Research Firm: Global Sales of Light Vehicles Will Hit 93.5 Million Units in 2017
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Research Firm: Global Sales of Light Vehicles Will Hit 93.5 Million Units

However, U.S. auto sales have lost some momentum already this year, and Trump’s proposed trade policies could be a wild card.

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Global light-vehicle sales will reach 93.5 million units in 2017, a growth rate of 1.5 percent over 2016, according to the London-based research firm IHS Markit.

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Global light-vehicle sales will reach 93.5 million units in 2017, a growth rate of 1.5 percent over 2016, according to the London-based research firm IHS Markit.

The prediction comes with a caveat, however. IHS Markit noted that risk in mature markets such as the auto industry is at the highest level since the Lehman Brothers collapse and the Great Recession, and will be a key factor for the near future. Engine-propulsion options will be a factor as well.

“Political uncertainty could cause a significant rift in light-vehicle sales both in the U.S. and Europe, as both regions are undergoing fluctuations in policy, leadership and other dynamics,” said Henner Lehne, senior director, global vehicle group for IHS Markit.

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U.S. auto sales have lost some momentum already this year, and President Trump “somewhat complicates the near-term picture,” IHS Markit asserted. Trump’s policy proposals regarding trade and environmental regulations “create some uncertainty, countered by a slightly improved economic picture for 2018-2021,” according to IHS Markit analysis.

“It is difficult (and unlikely) to sustain and continue to grow at the same rates the U.S. market has seen over the past eight years, and a leveling off is underway,” IHS Markit added.

IHS Markit forecasted U.S. light vehicle sales at 17.4 million units in 2017, down 1 percent from 2016.

Diesel on the Decline

IHS Markit predicted that the decline of diesel-vehicle sales in Europe is just the start of a growing trend of diesel decline expected in the coming years, due in part to significant challenges around RDE (real driving emissions) regulation and the arrival of the EU6d emission standards.

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Sales of BEV (battery electric vehicles) and PHEV (plug-in hybrid electric vehicles) light vehicles also were relatively flat between 2015 and 2016, according to IHS Markit analysis, “despite the ever-present longer-term growth fundamentals.”

Global BEV production remains significantly below 1 million units and will represent just 0.7 percent of new-vehicle supply globally in 2017, according to IHS Markit forecasts.

China Will Drive Growth

The majority of global growth can be attributed to China, as Chinese-targeted auto excise duty incentives are expected to continue through 2017, albeit at a lower rate of 7.5 percent for qualifying vehicles (up from 5 percent in 2016).

Provisional figures analyzed by IHS Markit suggest that China accounted for approximately 76 percent of the 2016 volume growth in global auto sales. December was the last month of a full tax-break stimulus program.

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“The mature markets, together with China, were key to the overall 2016 automotive growth story,” according to IHS Markit. Consumers bought 92.1 million light vehicles in 2016, up 4.6 percent from 2015, according to IHS Markit’s provisional data.

IHS Markit expects China to continue to be the world’s largest car market for the foreseeable future, and has upgraded its 2017 China forecast to 28 million units (up 1.9 percent).

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