Market Overview

Global Auto Sales Growth to Slow in 2018, Yet Remain at Record Levels; 95.9 Million Light Vehicles Forecast to Be Sold in 2018, IHS Markit Says

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As final light vehicle sales figures for the month of December are now
fully reported from major markets, 2017 remained on track to achieve
record auto sales on a global level, for the 8th year in a row. For
December 2017, global auto sales did not finish as strong as expected.
With 8.65 million units sold in December, global sales volume is down
1.7 percent over last year, according to the newest forecast from
business information provider IHS
Markit
(NASDAQ:INFO).

Total 2017 global light vehicle sales are expected to post around 94.5
million units, a new record -- up 2.4 percent compared with 2016,
according to IHS Markit forecasts.

After the strong performance of 2017, 2018 is forecast to see a slowdown
in global light vehicle sales growth, yet IHS Markit forecasts a
positive year to come, with global light vehicle sales estimated to
reach 95.9 million units.

"While this forecast reflects a slight moderation, it is concerning to
us," said Henner
Lehne
, executive director, global vehicle forecasting for IHS
Markit. "We expect 2018 will be yet another record-setting year for the
global auto industry, up 1.5 percent from 2017."

Regional outlooks influenced by economics, incentives and
geopolitical concerns

Regional forecasts will be influenced by a number of factors, depending
on each region's economic and political climate, IHS Markit says. For
the United States, the strong fourth quarter 2017 results could impact
early 2018 industry sales, but full-year sales volume in 2018 is
expected to achieve 16.9 million units, down 1.7 percent from 2017.
Demand remains healthy, supported by positive economic conditions and
welcoming credit conditions, but an incoming flow of used vehicles and
continued slowdown in passenger car sales as more consumers opt for
utility vehicles are expected to lead to decline for the second year in
a row.

Western Europe continues to recover, aided by lingering pent-up demand
in key recovery markets, however at a much lower pace than last year.
Some markets have OEM diesel incentives, which are expected to generate
mild pulled-forward demand, although buyers are not exactly queuing
around the block at local dealerships—IHS Markit forecasts 16.3 million
units for 2018, up about 0.7 percent in Western Europe.

Factoring in tax payback effects, Chinese demand will post 28.1 million
units, up 0.2 percent from 2017, according to the forecast. As in 2016,
confirmation of 2018 vehicle tax levels will obviously have a bearing on
the near-term outlook for the year.

The South Asian outlook has improved dramatically and should further
recover in 2018 as IHS Markit estimates this market will be up 7.3
percent from 2017, with India accelerating after tax reforms (up 11
percent). The forecast also indicates a decent 2018 outlook for ASEAN
car markets, estimating 7 percent growth over last year. Japan and South
Korea remain similarly impacted by regional geopolitical concerns and
are expected to moderate in 2018—Japan slows 2.4 percent, while Korea
will likely grow 2 percent. Russia and Brazil turned the corner in 2017,
and 2018 represents the sustainability test for both recoveries. Russia
is expected to grow by 15.9 percent, helped by a stronger rouble and
some recovery in oil prices, but sanctions remain a key negative driver.
Ongoing political troubles remain an issue, but Brazil is expected to
see 12.5 percent growth for 2018, driven by pent-up demand and improving
auto-financing conditions.

Last, there are the core Middle Eastern car markets. Most countries are
forecast to show strong growth percentage gains, in light of solid
economic outlooks, fueled by rising oil prices. However, the recent
developments in Iran need to be monitored closely. At the moment, the
region is forecast to grow at around 5 percent to about 3.4 million new
vehicles sales in 2018.

About IHS Markit (www.ihsmarkit.com)

IHS Markit (NASDAQ:INFO) is a world leader in critical information,
analytics and solutions for the major industries and markets that drive
economies worldwide. The company delivers next-generation information,
analytics and solutions to customers in business, finance and
government, improving their operational efficiency and providing deep
insights that lead to well-informed, confident decisions. IHS Markit has
more than 50,000 key business and government customers, including 85
percent of the Fortune Global 500 and the world's leading financial
institutions. Headquartered in London, IHS Markit is committed to
sustainable, profitable growth.

Automotive offerings and expertise at IHS Markit span every major market
and the entire automotive value chain—from product planning to
marketing, sales and the aftermarket. For additional information, please
visit www.ihsmarkit.com/automotive
or email automotive@ihsmarkit.com.

IHS Markit is a registered trademark of IHS Markit Ltd and/or its
affiliates. All other company and product names may be trademarks of
their respective owners © 2018 IHS Markit Ltd. All rights reserved.

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