December 2025 Light Vehicle Production Forecast

Europe: European light vehicle production for 2025 is revised upward by 32,000 units, reaching 16.9 million, driven by stronger results in the EU and Turkey. Inventory risks are being effectively managed, aligning production with rising domestic demand. However, lower-than-expected Russian output partially offsets these gains, and 2026 projections are trimmed due to Hyundai’s production cuts and increased imports from Korea and Mexico. The 2027 outlook improves slightly, reflecting ongoing adjustments in sourcing and market strategy.

Greater China: Greater China’s light vehicle production is upgraded by 550,000 units for 2025, with exports driving growth despite domestic sales challenges linked to subsidy reductions. While retail sales declined, exports surged by 600,000 units in November, supporting industry output. The forecast for 2026 and 2027 remains generally constructive, though a modest contraction is expected as the market navigates policy changes and competitive pressures. Innovation and government support continue to underpin growth, even amid economic uncertainties.

Japan/Korea: Japan’s production outlook for 2026 and 2027 is upgraded, largely due to strategic sourcing shifts for key models and favorable currency trends. Toyota and Subaru will maintain robust exports to the US, leveraging reduced tariffs and a weaker yen, while Honda Vezel production shifts to Mexico. South Korea sees a modest production increase for 2025, driven by stronger November results, with further minor upticks for 2026-2027 from adjusted vehicle launch schedules.

North America: North American light vehicle production is revised upward by 76,000 units for 2025 and by 288,000 units for 2026, reaching 15.24 million and 15.08 million units, respectively. Ford plans to recover lost F-Series volume, while increased demand and inventory management drive the positive outlook for the broader market. Asian automakers, notably Toyota and Subaru, will increase imports despite tariffs, reflecting strategic shifts in sourcing. Rollbacks in US emissions standards are expected to boost output of ICE-based trucks, supporting profitability.

South America: South America’s production outlook is cut by 124,000 units for 2025, with Brazil facing the largest downgrade due to weaker sales and relatively ineffective tax incentives for “cheap cars.” Argentina’s reduction is less severe, tied to recent production results. The region’s 2026-2027 forecast is lowered by 4.2% annually, reflecting macroeconomic caution, especially for Brazil, whose volumes are now substantially below previous estimates.

South Asia: South Asia’s light vehicle production is upgraded for 2025 and 2026, with ASEAN markets seeing slight improvements from stronger exports and rising BEV output in Thailand. However, medium-term forecasts for Thailand are tempered by economic headwinds and tighter lending, among other factors. India’s outlook is robust, with significant upgrades for 2026 and 2027, fueled by strong domestic demand amid GST reductions, prompting automakers to optimize production schedules to capture growth opportunities.

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