,607,034 units.
Ford is to shutter three manufacturing plants in Brazil this year in a major restructuring move. Ford Brazil will cease production at its Camaçari, Taubaté and Troller plants during 2021, as it said the ‘COVID-19 pandemic amplifies persistent industry idle capacity and slow sales that have resulted in years of significant losses’.
The picture continued to improve for automakers in the US recovering from the ‘COVID Correction’. The yawning 33.4% chasm of Q2 shrank to a 2.4% deficit in Q4 as total volume rose 41.6%. Deliveries hit nearly 4.2m units in the final quarter of 2020 and the full year total was slightly more than 14.65m, down 14.4% from 2019.
We consider immediate prospects for the UK car market and economy in the light of the imposition of a new COVID-19-induced lockdown in the UK, as well as a free trade deal struck with the European Union at the end of 2020. UK automotive faces challenges, but should not fear them.
Mahle Powertrain said it had helped “a major vehicle manufacturer” to overcome testing challenges posed by travel restrictions during the Covid crisis. Use of the hypobaric and climatic capability of the company’s Real Driving Emissions Centre in Northampton, UK, enabled the replication of real-world drive cycles without the requirement for global travel normally associated with altitude testing.
Increased demand for new vehicles during the COVID-19 pandemic helped General Motors and other automakers begin reporting strong fourth quarter US sales this week while executives voiced optimism the rebound from low sales during the April-May production shutdown would continue in 2021.
Volvo Cars is tripling electric car manufacturing capacity at its plant in Ghent, Belgium, as it prepares to meet fast-growing demand for its Recharge line.
Geely’s Volvo Cars announced record second half 2020 sales as fast-growing demand for electrified cars boosted the company’s recovery from the impact of the COVID-19 pandemic. The company said it had “acted decisively” to mitigate the effect of the pandemic during the first half of the year, allowing it to quickly restart its operations after a brief shutdown and embark on a strong recovery, helped by fast-growing demand for its Recharge line.
The Federal Chamber of Automotive Industries (FCAI) said Australian new vehicle sales in 2020 reached 916,968, down 13.7% year on year. “The decline of 13.7% was not unexpected and is attributed to the financial impact of the COVID-19 pandemic,” FCAI said.
UK light commercial vehicle (LCV) registrations ended 2020 down 20.0% year on year to 292,657 units. The van market declined in December following three months of growth spurred by home delivery growth, according to the Society of Motor Manufacturers and Traders (SMMT).
Taiwan new sales declined slightly in December 2020, to 45,505 units from strong year earlier sales of 45,925 units. The market nonetheless performed strongly last year with sales rising by 4% to a record 457,435 units, from 439,836 in 2019, despite the economic damage the COVID-19 pandemic has caused across the world.
5 January 2021
Despite COVID-19, Volkswagen Group’s Bentley Motors today announced record sales of 11,206 in 2020, an increase of 2% over 2019.
With new social measures introduced in December to control the COVID-19 pandemic and new variants of the virus emerging globally, consumer sentiment in South Korea turned more negative in December. Domestic sales by the five main South Korean automakers combined declined by 8.1% to 133,061 units in December 2020 from 144,839 in the same month of the previous year, according to preliminary data released individually by the companies. The market benefited from a strong pipeline of new models by the leading brands last year and also from a 30% sales tax discount introduced in June until the end of the year.
22 December 2020
Toyota is to halt production at its UK Burnaston plant due to ongoing disruption to UK-EU freight shipments caused by a French border ban on accompanied UK outbound freight trucks due to the emergence in Britain of a new COVID-19 virus strain. Toyota is bringing forward the annual shutdown for the Christmas holidays.
Indonesia’s new vehicle market continued to decline sharply in November 2020, by 41% to 53,844 units from already weak year-earlier sales of 91,240 units according to member wholesale data compiled by industry association Gaikindo. Indonesia is one of the countries in the region worst affected by the global COVID-19 pandemic. The vehicle market in the first eleven months of 2020 was down by almost 50%.
At the end of an extraordinary year, we are gathering snapshot perspectives from around the global auto industry on 2020 learnings and prospects for 2021. In this third of a series we will publish this month, we hear from Yann Brillat-Savarin, Executive Vice-President, Faurecia Group Strategy.
New vehicle sales in the Philippines continued to fall sharply in November 2020, by almost 33% to 23,162 units from 34,465 units in the same month of last year, according to member wholesale data released jointly by the Chamber of Automotive Manufacturers of the Philippines Inc (CAMPI) and the Truck Manufacturers Association (TMA). The Philippines is one of the countries in Asia worst hit by the COVID-19 pandemic, with GDP continuing to decline sharply in the third quarter by 11.5% year on year following an almost 17% contraction in the second quarter.
At the end of an extraordinary year, we are gathering snapshot perspectives from around the global auto industry on 2020 learnings and prospects for 2021. In this first of a series we will publish this month, we hear from Amanda Roble, General Manager, SABIC’s automotive business.
Volkswagen has been forced to reduce output its Wolfsburg plant in Germany due to disruption caused by the Covid pandemic at a key supplier.
China’s new vehicle market continued to recover in November 2020, with sales rising by 12.6% to 2.77m units from 2.46m units in the same month of last year, based on passenger car and commercial vehicle wholesale data released by the China Association of Automobile Manufacturers (CAAM).
Vietnam’s new vehicle market continued to rebound strongly in November 2020, with sales surging by over 25% to 34,860 units from 27,798 units in the same month of last year, according to wholesale data released by the Vietnam Automotive Manufacturers Association (VAMA). Vietnam has avoided falling into recession this year thanks to early action by the government to control the spread of the COVID19 pandemic.
A study – the Continental Mobility Study – sponsored by Continental says that private transportation has gained considerable importance during the COVID-19 pandemic and will emerge from the crisis ‘much stronger’. The study found that in order to minimize contact with others, many people are choosing to travel by bicycle or by car, while the use of public transportation has declined significantly.
China’s new passenger vehicle market continued to recover in November 2020 with sales rising by 8% year on year to 2.08m units according to retail data compiled by the China Passenger Car Association (CPCA). The Chinese economy has rebounded strongly from the COVID-19 pandemic, with GDP expanding by 4.9% year on year in the third quarter after growing by 3.2% in the second quarter, according to government data.
Although the global auto industry has moved on from the mass shutdowns of six months ago supply chains are still struggling to adjust. The availability of certain critical components is being called into question, forcing automakers to make tough decisions – either slowing or shutting production lines down until parts supply can restart, finding an emergency alternative supplier often at significant extra cost, chartering planes for emergency supply or even adjusting a vehicle’s design to make it less dependent on supply of one particular component.
China’s car industry is struggling with a shortage of semiconductors used in advanced automotive systems, according to China Daily newspaper citing industry insiders. The shortages were blamed on a lack of investment in new capacity due to the COVID-19 pandemic, combined with a stronger than expected rebound in vehicle production in the country following a sharp decline in the first quarter of 2020.
Taiwan’s new vehicle market expanded by almost 14% to 46,332 units in November 2020 from strong year earlier sales of 40,705 units, according to local reports citing registration data compiled by the Directorate of Highways. Taiwan’s vehicle market has performed strongly this year, particularly in view of the sharp declines seen elsewhere in Asia due to the COVID-19 pandemic. Sales in the first 11 months of the year increased by 4.6% to 411,930 units from 393,912 units in the same period of last year, putting the market on target for a record year in 2020.
The UK’s new car market was down a hefty 27.4% in the month of November as coronavirus-induced population restrictions hit the retail sector hard, according to data released by the Society of Motor Manufacturers and Traders (SMMT). November’s big market contraction is no surprise given the imposition of a second lockdown in England that shuttered dealers during the month (it has now lifted). The overall market decline was however, softened by ‘click and collect’ capabilities. However, there was some positive news in rising electric car sales in November. Battery electric vehicles (BEVs) accounted for 9.1% of the UK’s new car market last month (versus 3% in November of last year) and are rapidly catching the shrinking pure diesel share (14% in November).
New Zealand’s Motor Industry Association (MIA) said November 2020 registrations of new vehicles were lower than a year ago but “slightly stronger” than recent months. November sales dropped 14.2% below November 2019 with 11,889 vehicles registered, down 1,961 units.
Domestic sales by South Korea’s five main automakers combined increased by 5.3% to 143,591 units in November 2020 from 136,414 units in the same month of last year. In the first 11 months of 2020 domestic sales by the big five automakers increased by 6.3% to 1,473,973 units from 1,386,614 units in the same period of last year, with the market having fully recovered from the first quarter decline triggered by the COVID-19 pandemic.
China has rebounded strongly from the COVID-19 pandemic earlier this year, with GDP expanding by 4.9% year-on-year in the third quarter after growing by 3.2% in the second quarter, according to Chinese government data. In the automotive sector, domestic vehicle sales have risen year-on-year in each of the last seven months after an almost year-long decline which began in July of last year – when the government simultaneously introduced stricter emissions regulations and cut subsidies on new-energy vehicles (NEVs). Our analysis of China’s industrial recovery and growing presence on the global stage is here.
Japan’s eight main automakers reported a 2.7% year on year increase in global production to 2.44m vehicles in October, as the industry continued its gradual recovery from plunging global demand earlier in the year due to the COVID-19 pandemic.
China-based interiors giant Yanfeng says it continues to see opportunity in the shared mobility sector as the world looks to emerge from the effects of the global pandemic. Key to convincing potential customers of the benefits of ridesharing will be technology which demonstrates health safety and Yanfeng has been working on cabin cleanliness for some time. The supplier has developed an antimicrobial device that can be integrated into the headliner console and uses UV light to disinfect the air and surfaces in the vehicle interior.
Before the pandemic struck, the automotive aftermarket was in a state of flux. Evolving car ownership habits were altering the way we use, service and repair cars. In this interview, Alex Ashmore, Senior Vice President and President Aftermarket, Delphi Technologies explains how the industry needs to evolve in the shadow of Covid and what the impact has been.
Electrified vehicles, including pure electrics (BEV), plug- in hybrids (PHEV), pure hybrids (HEV) and mild hybrids, took 26.8% of the European car market, 302,587 units, in October 2020. Year to date (YTD) registrations fell 27% to 9.7m after an October down 7% to 1,127,624, the same level recorded in October 2018 and reflecting the significant impact caused by the second wave of the pandemic.
UK commercial vehicle production fell by 25.6% year on year in October with 6,761 units manufactured according to the Society of Motor Manufacturers and Traders (SMMT). Output for both export and domestic markets declined, by 21.1% and 30.4% respectively, due partly to worries over recovery post-pandemic.
UK car output is being hit by lower export demand as pandemic effects continue. UK car production was down 18.2% in October as output was hit by sharp declines in export demand from the EU and US markets, according to data released by the SMMT.
Ford Motor said it had ordered a dozen ultra cold freezers that can safely store the Pfizer COVID-19 vaccine. The move was aimed at ensuring the automaker’s workers had access to vaccines when they were rolled out nationally.
Malaysia’s new vehicle market continued to recover in October 2020, by over 5% to 56,670 units from 53,870 units in the same month of last year. The market looks to be rebounding reasonably well from the 41% decline in the first half of the year, which included a 55% drop in the second quarter after the government imposed a strict Movement Control Order (MCO) in March to help slow the spread of the COVID-19 pandemic.
BMW said last month it would bring manufacturing of the Mini Countryman successor model in-house in the wake of the pandemic crisis and re-evaluated group production needs. It has now announced that the successor model will be made at the BMW Leipzig plant from 2023.
Indonesia’s new vehicle market showed no sign of stabilising in October 2020, with sales plunging by almost 49% to 49,043 units from 96,030 units in the same month of last year, according to member wholesale data compiled by industry association Gaikindo. The global COVID-19 pandemic has taken a heavy toll on the economy with domestic consumption, investment and exports having weakened significantly this year.
New vehicle sales in Thailand amounted to 74,114 units in October 2020, according to wholesale data compiled by the Federation of Thai Industries (FTI), representing a more than 4% decline compared with the 77,121 sales reported previously for the same month of last year.
US president elect Joe Biden has hosted a virtual joint meeting with labour union leaders and the chief executives of major tech, retail and auto companies. The business leaders at the virtual meeting included General Motors CEO Mary Barra. “To state the obvious, we’re in a pretty dark hole right now,” Biden said at the start of the meeting. “We face a dark winter ahead with COVID.”
New vehicle sales in the Philippines continued to fall sharply in October 2020, by over 27% to 25,023 units from 34,397 units in the same month of last year, according to member wholesale data released jointly by the Chamber of Automotive Manufacturers of the Philippines Inc (CAMPI) and the Truck Manufacturers Association (TMA). The Philippines was one of the countries in Asia worst hit by the COVID-19 pandemic, with GDP continuing to decline sharply in the third quarter – by 11.5% year on year following an almost 17% contraction in the second quarter.
Following the news of progress on prospective COVID-19 vaccines, attention is turning to prospects for their deployment and subsequent positive economic impacts in 2021. Our analysts have had a first shot at what the news could mean for the global vehicle market in 2021.
New vehicle sales in Vietnam increased by almost 16% to 31,607 units in October 2020 from 27,271 units in the same month of last year, according to wholesale data released by the Vietnam Automotive Manufacturers Association (VAMA). The vehicle market looks to be recovering from a sharp decline earlier in the year, after sales began to stabilise in the third quarter following an almost 30% decline in the first half of the year.
Australian new vehicle sales fell 1.5% year on year to 81,220 in October and Tony Weber, chief executive of the Federal Chamber of Automotive Industries (FCAI), said the results were welcome news for the automotive industry. “After a very challenging year, we are seeing green shoots in the Australian new vehicle market. Every state and territory except Victoria and Tasmania have seen significant growth and, given the [extended lockdown] circumstances, Victoria’s result is seen as encouraging,” Weber said.
October registrations of new vehicles in New Zealand continued the downward trend for 2020, the Motor Industry Association (MIA) said. Registrations were 20.6% lower year on year at 11,876 vehicles.
China’s new vehicle market continued to recover in October 2020, with sales rising by 12.5% to 2.57m units from 2.29m units in the same month of last year, based on passenger car and commercial vehicle wholesale data released by the China Association of Automobile Manufacturers (CAAM). The economy has rebounded strongly from the COVID-19 pandemic earlier in the year, helped by huge government stimulus including sharply higher fiscal spending, interest rate cuts and lower reserve requirements for banks.
Sales of imported light passenger vehicles in South Korea rose by just over 9.8% to 24,257 units in October 2020 from 22,101 in the same month of last year, according to member data released by the Korea Automobile Importers & Distributors Association (KAIDA).
Group after tax profit at Porsche was back in positive numbers in the first nine months of 2020, at EUR437m though that was down significantly on the EUR3.52bn booked a year ago.
Early signs from the first light vehicle sales reports of October are in line with analysts’ modelling for the month, and if anything a little more positive, according to GlobalData analysis. In West Europe it was no great surprise that the boost from incentives began to wane and hard economic reality set in.
Toyota Motor doubled its full year earnings forecasts for the current financial year with production and sales recovering from the global COVID-19 pandemic faster than had been previously expected.
General Motors reported adjusted EBIT up 78% year on year to US$5.3bn for the third quarter of 2020. “”Sales in the US and China are recovering faster than many people expected,” the automaker said.
The UK new car market was down by 1.6% in October, with 140,945 cars registered, marking a nine-year low for the sector, according to data released by the Society of Motor Manufacturers and Traders (SMMT). SMMT said the Covid ‘firebreak’ population restrictions in Wales (which closed non-essential retailers, including car dealers) accounted for more than half of month’s losses. A similar ‘stay at home’ order for England starting 5 November will force more UK showrooms to close this month.
BMW has posted a set of financial results for the third quarter lifted by stronger sales and rebounding demand in key markets, most notably China. However, the company warned of risks ahead due to the pandemic ‘gaining momentum’.
Domestic sales by South Korea’s five main automakers combined increased just slightly in October 2020, to 135,495 units from 134,895 units in the same month of last year.
The Volkswagen Passenger Cars brand recovered “noticeably” in the third quarter of 2020 after the pandemic related slump in the first half of the year, the automaker said
Renault Samsung Motors has announced it will suspend production at its only plant, located in the South Korean city of Busan, for the first two days of this week to help control inventory. The South Korean Renault subsidiary also released its sales performance data for October – a 49% drop in global sales to 7,533 vehicles from 14,826 a year earlier.
UK car manufacturing output fell by 55 in September to 114,732 units – the lowest level for 25 years, according to data released by the SMMT. The SMMT noted that production for export was down by almost 10% at 87,533 units as companies continued to wrestle with the uncertain economic and political environment and COVID-related challenging global market conditions. Exports to key overseas destinations, including China, the EU and US fell 1.2%, 3.3% and 30.0% respectively.
Sales of new vehicles in southeast Asia’s six largest markets combined declined by almost 24% to 643,365 units in the third quarter of 2020 ( from 842,199 units in the same period of last year), according to data collected exclusively for just-auto. However, the trend during the year shows an improving trend as buyers returned to the market after lockdowns eased.
As recovering vehicle markets in Europe take on a green hue, helped by incentives that encourage electric car purchase, it seems that many carmakers in Europe have started to see a significant reduction in their average CO2 emissions levels. It’s one bit of good news this year. Indeed, the carmakers are largely on track to hit targets set by the EU, new research says.
Renault said Q3 2020 was marked by a “recovery in the trend of the global automobile market”, with a 4% drop compared with a 28% decline in the first half of the year. In Turkey, a market experiencing a very strong recovery (+178.0%), the French automaker increased sales by 131.1%.
Daimler raised its profit outlook for 2020 on the back of improving demand and measures to contain cost and preserve cash. Third quarter EBIT was up by an impressive 14% on last year. Cost cuts and draining dealer inventory as well as a big rebound in Mercedes sales in China boosted the results.
No deal – exiting the EU on 31 December without a trade deal with the bloc, thus reverting to World Trade Organisation (WTO) terms imposing a 10% tariff on finished vehicle trade – would be the worst possible outcome and undermine Britain’s green recovery, the Society of Motor Manufacturers and Traders said. “Just as the automotive industry is accelerating the introduction of the latest electrified vehicles, it faces the double whammy of a coronavirus second wave and the possibility of leaving the EU without a deal.”
Organisers of the UK exhibition for the automotive aftermarket, Automechanika Birmingham, have announced it has been postponed to 7-9 June 2022, from June 2021. That followed postponement of Automechanika Frankfurt to September 2021 as a result of the COVID-19 pandemic.
The month of September brought the strongest sales of the year for the global light vehicle market. The month proved to be a welcome relief after the SAAR rate slipped in August. As it was, September’s SAAR managed to sneak past the year’s previous high of 87.6m recorded in July with a SAAR of 88m. Global sales just managed a year-on-year gain of 0.2%.
Leaders of the European Automobile Manufacturers’ Association (ACEA) have called on EU policy makers and national governments to step up support to the auto sector, which continues to grapple with the fallout of COVID-19. ACEA says the corona crisis has rocked the EU auto industry, leading to production losses of more than 4 million motor vehicles to date (worth some EUR122bn). Registrations of all vehicle types have plummeted over the first three quarters of the year, with car sales forecast to drop by a historic 25% in 2020, ACEA says.
Amazon, set to become one of the global auto industry’s best customers for electric delivery vans, was, along with Spotify and Netflix, among the biggest risers in ranking amid global COVID-19 lockdowns in the 2020 Interbrands Best Global Brands Report. Toyota (#7; US$51,595m) and Daimler’s Mercedes-Benz (#8; US$49,268m) made the top 10 and Tesla (#40) was listed among ‘re-entrants’.
BMW says that its getting a cash flow boost as vehicle markets continue to recover from the pandemic-induced population lockdowns of the spring. BMW said in a statement that preliminary free cash flow for its automotive business in the third quarter 2020 amounts to EUR3,065m (previous year: EUR714m) and exceeds current market expectations. This, it said, was due in particular to a faster recovery in several markets, which led to higher sales growth.
New vehicle sales in Thailand declined by just over 4% to 77,433 units in September 2020 from already weak volume a year earlier, according to wholesale data compiled by the Federation of Thai Industries (FTI). This was an improvement on previous months, however, after sales fell by 15% year on year in August, by 27% in July and by 50% in the second quarter of the year when widespread lockdowns caused the economy to shrink by 12%.
Thermal management systems supplier Voss Automotive said on Monday it had acquired Henzel Automotive which last year booked sales of EUR32m and had 268 employees. Despite the COVID-19-related market slump, the new owner “expects previous year’s sales will be exceeded”.
Porsche is claiming “robust demand” during the COVID-19 pandemic affected first three quarters of 2020 though sales worldwide fell 5% year in year to 191,547 vehicles.
Daimler has reported preliminary third quarter financial results that it says reflect a faster than expected market recovery and a particularly strong September. Daimler also said it expects a positive impact for the remainder of the year, however with the fourth quarter 2020 to show the usual year-end seasonality pattern. The statement on future expectations was made under the assumption of no further COVID-19 lockdowns.
Malaysian car assembler and distributor Naza Group is said to be looking to give up its local Kia and Peugeot franchises due to weak domestic sales caused by the COVID-19 crisis.
As the autumn (fall) progresses, the trends in the US for COVID-19 are “worrisome”, according to Cox Automotive analysts. “Daily new COVID-19 cases continue an upward trend. The case growth is accelerating and causing higher hospitalisations as well. The impact on the economy continues,” they said in a report.
Data released by the China Association of Automobile Manufacturers (CAAM) shows that vehicle sales in China reached 2.57 million vehicles in September, a gain of 12.8% on September 2019 sales. The gain continues the rapid rate of recovery in China’s automotive market this year and is the sixth consecutive month of year-on-year growth. However, cumulative sales of vehicles for the first three quarters of the year in China are 6.9% down on the same period last year, at 17.1 million units, reflecting lost sales in the early part of the year when China’s market was hit by the COVID-19 induced population lockdowns.
General Motors on Monday reportedly said continued market recovery from the COVID-19 crisis helped its China vehicle sales grow 12% on year in July-September, its first quarterly sales growth in the country in two years.
Though uncertainties about the Brazilian economy in 2020 remain, downturn in the auto industry will be less than expected.
New vehicle sales in Vietnam were just slightly lower at 26,848 units in September 2020 from 27,058 units in the same month of last year, according to wholesale data released by the Vietnam Automotive Manufacturers Association (VAMA). The market had begun to stabilise after declining by almost 30% to 102,720 units in the first half of the year, with sales in August down by less than 4%. Vietnam had avoided falling into recession this year, helped by pre-emptive action early on to control the spread of the COVID-19 pandemic.
Valeo says it will keep all its sites in France open with no compulsory redundancies in the next two years. Three months ago, faced with an automotive sector severely impacted by the crisis caused by the pandemic, Valeo’s management started discussions with labour organisations aimed at preserving the competitiveness of its sites in France.
Taiwan‘s new vehicle market expanded by over 13% to 37,241 units in September 2020 from 32,854 units a year earlier.
To appreciate US light vehicle sales in the third quarter, it’s more important to compare them to the results in the second quarter of this year than the third quarter of 2019. Compared to a dismal, COVID-19-constrained second quarter, Q3 sales soared. Third quarter turnover was 32.2% higher than the previous quarter. Even with an extra selling day in Q3 the daily sales rate (DSR) was 30.5% ahead of Q2.
The recovery of worldwide retail passenger car sales by Mercedes-Benz continued in the third quarter despite ongoing challenging conditions. Global sales of 613,770 passenger cars in the period of July to September were higher than in the prior-year quarter for the first time this year (+3.9%) due to the positive development in China and rising customer demand in many other markets.
Jaguar Land Rover said its plants were back on two shifts after retail sales for the three month period to 30 September 2020 improved significantly versus the preceding quarter but continued to be impacted by COVID-19.
China’s auto manufacturing sector rallied in the first eight months of 2020 as the auto market maintained its recovery momentum, industry data showed. Profits of the auto manufacturing sector rose 1.5% year on year to CNY308.48bn (about US$45.3bn) from January to August, an improvement from the 5.9% drop seen in the January-July period.
Domestic sales by South Korea’s five main automakers combined increased by just over 25% to 138,530 units in September 2020 from 110,654 units in the same month of last year. In the first nine months of 2020, domestic sales by the big five automakers increased by 7.1% to 1,194,887 units from 1,115,305 units in the same period of last year, with the market having fully recovered from the first quarter declines due to the COVID-19 pandemic.
The UK car market was down 4.4% versus last year’s pace in the month of September, a result widely seen as disappointing and marking the weakest ever ‘new plate’ September. The recovery to demand following the relaxation of COVID lockdown restrictions from June continues, but the latest data suggests the rebound is now running out of steam as the public health emergency persists.
The UK new light commercial vehicle (LCV) market grew by more than a quarter (+26.4%) in September, according to Society of Motor Manufacturers and Traders (SMMT) data.
New Zealand‘s Motor Industry Association said September 2020 registrations of new vehicles reflected “a weaker economy affected by the worldwide COVID-19 pandemic”.
It is reported that Uber is in talks to acquire FreeNow, the BMW-Daimler combine which is an Uber ride-share competitor in Europe and South America. Like all new mobility providers FreeNow has struggled during the Covid-19 pandemic, with BMW and Daimler reportedly touting the business for new investment. Now Uber is reportedly in talks to ride to the rescue.
South African car makers have asked the government to reduce taxes on new vehicle purchases as part of a proposed stimulus package for the coronavirus-hit sector.
Chinese state-owned car maker FAW Group had held talks to acquire Italian truck group Iveco earlier this year but these had now been put on hold, two Reuters sources said. Changchun-based FAW, which makes heavy duty trucks under its own brand, is now reluctant to make international deals so as not to be seen to take advantage of troubled companies during the COVID-19 pandemic, one source said. Some European governments have sought to shield key industries from unwanted foreign interest this year, as the coronavirus pandemic hit companies across sectors.
Analysts at Cox Automotive say that they forecast the US light vehicle market annual sales pace in September at near 15.5 million units, the fifth consecutive month of improvement. Cox also forecasts sales volume in September at close to 1.275 million units, close to year-ago levels. Further, they says inventory levels continue to slip lower in conditions of strong demand, with only 3% of available inventory being model year 2021, far below normal levels.
Thyssenkrupp will realign automotive system engineering activities from 1 October by splitting the current system engineering business unit into two independent units. One will eventually be sold and there will be job losses. The reason for restructuring is a slump in order intake and sales drastically exacerbated by the coronavirus crisis.
Mitsubishi Motors was said to be planning to offer early retirement to some 500 to 600 workers in mid November as part of plans to cut costs and restructure its operations. The Japanese automaker is struggling with falling sales due to the global COVID-19 pandemic.
The UK’s auto industry trade association, the SMMT, has launched what it calls the ‘Safe Harbour Scheme’ to prevent insolvencies and save jobs across auto sector as it grapples with the effects of the coronavirus crisis. The SMMT says the new initiative allows multiple companies to come together to support critical suppliers without falling foul of anti-competition rules.
Nissan Motor expects to be profitable in 2021 if its current sales momentum continues, chief executive officer Makoto Uchida told reporters at the Beijing International Automotive Exhibition at the weekend. Uchida noted Nissan was beginning to recover thanks in large part to a strong sales rebound in China. After declining by 42% in the first quarter of 2020 due to the COVID-19 pandemic, the overall Chinese vehicle market has grown strongly in the last five month and Nissan expects this recovery to continue.
August commercial vehicle production in the UK fell 11.5% year on year (better than cars, see below) with 4,915 vans, taxis, trucks and buses manufactured.
Renault Samsung Motors confirmed it plans to suspend production at its only assembly plant until mid October to slow the build-up of inventory.
UK car production declined by 44.6% in August due to the impact of the ongoing COVID-19 pandemic on economies and car demand. UK car output so far this year is down 40.2% with a loss of 348,821 units worth more than GBP9.5bn to UK car makers.
Mahle is to close two German factories in Gaildorf (Baden-Württemberg) and Freiberg (Saxony), while adding there will be “adjustments to staffing levels” at other locations in the country and elsewhere in Europe. Last week the supplier said it saw no return to pre-crisis levels “for several years,” noting it had “excess global capacities of 7,600 jobs.”
Valeo has developed what it says is the world’s most powerful air sterilisation system for bus and coach cabins. On activation, the system eliminates in a single airflow cycle, more than 95% of viruses, including COVID-19, as well as any bacteria or mould present in the air circulating in the cabin.
August was not a strong month for European new car registrations as volume fell 18% year on year last month, indicating the positive trend seen since May – when lockdown began to ease across Europe – had halted. The bright spot was EV sales – up 121%.
Kia Motors said on Wednesday two of its eight domestic plants returned to normal operations following days of suspension due to coronavirus cases.
Traffic levels during the morning rush hour in Britain have returned to those last seen in January, before the coronavirus pandemic hit, according to data from RAC Insurance. However, it says that this is mainly due to the return of the school run, rather than commuters, with many workers continuing to work from home.
Hyundai Motor said it has reached an agreement with its labour union this week to freeze wages this year to help the company cope with the impact of the coronavirus.
New vehicle sales in Indonesia continued to plunge in August 2020, by almost 59% to 37,291 units from 90,568 units in the same month of last year, according to member wholesale data compiled by industry association Gaikindo. The global COVID-19 pandemic has taken a heavy toll on the economy so far, both in terms of domestic consumption, investment and exports.
Malaysia‘s new vehicle market expanded by 3.2% to 52,800 units in August 2020 from weak year earlier sales of 51,148 units, based on registration data released by the Malaysian Automotive Association (MAA). The vehicle market has begun to recover from a 55% drop in the second quarter, after the government imposed its strict Movement Control Order (MCO) in March to help slow the spread of the COVID-19 pandemic in the country.
Kia Motors has suspended operations at two vehicle assembly plants located near Seoul until next week after a number of COVID-19 infections were confirmed among its staff. The automaker confirmed 13 coronavirus cases had been traced back to its two plants in Gwangmyeong, including four family members of their workers.
Thailand‘s new vehicle market declined by close to 15% to 68,883 units in August 2020 from 80,838 units in the same month of last year. That followed much sharper declines in previous months, including a 27% year on year fall in July and a more than 50% drop in the second quarter, when large parts of the economy were under lockdown to help control the spread of the COVID-19 pandemic.
EU demand for passenger cars contracted 32% year on year in the first eight months of 2020, ACEA said. A tally of 6,123,852 new cars was registered across the European Union from January to August, almost 2.9m less in the same months of 2019.
New vehicle sales in the Philippines continued to fall sharply in August 2020, by almost 40% to 17,906 units from 29,599 in the same month of last year. The Philippines is one of the countries in Asia hardest hit by the COVID-19 pandemic, with GDP plunging by a record 16.5% in the second quarter as domestic consumption plunged.
The boards of Fiat-Chrysler (FCA) and Peugeot-Citroen (PSA) have agreed to amend terms of their proposed merger in a move designed to further conserve cash in the light of the ongoing impacts of the COVID-19 pandemic.
Dacia and Ford, the two carmakers in Romania, produced around 59,500 cars in July and August 2020, up 10% year on year, according to romania-insider.com, citing Romanian Automobile Manufacturers Association (ACAROM) data. The report noted this was the first increase in production since mid March when a state of emergency due to the COVID-19 pandemic paralysed the auto industry.
In this latest guest article written exclusively for just-auto, Dato Madani Sahari, the CEO of Malaysia Automotive, Robotics and IoT Institute (MARii), reflects on the coming together of connectivity and health science in the search for solutions to mobility restrictions resulting from the COVID-19 pandemic.
BMW’s Rolls-Royce has resumed full two shift production at its factory in Goodwood, southern England. The automaker said it was again operating at pre-lockdown levels with “workforce maintained and all manufacturing staff on site”.
Supercar maker McLaren Group said it was strengthening its balance sheet by selling its Surrey headquarters in southern England in a deal that could raise GBP200m, a media report said. The deal would be part of a broader strategy to restore company finances after months of disruption caused by the coronavirus pandemic.
Group Antolin said it had improved its financial position with new COVID-19 financial support loans from Spain, France and the United Kingdom. It had opened an innovation centre in China and all plants were operating while complying with virus prevention protocol.
Schaeffler is cut its net workforce by 4,400 in Germany and Europe by the end of 2022 focusing mainly on 12 locations in Germany and two elsewhere on the Continent. When the COVID-19 pandemic emerged in February and March 2020, resulting in a sharp drop in demand across all three divisions, the group responded with short term counter measures that had so far, it said, enabled it to weather the crisis.
The China Association of Automobile Manufacturers (CAAM) reckons the Chinese market, the world’s biggest, will grow only slightly in the next five years. Though sales recovered in recent months, following the COVID-19 pandemic, CAAM predicted a fall of around 10% for all of 2020.
General Motors has told salaried workers in the US to continue to work from home until at least June 30, 2021, according to a report in the Detroit Free Press (DFP) newspaper. The report cites an internal GM email that states the “current outlook is to continue operating as we are today until June 30, 2021.” It also said that GM is working to create “a more flexible work culture” after the pandemic.
Following completion of its 50,000th ventilator for COVID-19 patients, Ford is now targeting production of 100m masks by the end of 2021 for communities across the US with limited access to personal protective equipment.
The UK new light commercial vehicle (LCV) market returned to decline in August 2020 with a 16.1% decrease in sales.
West European new car registrations fell 15.5% year-on-year (YoY) in August 2020, according to data released by LMC Automotive – although underlying demand was strong, helped by government incentives designed to boost sales in the wake of the COVID-19 pandemic.
Nissan Motor received a record JPY130bn (US$1.23bn) in state loan guarantees in May from the Development Bank of Japan (DBJ), as part of a larger COVID-19 relief package made available by the government
New vehicle sales in Japan continued to decline sharply in August 2020, by 16% to 326,436 units from strong year earlier sales of 388,600, according to registration data released by the Japan Automobile Manufacturers Association. After a 32% decline in the second quarter of the year, the market continued to struggle as domestic consumers retrenched further amid rising economic uncertainty due to the global COVID-19 pandemic.
The UK new car market continued its underlying recovery in the month of August – though sales were 5.8% down on last year (which compares with a gain during the month of July).
Malaysia’s first national car company Proton Holdings reported an almost 25% year on year sales increase to 11,378 units in August, the second highest monthly sales total of 2020.
The organisers of the LA Auto Show have finally confirmed it has been postponed from November of this year and will move six months into the spring of 2021 due to the coronavirus crisis and its impact on public gatherings. The decision sets up a bunching of American motor shows in the April-June period, with LA’s show now in close calendar proximity to the Detroit and New York Shows.
Australia’s Federal Chamber of Automotive Industries (FCAI) has called for a loosening of COVID-19 pandemic restrictions after dismal new vehicle sales in August 2020.
General Motors and Honda said they’d signed a non-binding memorandum of understanding (MoU) to establish a North American automotive alliance.
August 2020 new vehicle registrations in New Zealand were affected by new COVID-19 restrictions, especially the alert level 3 imposed in the largest city, Auckland, after a resurgence of new cases.
China’s Geely Automobile Holdings (Geely) – owner of Volvo Cars – has applied to list its shares on Shanghai’s STAR stock exchange which would make it the first automaker to be listed on this hi-tech exchange. It sold 530,446 vehicles in the first half of the year, down 19% year on year, but is targeting a 3% decline over the full year to 1.32m vehicles thanks to a rebound in the second half of the year.
General Motors and Ventec Life Systems have delivered the 30,000th V+Pro critical care ventilator to the US Department of Health and Human Services and GM has exited the joint venture set up during the COVID-19 pandemic.
Domestic sales by South Korea’s five main automakers combined increased 5.6% to 111,847 units in August 2020 from 118,479 units in the same month of 2019, according to preliminary data released individually by the companies.
Geely‘s Volvo Cars said August sales volumes rose 7.2% year on year as its units in Europe, China and the US all reported increased sales. The company sold 51,239 cars last month with growth driven, as is now usual, by “continued strong demand” for the XC SUV range. In the first eight months of 2020, the automaker sold 383,492 cars, though that tally was down 13.5%.
Toyota says its global sales and production recovered to 90 percent of previous year’s level in July and that sales are recovering at a ‘faster than expected pace‘.
Online shopping has taken off during the pandemic and there’s also been a shift towards electric vans for delivery in urban areas. This order from Amazon for electric vans from Mercedes is the largest electric van order it has received to date. Amazon orders 1,800 e-vans from Mercedes.
UK commercial vehicle (CV) production grew 3.6% in July, according to the latest figures released by the Society of Motor Manufacturers and Traders (SMMT), with 5,234 commercial vehicles rolling off production lines. The slight increase follows a particularly low volume July 2019, when key model changeovers affected factory output, the SMMT said. Nevertheless, a growth result over year-ago levels will be viewed by many as particularly encouraging as the auto industry slowly recovers from pandemic impacts. UK car output in July was down by over a fifth on last year.
A report produced for the ‘American Automotive Policy Council’ (AAPC) says that American Automakers FCA US LLC, Ford Motor Company and General Motors are vital to the US economy, driving growth in both manufacturing and job creation.
Electric scooters are emerging strongly from the crisis, as people in urban areas look for alternatives to public transport. This looks like good timing from SEAT. Following the presentation of the new SEAT MO brand last June, created to boost the urban mobility strategy focused on micromobility products and services, the company has rolled out its first motosharing service in Barcelona with a total of 632 eScooters available to the public. SEAT MO website
UK car manufacturing output was down 20.8% in July with 85,696 units made as factories struggled to ramp up output in the face of slowly recovering global demand. The SMMT said that nearly all UK factories reopened after earlier pandemic shutdowns, but that social distancing measures and ongoing economic uncertainty ‘still stifled output’.
COVID-19 and its impact on markets appears to have hastened a sourcing shift for Honda. Honda says it plans to transfer some Civic model production from the UK to Japan ahead of the closure of its Swindon plant in southern England in 2021, according to sources in Japan.
BMW confirms it is cutting around 400 out of 950 agency staff at its Oxford Mini plant in the UK, with the COVID-19 pandemic substantially impacting demand. The move will see Oxford moving from a three-shift pattern to a two-shift one by mid-October (operating five days a week as now), affecting around 400 out of the 950 agency personnel on-site, who are employed by Gi Group. More job cuts – this time BMW employees – are expected.
The US vehicle market is forecast to see August claw-back. “The automotive industry momentum continues in August as the industry claws back more and more new vehicle sales each month since sales bottomed out in April,” said Eric Lyman, Chief Industry Analyst for ALG, a subsidiary of TrueCar.
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