Trends in the automotive markets
In 2015, we expect to see mixed trends in the passenger car markets in the individual regions. Overall, the increase in global demand for new vehicles will probably be slower than in the reporting period.
The Volkswagen Group is ideally positioned to deal with the mixed developments in the global automotive markets. Our broad, steadily growing product range featuring the latest generation of consumption-optimized engines as well as a variety of alternative drives gives us a global competitive edge. We are pursuing the goal of offering all customers the mobility and innovation they need, sustainably strengthening our competitive position in the process.
We estimate that demand for passenger cars worldwide will continue to increase in the period 2016 to 2019.
In Western Europe, we are predicting a slight increase in demand for automobiles in 2015 after the downtrend came to an end in the reporting period and growth was recorded for the first time in the wake of four years of decline. Pre-crisis levels are not expected to be reached in the medium term, however. The ongoing debt crisis will further unsettle consumers in many countries in the region and restrict their financial opportunities to buy new cars. In Spain and Italy, the recovery will probably continue at a modest pace, while in the United Kingdom we anticipate that the market volume will be just below the high level seen in the reporting period. In France, we are forecasting stronger growth than in 2014 thanks to a state subsidy for scrapping used diesel cars that will apply from 2015.
In Central and Eastern European markets, demand for passenger cars in 2015 is likely to be down considerably year-on-year, mainly due to the Russian market, which is slated to fall short of the prior-year level as a result of the political crisis. By contrast, we expect to see further growth or volumes remaining at the previous year’s level in many Central European markets.
After a weak 2014, we are projecting that the volume of the South African automotive market will remain level with the previous year in 2015.
In the reporting period, the German automobile market curbed its downward trend and recorded growth. We expect demand to edge up in 2015 provided the economic conditions do not deteriorate.
In 2015, we expect that the market for passenger cars and light commercial vehicles (up to 6.35 t) in the USA will benefit from the situation in the labor market and attractive financing conditions, and that the positive trend seen in the past year will endure, albeit at a noticeably weaker pace. The SUV segment will drive growth. In the
Canadian market, demand is likely to be slightly below the previous year’s high level, and in Mexico we also anticipate a slight uptrend.
Owing to their dependence on demand for raw materials, the South American markets are heavily influenced by developments in the global economy. Furthermore, increasingly protectionist tendencies are adversely affecting the performance of the region’s vehicle markets, especially in Brazil and Argentina, which have imposed restrictions on vehicle imports. Passenger car sales in South America will probably fall substantially short of the prior-year level. In Brazil, the largest market in South America, we are forecasting that the market volume in 2015 will be significantly lower than in the previous year. Following the market slump in 2014, we anticipate that demand in the Argentinian market will continue to taper off markedly in view of the persistently high inflation and the challenging macroeconomic situation.
The passenger car markets in the Asia-Pacific region look set to continue their growth trajectory in 2015, though at a slower pace. In China, the steady increase in demand for individual mobility will push up demand, albeit with less momentum. We expect the Japanese passenger car market, which moderately exceeded the previous year’s volume in 2014, to record a significant drop in 2015, primarily as a result of tax breaks expiring. In the Indian passenger car market, we anticipate a slightly higher volume in 2015 than in the previous year.
After a sizeable slump in demand in Thailand’s passenger car market in the reporting period dragged down passenger car sales in the ASEAN region overall, we anticipate positive growth rates in 2015 for the markets in the ASEAN region.
TRENDS IN THE MARKETS FOR COMMERCIAL VEHICLES
The markets for light commercial vehicles will also see mixed trends in the individual regions in 2015. Overall, we envisage slight growth in demand, which is likely to continue in the period 2016 to 2019.
In light of the sustained economic stabilization expected in 2015, we should see modest growth in the markets for light commercial vehicles in many countries in Western Europe. We anticipate that sales in Germany will be on a level with the previous year.
In the Central and Eastern European markets, sales of light commercial vehicles in 2015 will probably be on a level with the previous year. In Russia, we anticipate a further decrease in the market volume in 2015.
In North America, light commercial vehicles up to 6.35 tonnes are allocated to the passenger car market.
In South America, we estimate that there will be a noticeable increase in demand in 2015 as against the prior-year level. Pickup and SUV models in particular are enjoying growing popularity. In Brazil, the market’s growth will be determined by newly introduced SUV models that are registered as commercial vehicles. We expect the Argentinian market to experience lower demand in 2015 than in the previous year as a consequence of the macroeconomic situation.
The market volume in the Asia-Pacific region in 2015 will probably record a modest increase year-on-year. We expect growth in the Chinese market to be slightly down on the previous year. In Japan, we anticipate that the slight downtrend will continue in 2015.
For the majority of the Asian light commercial vehicle markets, including the ASEAN markets, we are forecasting further growth starting in 2015.
In the markets for mid-sized and heavy trucks that are relevant for the Volkswagen Group, new registrations in 2015 are set to drop noticeably below the prior-year level. However, we expect a positive trend in the period 2016 to 2019.
We predict that demand in Western European markets will rise modestly year-on-year on the strength of the economic recovery; this had been affected in 2013 by pull-forward effects related to the introduction of the Euro 6 emission standard. It is expected that the volume of new registrations in Germany in 2015 will also be slightly up on the previous year’s level.
We expect demand to remain level year-on-year in the Central and Eastern European markets (excluding Russia). Given the very sluggish macroeconomic development in Russia during the reporting period and the sanctions relating to the political crisis, we anticipate that the market volume in 2015 will decline.
Sales in the US market are forecast to rise sharply in 2015 on the back of strong demand for energy-efficient vehicles and the resulting higher demand for replacement vehicles in the heavy trucks segment.
We are forecasting significantly weaker trends year-on-year in the Brazilian market in 2015 owing to the still fragile macroeconomic environment and the austerity measures introduced by the government, which have resulted in less subsidized financing being available for automotive industry products, among other things.
Sales in China, the world’s largest truck market, are likely to remain almost level with the previous year in 2015. In India, on the other hand, we believe that the change of government in May 2014 will create further investment incentives from infrastructure projects, among other things. These will probably lead to a substantial year-on-year increase in the market volume in 2015.
In the bus markets that are relevant for the Volkswagen Group, we expect that new registrations will decline noticeably in 2015. This is due to the negative economic growth in the South American markets. While we anticipate that demand in Western Europe will remain level year-on-year in 2015, with the markets in Central and Eastern Europe experiencing modest growth, we expect a significant decline in the South American market.
For the period 2016 to 2019, we expect moderate growth overall in the bus markets that are relevant for the Volkswagen Group.