Global passenger car sales rose by 4.8% to 62.0 million vehicles in fiscal year 2011, beating the previous industry record set in 2007. Growth was primarily driven by the USA, China and Russia. South America also performed well and exceeded the record prior-year level. Demand in Western Europe was only slightly down year-on-year, mainly due to the upturn of the German market, while the markets in Central and Eastern Europe continued to recover. With the exception of China, new vehicle registrations in the Asia-Pacific region fell short of the previous year’s result due to the dramatic market downturn in the wake of the natural disasters in Japan. Passenger car sales continued to improve in South Africa but did not reach 2007 levels.
Global automobile production rose by 3.6% to 80.3 million units in the reporting period, of which 66.3 million were attributable to passenger cars (+4.6%).
Sector-specific environment
The established passenger car markets turned in a mixed performance in fiscal year 2011. While some industrialized countries were negatively affected by the debt crisis and its repercussions, others – in particular Germany – profited from the robust demand in the growth markets in the first half of the year. As expected, the expiry of government incentives in Western Europe also had an adverse effect. By adopting active manufacturer and dealership risk management and cooperating closely with financial service providers, the industry succeeded in overcoming the impact of this.
The extensive development of the major markets in China and Brazil, the expansion of activities in India and the ability to meet demand in Russia are becoming increasingly important for the automotive industry.
Many Asian, African and Latin American markets are showing signs of further easing in free trade. However, it cannot be ruled out that these countries will fall back on protectionist measures in the event of another global economic slump.
VOLKSWAGEN GROUP DELIVERIES BY MONTH
Vehicles in thousands
Europe/Remaining markets
New vehicle registrations in the Western European markets declined slightly in the reporting period to a total of 12.8 million vehicles, down 1.5% on the prior-year figure and the lowest overall market volume recorded in the last 16 years. In most high-volume markets, the decrease was primarily attributable to the extremely weak first quarter of 2011 as against the previous year, which was due in particular to the expiry of government incentives over the course of 2010. Slow economic growth, rising unemployment and the debt situation in some countries led to market volumes that were, in some cases, significantly below prior-year levels. Spain (–17.7%), Italy (–11.6%), the United Kingdom (–4.4%) and France (–2.1%) all suffered losses in fiscal year 2011. By contrast, the German passenger car market performed strongly, up 8.8% on the extremely weak prior-year level. The market share of diesel vehicles in Western Europe exceeded the previous high recorded in 2007, rising significantly to 55.4% in the reporting period as against 51.7% in 2010.
The passenger car markets in Central and Eastern Europe continued their positive development in fiscal year 2011. With an increase of 26.0% to 3.7 million units, demand was however well below the record level seen in 2008. This was almost exclusively due to the very positive development of the Russian market. Government support measures and significantly higher consumer confidence led to a 39.8% increase in passenger car sales in Russia, 2.5 million units. Manufacturers with local production facilities in particular profited from the sales boom. Overall, the Central European EU states also recorded more new registrations as against 2010. The passenger car market developed positively in the Baltic states (+83.9%), Bulgaria (+19.9%), Slovakia (+6.5%), Hungary (+3.2%) and the Czech Republic (+2.4%). By contrast, new passenger car registrations were down year-on-year in Poland (–10.6%), Romania (–8.9%) and Slovenia (–2.2%). Passenger car sales reached a new high in Turkey, up 13.4% to 578 thousand units.
The upward trend seen in the South African passenger car market in the previous year continued in the period under review. New registrations were 18.4% higher than in 2010, climbing to 399 thousand units. This was positively impacted by higher unit sales to car rental companies, among other things.
Germany
In Germany, demand for passenger cars rose by 8.8% to 3.2 million vehicles in fiscal year 2011, buoyed by the extremely low prior-year level and the economic upturn in 2011. As in the previous year, the light commercial vehicles market recorded double-digit growth, up 18.3% to 241 thousand vehicles, primarily as a result of increased demand. German manufacturers set new production and export records in 2011, eclipsing the previous high of the pre-crisis year 2007. Domestic passenger car production rose 5.6% to 5.9 million vehicles, while passenger car exports increased by 6.6% year-on‑year to 4.5 million units.
North America
In the North American market, demand for passenger cars and light commercial vehicles (up to 6.35 tonnes) grew to 15.3 million vehicles in 2011, an increase of 9.3% as against the previous year. This was almost exclusively attributable to sales of vehicles manufactured in North America. A range of new models and increased replacement demand saw automobile sales soar in the USA, despite the deterioration of the economy as a whole. However, passenger car and light commercial vehicles sales remained well below 2007 levels at 12.8 million units (+10.3%). In Canada, sales were slower than in the previous year, up 1.8% to 1.6 million vehicles in the reporting period. The Mexican market recorded a 9.7% increase in sales to 0.9 million vehicles, roughly on par with 2010 growth.
South America
Vehicle sales in South America rose considerably in 2011, exceeding the previous all-time high recorded in 2010. The Brazilian market was once again slightly up on the record prior-year level, recording a 0.1% year-on-year increase in new passenger car registrations in the reporting period. Demand for automobiles weakened clearly in the second half of the year despite the generally stable economic situation. This development was attributable to the uncertainty among consumers caused by rising inflation and higher interest rates. Imported vehicles saw significant growth, encouraged by a strong real. In September 2011, the Brazilian government passed a tax hike on imported vehicles in order to protect local industry, which became effective on December 15, 2011. At 542 thousand units, Brazil’s vehicle exports again grew as against the previous year (+7.7%).
In Argentina, the second largest automotive market in the region, demand for passenger cars clearly exceeded the record prior-year level with sales up 28.4% to 620 thousand units. Alongside relatively low-cost consumer credit, this was primarily driven by consumer behavior. High inflation caused consumers to invest in tangible assets such as cars to protect themselves against a loss of purchasing power.
Asia-Pacific
A total of 2.5% more new passenger cars were registered in the Asia-Pacific region in the reporting period than in the previous year. The Chinese automotive market recorded an increase of 876 thousand to 12.3 million vehicles. Vehicle sales in the country grew only moderately in comparison (+7.6%) in 2011 following the expiry of several government subsidy programs, in contrast to the high double-digit growth rates seen in 2009 and 2010. In Japan, new passenger car registrations fell by 16.3% to 3.5 million vehicles. In addition to general economic uncertainties, the sharp decline was caused primarily by production shortfalls as a consequence of the natural disasters on March 11, 2011, as well as new vehicle purchases in 2010 that were brought forward to take advantage of government subsidy programs available at the time. Despite dampened growth, the Indian passenger car market once again recorded a new high, up 5.6% to 2.3 million vehicles. The main reasons for the muted demand were high interest rates and increased fuel prices, particularly in the second half of the year.
DEMAND FOR TRUCKS AND BUSES REMAINS HIGH
Sales of mid-sized and heavy trucks with a gross vehicle weight of more than six tonnes in fiscal year 2011 exceeded the high prior-year level. 2.7 million vehicles were sold around the world, which represents growth of 7.1%. Performance in the individual regions was extremely varied: Europe, North America and Russia continued to recover following the sharp drop in demand in the wake of the financial crisis. South America and India continued their stable growth trajectory in fiscal year 2011 in line with economic conditions. China, the world’s largest market, did not match the high level seen in 2010.
Vehicle sales in Western Europe were very positive in fiscal year 2011. A total of 262 thousand vehicles were sold, 27.5% more than in the previous year. New heavy truck registrations in particular benefited from replacement purchases in the course of the economic recovery. Central and Eastern Europe also recorded extremely high growth in the mid-sized and heavy trucks segment with sales up 67.3% as against the previous year to a total of 140 thousand units. In Russia, the largest single market in the region, demand was 71.2% higher in 2011 than in 2010.
The sales figures for mid-sized and heavy trucks in North America rose by 35.9% to 377 thousand units as a result of the positive trend in the relevant economic sectors. Of these, 306 thousand units were sold in the US market, a year-on-year increase of 40.7%.
South America also saw market growth in the mid-sized and heavy trucks segments in fiscal year 2011. 13.9% more vehicles were sold than in the previous year, for a total of 223 thousand units. Truck sales in Brazil recorded an 8.4% increase to 165 thousand vehicles.
With the exception of the Chinese market, the Asia‑Pacific region again outperformed prior-year sales levels in fiscal year 2011. New registrations increased by 9.9% and amounted to 529 thousand units. Demand in China for mid-sized and heavy trucks did not match the high level of the previous year. A total of 1.2 million vehicles were sold there, representing a decrease of 8.9%. Nevertheless, China remains by far the world’s largest single market. In India, sales of mid-sized and heavy trucks grew by 10.7% year-on-year to 313 thousand units.
In fiscal year 2011, the global market for buses recorded an increase against the previous year. Demand in Western Europe, North America and the Asia-Pacific region grew at a comparatively moderate rate, whereas the Brazilian market for buses recorded a strong increase in vehicle sales.
DEMAND FOR FINANCIAL SERVICES
Overall, demand for automotive-related financial services remained high in the reporting period. In the European markets, automotive-related financial services were increasingly used by business customers in particular.
The leasing sector in Germany continued to expand in both the commercial vehicle and passenger car segments. The markets in North and South America, as well as the Asia-Pacific region, performed significantly better than in the previous year.
Increasing demand for leasing and loan offerings led to growth in the financial services market in the USA, and there was a recovery in the residual values of used cars. The Mexican financial services market was boosted by stable credit conditions and interest rates, as well as terms of up to 60 months. In addition, various promotions such as attractive insurance products and subsidies also saw an increase in activities in the local financial services market.
The Brazilian market continues on its growth trajectory, strengthened by an increase in retail lending. A clear rise in individual mobility needs led to substantial sales growth of Consorcio, a lottery-style financing product.
China also saw increased demand for financial services. There is potential to acquire new customers for automobile financing, as at the moment only around 10% of vehicle purchases are loan-financed. Demand for financial services continued to rise in India. In Japan, the volume of contracts rose sharply as against the previous year despite the natural disasters at the beginning of the year.
