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The year that was - Auto sales in 2009

In the past few years, the monster of recession had the global auto industry held tightly in its fists. Demand for cars went down and a similar trend was seen in the sales department. All this prompted the government to introduce some very nice economic stimulus programmes to raise the spirits of car manufacturers.

But the auto manufacturers got the better of recession starting in the third quarter of 2009 and it has continued in 2010.

In 2009, about 60 million new cars were sold across the world. This was about 6.1 per cent drop in the year-on-year (YoY). But this can be considered as an improvement when you compare with the YoY drop in sales in 2008, which was about 9.48 per cent.

The Automotive Research & Testing Centre (ARTC), the most prestigious vehicle testing, inspection and development hub in Taiwan, released a report that outlines the status of major auto markets across the world in 2009. Here is an analysis of what happened in some of the major car markets across the world in 2009.

Major Markets

Among the one who suffered the most, US was one who witnessed the steepest drop in sales of new cars in 2009. A total of 10.43 million units of new cars were sold in a market that used to be the single largest market, a decline of 2.82 million units from the previous year. In 2009, Japan witnessed a fall of about 9.3 per cent and sold about 4.6 million units of new cars.

China appeared to be rather unaffected by the global recession and registered a surge in car sales. In 2009, China sold a total of 13.6 million units, thereby dethroning US of the largest auto market crown. Another major auto market that defied the recession rules was India. India registered a growth in total demand and sales, which went up by 18.7 percent and a total of 1.43 million units were sold.

The US

Chrysler filed for the Chapter 11 in late April and General Motors followed close behind and went for bankruptcy in June 2009. This came as a major surprise for the once globally dominant automotive industry of the US. Despite the efforts of the US government, like the "cash for clunkers", the car sales still went down the drain, falling by 17.2% YoY.

Europe

According to the European Automobile Manufacturers' Association, even though the rate of decline slowed, the new car sales in Europe still registered a 2.8 percent decline in 2009. However, sales gains were also noticed across a few European countries including France, Germany, Austria, Czech, and Slovakia.

The French and the German government introduced subsidies for new car purchases. While the French government set the subsidy at 1,000-euro for new-car buyers replacing vehicles at least 10 years old, the German government offered about 2,500-euro subsidy (with total subsidy value of 1.5 billion euro) for new car purchases. In France total sales went up by 10.7 percent and Germany registered a growth rate that was up by 23.2 percent.

China

Chinese government introduced a number of incentives including subsidies for light passenger cars and mini commercial vehicles in rural and some urban areas. This brought a continued growth in new car sales in 2009. The same year placed China ahead of US as the world's largest single automobile market last year.

Japan

Sales of new cars that featured the conventional internal combustion engines (ICEs) saw a decline in the growth rate and it fell 11.2 per cent YoY. Japanese government showed its commitment and introduced incentives on the purchase of environmentally friendly cars and this helped the sales figure of hybrid cars shoot up by 172 per cent.

India

It comes rather as a surprise, but, the passenger car sales rose the most in three years in 2009. According to Bloomberg calculation of data released by the Society of Indian Automobile Manufacturers, sales totalled 1.43 million units in 2009, 18.7 percent more than the 1.20 million sold a year earlier.

The high sales rate was prompted by the government lowering the excise slabs and banks coming to the forefront with loans that had lower rate of interest.

Taiwan

Taiwan saw an increase in sales growth in late 2009. Purchase willingness of the consumers was affected by the weak consumer confidence and the government was forced to bring a subsidy program of US$923, through commodity-tax reduction for each new car sold with engine displacements under 2,000cc.

Total sales of new cars mounted up to 294,000 units, up 28.3% YoY. Industry experts commented that the subsidies merely encouraged people to buy earlier than they would have, and this may be a potential cause for a sharp decline in the first half of 2010.

Global Auto Manufacturers

GM will now have only few brands in the family including Chevrolet, GMC, Buick and Cadillac. Other nameplates, including Hummer, Saab, Saturn, will be sold while Pontiac will close its shops for good.

While Italian car manufacturer Fiat reached an acquisition agreement with Chrysler in June 2009 to acquire the American counterpart; Jeep was merged into the Nissan-Renault Group.

Ford, while refraining from taking any help from the government, sold its Jaguar and Land Rover subsidiaries to Indian automaker TATA Group. Volvo, also from the Ford Group, was acquired by Geely Automobile Holdings Ltd. of China.