International passenger car markets: VDA adjusts forecasts

The German Association of the Automotive Industry (VDA) is adjusting its market forecasts for the global market as well as the markets in China, the USA, Europe, and Germany.

While the Chinese car market is recovering with great momentum after the extensive lockdowns in spring of this year and despite current restrictions, expectations for the USA and Europe are dampened primarily by high inflation and interest rate hikes. These worsen the financing conditions for consumers and also reduce purchasing power.

In Europe, the Russian war of aggression in Ukraine has caused additional shortages along the value chains. The easing that was initially expected is now less pronounced than previously assumed. The difficult availability of preliminary products and raw materials continues to determine the markets, in particular the lack of semiconductors.

For China, we are now assuming a growth of +9% to 23.0mn passenger cars (previously +3%). After the lockdowns in April and May, the Chinese market has recovered with tremendous momentum. In addition, the government's demand-boosting measures (including tax cuts) are currently providing a significant tailwind.

We are correcting our forecast for the USA downwards and are now assuming a decline of 7% to a sales volume of 13.8mn light vehicles for the current year (previously -1%). In the US, low auto production has led to historically low dealer inventories. The interest rate turnaround by the central bank will also make consumer loans in the USA significantly more expensive, to which customers there are traditionally sensitive.

For Europe (EU27, EFTA & UK) we are lowering our forecast to -4% or 11.3mn cars (previously ±0%). The relaxation in supply chains that we had expected for the second half of the year is now having a lesser impact on the market than previously assumed. We also assume that negative demand-side effects will increase in the coming months due to falling purchasing power. We are lowering our market forecast for Germany from +3% to -6%. We are therefore now assuming a market volume of 2.5mn passenger cars.

For the global passenger car market, we continue to assume that the sales volume will be at the previous year's level (±0%). This black zero corresponds to a sales volume of 71.4mn cars. That is 9.2mn fewer cars than in the pre-COVID19 year 2019 and even 13.0mn fewer cars than in 2018.