Carmakers still sit on a certain amount of unfulfilled vehicle orders that have been carried over from last year.
Global car sales dipped by 0.1% year-on-year (YoY) to 81.05 million vehicles for 2022, showing almost no change from the 2021 figure, according to TrendForce analysis.
However, there is a chance for the global car market to return to positive growth this year. TrendForce currently projects that global car sales will increase by 3.8% YoY to 84.1 million vehicle units for 2023.
TrendForce data reveal that car sales in China totaled 26.9 million vehicle units for 2022, reflecting a YoY growth of 3.7%. China’s demand has been the key pillar that supports the entire global market for new cars. Conversely, the annual car sales figures from the US and Western Europe both came to a decade low for 2022.
The United States posted just 13.7 million vehicle units, reflecting a YoY decline of 8.1%. Western Europe posted just 11.8 million vehicle units, reflecting a YoY decline of 4.6%. The new car market of Eastern Europe recorded a YoY drop of 27.3% as well for 2022.
Due to the impact of its military conflict with Ukraine, Russia saw a contraction of around 1 million vehicle units in new car sales compared with 2021. Turning to the emerging markets, their performances were relatively strong in 2022. With an annual sales figure of 4.3 million vehicle units, India overtook Japan to become the world’s third largest car market for the first time. Also, car sales in Indonesia registered a positive growth for the second consecutive year and returned to the pre-pandemic level.
TrendForce points out that carmakers still sit on a certain amount of unfulfilled vehicle orders that have been carried over from last year. Therefore, a part of the projected sales growth in 2023 will be attributed to this demand. By region, China’s new car market will show a small or flat YoY growth for 2023 mainly because of the change in the vehicle purchase tax on cars that run on fossil fuels. This tax was halved last year, thereby encouraging Chinese consumers to purchase new cars in advance. Consequently, car sales in this country cannot be easily drummed up this year. A stronger policy incentive might be needed in order to effectively stimulate demand.
Turning to the US, there is a potential for growth in 2023 because its sales figure for 2022 is a low base for comparison. Furthermore, there are signs that consumer confidence has returned in the country. On other hand, the average price for new cars in the US has been on a very sharp upward climb, and the recent hikes in interest rates have created an unfavorable situation for people that want to obtain auto loans. The effects of these trends on the US car market cannot be ignored.
As for Western Europe, its sales figure for 2022 is also a low base for comparison. However, the Russia-Ukraine military conflict continues, and the challenges associated with the region-wide energy shortage have yet to be resolved. These factors will influence the growth of the Western European market during 2023.