Auto production trends across the globe are still varied, with China & US strong, Japan weaker and Europe rising a little from very low lows. Overall, things still look pretty good for the balance of 2013.
Chinese auto sales continue to track at ~10%YoY, which is a solid result after the surge at the start of the year. Weaker growth rates always seemed inevitable, but they have not weakened to a huge degree.
Commercial vehicle sales remain a point of interest, as this is one area that can tell us a lot about the pressure on businesses free cash flow and borrowing ability.
So far sales and production have been better than 2012 and 2011 in the YTD, although are still below the surge seen in 2010. This suggests many businesses are in a better place financially than the last couple of years, although July did see a big drop in growth rates to 7.5%YoY.
Looking at the big three gasoline based markets of China, Japan and the US, production growth has slowed, although is still travelling pretty well at 4.5%YoY YTD. The US has been stronger, but has offset to some degree by a slower Japanese markets, which is battling comps from last year which were affected by subsidies which have now passed.
The EU auto market has been a disaster, with passenger vehicle sales down ~6%YTD even after a very poor year last year. But auto production is estimated to have grown in the last quarter, which gels with the return to growth in the PMI data.
Stabilising the declines in the European auto market could ensure that 2H13 is pretty good (when accounting for seasonal patterns of a weak summer production period).
So while we won't be seeing the gangbusters growth rates seen a couple of years ago, global auto production is still likely to be solid.
