Car expert Ferdinand Dudenhöffer said the industry is approaching crisis mode as he claims global car sales are set to plunge this year. He warned how 12 of the world’s 15 largest auto markets are showing declining sales, and anticipated sales of new cars worldwide will drop by just over five percent, to 79.5 million. Mr Dudenhöffer, head of the research institute CAR of the University of Duisburg, compared this to how sales fell by 3.6 percent after the Lehman bankruptcy in 2008. He said: “The decline was not that significant even in the global financial crisis of 2008 and 2009.”
Mr Dudenhöffer said the biggest threat facing the auto industry is the US-China trade war, with both nations locked in a bitter tit-for-tat trade spat that has left investors around the world on edge.
US President Donald Trump recently ramped up tariffs on a list of $200billion worth of Chinese imports from 10 percent to 25 percent.
The American leader has also vowed to slap 25 percent tariffs on an additional $300billion worth of Chinese goods unless the two sides reach an agreement.
China has retaliated to US aggression by raising duties on a revised list of $60billion worth of US products to as high as 25 percent.
“If the US president implements his latest threat to impose further punitive tariffs on US imports worth $300 billion, there is a danger of a global car crisis.”
In China, new car sales decline in May for the eleventh consecutive month, and Mr Dudenhöffer fears this trend will continue.
He predicts the Chinese car market will decline by around ten percent this year.
This week saw China report the worst-ever monthly sales drop in the world’s largest vehicle market after sales tumbled 16.4 percent in May from the same month a year prior, according to the China Association of Automobile Manufacturers (CAAM) said.
The disappointing figures followed falls of 14.6 percent in April and 5.2 percent in March.
Xu Haidong, CAAM’s assistant secretary general, said one reason for the drop was provinces implementing ‘China VI’ vehicle emission standards earlier than the central government’s 2020 deadline, stoking uncertainty among manufacturers.
He said: “We gave the manufacturers too little time to prepare.”
Industry executives have said they believe the market will return to growth in the second half of this year due to government support.
Earlier in June, the government announced measures to revive sales, including stopping local authorities from imposing new restrictions on purchases and eliminating restrictions on NEVs.
NEVs include petrol-electric hybrid vehicles, plug-in hybrids, battery-only electric vehicles and hydrogen fuel cell vehicles.
In May, most automakers reported a decline in China sales, except Japan’s Toyota Motor Corp and Honda Motor Co Ltd which logged double-digit growth.
Last month it was revealed how in the US, retail sales unexpectedly fell in April as households cut back on purchases of motor vehicles and a range of other goods.
As well as slowdown in global demand, car sales have been dented in Germany by stricter emissions tests.
The Bundesbank warned the car industry was facing weaker demand from abroad and that global car sales were expected to decline further this year after posting the first drop since the financial crisis in 2018.