As 2024 approaches, S&P Global Mobility forecasts 88.3
million new vehicle sales worldwide next year as the recovery rolls
on. With the brakes off the supply chain, the risk to further
growth is that demand momentum fades as consumer uncertainty
overtakes pent-up demand.
Global new light vehicle sales in 2024 will see a 2.8% increase
year-over-year, according to a new forecast by S&P Global
Mobility. The light vehicle output recovery continues to feed
inventory restocking efforts across many regions, as supply chain
and demand is further recovering, supported by lingering pent-up
consumer demand. S&P Global Mobility remains wary on recovery
prospects, however, with consumer demand challenged by elevated
vehicle pricing alongside challenging credit and lending
conditions.
The forecast outlook incorporates stickier interest rates,
improving supply chains, the affordability
squeeze, lofty new vehicle prices, patchy consumer confidence,
energy price/supply concerns, auto lending risks, and ongoing
electrification growing pains.
“2024 is expected to be another year of cagey recovery, with the
auto industry moving beyond clear supply-side risks, into a murkier
macro-led demand environment,” said Colin Couchman, executive
director of global light vehicle forecasting for S&P Global
Mobility. “A major concern is how ‘natural’ EV demand will fare as
governments consider scaling back interventionist policy support –
especially for incentives and subsidies, industrial policy, and OEM
planning targets.”
Full-year 2023 global light vehicle sales – projected to reach
nearly 86.0 million units by S&P Global Mobility – represent a
8.9% increase from 2022 levels, with new auto demand benefiting
from ongoing output gains from restocking inventories as supply
chains normalize.
Market-by-market forecasts
Europe: Wrapping up 2023, solid Western/Central European market
momentum should deliver 14.7 million units (+12.8% y/y), as
improved vehicle production levels help delivery times and
inventory recovery. For 2024, S&P Global Mobility forecasts
15.1 million units, up by 2.9% y/y – reflecting economic recession
risks, tighter credit conditions, easing pent-up demand, still-high
car prices, and tapering EV subsidies.
“Key challenges for Europe include the dynamic electrification
transition, alongside wait-and-see customers, lurking Chinese OEMs,
energy woes, and looming EU elections,” Couchman said.
United States: US sales volumes are expected to reach 15.9
million units in 2024, an estimated increase of 2.0% from the
projected 2023 level of 15.5 million units.
“Just when the auto industry is looking to return to a sense of
normalcy from the supply side of the equation, US consumers in the
market for new vehicle in 2024 will continue to face affordability
issues by way of high interest rates, tight credit conditions and
slow-to-recede new vehicle prices,” said Chris Hopson, manager of
North American light vehicle sales forecasting for S&P Global
Mobility. “An uncertain consumer translates to an expectation of a
mildly progressing auto sales environment next year.”
“With an assumption that auto production levels will continue to
advance in 2024, growth of new vehicle inventory presents the
opportunity for rising incentive levels and deal making – a
potential release valve to the vehicle price pressures realized
over the last year,” Hopson added.
With the rollout of several highly anticipated models, US BEV
sales will continue to develop in the new year. By the end of 2024,
there will be nearly 100 BEV models available, double the number
there were in 2022, covering several more segments and providing
consumers interested in an electric vehicle even more choice.
Mainland China: For the year ending, the CNY100 billion
extension of New Energy Vehicle (NEV) incentives and recovering
local vehicle production supporting domestic sales, 2023 should see
a recovery to 25.3 million units (+4.9% y/y), according to S&P
Global Mobility. For 2024, the market will continue to be supported
by pent-up demand with gradual improvement of consumer confidence –
which has not fully recovered to pre-pandemic levels. 2024 demand
is forecasted at 26.4 million units, up a further 4.2%.
Mainland China NEV affordability is likely to further improve in
2024 with local battery cell prices already declining significantly
through 2023. Coupled with NEV tax exemption into 2024-2025, NEV
penetration (as % of passenger vehicles) is projected to further
increase to 44% in 2024, from 36% in 2023.
2024 production outlook downshifting towards traditional
demand-driven model
On the manufacturing side, global light vehicle production in
2023 is expected to finish at 89.8 million units – a healthy 9.0%
improvement over 2022 levels that exceeds expectations in several
regions, further building on implied inventory restocking. This
marks a welcome return to pre-pandemic levels of production on a
global basis, powered by gains in mainland China and India.
S&P Global Mobility continues to see a general production
outlook that is reliant on a more traditional demand-driven model.
As we transition to 2024, with inventories reaching equilibrium in
many markets, global production growth is expected to slip into a
mild reverse as the industry navigates recovery after a tumultuous
several years. For 2024, S&P Global Mobility forecasts light
vehicle production levels to decline by 0.4%, to 89.4 million
units.
“Vehicle output levels are flirting with the top of the current
cycle, with faster-than-expected inventory restocking potentially
colliding with real-world consumer demand levels,” said Mark
Fulthorpe, executive director of global light vehicle forecasting
for S&P Global Mobility. “During 2023, vehicle production has
benefitted from a virtuous cycle of improving supply chains and
strong order backlogs. As these conditions recede, manufacturing
will have less support.”
In mainland China, S&P Global Mobility forecasts effectively
flat production levels for 2024, down 0.1%, at 28.3 million units.
With inventories largely restored to pre-crisis levels and fragile
domestic demand, further export gains are expected to provide the
main positive effect.
Europe is expected to produce 17.4 million units in 2024, off by
1.8% from an estimated 17.8 million this year. Like in mainland
China, inventory levels are estimated to be restored close to
pre-crisis levels and will provide little upside in an environment
marked by diminishing backlogs and weaker incoming demand. Growing
imports from China are also expected to be felt.
For the North American region, overall production is expected to
make a small gain, 0.5%, at 15.7 million units – boosted by 3.9%
growth in US activity. Inventory restocking continues to provide an
upside, but it is not uniform, with pockets of the Detroit-3’s
lineup overstocked while Japanese and Korean brands still have a
pipeline to fill.
While supply chain conditions have undoubtedly improved since
2022, we continue to warn of a structural deficit in capacity for
semiconductors, notably older mature nodes. There was theoretical
overcapacity in 2023 as demand from other industries eased, but
there remains a risk that constraints could resurface once demand
from other sectors recovers.
“We do not foresee chip supply problems in 2024 as allocation
for automotive is robust and is bolstered by recent stockpiling of
chips by the vehicle makers,” said Jeremie Bouchaud, director,
semiconductor, E/E and autonomy practice, S&P Global Mobility.
“But 2025 could be a bottleneck if non-automotive demand comes back
strongly.”
Electrification shift looks unstoppable despite
near-term uncertainty in Europe & US
The past few years have seen many OEMs reaffirming
electrification ambitions for the coming five to 15 years. More
recently the narrative has shifted, with some automakers
highlighting the twin challenges of the electrification
transition—scaling output of sellable BEVs and finding willing
customers to buy them.
Reports of the demise of electric vehicles have been greatly
exaggerated, and S&P Global Mobility projects global sales for
battery electric passenger vehicles to be on track to post 13.3
million units for 2024 – accounting for an estimated 16.2% of
global passenger vehicle sales. For reference, 2023 posted an
estimated 9.6 million BEVs, for 12% market share.
Major markets are forecast for the majority of this volume,
though smaller markets will also see modest increases. Forecasted
BEV share by region is as follows:
Beyond 2024, many questions remain in the electrification space,
especially regarding charging infrastructure, grid power, battery
supply chains, global sourcing patterns, a swath of newly
arriving EVs, and the appropriate level of policymaker support
to help smooth the transition from fossil fuel to electric. For the
time being, China’s NEV policy, Europe’s “Fit for 55,” and the IRA
in the US are the key mile markers for policymakers’ visions for a
greener mobility future.
LIGHT VEHICLE PRODUCTION
FORECASTS
LIGHT VEHICLE ENGINE
FORECASTS
LIGHT VEHICLE ALTERNATIVE
PROPULSION FORECASTS
This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.
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- Source: http://www.spglobal.com/mobility/en/research-analysis/sp-global-mobility-forecasts-883m-auto-sales-in-2024.html
