China’s Automobile Market Forecast for 2023
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China’s Automobile Market Forecast for 2023
- China's automobile sales in the first 11 months of 2022 increased by 3.3% year-on-year to 24,3 million units. Full-year sales are expected to rise by 2.4% to 26.91 million units. In the first half of 2022, the new coronavirus infection spread again in some areas of China, so the “zero corona” policy with strict restrictions on movement was thoroughly enforced, resulting in a decline in automobile production and sales. Since June 2022, the automobile market has returned to a growth trajectory due to the Chinese government's reduction measures for passenger vehicle purchase tax and the automobile purchase support measures of some local governments.
- The automotive market in 2023 is expected to grow slightly compared to 2022. There is a high possibility that the pandemic will come to an end on a global scale, so expectations for economic recovery are increasing. In China, from December 2022, the “zero corona” policy was fully relaxed. As a result, business is expected to pick up, and expectations for an economic recovery in 2023 are increasing.
- In the passenger vehicle market, the sales of medium- and large-sized passenger cars are expected to continue growing steadily, supported by consumption by wealthy people in urban areas. The large MPV market is also expected to continue expanding driven by rising demand for courtesy vehicles for businesses and by families. The SUV market, the largest segment in China, is likely to grow for the first time in four years since 2020. The A and B segments are forecast to continue to grow, pushed up by compact BEVs. The commercial vehicle market in 2023 is expected to turn growth after two years decline in 2021 and 2022.
China’s NEV Market Forecast for 2023
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China’s NEV Market Forecast for 2023
- The sales volume NEVs (New Energy Vehicles: BEV, PHEV and FCEV) in China is expected to exceed 6.8 million units in 2022, nearly doubling from the previous year. Since 2022 was the final year of the NEV subsidy policy, it is forecast that last-minute demand likely boosted NEV sales. In addition, NEV sales in 2023 is expected to increase by 33% from 2022 to 9.1 million units.
- In recent years, in addition to the extension of cruising range by the performance improvement of NEVs, the installation of smart functions such as voice recognition as well as connected and driving support functions is expanding. For consumers, product development is progressing that makes them want to purchase NEV products even without subsidies. The NEV market is changing from policy-driven to market-driven, so it is believed that further expansion of NEV sales can be expected.
- However, the NEV subsidy policy will be abolished in 2023, and the cost of raw materials such as in-vehicle batteries is expected to rise. So there are concerns that this could lead to a decline in consumer willingness to buy.
- NEV commercial vehicles are overwhelmingly BEVs. In addition to the switchover to BEV buses for fixed-route service in various parts of China, the use of NEV trucks is also expanding in limited areas such as wharves, industrial parks and construction sites. In addition, the Chinese government is promoting the expansion of the use of FCEV commercial vehicles, so the market size of FCEV commercial vehicles is expected to expand gradually in the future.
Details on the launch of the next electrified Ford in Europe
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Details on the launch of the next electrified Ford in Europe
- Ford has specified the nature of the new 100% electric (BEV) and plug-in hybrid (PHEV) models it will launch between 2023 and 2025 in Europe. These will be six new models with a total sales volume that could reach 600,000 units in Europe by 2026, replacing the Ford Mondeo (2022), Ford Fiesta (2023), Ford Ecosport (2024), Ford Focus (2025), combustion engine models that have been widely successful for several decades. But today, times have changed and Ford is practically starting from scratch. The future are 100% electric SUVs and so next Ford models in Europe will be mostly 100% electric SUVs. The first one (based on Volkswagen's MEB platform) will be manufactured in Cologne in 2023. Another 100% electric SUV (also based on Volkswagen's MEB platform) will also be manufactured in Cologne in 2024. The two models are expected to total 200,000 units produced in Cologne in 2026.
- In 2024, the 100% electric Puma and Transit Courier will start production in Craiova (Romania). The two models should total 150,000 units produced in 2026.
- Finally, another all-electric model will start production in 2024 at the Valencia plant in Spain, alongside the new Kuga with a plug-in hybrid (PHEV) engine. This model should be produced at 100,000 units per year. With the Transit Custom electric and PHEV produced in Turkey, Ford will produce 600,000 electrified vehicles in Europe by 2026. Ford of Europe wants to become a 100% electric manufacturer in Europe by 2030. Inovev expects Ford of Europe to produce 615,000 vehicles in 2030, compared with 912,000 in 2022.
The future of the Russian market as seen by Russian statistical organizations
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The future of the Russian market as seen by Russian statistical organizations
- Russian statistical organizations have examined the future of the automotive industry in Russia. In 2023, they forecast a Russian car market of between 500,000 and 700,000 vehicles (cars and light trucks), compared with 615,000 in 2022 and 1,667,000 in 2021. According to these sources, this weakness of the Russian market can be explained by the negative dynamics of the GDP, by the decrease in imports, by the inactivity of some local factories previously assigned to the assembly of foreign vehicles and by the decrease in the population's income. The automotive market will have to adapt to these new conditions, in addition to targeted Western economic sanctions. These sources indicate that if the war with Ukraine were to escalate, the Russian car market could fall to less than 500,000 vehicles by 2023.
- AvtoVAZ is expected to increase its sales to 350,000 units next year (2021 level). The other two local manufacturers UAZ and GAZ will also remain at the 2021 level, at 30,000 and 50,000 units respectively. Chinese brands are expected to sell 170,000 cars in 2023 (up from 85,000 units in 2022 and 115,000 in 2021). This total includes sales through the launch of new brands, such as Moskvitch. It will be twice as high as in 2022, following the departure of European brands.
- Chinese manufacturers had seen their sales fall in 2022 due to a collapse of the Russian market (-63%) but their market share had increased in a market reduced by two thirds (7% of PDM in 2021 and 14% in 2022).
- Inovev insists that the Russian market is now divided between the Russian and Chinese automotive industries.
The U.S. vehicle parc (PC+LCV) by brand and group in 2022
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The U.S. vehicle parc (PC+LCV) by brand and group in 2022
- The U.S. vehicle parc (passenger cars and light commercial vehicles) will total 285 million vehicles in 2022 (source Automotive News) which represents a car ownership rate of 860 per 1,000 population, one of the highest in the world. This rate continues to rise as it was 750 per 1,000 population in 2015, 800 in 2016 and 840 in 2017. However, its growth tends to slow down since 2018. In Europe, this rate is around 500 vehicles per 1,000 inhabitants.
- The groups most represented in the US fleet in 2022 are obviously the Big Three (GM, Ford, Chrysler), the Chrysler group having been merged into the Stellantis group in 2021. They will account for almost half (49%) of the US car fleet in 2022.
- But Japanese manufacturers have increased their presence significantly over the past few decades. They will account for 36% of the US car fleet in 2022. The most represented Japanese groups are Toyota, Honda and Nissan.
- The Korean group Hyundai-Kia represents 6% of the US fleet in 2022.
- European manufacturers, mainly Germans (Volkswagen, Mercedes, BMW) will account for 8% of the US fleet in 2022.
- Other manufacturers will account for the remaining 1%. This is mainly Tesla, which alone accounts for 0.5% of the US fleet.
- By brand, three brands stand out. Ford remains the leader ahead of Chevrolet, thanks to its F-Series pickup, which has been the best-selling model in the U.S. fleet for several decades. Toyota is the third most represented brand. It is ahead of two other Japanese brands, Honda and Nissan. The Americans Jeep, Dodge and GMC follow.
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