Global Auto Production Continues to Collapse



Search  

ORIGINAL POST

Posted by Ed 35 days ago
The global economy continues to grind to a halt and the culprit has never been clearer: the auto industry.
 

For the better part of almost 2 years now, we have been reporting monthly on marked slowdowns in key auto markets like China, North America and Europe. Now, the slowdown in this massive industry is what's helping spur an overall global economic slowdown, according to FT.
 

The reaches of the auto market go deep, with long supply chains and large consumption of raw materials, textiles, chemicals and electronics. The industry is home to millions of jobs and last year, the sector shrank for the first time since the global financial crisis. The IMF is estimating that this fall in output accounted for more than 25% of the slowdown in the global economy between 2017 and 2018.
 

The sector may also be responsible for up to 33% of the slowdown in global trade growth over the same period, the IMF said.
 


Gian Maria Milesi-Ferretti, deputy director of the IMF’s research department said:
 

“The car sector has been weighing heavily on manufacturing activity and growth.”
 

And the fund's forecast of a small lift in global trade in 2020 is dependent on a recovery in the auto sector. Conversely, the fund's analysis also notes the potential further damage that could occur if the auto sector becomes the focus of the ongoing U.S./China trade war.
 

The White House is slated to make a decision on auto import tariffs by November 13.
 
 
https://www.zerohedge.com/economics/recession-auto-industry-tanking-global-economy
 
 
 
 
 
 
 

COMMENTS

bananaq 35 days ago
the world must be happy. less auto sales means less pollution

Ed 2 days ago
It also means massive layoffs across the auto industry as well as all the feeder industries (e.g. steel, mining, aluminum, etc...) 
 
 
 
Global car sales expected to slide by 3.1 million this year in steepest drop since Great Recession 
 
 
  • Global car sales are expected to decline by about 3.1 million in 2019 — a larger unit drop than in 2008, according to Fitch Ratings.
  • Falling demand in China, the world’s largest auto market, is a major factor in the worldwide decline.
  • Sales in the U.S. are struggling as well. Fitch Ratings anticipates an approximate 2% decline in U.S. sales to 16.9 million in 2019.

https://www.cnbc.com/2019/11/25/global-car-sales-expected-to-slide-by-3point1-million-this-year-in-biggest-drop-since-recession.html 
 
 
https://hongkong.asiaxpat.com/Utility/GetImage.ashx?ImageID=c1e1e542-9301-4cc7-98ff-f60115eeeeec&refreshStamp=0 

Ed 2 days ago
China Car Market Heads for Unprecedented Second Annual Drop 
 

Car sales in China continued to decline in November, extending a historic slump and all but ensuring a second straight annual drop for the world’s biggest auto market.  

Sales of sedans, sport utility vehicles, minivans and multipurpose vehicles fell 4.2% from a year earlier to 1.97 million units, the China Passenger Car Association said Monday. The decline was the 17th in the past 18 months, with the only increase coming this June as dealers offered large discounts to clear inventory.
 
Wholesales of new energy vehicles cars, including electric vehicles, fell 42% last month to 79,000 units, PCA said. 
 
Sales of cars running on electric motors have been falling since July as regulators reduced subsidies. 
 
(Ed's Note:  most of China's electricity is generated by coal fired plants...  EVs are therefore mostly powered by dirty coal...)
 
 
https://www.bloomberg.com/news/articles/2019-12-09/china-s-historic-car-slump-drags-on-as-sales-plunge-in-november 
 

Ed 2 days ago
The auto industry is one of the most important industries in the United States. 
 
The industry directly employs over 1.7 million people engaged in designing, engineering, manufacturing, and supplying parts and components to assemble, sell and service new motor vehicles.
 
In addition, the industry is a huge consumer of goods and services from many other sectors, including raw materials, construction, machinery, legal, computers and semi-conductors, financial, advertising, and healthcare.
 
The auto industry spends $16 to $18 billion every year on research and product development – 99 percent of which is funded by the industry itself.
 
Due to the industry’s consumption of products from many other manufacturing sectors, it is a major driver of the 11.5% manufacturing contribution to GDP.
 
https://www.cargroup.org/publication/contribution-of-the-automotive-industry-to-the-economies-of-all-fifty-state-and-the-united-states/ 
 

Ed 2 days ago

“The global car market will have shrunk faster in 2019 than at the height of the financial crisis, with 4m fewer vehicles sold than last year, according to the lobby group for the German auto industry.

 

“The Association of the Automotive Industry warned of further job losses during the next 12 months, with an ongoing downturn in China. Rapid growth there helped the sector recover from the global recession a decade ago.”

 

https://www.ft.com/content/b38adcac-169f-11ea-9ee4-11f260415385



< Back to main category



Login now