Moody Investor Services (Moody’s) states global auto sales forecast is slated to decline by 14pc in 2020 due to the COVID-19 outbreak, from earlier projection of 2.5pc fall given in February. The ratings agency projects a negative outlook for North American and European auto parts suppliers. Auto sales could recover in 2021 but depend largely on the recovery from the COVID-19 crisis.
Automotive production has been temporarily halted in Europe and North America amid health concerns, Moody’s cited. Earlier this year, with China going into a lockdown, international supply chain of auto parts remained disrupted. Several automakers in the world, depend on China for their requirement of auto parts.
Western Europe is likely to experience the steepest fall in demand as it has become the epicentre of the COVID-19 with deaths in Italy’s exceeding China’s tally. Moody’s expects auto sales to fall by 21pc in 2020.
China’s auto sales could decline by 10pc in the first half of 2020. Decline in demand for cars in China was more prominent in February as sales fell by 79pc from the prior year. Production and demand is likely to improve in the latter half of the year, and bounce to pre-COVID-19 in 2021, according to Moody’s.
In the US, the COVID-19 pandemic will lead to a 15pc drop in sales for light vehicles in 2020. Demand is likely to recover by 2021. Auto sales in Japan may decline by 8pc in 2020, with COVID-19 dampening the plans to launch new car models. In 2021, Japan’s auto sales, however, are likely increase at a higher rate than other countries.