Car sales around the world are expected to see their steepest year-over-year decline in 2019 since the financial crisis as consumer demand from the U.S. to China softens.
Global car sales are expected to fall by about 3.1 million in 2019, a bigger drop than in 2008, Fitch Ratings economics team said Monday, citing data collected by the International Organisation of Motor Vehicle Manufacturers. The slowdown in auto sales is contributing to a drag on global manufacturing, Fitch said.
"The downturn in the global car market since the middle of 2018 has been a key force behind the slump in global manufacturing and the car sales picture is turning out a lot worse than we expected back in May," Brian Coulton, chief economist at Fitch Ratings, said in a statement.
Global passenger car sales fell to 80.6 million in 2018 from 81.8 million new units sold in 2017, which was the first annual decline since 2009, Fitch said. Worldwide sales in 2019 look likely to fall by another 4% to around 77.5 million new vehicle sales.
Falling demand in China, the world's largest auto market, is a major factor in the worldwide decline this year. Sales there fell 11% during the first 10 months of this year compared with the same time last year. Coulton said weak credit growth, a rise in used car sales and new emissions standards depressed new car sales in China.
"Structurally, environmental concerns about diesel cars — and anticipated regulatory responses — and the growth of ride-hailing and car-sharing schemes are weighing on auto demand," he said in an interview.
Sales in the U.S. are struggling as well. General Motors, Ford and Honda have all cut back on production as the auto market cools. Fitch Ratings anticipates an approximately 2% decline in U.S. sales to 16.9 million vehicles in 2019.
Other countries experiencing declines are Brazil, Russia and India. Western Europe is expected to see declines as well.
This isn't the first warning of dark days for the auto industry. Consulting firm AlixPartners and auto data firm Edmunds both anticipated a decline in U.S. auto sales that would put pressure on automakers as costs rise and sales slow.
Fitch Ratings doesn't see a rebound in 2020 either.
"While we don't see a sharp further decline in global manufacturing in 2020, the auto outlook is pointing to a stabilization at best rather than any sharp rebound," Coulton told CNBC.