Tesla Inc (TSLA)

[DiscoverGold]

Bad News Keeps Coming for the Global Auto Market
By: Bloomberg | December 6, 2019

• Investment in electric vehicles continues to rise, but overall sales hit their peak two years ago.

General Motors Co. and LG Chem Ltd. announced this week that they will jointly invest more than $2 billion in a new plant for electric vehicle batteries in Lordstown, Ohio. The companies will hire 1,100 workers, which is about the same number that GM laid off after idling its compact Cruze model factory in Lordstown earlier this year. Their intentions tell us something about where companies see growth — in electric vehicles, and the batteries within them — but the news comes as the global market’s foot has come off the gas.

Global auto sales peaked two years ago at a bit under 86 million, on a trailing-12-month basis. In October, sales were only 78 million, a decline of almost 9%.

China’s market is so big — and had been growing for such a long time — that it obscures trends elsewhere around the world.

Sales are off in every major region. North America and Europe look to be the healthiest of markets, though, and they are also quite large. Still, they are down from their peaks and, being mature markets, are not poised for growth in the way places that are still “motorizing,” and growing their auto fleets in absolute and relative ways, might be.

For those markets, let’s look at the trend within Asia. China, as the data above show, is a significantly bigger passenger vehicle market than every other in the continent combined. Japan, the second-biggest passenger vehicle market, is not quite a quarter the size of China’s; India, according to the latest available data, was half the size of Japan’s.

Again, every market is down (though there are three for which the most recent sales data aren’t available). Japan is the healthiest market, relatively speaking; South Korea, Malaysia and Singapore are also within 10% of their peak. But as the data show, those last two markets are tiny and years past their peak. Malaysia’s passenger vehicle market peaked in 2014, as did Indonesia’s million-a-year market. China’s market peak actually came later than any of the major markets in Asia.

And what of the electric vehicle market? It’s growing, and my BloombergNEF colleagues expect the year to finish with 2.2 million EVs sold, up 12% from last year. China’s market is up 30% year on year, even with a year-on-year drop in the third quarter. Last quarter, EVs were 4.4% of China’s overall passenger vehicle sales. On a four-quarter basis, though, China’s EV market has recorded its first downturn.



China’s central government just released its latest plan for new energy vehicles (electric, plug-in hybrid electric and fuel-cell vehicles). The plan is a doubling down, as my colleagues describe it, with a broader strategy of integrating NEVs into the power grid and logistics fleet while increasing sales. It could be a welcome boost for the world’s biggest auto market. For now, though, it doesn’t offer much to makers of internal combustion vehicles anywhere.

Read Full Story »»»

DiscoverGold