Car Sales to Top 90 Million Globally for First Time
Results fueled by rebounds in Western Europe and emerging markets such as Brazil and Russia
Global sales of passenger cars and trucks likely surpassed 90 million for the first time in 2017, the latest indicator that demand for conventional automobiles remains strong even as driverless cars and ride sharing get increasing attention.
The results, based on preliminary data provided by WardsAuto.com, were fueled in part by a continued rebound in Western Europe and recovery in major emerging markets, including Brazil and Russia. Asian buyers are the main engine for sales growth with more than a quarter of the cars sold last year going to Chinese customers, up from less than 15% a decade ago.
The North American market is the world’s most profitable for auto makers, but American dealership traffic has slowed after several years of momentum. Analysts expect U.S. sales in 2017 to fall short of a record 2016 and are bracing for production cuts in the first quarter of this year amid further slowdown. December’s U.S. sales are due out Wednesday.
Global demand remains robust, however, with 2017’s relatively modest 2.7% growth estimate far outpacing population growth. WardsAuto.com says world vehicle sales have grown at an average annual pace of 4.1% since 2009, higher than the 1.2% population growth over the same period, according data provided by the World Bank.
The total number of vehicles in use globally topped 1 billion for the first time in 2009. That number has grown by another third in the years since, according to Wards.
The auto industry’s growth poses challenges for regulators already struggling to make increasingly congested roads safer and cleaner. Even as car companies and tech giants say autonomous cars, electric vehicles and sharing services are a way to reduce emissions and traffic deaths, governments around the world are trying to spark demand for electric cars. And the most-recent data shows highway fatalities are climbing.
Officials in China and lawmakers in the U.S.—the world’s two biggest markets—last month extended or preserved tax breaks aimed at electric cars, which represent less than 1% of global production and sales, according to IHS Markit. Officials in certain European cities and countries, meanwhile, have said they aim to ban sales of conventional combustion-engine cars in years to come.
Significant growth for electric cars remains at least five years away due to battery-range concerns and cost barriers, said Dave Zoia, director of content at WardsAuto.com. Car companies are expected to launch a spate of partial or fully electric cars by 2025 as development costs ease and charging infrastructure expands.
Government officials boosted efforts to increase EV sales via tax breaks and other incentives about a decade ago, a time when high gasoline prices and a weak U.S. economy played a hefty role in slowing global sales. Tesla Inc. and a handful of rivals have increased overall sales of battery-powered cars since then, but the increases have been overshadowed by stronger demand for conventional cars.
Global light-vehicle sales, which exclude commercial units, have surged since the U.S. financial crisis as Western Europe and North America returned to levels hit before the U.S. recession and Euro Crisis. Income growth in emerging markets, meanwhile, has created a growing class of first-time buyers and used-car shoppers in Asia.
Some of the fastest-growing auto makers in the world are based in China, including Chery Automobile Co., Guangzhou Automobile Group Co. , SAIC Motor Corp. and Zhejiang Geely Holding Group Co.
SAIC in 2016 sold 285,803 vehicles, a 115% increase compared with the previous year, and Geely’s sales rose 28% to more than 1.1 million vehicles in 2016, according to WardsAuto.com.
“China is still a strong market and still a growing market,” said Mr. Zoia of WardsAuto.com. “It’s hit the next level where all the growth isn’t coming from first-tier cities. It’s expanding to second- and third-tier cities.”
As roads become more congested, they are also getting deadlier. Globally, more than 1.25 million people die each year because of road-traffic crashes, according to the World Health Organization, with more than 90% of the fatalities occurring in low- and middle-income countries where sophisticated safety gear isn’t as readily available.
Even as cars in mature markets are loaded with the latest features to assist drivers—such as lane-keeping aids and automatic braking—traffic fatalities in the U.S. had an unexpected spike recently. More than 37,000 traffic fatalities are estimated to have taken place on U.S. roads in 2016, according to the National Highway Traffic Safety Administration.
An estimated 18,680 people were killed on U.S. roads in the first half of 2017, according to the National Safety Council. Although that is 1% lower than deaths in the first half of 2016, it is 8% higher than the 2015 first-half estimate.
Auto makers and tech giants—spanning from General Motors Co. to Uber Technologies Inc. to Alphabet Inc. —are working on driverless-car technology aimed at reducing or eliminating traffic fatalities. But those projects remain in initial phases. Mr. Zoia said adoption of autonomous vehicles will be “slower and more limited,” with sales of fully autonomous vehicles at the retail level “a ways away.”