Falling new-car sales in China are the biggest reason global auto sales are expected to fall around 3.1 million units or about 4% in 2019, and a major reason there’s “little reason to anticipate a rebound in global car sales in 2020,” according to Fitch Ratings.
The downturn in China puts pressure on margins and costs in the rest of the world, and it’s a big deal for the U.S. auto companies, especially General Motors, which has a much bigger sales footprint in China, than Ford Motor Co. or Fiat Chrysler Automobiles.
In the third quarter, GM reported its sales in China were down 17.5%, to 689,531. Cadillac was the only GM brand that outsold the year-ago quarter in China, with an increase of 10.9%, GM said.
Rival Ford Motor Company and its joint ventures in China said last month third quarter sales were 131,060 units, down 30.3% from a year ago.
Fiat Chrysler said sales were down 24% in the third quarter in China, to just 35,000 units, the company said.
Global auto sales are forecast to be about 77.5 million in 2019, down about 4% from 2018, Fitch said in a recent report. Global passenger car sales fell to 80.6 million in 2018, from 81.8 million in 2017, the ratings agency said, citing data from the International Organisation of Motor Vehicle Manufacturers.
“The main source of weaker-than-expected sales this year has been China,” Fitch said. Year-to-date through October, sales in China were down 11% vs. the first 10 months of 2018. For the full year of 2019, Fitch said it expects China sales to fall about 2.1 million units, or about 9% vs. 2018.
Auto sales are off in other major global markets, too, Fitch said. The ratings agency said it expects sales to decline “nearly 2%” in the U.S. market and Europe, as well as a decline of about 5.5% for Brazil, Russia and India combined.
“Weakness has been quite widespread,” Fitch said.