Car sales across the world are expected to witness a sharp decline in 2019, as demand for automobiles continues to plummet in two of the world's biggest economies. Car sales are expected to decline by 3.1 million units in 2019 on a year-over-year basis.
The decline is steeper than the one witnessed in 2008 during the global meltdown. According to Fitch Ratings, slower car sales are also likely to impact global manufacturing. Car sales have been shrinking in the United States and China for a while now and don't look like gathering momentum anytime soon.
Car sales suffering since 2017
Carmakers across the globe have been suffering for almost the last couple of years. Global passenger car are likely to decline by 4% in 2019, the steepest ever. Global passenger cars are expected to register sales of 77.5 million only this year.
Passenger car sales slumped in 2018 also, when a total of 80.6 million units of new cars were sold globally. This was a steep decline from 81.8 million units of new passenger cars sold in 2017. Passenger car sales started taking a hit from 2017. That year, global passenger car sales registered its worst annual decline since 2009.
Fitch Ratings also says that car sales in the United States, the world's second largest market for cars, are likely to decline once again in 2019. Passenger car sales in the United States are expected to fall by 2%, with sales of about only 16.9 million units.
Lot of headwinds for carmakers
Slowing global economy has been one of the major reasons behind declining car sales. Moreover, demand for passenger cars have been declining in the United States for quite some time now, with an increasing number of Americans going for pickups, crossovers and SUVs.
This has seen all major U.S. carmakers like General Motors, Ford and Fiat Chrysler suffering for the last couple of years. Also, China's slowing economy has seen a significant decline in new passenger car sales in the world's biggest market for new cars. And if that was not enough American and European carmakers have been feeling the heat of increased tariffs since the beginning of 2018.
Also, ride-hailing services over the past three year have been eating into the businesses of carmakers. Passenger car sales have been also on the decline in other major economies like Russia, India and Brazil owing to slowing economy and a significant slump in car sales is likely to seen in Europe too this year.