April 2025 Light Vehicle Production Forecast

By Mike Wall , Executive Director, Automotive Analysis, S&P Global Mobility

Each month, we leverage global light vehicle production actuals, registration data, and sales data to provide the most up-to-date, short-term production forecast available.

Here's a closer look at global production data by region and our updated April production forecast.

Top Takeaways for the Month

Recent US tariff actions have significantly impacted the outlook for light vehicle sales and production, leading to broad downgrades in forecasts for various regions. The April forecast update reflects two main influences: specific auto tariffs affecting North America and select other regions and broader reciprocal tariffs impacting particularly international markets.

Notably, reductions in auto tariffs are anticipated in early 2026 for Canada and Mexico, and in early 2027 for other countries. The most pronounced downward revisions are seen for 2026, following rather solid performance in many markets through Q1-2025.

The overall impact is concentrated in North America, with significant repercussions for Japan, Korea, and Europe due to the interplay of tariffs and macroeconomic factors.

Regional Highlights

Europe: The light vehicle production outlook for Europe has been reduced by 12,000 units for 2025 and by 251,000 units for 2026, with a further reduction of 266,000 units for 2027. This decline is heavily influenced by the 25% US tariffs on vehicles and parts, expected to remain until 2026 before decreasing to 15% in 2027. The forecast also considers the negative macro demand impact of 10% US reciprocal tariffs, although partially offset by EU CAFE rule adjustments and Germany's investment plan.

Greater China: The forecast for Greater China light vehicle production has been cut by 198,000 units for 2025 and by 503,000 units for 2026. The ongoing US-China tariff dispute is creating significant challenges for exports and consumer confidence, leading to a projected production of 30.5 million vehicles in 2025, a 1.4% decrease from 2024. The industry faces ongoing pressures related to supply chain management and cost control, with expectations of continued difficulties in the coming years.

Japan/Korea: Production forecasts for Japan have been lowered by approximately 300,000 units per year for the 2026-2027 period due to the 25% US auto tariff, which is expected to persist going forward, albeit mitigated somewhat by an expected reduction in the autos tariff rate to 15%. The long-term outlook also sees a reduction of around 160,000 units annually, with no significant production shifts to the US currently anticipated, yet still being evaluated. In Korea, production forecasts have been adjusted downwards by 112,000 units for 2025 and 203,000 units for 2026, reflecting the adverse effects of US tariffs and political instability.

North America: North America's light vehicle production outlook has been reduced by 944,000 units for 2025 and 778,000 units for 2026. The forecast reflects the steepest cuts since COVID, driven by the implications of direct tariffs and declining demand. Inventory levels are expected to drop as consumers rush to secure pre-tariff priced stock, with a production forecast for 2027 remaining flat at 15.47 million units, indicating a potential for onshoring benefits for manufacturers like Nissan, BMW, and Honda, among others.

South America: The light vehicle production outlook for South America has been reduced by 28,000 units for 2025 and 34,000 units for 2026. While direct vehicle impacts from tariffs are limited, the broader supply chain implications and demand reductions have influenced these forecasts. Brazil is expected to be less affected than Argentina, where local production dynamics are more constrained.

South Asia: The production outlook for South Asia has been adjusted downward by 88,000 units for 2025 and by 174,000 units for 2026. The ASEAN market faces challenges due to the US's 25% import tariff on automotive parts, negatively affecting Thai exports. Adjustments for India reflect increasing uncertainties from US tariffs, with notable downward revisions for specific models reliant on European markets.

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