Understanding Global Automotive Demand in 2024

In today's dynamic automotive market, understanding global and regional demand is crucial. Our recent webinar, " Impact of Chinese Imports on Western Markets and Retail Networks," provided a comprehensive overview of current trends, historical data, and future projections in the automotive industry.

Before the COVID-19 pandemic, global OEM sales were robust, exceeding 80 million units annually, peaking at nearly 88 million in 2019. However, the pandemic introduced significant challenges, notably a semiconductor chip shortage that affected production and sales. This shortage created a profitable phase for dealers and OEMs as vehicle allocation became more critical.

As we move through 2024, the landscape is shifting again. While Q1 saw positive growth in markets like Greater China, India, and the UK, Q2 experienced a 1.3% decline in automotive demand due to affordability concerns and rising interest rates. Consumers have become hesitant to make significant purchases, reflecting broader economic headwinds.

Regional Insights

In Q2, Greater China remained the automotive powerhouse, selling approximately 550,000 units globally, followed by North America and Europe. However, this number was a drop in total volume compared to Q1 and resulted in a decrease in China's global sales share. The shift allowed North America and Europe to increase their market share, highlighting the volatility in the automotive landscape.

OEM Performance

Examining global OEM performance from 2019 to 2024 reveals varying recovery rates. Brands like Hyundai, Kia, and Toyota have regained strength, while others like Volkswagen and Stellantis have struggled. Notably, BYD has entered the top 10 OEMs globally for sales volume, marking a significant milestone in its growth trajectory.

In the first half of 2024, BYD's sales reached approximately 900,000 units, showcasing its rapid expansion and market share gains, particularly in the face of challenges faced by traditional manufacturers in mainland China.

The Rise of Chinese EVs

The Chinese automotive market has experienced remarkable growth, particularly in the electric vehicle (EV) segment. From 2010 to 2023, sales from Chinese OEMs overseas surged to over two million units, with notable successes in markets like Russia, Australia, Brazil, and Mexico. Brands such as MG, Chery, Geely, Great Wall, and BYD are leading this charge.

However, while BYD has achieved significant sales volumes, it remains less geographically diversified compared to its competitors. This lack of diversification may explain why they are not the dominant force in every international market.

Market Share Dynamics

Chinese brands have a strong foothold in the NEV (new energy vehicle) space, which encompasses electric vehicles, range-extender vehicles, and plug-in hybrids. Their competitive edge in this area has allowed them to capture a higher market share in various countries, including Russia and Turkey.

As the automotive industry continues to evolve, traditional OEMs are responding to the competitive pressure from Chinese manufacturers. This includes adjustments in pricing strategies and potential regulatory actions aimed at leveling the playing field.

Conclusion

The automotive landscape is in a state of flux, influenced by economic factors, consumer behavior, and competitive dynamics. As we move forward, understanding these trends will be essential for stakeholders across the industry. The rise of Chinese brands, particularly in the EV market, signals a significant shift that established OEMs must navigate carefully.

Listen to Bjoern's full analysis on evolving automotive trends by accessing a replay of our July 24 webinar, "The Impact of Chinese Imports on Western Markets and Retail Networks".

Watch the webinar.

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.