By on February 27, 2020

The growing spectre of coronavirus, an illness currently knocking on every country’s door (and waltzing past the threshold of many), has led Moody’s Investor Service to take an axe to global car sales projections.

On Wednesday the firm erased earlier predictions of a mild cool-off in 2020, replacing it with a steeper volume loss. Given recent reports of automakers scrambling to circumvent supply chain disruptions, idling plants, and a near-total drop in new vehicle sales in China, the prediction has legs.

As reported by CNBC, Moody’s has revised its earlier estimate of a 0.9 percent global drop to 2.5 percent, and even that figure is based on an assumption that the spread of the coronavirus outbreak can be halted before the end of the first quarter.

As the wildly infectious disease shows no signs of easing — and no respect for land borders — that figure could be due for another revision before long.

While the viral outbreak factors heavily into the firm’s forecast, it’s not the sole element at play. Europe’s imposition of strict emissions mandates factors in, too. Should world events play out the way Moody’s anticipates, 2020 will see sales fall 2.9 percent in China, 4 percent in Western Europe, and 1.2 percent in the United States.

It goes without saying that the firm’s outlook is “negative.”

Last year, global new vehicle sales took a 4.6-percent haircut. In the U.S., volume decline was roughly 1.5 percent, though the industry managed to stay north of 17 million units for a fifth consecutive year. That goalpost stands to recede into the sky in 2020, regardless of what happens with the virus.

[Image: welcomia/shutterstock]

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16 Comments on “2020 Ain’t Looking Bright, According to Moody’s...”

  • avatar

    If COVID-19 goes world wide and we don’t see a vaccine or it hopping back to an animal reservoir, we will see around 320 million deaths based on a 4% mortality rate and 5.5 billion humans. I’d say that it would actually be closer to double or triple that since poor countries won’t have the resources to treat sick people.

    • 0 avatar

      1.5 % death rate in 1st world countries.
      3 % in 3rd world i thought.

      80% in 70 year old +.

      • 0 avatar

        Well geez then…you OKAY BOOMER(s) should be STOKED for this coronavirus thing! You’ve been trying to denigrate, destroy and erase their history for years.

    • 0 avatar

      @Lou_BC – A lot of moving parts to this epidemic, the workings of which are yet to be revealed.

      At this time we don’t know how infectious it is (the percentage of people that acquire infection vs the number that are exposed) and the percentage of those infected that remain asymptomatic. The morbidity of the disease could also be influenced by “how infected” (a poor choice of term) a patient is. The preliminary data that Redapple posted is in line with what I’ve seen.

      So far only those showing symptoms are judged to be infected. If a significant percentage of infected people are asymptomatic and allowed to exit quarantine after x number of days but are still shedding virus particles, that’s a big leak. And there’s speculation that 14 days isn’t enough for some infected people to purge whatever viral load they have.

      I searched Google with “asymptomatic influenza infection” and the first hit is an abstract of a meta-study published by the U.S. NIH; the PubMed number is PMC4586318. It is a good and not too dense read, and illustrates how many factors need to be considered. Summary is that asymptomatic influenza runs from 15% to 50% and they speak to the substance of the second paragraph above. Let’s see if I can get the link here:

      Back to car stuff….even if this epidemic goes away quickly, a big hit to consumer confidence could tank auto sales, especially if the buyer feels less “wealthy” due to fearing a layoff and/or see their portfolio lose significant value.

      • 0 avatar

        Look at how the current corona virus “scare” has affected the international supply lines, the stock market and all things downstream. If it really gets scary and spreads, like the Spanish Flu was a global pandemic, things will get a lot more dicey.

        But the portfolio thing is normal during such times of uncertainty. If this blows over like Zika, Ebola or any number of virus scares of the past, we’ll see the stockmarket, car sales, public gathering, etc all rebound because the US economy was strong before the virus and will be strong again after the corona virus.

      • 0 avatar

        @EGSE – “asymptomatic influenza runs from 15% to 50%”
        I’ve seen some experts stating that for each known case of COVID-19 in China there are probably 8-10 mild to asymptomatic cases. Part of that high number is due to China’s history of under-reporting as well as adjustments to criteria for testing positive.
        We’ve seen cases pop up with no know contacts to confirmed cases. It will be interesting to see if Italy and Iran can contain their outbreak. Quarantine periods will need to be extended.

        As it stands, most of the “internal” professional information I’ve seen has yet to raise alarm bells. In 2015 with the last ebola outbreak the Canadian Federal Government made it mandatory for all health care facilities in Canada to have trained high risk infectious disease control teams. I’m not too concerned at this point in time.

        • 0 avatar

          “China’s history of under-reporting”

          That hit the nail right on the head!

          Zika and Ebola outbreaks were promptly reported through WHO channels.

          But the secretive Communist Chinese government thought they could keep this under wraps, and failed miserably.

          An interesting factoid is that the Chinese CDC was actually modeled after the US CDC and Dr. Anthony Fauci trained those Chinese 30 years ago. But even Dr. Fauci is getting the run-around from those researchers these days, and no Chinese samples of this novel corona virus (CoVid-19).

          Where are the anti-communist conspiracy theorists?

  • avatar

    I think climate change is more urgent issue. We’re all gonna die.

    • 0 avatar

      @Inside Looking Out – Well….. if COVID-19 goes global and humans panic…. that combination might just cull the herd enough to mitigate the global warming issue.

    • 0 avatar

      Hard to imagine, considering the far more dramatic climate changes hominids have experienced over the last few million years.

      • 0 avatar

        Except these changes aren’t happening over millions of years, they’re happening over 70 years. Stop parroting nonsense and read up on this for real. The ICPC reports are a good starting point.

  • avatar
    Jeff S

    Wouldn’t be the first time in history that a plague or pandemic has reduced human population. As for climate change I wonder if we as a species have reached the tipping point–the Earth might survive and adapt but we as a species might become extinct.

    • 0 avatar

      All true. Yet many diseases are caused by the close proximity of humans and animals and can thus be prevented by increasing the separation between them.

      A concept lost on the Chinese and other developing nations.

      • 0 avatar

        “and can thus be prevented by increasing the separation between them”

        It isn’t so much the contact between animals and humans but humans and humans. Arguably, there are too many humans on this sphere hurtling through space.

        Research plainly shows that as infants, the more contact humans have with animals and dirt and dust, the least likely humans are to develop allergies or other autoimmune issues.

        • 0 avatar

          I’ve heard and I’ve read that many of these diseases have jumped from animals to humans, and then proliferate from human to human.

          HIV and Ebola supposedly jumped from monkees to humans while Zika was primarily mosquito-borne, like Malaria.

          The Swine flu originated in China, supposedly jumped from pigs to humans, and the other flu that originated in China jumped from birds, chickens, ducks and geese to humans.

          But I could be wrong; I’m not a doctor, nor do I play one on ttac.

          • 0 avatar

            “Zika was primarily mosquito-borne, like Malaria”

            Mosquitoes aren’t the reservoir i.e. the host population. They are known as a vector i.e. mode of transmission.

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