World Vehicle Sales Up 6.7% in January

Automakers started off the year 6.7% ahead of 2017 with 8.04 million vehicles sold in January.

A huge boost came from China, where sales increased 11.5% to 2.81 million, compared to year-ago’s 2.52 million. The growth exceeded expectations as regulation changes are uncertain and the overall economy is slowing. Competition is fierce in the world’s biggest market, with local brands frequently pushing out new models to vie for buyers’ attention.

Ford China CEO, Jason Luo, unexpectedly resigned at the end of the month, citing personal reasons. Ford experienced slow sales in 2017 and brought Luo on in September to help turn things around. Last month’s sales tumbled 18%, and Ford blamed lack of new product for the slowdown.

General Motors, Toyota and Volkswagen all posted positive January results with their China partners.

China’s growth helped push the Asia-Pacific region’s total 9.7% above year-ago with 4.17 million sales. Results varied across the region, with India soaring 13.6% to 375,000 units, while Japan was flat at 400,000.

Demand also was strong in Europe, gaining 7.5% to 1.61 million deliveries, from year-ago’s 1.50 million. Several large markets, including Germany (+11.4), Italy (+4.3%) and Spain (+19.5%) saw significant growth.

Russia has announced plans to encourage automotive exports through increased subsidies for transportation costs for local manufacturers. The declining value of the ruble has made production in Russia more affordable, though local sales have been slow in recent years. While January sales improved 33.5% year-over-year, demand was far behind pre-2015 levels.

In South America, sales improved 23.0% over year-ago’s weak total with 375,000 units. Volkswagen announced major investment plans in the region last November and began selling the South America-exclusive Virtus sedan, built in Sao Paulo, Brazil. Though Brazil saw 23.1% growth to 181,000 in January, it still was a fraction of sales a few years ago.

North America sales were flat at 1.41 million. The total was pulled down by Mexico’s 11.4% drop to 112,000 units, which still was its third-highest January. Canada posted a best-ever January with 120,000 units, beating year-ago’s record by 6.4%, and U.S. sales ticked up 1.4% to 1.18 million.

Sales in South Africa were down 9.1% to 46,000 amid a severe three-year drought. Consumers may be too distracted by the daily limit of 13 gallons (50 L) of water per person to shop for a new vehicle.

Global sales are expected to grow again this year, with flat sales in developed countries and increased demand in emerging markets.

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