FRANKFURT AM MAIN, Germany—The outlook for the global automotive manufacturing industry remains stable over the next 12 to 18 months, according to Moody's Investors Service.
The robustness reflects expectations for steady demand across key regions despite looming challenges, the ratings agency said in a report launched Sept. 18. Nevertheless, emerging risks including trade disputes, rising interest rates and higher fuel prices could hit sales next year, according to report author Falk Frey, a Moody's senior vice president.
"Steady auto sales in China are a key driver of our global forecast, but growth will remain far more modest than the double-digit percentage gains seen as recently as 2016," said Frey.
Global light vehicle sales to grow 1.5 percent this year and 1.3 percent in 2019, forecasts Moody's. Sales in China, it added, should grow 2 percent this year—slowing from 3 percent in 2017—and 2.5 percent in 2019.
However, U.S. light vehicles sales are expected to cool in the coming months on rising interest rates, higher vehicle prices and the likely impact of tariffs on imports. Moody's expects U.S. light vehicle sales to fall by 1.2 percent in 2018 and 0.6 percent next year, while staying on track to reach 16.9 million units this year.
Western European sales are forecast to grow by 2 percent in 2018 before slowing to 0.5 percent in 2019, while Japanese sales growth is forecast to slow to 0.1 percent this year, before accelerating to 1.3 percent next year.
Consumer demand for new cars will remain strong in India and will continue to rebound in Brazil and Russia, buoyed by improving macroeconomic fundamentals, Moody's added.
The firm's analysis finished with a caution that "the automotive market could deteriorate quite rapidly, due to factors such as new import tariffs or rising commodity costs." Manufacturers, it added, likely are to see stricter emissions-reducing regulatory targets, rising pressure on margins, changing consumer preferences and technology-led disruption.