Global automobile market: US auto demand strengthened in August, while Europe’s rapid EV shift and India’s tougher comparisons cloud the global outlook

Overview

This monthly global auto-market update contrasts firm US demand with a fast European transition toward EVs and a more cautious Indian outlook. Nomura’s broader forecast still calls for a 0.9% year-on-year decline in global automobile demand in 2026.

Core views

Nomura’s central message is that differences among major auto markets remain pronounced, with the US standing out positively. US automobile sales volumes performed particularly well in August, and the seasonally adjusted annual rate reached a year-to-date high of 16.85mn vehicles. Although the report notes continuing macroeconomic uncertainty, it says volumes have remained stable for several months under similar conditions and identifies no additional negative signs ahead. Gasoline prices had risen to an all-US average of $4.478 per gallon on 21 September, close to the year-to-date high of $4.50 on 11 May. Nomura believes this selling environment continues to favor Honda Motor and Toyota Motor because of their hybrid-vehicle strengths. Europe presents a contrasting powertrain story. Sales in the EU, EFTA and UK rose 5.2% y-y, but the mix shifted sharply away from internal-combustion vehicles: EV sales rose 52.2%, while gasoline and diesel sales fell 23.8% and 22.8%, respectively. Hybrid sales rose only 3.4%, below overall market growth, and the hybrid share slipped from 33.4% in August 2025 to 32.8% in August 2026. Meanwhile, EV share rose from 20.2% to 29.2%, materially narrowing the gap with hybrids. Nomura sees a marked transition from ICE vehicles to EVs and considers the hybrid weighting likely to have already peaked. Chinese manufacturers including Chery, Geely and Leapmotor have joined BYD and SAIC in expanding their European presence since early 2026. The report therefore flags the risk that Japanese automakers’ historical hybrid advantage could erode in Europe. India has remained firm following the Goods and Services Tax reduction on 22 September 2025. According to SIAM, August 2026 auto sales grew 33.2% y-y. Nomura nevertheless urges caution because the comparison base becomes much higher from October 2026, which it expects to slow year-on-year growth. It also cites unsupportive macroeconomic conditions. Because Diwali fell in October in 2025 but will occur in November in 2026, the report says demand should be assessed across the combined October-November period rather than from either month in isolation. At the global level, Nomura’s demand forecast is cautious: global automobile demand is projected to decline 0.9% y-y in 2026 before improving thereafter. The report supports its view through monthly sales tracking across 18 countries, regional demand forecasts, powertrain-mix analysis, automaker market-share and production data, and indicators relating to US affordability, credit, incentives, inventories and consumer conditions. Its framework emphasizes that demand and profitability vary by region, powertrain exposure and the interaction of affordability with financing and incentive conditions.

Analysis framework

Nomura compares monthly vehicle-sales data across major markets, then links regional demand to powertrain mix, market shares, production forecasts, affordability, credit and incentive indicators. It uses historical data and its own forecasts to identify changes in demand momentum and the relative positioning of automakers.

Methodology notes

• Industry AnalysisSupply-demand framework

  Regional auto-demand and sales-volume tracking

  The report compares sales volumes and growth rates across countries and combines them with demand forecasts to assess where global auto conditions are strengthening or weakening.

• Industry AnalysisVolume-price decomposition

  Powertrain mix and affordability analysis

  Nomura examines vehicle volumes alongside powertrain shares, gasoline prices, financing, incentives and affordability to explain changes in sales conditions and competitive positioning.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Honda Motor [7267]

  Nomura considers the US selling environment favorable because of Honda’s hybrid-vehicle strength.

  Strengths

  Strength in hybrid vehicles.

  Comparison

  Benefits from US conditions alongside Toyota Motor.

• Toyota Motor [7203]

  Nomura considers the US selling environment favorable because of Toyota’s hybrid-vehicle strength.

  Strengths

  Strength in hybrid vehicles.

  Weaknesses

  Its hybrid-led advantage could be challenged in Europe as EV adoption accelerates.

  Comparison

  Benefits from US conditions alongside Honda Motor.

  Risks

  Risk of losing hybrid-related advantages in the European market.

Key data

• US August SAAR16.85mn vehiclesYear-to-date high in August 2026
• US gasoline price$4.478/gallonAll-US average as of 21 September; near the year-to-date high of $4.50/gallon on 11 May
• Europe auto sales growth5.2% y-yEU + EFTA + UK sales growth
• Europe EV sales growth52.2% y-yCompared with gasoline sales down 23.8% and diesel sales down 22.8%
• European EV share29.2%Up from 20.2% in August 2025
• European hybrid share32.8%Down from 33.4% in August 2025
• India August auto sales growth33.2% y-yAccording to SIAM
• Global auto-demand forecast-0.9% y-yNomura forecast for 2026

Impact & implications

Nomura sees US resilience as supportive for hybrid-strong Honda and Toyota, but believes Europe’s accelerating EV adoption and expanding Chinese manufacturer presence could weaken the relative advantage of Japanese OEMs that are strongest in hybrids. India’s headline growth is expected to become less favorable from October because of base effects.

Risks

• Macroeconomic uncertainty could weaken currently stable US auto demand.
• Rising gasoline prices could affect consumer vehicle demand and powertrain preferences.
• Japanese automakers strong in hybrids risk losing their competitive advantage in Europe as the market shifts toward EVs.
• India’s auto-sales growth may slow from October 2026 because of a high year-on-year comparison base and weak macroeconomic conditions.

What to watch

• US sales volumes and SAAR following the August year-to-date high.
• US gasoline prices and their effect on hybrid demand and vehicle affordability.
• The pace of European EV-share gains relative to hybrid vehicles.
• Chinese automakers’ expanding presence in Europe.
• Combined October-November Indian demand, given the shift in Diwali timing.