Global Car Market Shrinks 30% in First Half... What About the Second Half?

Global Vehicle Production and Sales Both Hit Bottom in April
Clear Recovery in June... H2 Sales Decline Forecasted at 12~8%

In February this year, Hyundai Motor Ulsan Plant export shipment dock (Photo by Yonhap News)

[Asia Economy Reporter Kim Ji-hee] Sales in major global automobile markets plummeted by nearly 30% in the first half of this year. Sales in European regions such as Italy and the United Kingdom dropped by more than 40%, and the Indian market, another major market, also fell to about half its previous level.

According to the Korea Automobile Manufacturers Association on the 17th, automobile sales in most major markets from January to June this year recorded a decrease rate of around 40% compared to the same period last year. During this period, sales in India and Spain fell by more than half, and the United Kingdom and Italy also saw declines of over 40%. Among major global countries, South Korea was the only one to see a 6.6% increase in automobile sales in the first half of the year.

Notably, since hitting a low point in April and May, sales in various countries have shown a clear recovery trend. Europe, Canada, and Italy, which recorded a sales decrease rate of over 60% year-on-year in April, showed a decrease rate in the 20% range in June, quickly emerging from the "COVID-19 shock." The United Kingdom and Spain, whose sales shrank by up to 96% during the same period, also improved to a decrease rate in the 30% range compared to the previous year.

A similar trend is observed not only in sales but also in production. In China, where sales turned to an upward trend compared to the previous year starting in March, production has also been steadily increasing since April. Production in June surged by a remarkable 22.5%. Production in the United States, one of the world's top three automobile markets, also significantly reduced its decline from 98.5% in April to 18.1% in June.

In South Korea, production volume in the first half of the year showed a gradual recovery with year-on-year changes of ▲6.7% in March ▲-22.2% in April ▲-36.9% in May ▲-10.7% in June.

This trend is expected to continue in the second half of the year, leading to a recovery in major countries' automobile markets. Automobile sales in China continued to increase year-on-year in July, and sales declines in the United States and Western Europe also slowed. Emerging markets, where demand recovery had been relatively slow, are also showing a gradual easing of the sharply dropped sales volume.

Accordingly, there is an expectation that second-half sales will partially compensate for the sharp sales slump in the first half. The association forecasted that the sales decline rate in the second half will improve significantly to between 12% and 8%, compared to -29.2% in the first half. Overall, it is analyzed that the global finished car market will shrink by at least 18% to a maximum of 21% this year. In June, IHS Markit projected that the automobile market size this year would decrease by 21.9% year-on-year to 70.1 million units, and in the same month, Hyundai Motor Global Business Research Institute forecasted a size in the low 70 million units range. This month, GlobalData projected annual sales of about 73 million units for this year.

This content was produced with the assistance of AI translation services.