The global light vehicle market is forecast by GlobalData, a leading data and analytics company, to stay under pre-pandemic levels until 2023.
Calum MacRae, Automotive Analyst at GlobalData, comments: “Demand and industry output is now in recovery phase, but the economic foundations for the global vehicle market are fundamentally damaged.”
GlobalData forecasts that the global light vehicle market will grow by 14.6% to a little over 85 million in 2021, which compares with 89 million units in pre-virus 2019. The market is projected to return to at least 2019 levels by 2023, but risks remain for the path of the sector’s demand recovery over the next few years.
MacRae adds: “That 85 million market level projected for 2021 compares with a previous peak of 94 million light vehicle sales achieved in 2017 and 2018. It is also a long way removed from the over 100 million annual global market being viewed as highly possible just a few years ago.”
Market recovery this year has also been a reaction to an extraordinary event rather than part of the more conventional economic cycle seen in normal times, but he warns that the economic backdrop is set to change.
MacRae notes: “From next year and beyond much will depend on the path of major world economies when the recession threatens to become more broad-based with demand impacted by higher levels of unemployment and some permanent scarring from the pandemic. That could put pressure on governments to extend special measures and support for the sector – for example with continued incentives to buy electric cars in Europe.
“The global picture this year has been boosted by rapid recovery in China, the world’s largest vehicle market, but the global vehicle market is still forecast to be down by 16% on 2019’s level.
“That’s a bigger annual decline than experienced in the financial crisis of 2008/9 and GlobalData’s latest forecasts point to the likelihood of continuing pressures on the automotive industry over the next eighteen months in the context of still fragile and weak demand.”