Global Car Market to Shrink for 2-3 Years

Global sales of light vehicles will decline year on year through at least 2021, predicts LMC Automotive at its annual outlook conference outside Detroit, Mich.

Global vehicle forecasting chief Jeff Schuster notes that worldwide sales dipped 1% last year and are headed for a 4% decline—representing 4 million fewer sales—in 2019.

The global auto industry also has far too much production capacity in place. Existing plants are operating at an average 62% of capacity now, and that ratio will slide to 60% in 2020, Schuster says.

Looked at another way, the industry’s unused annual capacity will balloon to 60 million units in 2020 from 41 million in 2018, Schuster says. He anticipates no improvement until at least 2022, in part because carmakers are still building more assembly plants.

In the U.S., sales are expected to reach at least 17 million units in 2019, marking their fifth consecutive year at or above that mark. But LMC says volume will fall to 16.6 million units next year and 16.5 million in 2021.