March is usually the incremental period of the global auto market, but this year is different. The recent outbreak in China, as well as the situation in Russia and Ukraine, have re-exacerbated supply chain bottlenecks that have been easing in recent months, leading to further pressure on the global auto market.
The 14 national automobile market further explored, and Russia and Ukraine fell the most
In March, car sales in 11 of the 14 countries counted by Gaz Auto showed a downward trend, while about 70% of the countries saw double-digit sales declines. Among the world's major auto countries, China, which has been playing a stable role, has not been able to avoid declines, and only India's sales have barely stabilized. However, the small Netherlands and Norway saw slight increases in their car markets.
First of all, China, as the world's largest automobile market, has a gap of hundreds of thousands of vehicles in March compared with normal production and sales, ranging from the overall car market to passenger cars, commercial vehicles, pickup trucks, etc. Have declined sharply, which is mainly affected by the domestic epidemic. In fact, as early as before the spread of the epidemic, many car companies were already in a state of full production operation, and with the large-scale outbreak of the epidemic, the production and logistics of related parts and components came to a standstill, and the difficulties of market players increased significantly. As for the first quarter, the year-on-year growth rate of China's automobile market is also significantly reduced, mainly due to the impact of the epidemic, in addition, the shortage of chips has not been significantly alleviated, the price of raw materials for power batteries has risen rapidly, further pushing up the manufacturing costs of enterprise products, and the production and operation activities of automobile companies have been affected to a certain extent, resulting in the overall situation being less than expected.
In the United States, the second largest car market, the automotive industry is not only affected by the continued impact of semiconductor shortages and the new crown epidemic, but also faces challenges such as the escalation of the situation in Russia and Ukraine, fuel price fluctuations, and shortages of batteries and other components and materials, with new car prices rising and sales falling by 24% year-on-year. Automakers' production has been heavily impacted, as well as new car inventories at dealers across the United States. Market analyst firms such as J.D. Power said U.S. light vehicle inventories fell below 900,000 units in March due to a shortage of parts and components that led to a reduction in production. Monthly inventory of light vehicles in the U.S. has been below 1 million units since last summer. In the first quarter, the U.S. auto market fell at 16 percent, nearly the lowest level in the past 10 years. Charlie Chesbrough, senior economist at Cox Automotive, bluntly said that the U.S. new car market is stuck in lower gears, and sales will continue to hover at the current low level until supply improves.
And this situation is not only the case in the United States, but also in some European countries. France, as one of the five mainstream car markets in Europe, car sales have been falling for 10 consecutive months, and industry insiders are worried; new car sales in the UK in March even fell to the lowest level in the same period in 24 years, and usually about 20% of the total annual new car sales in the UK come from March, in view of this, the sales results in March are also very disappointing for the British automotive industry.
In March, new car sales in Spain fell by more than 30% year-on-year, in addition to objective factors, in large part because of the strikes of some truck drivers that delayed the delivery of vehicles and parts and exacerbated existing supply chain problems. The problem of the car market in Russia and Ukraine is more typical, and due to the further escalation of tensions between the two countries, the performance of the car market in the two countries has also dropped to a freezing point. The ruble has been hit hard by multinational sanctions on Russia, and most car companies have begun to boycott Russia, and the country's new car sales in March were almost cut from the same period last year. Svetlana Vinogradova, CEO of Rolf, Russia's largest car dealer, predicts that demand in Russia will fall by half this year to the level of new car sales in Spain, which has only a third of Russia's population. The Ukrainian auto market fell even harder, with car sales falling to just 546 from 9,041 in the same period last year.
Perhaps the only ones that can give us a little comfort are the Netherlands and Norway, two small European countries. Although tight supply and rising costs also affect car sales in both countries, for the Dutch and Norwegian markets, where overall sales are relatively low, relatively affluent consumers may be able to afford the rising prices, so car sales will not fluctuate significantly.
The electric vehicle market as a whole is still growing, with sales falling in individual countries
Although the overall performance of the global auto market is weak, the sales volume of electric vehicles as a whole still maintains a growth trend, but it is still slightly inferior to the previous high growth rate.
Among the eight major countries counted by Gaz Auto, China is the only market where the sales of electric vehicles still maintain a three-digit high growth rate, indicating that the price increase in China's new energy vehicle market in March did not affect the market performance too much, and the sales performance of many new energy vehicle companies in the month was still outstanding. The industry generally believes that in the context of repeated epidemics, it may stimulate the rise in demand for some private cars, and combined with the impact of the current high oil prices, more people will choose to buy new energy vehicles, so China's new energy vehicles will still maintain strong growth.
The U.S. electric vehicle market is also booming. According to the recent U.S. light electric vehicle sales report released by the Kelly Blue Book, from January to March this year, U.S. electric vehicle sales surged by 76% year-on-year to a new high. Driven by high gasoline prices, electric vehicles accounted for 5.2 percent of new car sales in the U.S. in the first quarter, compared to 2.5 percent in the same period last year.
The UK also set a new sales record for electric vehicles in March, of which the sales performance of pure electric vehicles was even more prominent, up 79% year-on-year, accounting for nearly one-sixth of total sales, almost exceeding the sales of electric vehicles in the UK in 2019. Although the growth rate of electric vehicle sales in France has slowed, the electric vehicle market has achieved an important milestone – in the first quarter of this year, the sales of electrified vehicles surpassed gasoline-powered vehicles for the first time.
Although electric vehicle sales in Spain surged 53% in March, the growth rate of electric vehicle sales has slowed as many of the components of electric vehicles produced in the country come from Ukraine, and its market share has also decreased compared with February.
Germany, as europe's largest electric vehicle market, the market performance in March was not good, sales fell by 6% year-on-year; in Sweden, where the electric vehicle market is more mature, electric vehicle sales also fell by 9% in March, and the main reason for the decline in sales in these two countries is still the production interruption caused by the shortage of parts, not the lack of consumer demand.
Overall, in the context of the situation in Russia and Ukraine, fuel prices have risen sharply, resulting in higher consumer demand for electric vehicles, and the global electric vehicle market has also ushered in large-scale growth. However, with the continuous rise in the price of raw materials for power batteries, or to a certain extent affect the adjustment of the power structure of electric vehicles, and this adjustment may be more inclined to the direction of plug-in hybrid vehicles, which will further promote the development of plug-in hybrid vehicles.