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Winners & losers in the global car market

Autocar 2019-02-11 00:00:00
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    2018 was tumultuous for the global car industry with the main market, China, contracting for the first time in nearly 30 years.


    Shockwaves from this drop are still being felt across the globe, amplified by subdued sales in the US, Germany and the UK. Of course there were also winners in the global car sales game – India is closing the gap on Germany and Brazil recorded significant growth. SUVs remain the segment to be in, contributing one-in-three global sales with each of the four main segments experiencing growth. And despite overall poor sales in China, demand for luxury cars and some import brands was buoyant.

    Electric cars continue to grow significantly, albeit from a small base, and two of the most famous nameplates in the car business – the Porsche 911 and Ford Mustang — strengthened their hold on the supercar and sportscar/coupe markets. All these figures were supplied by JATO Dynamics and are based on preliminary data for 53 markets, which account for 85 per cent of the global total:

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    Global Countries: Top 10 Winners and Losers, 2018 v 2017


    With the established global economies stuttering, the good news last year came from emerging economies like Brazil, Russia, Thailand, Indonesia and India, which continues to close on Germany. “We think the better economic and political mood along with renewed key models, including SUVs, boosted these markets,” says Felipe Munoz, JATO’s global analyst. NOTE: Data includes estimated December data for China. Includes cars, light commercial (LCV) & heavy goods vehicles (HGV). China excludes most of LCVs/Heavy vehicles.

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    Global Top 5 segments: SUVs on a roll, saloons, hatches and minivans down


    This is the story of SUVs and their growing popularity. The formula of a raised driving position, rugged styling and practical passenger/luggage spaces appeals across the globe, especially in markets with rough roads.

    “But this positive result means difficult times for the regular popular segments, compacts, subcompacts, midsize and especially MPVs,” says Munoz. Sales of pick-ups, including US ‘trucks’ are booming in North America, Brazil and Thailand. JATO also believes that the SUV boom is long-lasting and stable, not like other short-lived market trends.

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    China: Goes sour for some foreign car-makers, but others did well.


    Geely was the outstanding success story in China, having jumped a few spots in the Top Ten to third overall.  The successful launch of its near-premium brand Lynk & Co had much to do with the success, but also a strong range of Geely-badged SUVs.

    Another winner was Toyota again thanks to SUVs, but also compact and midsize sedans. General Motors (GM), which remains well positioned as China’s number two, suffered with the wrong mix of models, including less-popular SUVs, but also launched new three-cylinder engines that Chinese car-buyers feared were not sufficiently powerful. And PSA is still suffering for the lack of modern cars, a hangover from its historic focus on cheap, affordable models.

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    China: The sales steamroller that stopped tolling: Which models suffered?


    “The most affected segments by the downturn of the economy were the MPVs (like the Wuling Hong Guang, pictured), down 20% and subcompact saloons down 22%,” says JATO. Bucking the global trend, SUVs also dropped, by three per cent, while small sedan fell by six per cent. In contrast, midsize, executive and luxury sedans, sports cars and citycars did better, the latter linked to the popularity of electric powertrains.

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    US market in a holding pattern: Trucks and SUVs on top


    The US market may have remained virtually static last year, but the proportion of trucks and SUVs rose once again. No wonder Ford is pulling out of the sedan market — SUVs and Trucks now compose 62 per cent of US sales.

    “Overall the market didn’t grow, but the popularity of SUVs (+10%) and Trucks (+4%) hasn’t stopped. The consumer there doesn’t want small cars and sedans,” says JATO. The three main domestic brands — GM, Ford and FCA — retained market share as the fall of GM and Ford was offset by FCA, whose Jeep unit sales rose 17%, boosted by new product like the Wrangler, pictured. FCA's Ram was up 7% on the year. But the biggest winner was Tesla, thanks to the Model 3, which finally took off in the second half.

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    EV sales are a tale of growth: Tesla 3 becomes world’s best-selling EV


    Electric Vehicle (EV) sales can do no wrong as the world shifts towards battery electric powertrains with sales almost doubling to 1.27m units last year, a 72 per cent increase. The rise is largely down to China, where affordable city cars like the BAIC EC, are being promoted by central and local government, and the US, where the Tesla 3 went on sale.

    “China is firmly-established as the world’s biggest market for EVs and many local car-makers are taking advantage,” says JATO, “encouraged because brand name means less to EV buyers, giving lesser Chinese nameplates a head-start.”

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    Europe’s mixed year


    A challenging year in Europe was characterised by Brexit worries, controversy over diesel emissions and production shortages of new WLTP-compliant engines, all having a negative effect. As a result the European market remained static, mirroring the US, with sales ending 2018 at 15.6 million units.

    This bigger picture was made up by declines in the UK and Italy and increases in France, Spain, Poland, Netherlands and Hungary. Contributing to the trend for growing SUV sales, European car-buyers lapped up a record 5.4m SUVs, a 19 per cent increase. “Part of this boom is explained by the arrival of more models, more small SUVs, and a big boost from Volkswagen Group,” says JATO. Nevertheless, European SUV sales still have a long way to go to match the US and China, making up just 35 per cent of the European market.

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    Did India overtake Germany as world’s fourth biggest car-market?


    “Not yet, but that is getting close,” says JATO, “and is expected to happen in the next two-to-three years.” India, with a population of over one billion increasingly affluent potential car-buyers, has huge growth potential. Germany with 83 million people and a high percentage of car ownership, has less potential for growth.

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    Which types of SUVs are proving the most popular?


    JATOs figures show all of the SUV sub-segments posted growth last year, but the most dynamic one was the small B-SUV. Models like the Renault Captur, Honda HR-V and multiple compact Chinese models, contributed to global B-SUV sales up by 11% to 6.6 million units. New models from Hyundai-Kia, PSA and VW Group boosted the market.

    Overall, however, larger C-SUVs like the Ford Kuga (pictured) and Peugeot 3008, are the world’s most-popular – and they dominate the market in China and Europe.

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    Supercars: Do car enthusiasts still love the Porsche 911?


    “Yes, the 911 was again the world’s top-selling supercar,” says JATO. But global high-end sports car sales fell by 5% to 102k units largely because US enthusiasts bought 17 per cent fewer powerful two- or two-plus-two seaters.

    Chinese car-buyers are still to fall-in-love with supercars, so booming demand in Germany, where sales were up a dramatic 30 per cent confirmed it as the world’s second-biggest market.

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    Sports cars and Coupes: Mustang is number one, but the MX-5 slips


    A tricky market to define, but the Ford Mustang (pictured) retained its crown, well ahead of the Dodge Challenger and Chevy Camaro in a market that totals 377k units worldwide. But the growing influence of SUVs is being felt even in the sportscars/coupes market, where sales dropped 13 per cent last year.

    The Porsche Boxster/Cayman had a healthy year, but the Mazda MX-5 lost a little of its lustre and sales dropped 19 per cent. It may be noteworthy that there was only new entry: the fabulous Alpine A110, which went on sale in 2018 in Europe, Japan, and Australia.

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    Losers: Global markets that shrank in 2018 and why?


    TURKEY: Economic and political uncertainty have adversely impacted the new car market by eroding car-buyer confidence

    ARGENTINA: A deteriorating economy is matched to a depreciating currency, making imported cars more expensive. “Inflation is growing and consumer confidence decreasing,” says JATO.

    MEXICO: Mexican car-buyers often take out car-maker loans of up to five years, says JATO, and consumers are now taking time to reduce these debts. “All markets have their peak, and Mexico is not an exception,” say Munoz.

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    Global luxury: Boom, bust or ticking over?


    JATO includes the large saloon and SUV segments in its luxury classification together with supercars and the 2018 market was 1.75 million units, down by 3% after demand dropped in the US, China and Germany. Surprisingly, considering the woes in the volume market, the UK actually posted an increase of two per cent.

    Winners: Cadillac, Lexus, Volvo, Lincoln and Tesla with new products, winning design and more SUVs, like Volvo’s XC60 (pictured).

    Losers: Mercedes-Benz, BMW, Land Rover, Audi, Porsche, Maserati. Key products aged, and model changeovers affected output.

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    Tesla: What really happened with Model 3 sales and how are the S and X doing?


    Tesla finally moved into the more volume-priced segment with the Model 3 and sales took off. Most important it made an AFV (alternate fuelled vehicle) a valid, affordable alternative in the US, market that has previously been reluctant to adopt AFVs.

    “The question now is whether this car will find enough consumers in Europe and Asia,” says JATO. On the up-side the Model 3 has been launched with good timing — just when the Model S is ageing — but at the same time as premium rivals like Jaguar and Audi are arriving at market, with BMW, Mercedes and Porsche close to market.

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    Luxury in China: In reverse or doing well?


    China’s love-affair with Cadillac’s large saloons like the XTS (pictured) shows no sign of waning, and it outsold its nearest competitor BMW three-to-one. “The American car design is more appealing than Europeans in this segment: they are bigger and have more chrome,” says Munoz. Surprisingly, Mercedes-Benz lost ground to Porsche, largely because the ageing S-Class is out-of-favour. Given that the Chinese traditionally are not great consumers of sports cars, Porsche’s success might be a watershed, especially since the 718 family did well.

    Lexus also recorded a huge boost in popularity, with the brash-looking new LS hitting a styling sweet spot with the Chinese. “Thanks to the arrival of several new players, this segment continues to grow fast, so the downturn of overall market is not visible in this segment,” added Munoz.

Global luxury: Boom, bust or ticking over?


JATO includes the large saloon and SUV segments in its luxury classification together with supercars and the 2018 market was 1.75 million units, down by 3% after demand dropped in the US, China and Germany. Surprisingly, considering the woes in the volume market, the UK actually posted an increase of two per cent.

Winners: Cadillac, Lexus, Volvo, Lincoln and Tesla with new products, winning design and more SUVs, like Volvo’s XC60 (pictured).

Losers: Mercedes-Benz, BMW, Land Rover, Audi, Porsche, Maserati. Key products aged, and model changeovers affected output.