Moody’s Expects Global Auto Sales to Fall 14% in 2020

As a result of the ongoing crisis caused by the COVID-19 pandemic, credit ratings agency Moody’s Investor Service has just revised its 2020 forecast for global light vehicle sales and it looks pretty bad.

The agency now expects a drop of 14 percent versus 2019, which is much more than its previous estimate of about 2.5 percent in February.

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According to Moody’s, Western Europe is going to see the steepest drop-off in demand at 21 percent this year. Only a month ago, it projected a decline of 4 percent.

The United States will be the next hardest hit with a drop of at least 15 percent in 2020 (previously 1.2 percent).

As for China, the world’s biggest car market and the source of the coronavirus outbreak, sales are likely to fall 10 percent (previously 2.9 percent), Moody’s predicts. They plunged 79.1 percent in February, marking their biggest ever monthly decline based on data from the country’s largest auto industry association.

Earlier this week, Ford said it aims to restart production at select North American plants as early as April 6, while other automakers such as Honda and Toyota announced an extension of their idled operations.

Meanwhile, dealers are faced with closed showrooms and trying to survive by turning to online sales. In places like Quebec, the legal requirement for car buyers to sign the contract within the dealerships walls has been temporarily lifted, which is good news. However, some dealers are reporting that initiatives like home test drives have had little impact on their business so far.