Indicators of what shape global auto sales could be in by the end of the year suggest that the outlook for 2018 could be brighter than initially thought.
Figures published by Moody’s Investors Service in March suggest that vehicle sales should hit 1.5% growth in 2018, with the revision leading to the bond credit business revising its outlook from negative to stable over the next 12 to 18 months.
It predicts this growth to slow slightly, with global auto markets expected to grow by 1.3% in 2019.
The report is not a rating action, rather an update to markets from the rating agency.
US sales to be better than expected
As part of the predictions, Moody’s noted that the predicted contraction in US vehicle sales should be less impactful than was previously thought.
In the report, published March 14, it revises total light vehicle sales for the calendar year 2018 up to about 16.9 million in total. Its previous prediction, back in December, indicated that sales would total 16.8 million for the year ending December 2018.
While this still represents a 1.2% year-on-year decline, Moody’s cites a ‘modestly improving macroeconomic environment’ as leading it to change its forecast, as it also revised its projections for US GDP growth for 2018.
Overall sales for the calendar year that ended December 2017 fell by around 2% on the previous year – the first drop in sales on record since the last recession.
2017 was still the fourth-best ever year on record for vehicle sales in the USA, and also beat estimates from many reputable industry sources by around 200,000 units.
China, Germany among those driving global growth
Growth in the rest of the world also contributed to the change in prediction.
Chinese vehicle sales are expected to grow by 2% year-on-year in 2018, despite the expiration of a tax cut for those purchasing small-engine passenger vehicles.
Germany is predicted to lead the way in Western Europe with a 4% year-on-year increase in auto sales, with Moody’s putting growth for the region at 1.9% overall. Scrappage schemes, encouraging motorists to trade in more polluting older vehicles in exchange for money off purchase of a more environmentally friendly new vehicle are expected to contribute to this.