World Vehicle Sales Up 3.9% to Reach First-Half Record

Sales worldwide rose 3.9% in first-half 2016 to 45.57 million units, the largest first-half total in history by countries tracked by WardsAuto. Automakers sold 7.92 million vehicles in June, climbing 5.7% above same-month 2015.

June sales were strong in Europe, up 6.0% to 1.99 million vehicles. Almost every country witnessed growth, including Finland (+19.5%), Poland (+27.3%), and Czech Republic (+21.3).

However, sales in the U.K. slipped 0.1% to 298,000 units in the same month voters decided to leave the European Union. Consumers may be hesitant to make big purchases with so much uncertainty in the near future. The effect on the auto industry may not be clear for a few months, because there is often a delay between purchase and registration, and trade and other regulations have not been decided. Year-to-date, U.K. sales were 3.4% ahead of same-period 2015.

In Ireland, demand increased 8.8% to 2,605 vehicles. June is typically slow for vehicle sales; this year the month’s total fell 69.8% behind May’s. With the second registration period for the year starting in July, buyers often wait until then to purchase a new vehicle. The country’s total for first-half 2016 of 122,000 units was 23.7% ahead of same-period 2015.

Spain sales shot up 11.6% in June to 143,000 vehicles. Consumer interest in alternative energy vehicles seems to be growing in the market. Hybrid sales increased 92%, according to auto manufacturers’ group ANFAC, to reach nearly 3,000 units, and electric vehicle sales were up 57%. 

Sales in Russia continued to fall behind last year, with June’s total tumbling 11.0% to 131,000 units. The shrinking demand has caused several automakers, including General Motors and Ssangyong, to close plants or cancel export programs in the country. Six months into the year, Russia sales saw a steep decline of 13.3% to 712,000 units compared to same-period 2015. Last year’s second half saw slightly higher sales than the first, so there is some hope for an improved year-end total.

June’s figures brought Europe’s first-half tally to 10.57 million sales, 7.2% ahead of same-period 2015, with year-over-year gains each month. However, automakers are concerned the Brexit-vote impact will reverse this trend in the latter half of the year. 

North America sales grew 3.8% to 1.87 million for the month, with gains seen in all three countries. Demand in Canada increased 6.8% to 194,000, and the U.S. saw a 1.9% uptick to 1.54 million units. Mexico sales soared 25.5% to reach the best-ever June total of 138,000 to continue a long stretch of year-over-year gains, despite a slowing economy and weakened peso. 

Year-to-date, automakers have sold 10.55 million vehicles in North America, a 2.7% increase from same-period 2015. Holding the number one position, General Motors accounted for 16.1% of the region’s tally with 1.7 million sales this year. Ford earned a 14.7% share, and Toyota beat FCA for third place by a fraction of a percent with a 12.9% share.

Sales in the Asia-Pacific region soared 9.2% with 3.67 million units. Big gains were seen in many emerging markets, including Singapore (+22.9%), Philippines (+19.6%) and Vietnam (+26%).

India, the world’s fastest-growing economy, saw a 3.9% boost in demand in the same month the federal government approved a wage increase for its employees. In first-half 2016, India’s total of 1.81 million vehicles was 6.8% ahead of last year.

The Chinese auto industry continued to grow, rising 14.9% over same-month 2015 to 2.07 million vehicles. This year has seen a rise in Chinese brands as they close the quality gap, though foreign luxury brands such as Buick and Lincoln still saw robust double-digit gains. Consumers seem to favor all SUVs, because the segment grew 40% in June while car sales fell 3.9%, according to The CAAM, the auto manufacturers’ trade group. Year-to-date, sales in China reached 12.83 million units, outpacing 2015 by 8.2% to hold a 28.2% share of the global tally.   

On the other hand, Japan sales were down 4.9% to 421,000 units in June. Stagnant wages, an aging population and difficulty for young people to find steady work contribute, among other factors, to a frugal population with little to spend on non-essential goods. Japan has only seen one month of year-over-year growth so far in 2016, bringing its first-half total to 2.55 million, 4.8% behind last year.

Automakers sold 309,000 units in South America for the month, plummeting 15.3% below June 2015. Low oil prices, the Zika virus, and political unrest have plagued the region in recent months, leaving few people shopping for a new vehicle. Chile was the sole bright spot, with sales rising 3.7% to 25,000 deliveries.

In Brazil, with a population of 210 million, sales fell 19.2% to 172,000 units. Venezuela witnessed a particularly acute drop of 87.1% to 243 units during a month of demonstrations and riots due to severe food shortages.

Year-to-date, South America’s total of 1.79 million was 18.6% behind same-period 2015.

Globally, Volkswagen Group has pulled ahead to the No. 1 position for first-half 2016, reporting a 1.5% increase in sales, despite its emissions scandal, while Toyota posted a 0.6% loss. GM reported a 1% year-over-year gain in global sales, including Buick’s outstanding 20.1% surge to 675,964 units largely due to growth in China.

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