DEVELOPMENT OF THE MARKETS FOR PASSENGER CARS AND
LIGHT COMMERCIAL VEHICLES
We expect developments in the markets for passenger cars and light commercial vehicles in the individual regions to be mixed in 2013; overall, growth in global demand for new vehicles will probably be significantly slower than in the reporting period. We expect market momentum to increase in 2014 as against 2013.
The Volkswagen Group is well positioned to deal with the mixed developments in the automotive markets. Our broad product range featuring the latest generation of consumption-optimized engines gives us a global competitive advantage. We are pursuing the goal of offering all customers the mobility and innovation they need, sustainably strengthening our competitive position in the process.
In Western Europe, we expect demand for automobiles to decline in 2013. The ongoing debt crisis is unsettling consumers in many countries in the region and restricting their financial freedom to buy new cars. Particularly in core markets such as Spain and Italy, large-scale government austerity measures are also putting a damper on demand. We expect the economic situation in Western Europe to ease somewhat in 2014, which should lead to a modest recovery in demand for new cars in many markets.
In Central and Eastern European markets, we expect only a slight increase in demand for automobiles in 2013 as against the prior-year level, and a return to higher growth rates in 2014. In Russia, it will fail to beat the high level recorded in 2012 and the market will probably not return to a growth trajectory until 2014.
After three years of high growth rates, the South African vehicle market is likely to ease in 2013 and 2014.
Despite the stable economic environment, the widespread consumer restraint in Western Europe also reached the German market in the reporting period. We expect demand to decline in 2013. Starting in 2014, there should be a modest rise in demand for automobiles in Germany once again, depending on further developments in the eurozone.
In spite of a muted economic recovery, the US vehicle market benefited from pent-up replacement demand in 2012, a trend we believe will endure in a weaker form in
2013. However, the continuing uncertainty as to fiscal developments, the weak labor market and potential lending restrictions could impact market growth in the short term. We anticipate a sustained positive market trend in 2014. We are also expecting to see a positive trend in the Canadian and Mexican markets for passenger cars and light commercial vehicles in 2013 and 2014.
Owing to their dependence on demand for raw materials, the South American markets are heavily dependent on the global economic developments. Increasingly protectionist tendencies are also adversely affecting the performance of the region’s vehicle markets, especially in Brazil and Argentina, which have imposed restrictions on vehicle imports. In Brazil, the largest market in the region, demand for vehicles soared in 2012 on the strength of tax breaks. It will probably remain on a level with the previous year due to the gradual reduction of these subsidies over the course of 2013. The Argentinian market is expected to contract further as a result of the macroeconomic situation. We anticipate that the region’s automotive markets will start growing again as from 2014. South America’s major economies should benefit from the expected rebound of the global economy.
The markets in the Asia-Pacific region look set to continue their growth in 2013, albeit at a slower pace. Increasing demand for individual mobility will drive demand in China in particular. However, indications that the economy is losing traction could act as a brake on the demand for automobiles. In addition, restrictions on vehicle registrations – such as have already been introduced in Beijing, for example – could also be imposed in other metropolitan areas in China in the future, dampening market growth there. India is also likely to see positive volume growth, depending on the general economic policy environment. In Japan, backlog effects resulting from the natural disasters and government incentives boosted the market to an exceptionally high level in the reporting period. We expect a substantial decline in demand in 2013, a trend that will be exacerbated by a weaker economy on the whole. For 2014 we assume that the Asian vehicle markets will continue growing, especially China and the markets in the ASEAN region.
DEVELOPMENT OF THE MARKETS FOR TRUCKS AND BUSES
Following the 8.9% decrease in demand for midsize and heavy trucks in 2012, we expect total volumes in the markets relevant to the Volkswagen Group to mirror the 2012 level in 2013 and 2014.
Market growth in Western Europe is currently being hard hit by the weaker economy. We therefore anticipate a further decline in 2013 and a virtually flat market in 2014.
In 2013, the pace of growth in Russia is expected to trail behind that of 2012, while in 2014 it should remain at roughly the same level. Key factors in this development are the multiyear fleet renewal program, which has saturated demand for replacement purchases, and declining export and transport volumes to the EU.
In the United States, we envisage greater demand for trucks despite the uncertain business climate for 2013 and 2014.
The Brazilian market is expected to see increased demand in 2013. This will continue in 2014, buoyed by state subsidies and more favorable financing conditions for trucks. The preparations for the upcoming major sporting events and the associated infrastructure developments may also boost the market.
China, the world’s largest truck market, is expected to stabilize at 2012 levels in 2013 and 2014. The extent to which the incentive programs planned by the Chinese government will up demand for trucks remains to be seen.
We expect the Indian market to develop positively in 2013 and 2014.
Demand for buses will probably exceed 2012 levels in almost all regions in 2013 and 2014. In Western Europe, however, the bus market is expected to shrink slightly in 2013 due to the debt crisis. We expect to see a slight recovery in the market again in 2014 with a return to 2012 levels. In China, the world’s largest bus market, we are forecasting an upswing.