Forecasts for the European and global auto market continue to be revised downward because of growing uncertainty about the pace of recovery after coronavirus restrictions are eased. Factors that could temper optimism include a loss in consumer confidence, fear of a second wave of infections and a lack of urgency to buy new cars, especially if substantial incentives are not put in place.
“Impacts to global auto demand in the wake of COVID-19 have rapidly progressed to severity levels higher than the 2008-09 recession, and significant uncertainty around prospects for a meaningful recovery remain,” analysts IHS Markit said in a report at the end of April.
LMC Automotive lead analyst Jonathan Poskitt said Thursday that the company has gamed out three paths to recovery: A V-shaped curve, with a quick rebound, that would lead to 75 million global sales; a U-shaped curve, with a slower rebound, and 60 million global sales; and an L-shaped curve, with sales depressed well into 2021 and just 57 million sales in 2020.
The greatest likelihood at this time, he said, is that sales will fall to about 70 million units.
IHS is forecasting a similar decline, with global light vehicle sales at 69.6 million this year, a 22 percent decline from 2019 “with risks still skewed to the downside.” Earlier in April, IHS had forecast a 20 percent decline.
Citing deep post-coronavirus uncertainties, France-based Inovev is predicting a deeper drop in European registrations, saying that light vehicle sales could fall by 41 percent this year to 10.3 million units from 17.4 million in 2019.
Another analyst company, Fitch Solutions, is forecasting just a 10 percent drop in global sales, and an 11 percent decline in production, this year.