Trends in the passenger car markets
We expect trends in the passenger car markets in the individual regions to be mixed in 2016. Overall, growth in global demand for new vehicles will probably be slower than in the reporting period.
The Volkswagen Group is well positioned to deal with the mixed developments in the global automotive markets. Our broad, selectively expanded product range featuring the latest generation of engines as well as a variety of alternative drives puts us in a good position globally compared with our competitors. Our goal is to offer all customers the mobility and innovations they need, sustainably strengthening our competitive position in the process.
We estimate that demand for passenger cars worldwide will continue to increase in the period 2017 to 2020.
For 2016, we anticipate that the demand volume in Western Europe will be in line with that of the reporting period. Pre-crisis levels are not expected to be reached, even in the medium term. The ongoing debt crisis will probably further unsettle consumers in many countries in the region and restrict their financial opportunities to buy new cars. In Spain and Italy, the recovery will probably continue in 2016 at a modest pace, while in the United Kingdom we anticipate that the market volume will be below the high level seen in the previous year. For France, we expect growth to be only slightly positive.
In the Central and Eastern European markets, demand for passenger cars in 2016 is estimated to be under the weak prior-year figure. Following significant declines in previous years, the volume of demand in Russia will probably decrease again in 2016. We expect to see further growth in demand or volumes remaining at the previous year’s level in many Central European markets.
We are projecting that the volume of the South African automotive market will be significantly below the previous year’s figure in 2016.
Following the positive trend of recent years, we forecast that the volume of the German passenger car market in 2016 will remain level with the prior-year figure.
In 2016, we expect that the market for passenger cars and light commercial vehicles (up to 6.35 tonnes) in the USA will continue to benefit from favorable conditions and that the positive trend seen in the past year will endure at a weaker pace. Growth is expected to be driven mainly by the SUV and pickup segment. In the Canadian market, demand is likely to be slightly below the previous year’s high level. In Mexico, however, we anticipate that the market volume will be noticeably higher than in 2015.
Owing to their dependence on demand for raw materials, the South American markets for passenger cars and light commercial vehicles are heavily influenced by developments in the global economy. Furthermore, protectionist tendencies are adversely affecting the performance of the region’s vehicle markets, especially in Brazil and Argentina, which have imposed restrictions on vehicle imports. The volumes of the South American markets will probably fall considerably short of the prior-year figures in 2016. In Brazil, the largest market in South America, we are forecasting that the volume of demand will be substantially lower than the already poor figure recorded in the previous year. In Argentina, we anticipate that, in view of persistently high inflation and the challenging macroeconomic situation, demand will be noticeably down year-on-year, following significant declines in the previous two years.
The passenger car markets in the Asia-Pacific region look set to continue their growth trajectory in 2016 at a similar pace. In China, the steady increase in individual mobility requirements will continue to push up demand; the rate of growth should be in line with the previous year. Tax breaks for vehicles with engine sizes of up to 1.6 l are also expected to contribute to growth. Strong demand is still forecast for attractively priced entry-level models in the SUV segment. In India, we expect demand for passenger cars to slightly exceed the previous year. We anticipate that demand in the Japanese passenger car market will decline slightly in 2016. We are forecasting positive growth rates for the markets in the ASEAN region in 2016.