Car sales across the world are expected to observe their steepest year-over-year drop in 2019 since the financial crisis as consumer demand from the U.S. to China weakens.
Global car sales are expected to drop by about 3.1 million this year, a bigger drop than in 2008, Fitch Ratings economics team stated Monday, mentioning data gathered by the International Organisation of Motor Vehicle Manufacturers. The slump in auto sales is contributing to a drag on worldwide manufacturing, Fitch stated.
“The downturn in the global car market since the middle of 2018 has been a key force behind the drop in global manufacturing and the car sales picture is turning out a lot worse than we expected back in May,” Brian Coulton, chief economist at Fitch Ratings, stated.
Worldwide passenger car sales dropped to 80.6 million in last year from 81.8 million new units sold in 2017, which was the first yearly decrease since 2009, Fitch stated. Worldwide sales in 2019 look likely to drop by another 4% to around 77.5 million new vehicle sales.
Declining demand in China is a significant factor in the global decline this year. Sales there dropped 11% during the first 10 months of 2019 compared with the same time in 2018. Coulton said weak credit growth, increase in used car sales and new emissions standards lowered new car sales in China.
“Structurally, environmental concerns about diesel cars — and anticipated regulatory responses — and the growth of ride-hailing and car-sharing schemes are weighing on auto demand,” he stated.
Sales in the U.S. are having a hard time as well. General Motors, Ford and Honda have all a decrease in production as the auto market cools. Fitch Ratings anticipates an about 2% decline in U.S. sales to 16.9 million vehicles in this year.
Other countries experiencing a decrease in sales are Brazil, Russia, and India. Western Europe is also expected to see declines.