IHS Markit Global has forecast car sales to decline 22% to 70.3 million units this year in the wake of COVID-19, with regional forecasts impacted substantially as facilities across key regions remain closed. An economic forecast update issued by the Economics and Country Risk team of the market intelligence provider indicates a 2020 global real GDP growth hard and fast into “real” recession, down about 3%, with a very sharp reduction in near-term demand/supply followed by a slow recovery. “The unexpected and sudden nature of the impacts of the pandemic are hitting the autos sector hard, with unprecedented levels of uncertainty around prospects for meaningful global recovery”, said Colin Couchman, Executive Director, Global Autos Demand Forecasting at IHS Markit. “Market fortunes are expected to be mixed, as delayed and destroyed demand interacts with massive global supply disruption.”
Though most factories in China are back to work, IHS Markit forecasters caution that it will take time for plants to fully recover, especially as revised COVID-19 working practices make it virtually impossible to rebound to previous operational capacity, among weakened demand conditions. Mainland China is expected to have a sales decline of more than 15.5%, year-on-year, to 21 million units. There are signs of an encouraging uptick in showroom traffic, but consumer confidence is said to remain fragile. So far, 12 cities have introduced various incentives to hike sales, including New Energy Vehicle subsidies, scrappage incentives and increased license plate quotas. The U.S. light vehicle market is expected to decline 26.6% from 2019 levels to 12.5 million units this year, while across western and central Europe, IHS Markit forecasts a 24.9% drop in light vehicle sales, to 13.6 million units.
Global light vehicle production is expected to drop 21.2% due to COVID-19, that is 18.8 million unit lower than in 2019. The biggest disruption is expected to hit in the first half of the year, with output in the first quarter expected to decline 24% year-on- year and -44% in the second quarter as lockdown measures intensify. “The balance of the year is forecast to ease, but overall, the second half of the year is expected to be down by nearly 8%, compared with an overall decline of 35% in the first half”, said IHS Markit.
