The S&P Mobility July light vehicle production forecast, covering 99% of global volume, has been revised upward, reflecting stronger-than-expected output in North America, Greater China, Europe, Japan, South Korea, and South America.
Each month, the latest global light vehicle production forecast is updated using actual production, registration, and sales data to provide the most accurate short-term outlook. The July 2025 forecast reveals mixed trends across various regions, primarily due to ongoing trade tensions, evolving tariff policies, and shifting regulatory environments. While tariffs continue to pose challenges, a general reduction is expected by 2026. The production forecasts for North America, Greater China, and Europe have been revised upward, reflecting resilient supply chains, strong demand, and supportive policies. However, risks such as Chinese export restrictions on rare earth elements and changes to electric vehicle subsidies introduce some uncertainty.
Here’s why it matters:
For dealers, production forecasts play a crucial role in ensuring vehicle availability, optimizing inventory planning, and informing sales strategies. By understanding changes in regional production, dealers can better anticipate shifts in vehicle supply and demand, particularly for in-demand segments like hybrids and EVs.
The impact of tariffs and regulatory changes can affect vehicle pricing and dealer profit margins. Furthermore, dealers operating in markets heavily influenced by imports or exports can benefit from understanding how trade policies and tax regulations affect vehicle flows and the competitive landscape.
Key takeaways:
- North America shows production strength in 2025
The region’s light vehicle production forecast increased by 241,000 units for 2025, underscoring the resilience of the supply chain. However, outlooks for 2026 and 2027 were lowered due to inventory normalization and ongoing tariff effects. - Greater China’s production boost fueled by NEV growth
China’s forecast rose sharply by over 160,000 units for 2025, supported by government subsidies and a booming new energy vehicle market, though foreign brands face competitive headwinds. - Europe’s production outlook improved despite inventory reductions
Europe’s 2025 production forecast increased by 90,000 units, with gains especially in ICE vehicles, due to updated EU regulations and expected tariff reductions starting in 2026. - EV production faces volatility
North American BEV production forecasts were materially reduced, reflecting uncertainty over subsidy programs and emissions standards, which could affect dealer EV inventories. - Emerging markets see mixed outcomes
Brazil’s new tax regime lifts South America’s forecast by 56,000 units, but Argentina’s production is expected to decline. South Asia’s outlook is mixed, with ASEAN exports rising but India facing production challenges and rare earth supply risks.
