- ECONOMIC IMPACT -

Latest update: 17 March

Worldwide GDP forecast looks positive. After downturn for several months, positive GDP is forecast in all countries; 2021 consensus forecast for GDP growth is currently 5.6%.

Unemployment continues to be high. According to the OECD, the unemployment rate in OECD nations stood at 6.8% in December 2020.

- SECTOR IMPACT-

Latest update: 8 January

Sales review

February’s light vehicle sales show a strong 16.2% year-on-year increase, almost all of which is attributable to China’s sales being compared to its lockdown led low in 2020. Other major markets in Asia also performed strongly – South Korea was up 26.1%, India up 18.4% and Japan a more marginal 0.6% - but all paled in comparison to China’s 429% increase. In itself, while not meaningless, a better base for comparison for China would be February 2019. Compared with then sales were 1.75% ahead, demonstrating that China’s market is back to normality. However, major markets aside, Asia Pacific’s sales declined 2.2%.


Again, lockdowns impacted sales in Europe, particularly in West European markets, with sales overall falling by 14.2%. The overall position for European sales would have been much worse if not for another strong performance by the Turkish market. West European sales fell by 18.3%, with the Spanish and UK markets particularly badly hit.


North America’s sales fell by 11.5%, with sales in the US hit by a bout of severe weather and two fewer selling days to fall 11.4%. The picture in Canada and Mexico almost exactly mirrored that of the US with sales falling by a combined 12%. South American again lost recovery momentum in February as its largest market, Brazil, slipped 17.8% on the back of a surge in coronavirus cases. Some of Brazil’s losses were recovered in other countries to leave the region down 2.7% year-on-year.

Sales outlook 2021

From here on we expect it will be a case of the global market preparing for a notional lift off as the exceptionally weak March and April of 2020 come into play. Our latest forecast sees a surge in sales of nearly 50% in March, with even more robust growth of 76% set to follow in April. Before anyone gets carried away the resultant market level for both months are expected to be short of sales levels achieved in the corresponding months of 2019 when epidemiology was not common parlance.


Once European infection rates subside and lockdowns ease we expect the sales running rate to become progressively better through the year. For Q1 we forecast a SAAR of 81.6m, improving to 84.2m for Q2 and by the final quarter we expect a sales rate averaging 88.8m indicating a return to near normal. Later quarters of the year will be driven by pent-up demand and whether that can carry into 2022 will be key for the medium-term development of markets as there remains considerable uncertainty as to the fundamental economic health of many countries once the crutch of government support is removed. The recent passing of the $1.9trn stimulus package in the US indicates how difficult it will remain in getting a read on market fundamentals.


For 2021, our base forecast now stands at 85.2m – that’s 13.2% ahead of 2020, but 4.3% shy of 2019’s total. Volume-wise the bulk of that growth will come from the sector’s established pillars of West Europe, China and the US.