2016 was a record-breaking year for global car sales, and it was almost entirely driven by China – Business Insider

Posted: Thursday, January 19, 2017


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Last year was yet another record-breaker for global car sales.

According to a report from Macquarie Bank, 88.1 million million
cars and light commercial vehicles were sold worldwide in 2016,
up 4.8% from a year earlier.

That was the fastest annual rate of growth since 2013.

The chart below from Macquarie shows the clear recovery in sales
following the global financial crisis in 2008/09.


macquarie new car sales globally in 2016via Business Insider Australia

Unsurprisingly, the strong global growth was fueled by one of the
largest and fastest growing economies in the world right now:
China.

“In terms of which markets supplied that increase, there is one
clear stand-out: China, which gained 13% and saw an additional
3.2 million vehicles sold,” Macquarie said, noting that sales
were partially assisted by a 50% sale tax cut for smaller
vehicles.

Of other major markets, sales in the European Union had a strong
year, increasing by an additional 1.1 million vehicles, or 7%.
Elsewhere, sales in the US increased by just 70,000, or 0.4%.

Growth in those markets helped to offset declines of 20% and 11%
and 2% in Brazil, Russia and Japan.

These two charts show the trend in sales by major market, with
China now standing head-and-shoulders above the rest in terms of
total vehicles sold.


macquarie new car sales by major market in 2016via Business Insider Australia

After such a strong year, and despite a one-year extension of
China’s tax break on sales of smaller vehicles (although the
discount was halved), Macquarie says that global car sales growth
will weaken in 2017.

“Looking ahead to 2017, it seems likely that car sales growth
will slow sharply,” the bank says, forecasting that global sales
will increase at half the pace seen in 2016.

“The main reason for this slowdown is to be found in China,” it
says. “Not only has the tax incentive been halved, to 2.5%, but
the surge in sales seen in the last few months must owe something
to consumers bringing forward purchases in case the incentive was
scrapped completely.”

Macquarie expects sales in China to grow by 2.8%, acknowledging
that sales could both undershoot or overshoot this figure
depending on how well the economy fares.

“There we are reasonably bullish, at least in the first half of
the year,” it says.

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