LMC Automotive, a market report and forecast provider based in Oxford, UK, has released its global light vehicle (LV) sales update for June. The selling rate rose to 85 million units per year in June 2022, the best result of the year so far. Year-to-date sales lie 8.5% under the same period in 2021, an indicator of the recovery still ongoing in the market.
While supply issues are still impacting demand in most regions, a strong sales recovery in China – supported by the easing of lockdowns that allowed OEMs to ramp up production as well as a new temporary tax cut for Passenger Vehicles (PVs) – enabled the rise seen from May to June.
In the US, LMC Automotive found that LV sales fell to 1.13 million units, a 12.6% decline year-on-year. This annual comparison was said to be mitigated by the sales decline in June 2021, when chip shortages began to impact the market. Record-high transaction prices in June are said to also be impacting the market. Canadian sales also dropped, by 11.5% year on year, to 149,000 units, while Mexico reported a 4% year-on-year growth.
The West European selling rate remained broadly flat month-to-month from May to June. At 11.3 million units per year, this brought the HY2022 average to just 11 million units/year. New vehicle registrations remain in poor shape due to supply constraints, with selling rates below annual 2020-2021 results. The East European selling rate was 2.7 million units/year in June, signalling no improvement from May.
In China, the selling rate spiked to a record high in June. Preliminary data from LMC Automotive indicates that, in June, which is usually a slow sales month in the year, the selling rate reached 32.9 million units, up 40% from the previous month. That followed a 65% increase from May. In year-on-year terms, sales grew by almost 30%, but contracted by 2.3% year to date.
The Japanese market decelerated for the second consecutive month in June, as the shortages intensified in Q2 during China’s lockdowns. The June selling rate was 3.62 million units/year, down 5% from a weak May. Sales contracted by 10% in June 2022 from 2021 (the 12th consecutive month of decline) and 15% year to date. Demand is said to remain robust, continuing to outstrip supply.
In Korea, sales accelerated in June, as 30 June was the original expiry date for the temporary excise tax cut on PVs (now extended to December 2022). The June selling rate surged to 1.69 million units/year, up 7.5% from a weak May. Nonetheless, that was a sluggish result for Korea. The ongoing procurement crisis and the week-long truckers’ strike in the country disrupted supply and sales in June. In year-over-year terms, sales declined by 12% last month and 11% year to date.
Brazilian LV sales fell from June 2021 by 2.8% in June 2022 to 165,000 units. Although this was undoubtedly one of the better results in the year to date, the selling rate slowed to 1.96 million units/year in June. Availability of models is improving – inventory stood at 145.5k units in June, up from 124k units in May, while days’ supply grew to twenty-four from twenty-one days.
In Argentina, LV sales fell by 7.8% year over year in June, to 33,000 units, but that doesn’t capture the reality of the situation. In 2021, the country emerged from its lockdown and saw a jump which has provided a high base. The year-over-year decline does not tell the whole story. June 2022 delivered a relatively good performance, as the selling rate climbed to 405k units/year, the strongest rate since November 2020. Overall, however, the market is still being held back by low inventory and import restrictions.