It was a tough year for the carmakers around the globe. The global auto industry is struggling to deal with problems as sales fell by more than 4%. This year it won’t be easy to improve the situation.
The number of vehicles sold in major global markets declined to 90.3 million in 2019. Based on the information provided by analysts at LMC Automotive.
As a result, in comparison with 2018 sales fell by more than 4 million vehicles, more precisely 4.1 million. The situation is more complicated after comparing this result with the same period of time in 2017. A couple of years in 2017, carmakers sold 95.2 million cars.
There is no shortage of problems. For instance, the interest in the cars powered by the internal combustion engine is falling as people are looking for more eco-friendly cars. Scandals shuttered the trust in carmakers as several companies manipulated the results.
Moreover, some experts believe that the world may have reached “peak car.” It means that after this period, the global demand for vehicles will begin to decline and it will be impossible to stop this process.
It is not only the auto industry which is suffering as falling sales will have a dramatic impact on the global economy. Based on the information from the International Monetary Fund, the car industry account for 5.7% of economic output and 8% of goods exports. Moreover, the auto industry is the second-largest consumer of steel and aluminum.
Auto industry and major markets
China is the world’s largest market for vehicles. Automakers are working hard to boost sales in this market. One worst thing that may happen is losing this lucrative market.
However, as the Chinese economy is slowing down the sales are falling, and this is a severe challenge for the companies. Furthermore, China eliminated the tax incentive for electric car purchases.
The result is truly worrisome, to say the least, as sales declined by 2.3 million in comparison with 2018.
Another crucial market for the global auto industry is India. Carmakers invested heavily as the Indian market is important for their companies. As in the case of China, India’s economy is experiencing problems along with other issues.
Companies also had to modify their plans in Europe. Brexit as well as Volkswagen’s diesel emissions crisis changed the plans of many potential buyers.
In this situation, many companies decided to look for partners as dwindling sales jeopardized their future. For example, the PSA Group that owns Peugeot and other famous brands partnered with Volkswagen and Ford to develop electric cars.
Other competitors also decided to join forces as this way; it will be easier to improve the situation. German companies Daimler and BMW are going to develop ride-sharing and driverless technology.
In 2020, the outlook for the global auto industry is also far from being ideal. LMC expects global sales to fall below 90 million or 0.3 in comparison with 2019. This will be another blow for the struggling auto industry. Changing trends and falling demand will continue to affect carmakers around the world.