Sales growth in key markets in March
China activity level improving month over month, ROW down sharply on lockdown
China wholesale volume declined 48% year over year, taking the year-to-date decline to -45% year over year. While the drop is still very steep, it is better than the -79% in February and activity levels recovered gradually during the month. The dealer association data suggest high 2.68 months of dealer inventory in March, but we think that is mainly a denominator effect while absolute dealer inventory did not increase. The top-5 EU markets declined by 56% on average, and US sales dropped 39% in March.
What to expect for Q2? April should be the low point in Europe and the US
From today's perspective, April will likely mark the low point in Europe and the US with plant and dealership closures and mobility restrictions throughout the month. Assuming a restart of production in early- to mid-May outside China, we forecast a Q2 decline of -45% year over year in Europe and -35% in the US. Our 2020 forecast of a -10% decline in global auto production is predicated on auto-specific stimulus, which could be introduced in H2. As almost 100% of car plants and dealerships have re-opened in China, we expect the positive trend there to continue. We estimate a -10% decline year over year in Q2.
Price discounts growing – premium segment more resilient
In China, price discounts have increased further m/m for mass-market brands while premium was flattish. US new car incentives (ALG) increased by +2% year over year. The Manheim used car index remained strong in March but the virus impact is likely not yet visible. The EU diesel share declined by 4.6% year over year and also on a sequential basis.