May’s global vehicle sales: ‘one step forward, two steps back'

A

nalysis of May’s light vehicle markets shows that recovery is continuing, but it is fragile and coming from a very low base.

Global light vehicle sales rose by 36.2% in May, but in the recovery phase an eye on the seasonally adjusted annual rate (SAAR) remains more important.

For SAAR it was a continuing story of ‘one step forward, two steps back’. After March and April’s strong showing the global market regressed to the hesitant levels of January and February with a SAAR of 80.8 million, the lowest level since January and February.

Despite the positive year-on-year gains, it was largely a disappointing month for sales. The SAAR for most regions – excluding North America – slipped back markedly in May demonstrating the fragility of the recovery in most markets. In Asia, the decline in SAAR was unsurprisingly most obvious in India as the country battled its second wave of infections.

The perilous state of many economies, Covid-19 infection rates, the progress of new variants and the stringency of lockdown measures all affect light vehicle sales. In key West European markets, a direct correlation was apparent between lockdown stringency and sales in May. In Chile, the success of the vaccination program there allowed the market to outperform other markets in May.

Early Western Europe assumptions centring around ‘markets that lost most, would gain most’ have been derailed by both the Alpha variant of Covid-19 and the initial slow vaccination roll-out in mainland Europe. Since January’s forecast, this has meant a 1.2 million-unit, or 8.1%, downward revision in the Western Europe forecast.

As ever, that could be subject to change due to the ongoing disruption that the pandemic brings to markets.