The U.S. market is second largest with sales of 15.6 million new cars in 2013, up 7.5% from the 14.5 million cars sold in 2012. Japan, Brazil, and Germany round out the top five, but those three countries all posted declines compared with compared with 2012 sales.
The decline in Japan was much smaller than expected due largely to the expansive economic policies that the country adopted. Sales in 2012 had been boosted by significant government incentives to buy lower-emission vehicles like the Prius hybrid from Toyota Motor Co. (NYSE: TM), so the sales decline of just 0.5% was actually better than most observers expected.
In India, the sixth largest market for new cars, new-car sales fell 5.4% year-over-year. The decline was a big surprise after 11 straight years of gains.
The sales data was collected by Italy-based consulting firm focus2move, and matches closely an estimate from IHS Automotive of 82.8 million cars sold in 2013.
Breakdowns by automaker aren’t yet available, but General Motors Co. (NYSE: GM), Toyota Corp. (NYSE:TM), and Volkswagen AG (OTC: VLKAY) are expected to emerge as the top three. According to IHS Automotive, all three sold more than 9 million cars last year and accounted for more than a third of the global total.
IHS has estimated 2014 sales around 86.4 million, while another automobile research firm, LMC Automotive, has set its growth estimate at 5%, or 87.7 million based on the focus2move total. U.S. sales iare expected to rise to 16 million to 16.5 million vehicles. That would put U.S. sales very near the 10-year average of 16.7 million sales before the financial crisis of 2008.
When Ford Motor Co. (NYSE: F) has warned that its profits in 2014 would be lower than analysts’ estimates, the company blamed the number of new car launches it plans for the year, foreign exchange rates, and higher costs. What it did not say anything about was pricing. Competition for sales is expected to be fierce among carmakers this year, and unless they can avoid offering substantial incentives to buyers, selling more cars at a lower profit on each could lead to a rocky year.
The good news, again, comes from China where analysts see new-car sales growing 9% to 11%. The problem is that these increases are getting smaller as China’s economic growth has dropped out of the double-digit range. The world’s largest country won’t carry the weight for many more years.
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