Global car sector outlook to remain stable in 2019 Moodys

Moody’s Investors Service on Tuesday said the outlook for the intentional automotive sector would be stable for the next 12 to 18 months.

This outlook reflects forecasts for steady demand in the sector over the main regions globally, despite various challenges, Moody’s report, titled “Automotive manufacturing -- Global, Modest growth in light vehicle sales to continue into 2019 amid threats of US tariffs” said.

"While global auto sales so far this year support our full-year 2018 forecast, we see greater risks emerging that could hurt sales next year, including trade and tariff disputes, rising interest rates and higher fuel prices," Moody's senior vice president Falk Frey stated.

One of the main reasons for Moody’s expectations is the stability in car sales in China, Frey added.

The US-based rating agency expects auto sales in China will rise 2% during 2018, and by 2.5% next year.

Moody’s previously projected that international light car sales would increase by 1.5% in 2018 and 1.3% during 2019.
“US light vehicles sales will likely cool in the coming months. Rising interest rates, higher vehicle prices and the threat of tariffs on auto imports are likely to make consumers consider a used car or delay buying a new one,” the report indicated.

Although light car sales are expected to decrease by 1.2% in the US this year, they are forecast to reach 16.9 million by the end of the year.

Meanwhile, consumer demand for new vehicles will remain strong in India and will continue growing in Russia and Brazil.

As for Japan, auto sales are set to fall slightly by 0.1% in 2018 before increasing to a rate of 1.3% in 2019, Moody’s predicted, adding that its forecasts for car sales in Western European are set to increase by 2% during 2018 before registering a 0.5% fall next year.

The rating agency’s new report on the sector is titled Automotive manufacturing -- Global, Modest growth in light vehicle sales to continue into 2019 amid threat of US tariffs".