[ET Net News Agency, 18 September 2019] Global light vehicle sales look set to fall by
2%-3% this year and we foresee virtually no growth over 2020-2021, according to a report
published by S&P Global Ratings on titled "Global Auto Sales Will Stay In The Slow Lane
For At Least The Next Two Years".
"Worsening global economic conditions, the trade war between the U.S. and China, and the
high cost of innovation for carmakers will continue to dampen sales," said S&P's credit
analyst Vittoria Ferraris.
The credit rating agency expects auto manufacturers will suffer some margin erosion,
particularly in the mass-market segment, as they may struggle to fully pass through the
increased cost of connectivity, electrification, and autonomous driving. These rising
costs will translate in higher auto prices and damage consumer affordability, additionally
deterring car buyers.
On the plus side, persistently low-interest rates should support affordability, while a
rich pipeline of new models featuring sophisticated upgraded connectivity and
electrification options and autonomous solutions will be attractive for the market.
"However, we do not think this will be sufficient to raise global light vehicles sales
next year, following the dip in 2019 sales that we estimate this year," said Ferraris.
S&P now expects light-vehicle sales in China to decline by 7%-9% this year, while we
foresee a 3% decline in the U.S. and up to a 2% decline in Europe.
For 2020 and 2021, S&P's base-case assumption is for zero to 1% growth in global light
vehicle sales. It expects all market regions will experience volume weakness, except in
China, which may see a modest rebound, although not before 2021. (KL)