Global Car Sales in September Show First Increase This Year... "Recovery Trend Remains Uncertain"

[Asia Economy Reporter Kiho Sung] Global automobile sales, which were hit hard by the novel coronavirus disease (COVID-19), turned to an upward trend in September for the first time this year. However, liquidity issues caused by the resurgence of COVID-19 in developed countries and labor union risks in the domestic automobile industry remain, making it difficult to be optimistic about the situation.

The Korea Automobile Manufacturers Association announced on the 9th that global automobile sales recorded 7.95 million units in September, an increase of 2.0%, marking the first growth this year.

By region, major markets such as the United States, Europe, China, and India showed year-on-year increases. In the U.S., due to historically low interest rates and government stimulus measures, as well as increased demand for cars as an alternative to public transportation, sales rebounded by 6.1% to 1.34 million units in September, marking the first increase since the COVID-19 outbreak. Europe also saw an increase in September following July, driven by incentives for low-emission vehicles, continued travel restrictions, and the realization of pent-up demand delayed by COVID-19.

However, from October onwards, the continuous growth is uncertain due to the resurgence of COVID-19 in developed markets such as the U.S. and Europe. In Europe, countries like France, the United Kingdom, and Belgium are expected to see a decline in new car sales due to lockdown orders starting in November, including dealership closures.

In the U.S., although there was a slight increase of 1.1% in October, the continuation of the upward trend is uncertain due to the resurgence of COVID-19, persistently high unemployment rates, increased long-term unemployment dampening consumer sentiment, and delays in additional stimulus fund negotiations caused by the presidential election.

The Automobile Manufacturers Association explained that it is unclear whether the strong export performance of domestically produced cars, which showed growth for two consecutive months in September and October this year, will continue. It also pointed out that recent labor union risks, such as the partial strike by Korea GM, strike preparations by Kia Motors’ union, and delays in collective bargaining negotiations between Renault Samsung Motors and labor, are intensifying concerns over the resurgence of liquidity crises among suppliers.

Jung Manki, chairman of the Korea Automobile Manufacturers Association, stated, “It is fortunate that global demand showed signs of recovery as the COVID-19 situation eased for a while, but the resurgence of COVID-19 in developed markets raises concerns that the global demand recovery may falter toward the end of the year, and liquidity crises for our companies continue.” He emphasized, “Considering the difficult financial conditions of parts suppliers, labor-management conflicts such as ongoing collective bargaining negotiations and strike actions in the automobile industry, which have recently failed to reach agreements, must be resolved promptly.”

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