World Car Sales Will Fall More Than 4 Million In 2019.
“The year 2019 will be more stressful for the auto industry worldwide than in 2009”
The world car market is about to take its biggest hit since the financial crisis of 2008, according to a report from Germany’s Center for Automotive Research (CAR), with sales diving more than 4 million in 2019.
The fall, triggered by U.S. sanctions policy and led by a huge fall in China’s sales, will extend over four years and be exacerbated by harsher CO2 regulations and the challenges this implies from the enforced take up of electric vehicles in Europe.
The forecast, authored by CAR’s Professor Ferdinand Dudenhoeffer, doesn’t include the impact from a possible crisis if Britain leaves the European Union (EU), or if the U.S. imposes tariffs on European vehicle imports.
Dudenhoeffer said world sales in 2019 will fall to 79.5 million in 2019 from 83.7 million last year, and won’t recover to 2019’s levels until 2022 when sales will rise back to 84 million.
“If the U.S. president puts into action his latest threat to impose further punitive tariffs on more than $300 billion in U.S. imports, there is a danger of a global car crisis,” Dudenhoeffer said.
“The year 2019 will be more stressful for the auto industry worldwide than in 2009. According to our more conservative forecast, vehicle sales worldwide will decline by more than 4 million new cars in 2019. Globally this is twice as big a decline as in the midst of the global financial crisis,” Dudenhoeffer said.
“One of the main triggers is the great uncertainty cause by the customs wars and sanctions of the U.S. government under President Donald Trump,” Dudenhoeffer said.
China hardest hit
The CAR report said China will be hit hardest, where sales have already fallen by 15% in the year to April. The new car market in China fell 13% to 1.61 million in May, for the 12th consecutive monthly fall.
CAR, based at the University of Duisberg-Essen, said big carmakers will show the results of this fall in their second quarter financial results. GM, Ford and Tesla will be hit hard, according to the report.
“No taken into account in all these considerations are further deterioration of the British economy in the case of a threatened non-ordered Brexit. Also not included are possible punitive tariffs for car imports from Europe to the U.S., or intensification of the Italian debt crisis,” Dudenhoeffer said.
“The automotive industry’s earnings and liquidity will be significantly reduced in 2019 and it will fall into crisis mode. The major challenges of the coming years – the costly ramp-up of electromobility – are intensifying the pressure. As carmakers after 2021 are forced to sell more electric cars to avoid EU fines, sales will drop,” he said.
Dudenhoeffer said cheap small cars will be a thing of the past and pointed out that the price of a little electric Opel Corsa city car would start at 29,900 euros ($33,850) compared with the current gasoline entry level car priced at about 12,000 euros ($13,580).