The U.S. light car market ended March selling 1.25 million units, down 22% from March 2021 (which was a strong month). The U.S. market is going to be affected by a shortage of parts that make up the list of extremely few vehicles.
According to GlobalData Unit, LMC Automotive has an annual sales rate of only 13.4 million units in March (SAAR).
March also saw General Motors top the market, although it ended the first quarter behind Toyota. In fact, the Toyota RAV4 was the only vehicle to sell more than 100,000 units in Q1. Tesla has also strengthened its lead in the premium segment, surpassing BMW by nearly 20,000 units.
March 2022 was the fifth weakest month for light vehicle sales in the U.S. since 2000.
In Q1, sales totaled 3.29 million units, down 16% from Q1 2021. Historically, and under normal demand conditions, the volume would have been close to 4 million marks at this time of year.
Analysts at LMC now predict that supply chain disruptions will persist throughout 2022. Global light vehicle sales are now projected to grow by just 1% to 82.6 million units – a forecast that has fallen by nearly 3 million units since February.
Augusto Amorim, senior manager, Americas Vehicle Sales Forecasts, LMC Automotive, told Just Auto that Toyota was navigating the shortage of chips better than Ford: General Motors overtook Toyota in March, but finished the quarter ahead of its rival. They are the only two OEMs to have sold more than 500,000 units in Q1. Still, the Toyota RAV4 was the best-selling car in the United States for the second month in a row, as chip shortages hit Ford’s output even higher. The F-150 was sold in March by both the Chevrolet Silverado and the Ram 1500.
Amorim also noted that of the established OEMs, only Mazda and Tesla sold more than in March 2021. In addition, Tesla continues to be the leader in the premium segment, selling 100,000 units in a quarter for the first time. “Tesla was about 20,000 units ahead of BMW,” he noted
There were no big surprises in the performance of different segments, but the Chevrolet Equinox and Honda CR-V sales recovery compact SUV topped the sales rankings. Compared to the 18% drop in sales of Midsize SUVs, this was the segment that had the lowest, 10% YoY drop in the top five most popular. Smaller SUVs have fallen the most at 37% YoY, as OEMs continue to focus on more profitable models.
LMC has downgraded its outlook for U.S. light vehicle sales in 2022, as recovery is expected to be hampered by a lack of inventory. Volume is now expected to reach 15.3 million units a year, down 500,000 from last month. The pace of recovery is now expected to be slower than at the beginning of the year. Q1 North America production levels may be about 50,000 units lower than we expected last month and the periodic downtime and slow line rates continue to limit supply.
Furthermore, the LMC said that the expansion of supply disruptions is likely to spread in 2023, prompting a 400,000-unit decline that would bring the year’s topline volume to 16.5 million units, still an 8% increase from 2022.
Jeff Schuster, President, Americas Operations and Global Vehicle Forecast, LMC Automotive, said: “In terms of March performance, we think the risk is balanced in Q2, but there are more negative risks in H2, as we continue to improve sales rates. The H1 averaged 16.2 million units from the 14.3-million-unit speed forecast. Vehicle prices remain a significant headwind despite improved supply. Epidemics and declines from supply chain deficits have fundamentally changed the procurement process, including how much inventory is carried in the dealer lot and the level of incentives that go forward. The industry will recover, but historically it will work much differently. “
Western European SAAR dropped to just 9 million a year in March
Passenger car sales in Western Europe fell to 9.0 million units a year in March, from 10 million units / year in February, to an average of only 9.6 million units / year in Q1 2022. LMC described the start of 2022 in Europe as “very disappointing because the automotive industry continues to suffer the effects of supply problems”. To make matters worse, the war in Ukraine only exacerbates these problems.
In Germany, sales fell slightly to 2.4 million units / year in March, from 2.7 million units / year earlier. UK PV sales fall to 1.2 million units / year from 1.9 million units / year in March
For France in February, sales remained at a disappointing 1.4 million units / year. In Spain, sales fell to 574k units after trucker strike delivery was delayed, from 700k units a year earlier. Finally, in Italy, sales fell to 1.1 million units / year in March, from 1.2 million units / year in February.
The LMC’s Western European forecast has been cut since last month as registration figures stagnated, further exacerbated by the war. “We still expect sales to improve by 2022 but now at a slower pace than last month’s forecast,” said LMC analyst Jonathan Poskit. “The war will also eliminate underlying demand, through higher inflation and lower real incomes in the long run, although our view is that the initial impact on registration will be felt through a reduction in supply constraints, as at least for the time being, demand is still exceeding supply.”
Russia’s light car market fell 63% in March
The war in Ukraine and its economic effects have already plunged the Russian car market. Figures released by the AEB in Moscow show that the Russian light vehicle market (cars and LCVs) fell 62.9% in March, selling only 55,129 units – the equivalent of an annual market of 700,000 units.
Contrary to common practice, the AEB press release containing the data was significantly without any comment from the members of the AEB Automobile Manufacturers Committee on data or market trends.
Analysts predict that the Russian car market will see a big decline this year due to much lower economic growth and supply problems in the market. Western brands have stopped shipping vehicles and parts to Russia, and domestic producers are finding it difficult to get parts internationally.
GlobalData market data shows that the Russian light car market reached 1.67 million units in 2021, about 4% more than last year. Analysts expect autonomous manufacturing plants in Russia to be severely disrupted this year and shut down in the face of much lower demand. However, much depends on the course of the Ukraine crisis and its economic impact for the rest of the year.
One possibility is that Chinese automakers will fill the void created by the absence of Western brands.
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