Global Car Sales Forecast to Rise 1.5% this Year

Sales of cars and light-duty trucks are likely to expand to 93.5 million units this year from 92.1 million in 2916, says IHS Markit.

But the market research firm cautions that demand could be damped by political uncertainties and possible shifts in demand for diesels, hybrids and electric powertrains.

IHS Markit expects that last year’s drop in European sales of diesel-powered vehicles will accelerate in 2017 and continue to worsen over the next several years. At the same time, the firm notes that deliveries of electric and plug-in vehicles were relatively flat from 2015 to 2016. Global production capacity for such vehicles will remain “significantly” below 1 million units this year, representing only 0.7% of the industry’s total output.

China generated 76% of last year’s growth in light-vehicle sales overall, according to IHS Markit. It says mature auto markets accounted for most of the balance.

The forecast predicts this year’s car sales will be flat in the U.S. and rise only 1% in western Europe. Russia’s car market appears to have finally bottomed out and is poised to surge in the second half, delivering full-year growth of 8%, according to the report.

IHS Markit says India’s demonetization program will hold market growth there to about 8% this year. Demand is likely to rise 5% in southeast Asia, 1% in Brazil, Japan and the Middle East.