Via S&P today:
Global light vehicles sales fell by 6.4% in the year to June 30, 2019. Sales declined in all major markets with the exception of Central and Eastern Europe, which saw a slight pick-up of 0.5%. In light of current conditions, global auto manufacturers’ hopes for a sharp increase in sales in the second half of 2019 and 2020 now appear to be dashed.
Economic conditions have worsened globally as a result of the ongoing trade war between the U.S. and China, resulting in a downturn in global trade. The risk of a no-deal Brexit and the higher probability of a recession in the U.S. will further dampen consumer confidence and, consequently, prospects for auto sales in the next two years. We also expect 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.
