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Risk is rising in global auto market, uncertainty remains high

The entire global vehicle market is facing flat-to-falling sales for the foreseeable future, says Jeff Schuster, president of global forecasting at LMC Automotive.

in Automotive News Europe, by Danielle Szatkowski | Automotive News, 06-08-2019

“Risk to auto sales globally is rising, and uncertainty remains high,” Schuster told Automotive NewsEurope sister publication Automotive News.

The mature markets of Western Europe, the U.S., Japan and Korea will likely contract in volume over the next five to seven years, Schuster said, which means the industry’s global growth opportunities will rely on emerging markets.

“This leaves countries that are highly volatile — Brazil, Russia, India, Turkey, China — to drive growth globally,” Schuster said. “But right now, many of these countries are in a decline, and that’s a risk to the long-term global market.”

Schuster forecasts that global light-vehicle sales will decline 2.6 percent in 2019 to 92.2 million units. Through 2025, he expects sales to muster a compound annual growth rate of just under 2 percent.

Trade friction and tariffs will continue to generate risk in global planning, especially with the European Union.

At the same time, more stringent emission regulations, especially in the form of new carbon dioxide requirements in Europe and China, have automakers counting more heavily on sales opportunities in electrification, Schuster said.

China accounted for 60 percent of battery-electric vehicles sold in 2018, totaling 770,000 units, Schuster said, and in 2030, China’s battery-electric vehicle count is expected to reach 6.4 million.

“The challenge in China and Europe is that these manufacturers need their battery-electric vehicles to hit the emission standards,” Schuster said. “There are price and infrastructure challenges that manufacturers will have to face. They also need consumers to buy the vehicles.”



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