IHS Automotive releases initial post-Brexit market expectations
On June 28, IHS Automotive released an initial forecast simulation as to what this will mean for light-vehicle registrations between 2016 and 2018.
IHS Automotive forecasts an even greater fall in registrations during the coming years in the UK than already expected. This situation will also result in smaller gains in Western Europe and globally.
Given the great deal of unknowns at the moment, IHS Automotive will continue to track the ongoing situation and provide updates as required.
Key points
UK forecast
- Market will remain up in the full year of 2016
- However, reduced growth of 1% year on year (y/y) versus the 3.2% y/y gain previously anticipated
- Declines already forecast to take place during 2017 and 2018 are now expected to be steeper
- For 2017, registrations of light vehicles now forecast to fall by 1% y/y rather than a 3.5% y/y decline
- For 2018, registrations now expected to hit 71 million units versus the 2.94 million units
European forecast
- Western European forecast will now fall during the next two years despite further gains during 2016
- Light-vehicle registrations will grow by around 0% y/y to 15.64 million units this year versus the 15.75 million units that was expected
- For 2017, registrations expected to dip by 2% y/y to 15.45 million units, compared to the increase to 15.98 million that was expected
- For 2018, the situation is now expected to be flat at 45 million units rather than standing at 15.95 million units as was expected.
Global forecast
- Expects growth to be less substantial over the next few years
- 2016: light-vehicle registrations are now seen to be 89.82 million units, an increase of 2.0% y/y, although this is below the 90.02 million units originally forecast
- 2017: further gain of 1.4% y/y to 91.06 million units is anticipated, around 25 million units behind original forecast
- Predicts global sales hitting 12 million units in 2018, versus the previous forecast of 94.5 million units
IHS Automotive expects factors including an unwinding of GDP, with growth in 2017 now put at 0.2% instead of the previous forecast of 2.4% to have a direct impact in the short term.
The depreciation of the GB pound versus other currencies will have a negative impact on imported vehicles, and some OEMs are already considering what steps they will take to change pricing of overseas-built vehicles to offset the effect.
Yet, there could be some benefits for vehicle producers initially from the depreciated pound, making vehicles even more competitive and attractive than they might have previously been.
However, Western Europe will not escape the impact of the UK’s referendum. Indeed, IHS believes that the Eurozone’s growth outlook has weakened appreciably following the UK’s decision to leave the EU.
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Source: IHS Automotive
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In: CLEPA News, Growth & Competitiveness