Chart Of The Day: Global Sales Growth Slows To A Crawl
According to Wards Auto, global auto sales through May hit 32.62 million units, up 6.0% from the year-ago number. But as the chart above shows, the rate of growth in global deliveries has slowed dramatically over the past year-and-a-half, falling below five percent the last several months. So what’s the problem? At this point, what isn’t the problem? The US and Japan have been hit hard by the Japanese tsunami, while the once-blistering-hot markets of China and India are shrinking and growing more slowly respectively.
Collectively, markets in the Asia/Pacific region accounted for 2.35 million vehicle deliveries, equating to 37% of world sales, the region’s lowest global market share since May 2009.
In the U.S. and Canada, sales of Japanese vehicles slipped precipitously below the rest of the market in May due to supply shortages, pulling North America’s year-over-year performance 2.3% below like-2010 on a volume basis, despite an 11.7% increase in Mexico.
So where’s the good news? After a forgettable few years, Europe is back… and South America is staying strong.
Overall deliveries in Europe rose 14.2% in May, to 1.85 million units. The resulting 29.2% share of world sales was the region’s highest take since June of last year…
Double-digit growth in many of South America’s smaller markets lifted regional sales in May 27.6%, compared with year-ago, for a 7.9% share of global deliveries – a 9-month high.
I believe that the current state of the US and Western economies have a lot to do with the softened demand for cars. Europe may enjoy an increase in sales now but all is not well there as several of my cousins have told me. In the US the economy is not expanding and the depressed job market is hurting many recent graduates. Housing is not doing well and construction is down. People and corporations with money are hoarding it for fear that it will be even worth less tomorrow and many are loathe to invest in any job-creating ventures lest they be punished severely with higher taxes and mandated healthcare provisions. Even small businesses can see the handwriting on the wall and many have pared employees down to the absolute minimum. Gone are the confident and carefree pre-2007 days, and I don't see them coming back under the current administration. I think that the remainder of this year and next will be slow going and I, along with millions of others, are cutting back on spending. Buying my 2011 truck last January was be last major purchase until we trade my wife's 2008 Highlander in 2013.
I've bought my last new car.Speaking as a recently retired boomer couple, I would imagine... we are not alone.
Is there an iron law in the universe that says that car sales must go up forever? Demographics, finance, and peak oil be damned? I have a perfectly good 4-5 year old car with 50,000 miles that I plan to run for a long time. And now that the banksters have taken everything, and oil is getting more expensive, and you expect me to buy a new car every few years? Get real.
Being greedy and wanting your stock prices to go up are two different things.