Car sales across the world will fall by around 3.1 million units in 2019, claims a study by Fitch Ratings. This downfall is predicted to be steeper than 2008, the last time when the global auto industry faced a severe slowdown.
Fitch says, global passenger car sales have dropped to 80.6 million in 2018 from 81.8 million in 2017, the first annual decline since 2009, as per data available from the International Organization of Motor Vehicle Manufacturers.
It also mentions that combined YTD sales in Brazil, Russia and India are down by 5.5 per cent, reflecting sharp falls in India.
The slump in auto sales after the rapid growth in the sector between 2011 and 2017 has been a significant factor behind the drop in world manufacturing and global GDP growth.
Demands for the cars have been significantly weaker than expected, says Fitch. Globally, sales in 2019 are likely to decline by around 4 per cent to around 77.5 million. In 2008, car sales declined by 3 million units.
Commenting on this, Brian Coulton, Chief Economist, Fitch Ratings, said
"The downturn in the global car market since the middle of 2018 has been a key force behind the slump in global manufacturing and the car sales picture is turning out a lot worse than we expected back in May."
He also said, "There seems little reason to anticipate a rebound in global car sales in 2020, even if China sales see a marginal recovery of around 1 per cent. This means that the auto market will likely continue to weigh heavily on global manufacturing and on economies with high exposure to this sector, such as Germany."
The weaker-than-expected sales in 2019 have been led by Chinese market, where year-to-date sales during January-October period are down by 11 per cent compared with the first 10 months of 2018.
Fitch further forecasts that both the US and western European markets are expected to see a decline of nearly 2 per cent this year, taking the level of sales to 16.9 million and 14 million, respectively