Global new passenger car registrations reach record high
Global demand for passenger cars increased by 5.0% to 70.1 million vehicles in 2013, exceeding the previous year’s record level. This development was driven by the rapid growth in China and the NAFTA region in particular. Global passenger car production rose by 5.6% to 74.6 million units in the reporting period.
The established passenger car markets turned in a very mixed performance in fiscal year 2013. While some industrialized countries were still negatively affected by the debt crisis and its repercussions, demand remained robust in certain growth markets.
The continued development of the major markets in China and Brazil, the expansion of activities in India and the ASEAN region and an increasing presence in Russia are still highly important for the automotive industry.
Trade restrictions have been reduced in many Asian and African markets. However, it cannot be ruled out that these countries will fall back on protectionist measures in the event of another global economic slump.
In Western Europe, new registrations in the reporting period were even lower than in the previous year. Demand reached its lowest level for 20 years, at 11.5 million vehicles (–1.9%). However, the passenger car markets that were most affected by the debt crisis stabilized at a low level in the second half of the year. Demand declined year-on-year in the volume markets of France (–5.6%) and Italy (–7.1%). In Spain, a further decline in new registrations was prevented (+3.3%) by government incentive programs. Sustained high demand from private customers in the United Kingdom led to market growth of 10.7%. At 53.1%, the market share of diesel vehicles (passenger cars) in Western Europe was down on the prior-year figure in fiscal year 2013.
In Central and Eastern Europe, demand decreased by 3.9% to 3.8 million vehicles. In Russia, by far the region’s largest passenger car market, the government car loan subsidies introduced on July 1, 2013 were unable to stop the decline in demand: this decreased by 5.7% to 2.6 million vehicles. Passenger car sales were pushed down by the new extra duty on imported cars. At 0.8 million passenger cars, the Central European EU states recorded an overall market volume on a level with the previous year.
In Turkey, sales reached a new peak of 643 thousand vehicles (+15.7%) in 2013, largely due to the sharp rise in the number of imported vehicles.
Sales in the South African market rose for the fourth consecutive year. New registrations increased by 3.4% to 455 thousand units in the reporting period, primarily due to the relatively low interest rates and manufacturer and dealer incentives.
Passenger car demand in Germany was even lower than in the previous year at 3.0 million units (–4.2%). This represents the second-lowest level since German reunification. However, the first signs of stabilization started to emerge in the fourth quarter. Despite the positive consumer sentiment, customers were reluctant to buy new cars. By contrast, demand for used cars rose. Both domestic passenger car production (+1.0% to 5.4 million vehicles) and passenger car exports (+1.6% to 4.2 million units) were up slightly year-on-year, however, and exceeded the comparable average figures for the past ten years.
In the North America region, demand for passenger cars and light commercial vehicles (up to 6.35 tonnes) rose sharply in fiscal 2013. The North American market registered its highest volumes since 2007, with a rise of 7.3% to 18.4 million vehicles. In the USA, the overall market volume increased by 7.7% to 15.6 million units, largely thanks to the favorable financing conditions offered by manufacturers and higher replacement demand. In Canada, demand rose by 4.0% to a new record of 1.7 million vehicles. The Mexican market exceeded the 1 million new registrations mark last reached in 2008, posting a rise of 7.7% to 1.1 million units.
In South America, the number of new passenger car registrations fell just slightly below the prior year’s high level. At 2.8 million units, demand in Brazil was 3.1% short of the record level achieved in 2012. The market continued to be buoyed up by government tax incentives, but their effect had been much stronger in the previous year. The proportion of new registrations accounted for by imported passenger cars declined to 17.0% (18.8%). In contrast, at 563 thousand units, Brazil’s own vehicle exports were up by a significant 26.5%.
In Argentina, demand for passenger cars rose by 8.9% in fiscal year 2013 to a record high of 640 thousand units. The country’s high inflation means that consumers are investing more in tangible assets.
The Asia-Pacific region registered market growth of 8.6% in fiscal year 2013, reaching a new peak of 28.0 million units. This growth was mainly driven by the Chinese passenger car market, which achieved double-digit growth for the first time since 2010, rising 17.0% to 15.8 million vehicles. The unexpectedly strong growth was bolstered in particular by China’s robust macroeconomic environment, a large number of new passenger car models and the still comparatively low passenger car density.
The Indian passenger car market registered a year-on-year decline for the first time since 2001, decreasing by 6.7% to 2.4 million units. In addition to the weaker economic environment, this downward trend was mainly due to the still high financing costs and higher fuel prices.
In Japan, the number of new vehicle registrations remained at the previous year’s level, with an overall market volume of 4.6 million vehicles (–0.1%). The encouraging performance of the Japanese economy positively impacted the vehicle market. In 2012, the Japanese market had continued to be buoyed by the significant pent-up demand resulting from the natural disasters in 2011 and government stimulus measures.
DEMAND FOR COMMERCIAL VEHICLES MIXED
Overall, demand for light commercial vehicles was slightly higher in fiscal year 2013 than in 2012. A total of 11.8 million vehicles were sold worldwide, representing an increase of 0.6% on the previous year.
There was a slight decline in demand in Western Europe, as the economy was still weak due to the ongoing sovereign debt crisis. At a total of 1.3 million vehicles sold, vehicle sales were down 3.2% compared with the previous year. Most markets in Western Europe fell slightly short of their prior-year figures. However, the UK market benefited from an improved macroeconomic trend.
In Central and Eastern Europe, demand declined slightly overall as against the 2012 level. 326 thousand (335 thousand) vehicles were sold in the reporting period. While individual markets such as Poland and Slovenia grew over the course of the reporting period, Russia’s downward trend in demand accelerated at the end of the year.
The North American market saw a significant rise in unit sales to 9.2 million (8.3 million) vehicles in the reporting period, with higher demand for pickups and SUVs in particular.
Vehicle sales in South America increased overall in 2013. At 1.3 million units, 7.3% more light commercial vehicles were sold than in the previous year. The growing popularity of SUVs for private use, which are reported as light commercial vehicles in these markets, was the main driver of this, despite the weak economic conditions. Particularly in Argentina, where many customers increasingly invested in tangible assets prompted by the high inflation, the market for light commercial vehicles grew significantly in the reporting period.
At 7.9 million (+0.6%), vehicle sales in the Asia-Pacific region were on a level with the previous year in the fiscal year 2013. The Chinese market, which dominates the region, returned to a slight growth path during the reporting period, after stagnating in the previous year. A total of 5.1 million (5.0 million) units were sold there. In Japan, the expansionary economic policy gave the light commercial vehicle market a moderate lift. Sales in India fell short of the prior-year level, declining by 10.0% to 600 thousand units due to higher fuel prices, among other factors. Sales figures were higher year-on-year in most markets of the ASEAN region thanks to positive economic developments.
Demand for mid-sized and heavy trucks with a gross weight of more than six tonnes was up slightly year-on-year in the fiscal year 2013. A total of 2.7 million vehicles were sold worldwide, representing a slight increase of 2.5%.
In Western Europe, vehicle sales increased by 5.7% compared with the previous year and totaled 248 thousand units. The negative effects of the still unresolved debt crisis in the eurozone were more than offset by purchases pulled forward ahead of the introduction of the Euro 6 emission standard on January 1, 2014.
At 164 thousand vehicles, new registrations in Central and Eastern Europe in 2013 were 5.5% below the comparable prior-year figure. In Russia, the largest market, the sales figures declined by 14.0% to 103 thousand units. The introduction of the recycling fee on imported vehicles in September 2012 and the negative oil price trend played a large part in this decline. In addition, the lower commodity prices had a negative effect on Russia’s state finances, which the government responded to by cutting infrastructure projects.
At 435 thousand vehicles, sales of mid-sized and heavy trucks (more than 6.35 tonnes) in North America remained at the prior-year level (433 thousand). The US market, which was heavily impacted by companies’ reluctance to invest, accounted for 351 thousand (346 thousand) of these vehicles.
At 234 thousand (231 thousand) units, sales in South America were above the previous year’s level. In Brazil, in particular, the higher transportation demand due to the bumper harvest and favorable financing conditions for trucks had a significant impact. New registrations in the country increased by 12.4% to 149 thousand vehicles.
Excluding the Chinese market, the volume of vehicles sold in the Asia-Pacific region was significantly lower than in the previous year. New registrations amounted to 448 thousand (539 thousand) vehicles. This decline is attributable in particular to the slump in unit sales in India, caused by the weaker macroeconomic situation. Sales of mid-sized and heavy trucks in India were 30.7% lower year-on-year, at 184 thousand units. In China, the world’s largest truck market, total demand amounted to 1.1 million units in the fiscal year 2013, 14.8% more than in the previous year. This increase was largely attributable to the improved domestic economy and the investments made ahead of the introduction of new emission standards in 2014.
Global demand for buses was on a level with the previous year in fiscal year 2013. Demand for buses also stagnated at the 2012 level in Western Europe, where the negative effects of the sovereign debt crisis were offset by purchases pulled forward due to the introduction of the Euro 6 standard.
TRENDS IN THE MARKETS FOR POWER ENGINEERING
The markets for power engineering are subject to differing regional and economic influences. Consequently, their business growth trends are generally independent of each other.
The merchant shipbuilding market is still dominated by significant overcapacity in the merchant fleet. Despite declining in the reporting period, deliveries remained at a high level. Rising fuel and operating costs caused mounting cost pressure for shipping company owners. At the same time, the excess capacities at shipyards kept the price of constructing new ships low. This situation led to a slight rise in orders in 2013, including for extremely large ships, which make it possible to reduce the price per unit shipped. Demand for offshore and special ships remained high in the reporting period. Due to the still high price of oil, orders were received for supply and construction vessels for developing new reserves. Demand for tankers for transporting liquid natural gas (LNG) and for cruise ships also remained high. The special market for government vessels also continued to perform well.
The market for decentralized diesel and gas engine power plants slowed down slightly in 2013, although growth was still high. This was attributable to the economic situation in the emerging markets, which deteriorated at the start of the year. In addition, the more difficult financing conditions led to longer project lead times. While there was a further slowdown in orders for diesel and oil fired power plants, demand for power plants with gas engines and dual-fuel engines (which can run on both liquid fuel and natural gas) was relatively stable. This shift in demand reflects the trend towards natural gas power plants.
There was a slight decline in the reporting period in orders from industrial facilities where compressors and turbines, turbo gear units and slide bearings are used. Although the growing demand for energy and primary materials meant that there was a significant investment requirement in this market and interest from customers remained high, economic uncertainties and difficult financing conditions caused order placement delays. Oil and gas investments remained high in 2013 due to the rise in oil prices. Price pressure rose sharply, with the yen’s devaluation giving Japanese competitors an advantage.
The development of offshore wind energy again fell well short of the original market expectations in 2013. This was largely attributable to the ongoing technical problems, particularly in relation to infrastructure, and the limited financing options.
DEMAND FOR FINANCIAL SERVICES
Global demand for automotive-related financial services remained high in fiscal year 2013. Customers are increasingly optimizing their total spend on mobility, so the trend toward just using a car, rather than actually buying one, continued. New mobility services such as car sharing are thus gaining in importance.
In the difficult economic environment, particularly in Southern Europe, providers stepped up their business activities in 2013 and developed attractive, customer-oriented campaigns.
Despite declining new passenger car registrations, the finance and leasing business grew in Germany. Alongside traditional finance products, there was also higher demand for packaged products including insurance and service.
In North America, demand for financial services rose again. In the USA, the market for new vehicle financing registered slower growth, while the market for leasing through captive financial service providers grew sharply. Demand for financial services also continued to rise in Mexico. This was primarily attributable to the stable lending conditions and interest rates, as well as growing interest in modular mobility products.
The strong growth seen in Brazil in recent years weakened in 2013. However, this trend was countered through special campaigns to bolster lending to private customers. In particular, the sustained demand for car ownership was supported through the sales of Consorcio, a lottery-style financing product. The high inflation in Argentina continued to have a positive impact on sales volumes for automotive-related financial services.
The macroeconomic situation in the Asia-Pacific region was characterized by stability and growth in 2013, which was reflected in the demand for automotive-related financial services. In China, the proportion of loan-financed vehicle purchases increased from 15% in 2012 to more than 20% in 2013. There is still significant potential to acquire new customers for automotive-related financial services. The Japanese market benefited from stable demand. India, South Korea and Australia also registered sustained growth in demand for automotive-related financial services.
The financial services market in the commercial vehicles segment also saw a trend towards optimizing total costs in the mid-sized and heavy commercial vehicle category. Innovative transportation solutions are becoming increasingly important to customers as a point of difference. More intense competition was seen in the commercial finance market in Germany and, increasingly, in Europe as a whole due to the interest rate developments.